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Sunday July 13, 2025

What’s Up with the Federated Settlement? Here’s Why It Matters (and Why It’s a Big Deal for Portland’s Future)

As someone who’s been working closely on housing policy and helped launch our new Social Housing Task Force, I want to offer some context on this week’s big news: the City of Portland is settling a 14-year legal battle with Federated, the Florida-based developer who never followed through on the Midtown project in Bayside.

So what happened?

Back in 2011, we sold valuable city-owned land to Federated, who promised a ton of housing, retail business space, and a parking garage. But despite having approvals, they never pulled permits, and the project expired. Portland taxpayers, meanwhile, kept paying interest on a federal loan for a garage that never got built. We eventually used eminent domain to take back one lot (Lot 6), and Federated sued us—for $15 million. Then we sued them too. It’s been tangled in court for years while Bayside sits there looking like Escape from New York—just overgrown weeds , busted concrete, and rusted-out fencing on some of the most valuable, transit-connected land in the city.

Now, the settlement: we’re paying Federated $15 million to get back all the Bayside land—not just Lot 6, but Lots 1, 3, and 7. This avoids a prolonged legal fight and gets the land back under public control.

Why does this matter?

Because Bayside is strategic. It’s downtown-adjacent, transit-connected, and newly zoned under ReCode to support dense, walkable development. This is exactly the kind of land where we could do something amazing—like build social housing that stays affordable and permanently off the speculative market. We’ve got the tools now: task force seated, policy momentum building, and a public hungry for real housing solutions.

But let’s not sidestep the truth here: Portland got burned on this deal a decade ago. Federated was an unknown developer, and they didn’t deliver. This is a cautionary tale about what happens when we hand over public land to private interests without safeguards. In this case, we’ve clawed back land that should never have been lost—and we did it before a drawn-out lawsuit could paralyze progress even longer.

I say we make sure we don’t waste this second chance. Let’s dream bigger for Bayside. Let’s invest in public land for public good—not more luxury units, not more empty promises.

What would you like to see built there?

ksykes@portlandmaine.gov 207-558-5764

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