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Regional Interests

Concordia University Portland campus sold to church fund lender

A few people, mostly residents of the Concordia neighborhood, stand outside of the Multnomah County Courthouse on June 29, 2021, to listen into foreclosure auction proceedings.
A few people, mostly residents of the Concordia neighborhood, stand outside of the Multnomah County Courthouse on June 29, 2021, to listen into foreclosure auction proceedings.

The former Concordia University campus in Northeast Portland is officially in the hands of a new owner — one quite familiar to the old owners. But it is still unclear what will happen to the property, long term.

The Lutheran Church Extension Fund bought the property for $3 million Tuesday afternoon at a foreclosure auction in front of the Multnomah County Courthouse.

The Extension Fund was a lender to Concordia Portland.

The Lutheran Church Extension Fund is a nonprofit financial institution “dedicated to supporting Lutheran Church-Missouri Synod church workers, congregations and organizations,” according to Joe Russo, LCEF’s chief marketing officer.

The Lutheran Church Missouri Synod is the organization which supervises the Concordia University System, including the former Portland campus and multiple other campuses across the U.S. There were no other bids at the auction Tuesday.

It is not clear what the Lutheran Church Extension Fund may do with the property, which until last year was the site of Oregon’s largest private university. It closed in spring 2020.

According to the property’s notice of sale, Concordia University was in default of more than $36 million in loans it received from the Extension Fund.

Under an Oregon statute, once a nonjudicial foreclosure sale, like this one, has been conducted, no other actions may be brought against a “deficiency” — excess money owed, such as a loan. That means Concordia-Portland’s debt to the Extension Fund is essentially gone.

Still, the former university has other ongoing financial and legal issues.

A technology company called HotChalk sued the university last year, claiming the former institution owes it more than $300 million for a partnership in which HotChalk helped Concordia with its online education program. The Lutheran Church Missouri Synod and its Extension Fund are also both defendants in that case. A jury trial for the lawsuit is set for October, according to court records. Parts of HotChalk were purchased last year by the technology company Noodle.

The closed university is also facing a class-action lawsuit brought on behalf of more than 90 former students looking to have their lost tuition refunded. In the complaint, the students say they would not have paid the university tuition if they had known about the impending closure.

The Oregonian/OregonLive also reported last year that the Oregon Department of Justice was beginning an investigation into Concordia-Portland — specifically to see if Concordia had violated the “Oregon Nonprofit Corporations Act” or any other laws.

At the time of the auction Tuesday, it wasn’t clear what the Extension Fund would do with the property — whether it might retain it, or turn around and sell it to another buyer, especially with the ongoing litigation.

The Concordia property is zoned as “Campus Institutional,” which allows the land to be used for educational and medical facilities as well as parks and open areas. If the Extension Fund, or another future buyer, wants to use the former campus for something else — such as housing or a commercial development, they would need to get permission from the city.

Peter Keller, Chair of the Concordia Neighborhood Association, said that’s something that area residents will be keeping track of.

“The neighborhood would really like the property that Concordia was on to be a similar type of institution — educational, or some other similar zoned purpose,” Keller said.

Keller said the neighborhood association recently conducted an informal poll of residents, business owners and others who frequent or work in the area, to get a sense of what people want to see the former private university become.

According to the multiple-choice survey, in which 350 people took part, about half of the respondents said they want to see the property remain as a school. About 20% said they would like to see it become a community center. The remainder of the respondents had various other ideas: housing, a medical center, a retirement center or transitional housing for people experiencing homelessness.

“Who knows what they’ll do with the property,” Keller said of the Lutheran Church Extension Fund.

Extension Fund spokesperson Russo told OPB via email Wednesday that the LCEF plans on selling the property in the “near future.”

“We are working with local Portland real estate experts who are very familiar with the property and understand the needs and wants of this community,” Russo said. “We look forward to positioning the property so that it can be put back to good use for the community. We will continue to maintain, protect and preserve the property until a suitable buyer is found.”

Under Oregon law, the Extension Fund will receive the deed for the Concordia-Portland property within 10 days. From there, it can begin to move forward with any potential plans.

Editor’s note: Previous reporting mischaracterized the Lutheran Church Extension Fund. The Extension Fund is separate from the Lutheran Church Missouri Synod, but the Fund supports the Synod, and the two nonprofit entities share the same religious faith and similar missions.

Copyright 2021 Oregon Public Broadcasting