Former Concordia Portland campus is in limbo as $ 300 million lawsuit advances

The future of the former Concordia University campus in northeast Portland is still uncertain nearly two years after the school closed. And the reasons that led to the closure of Oregon’s largest private university are still unclear.

A Multnomah County Circuit Court hearing on Friday sought to provide some clarity. Lawyers on opposite sides of a lawsuit linked to the old university are arguing the fallout from the school’s sudden shutdown. One of the key elements of this – especially for Oregonians – is how this case could affect the future of the now empty 13-acre property.

Last year, a few months after the Portland campus closed to Concordia, the tech company HotChalk sued college and others related to it for over $ 300 million. By running its program online, HotChalk helped boost enrollment at Concordia, allowing the college to become Oregon’s largest private university, before it closed. In his lawsuit, HotChalk claims the former university owes him that nine-figure sum due to illegal breach of contract, fraud and other allegations.

HotChalk isn’t just suing Concordia Portland. He is also suing the Lutheran Church Missouri Synod, the organization that oversees the Concordia university system, including the old Portland campus; the Lutheran Church Extension Fund, a non-profit financial institution that supports synod organizations through loans and other financial aid; and others, such as the individual members of the Council of Regents of Concordia Portland.

Among his claims, HotChalk claims that the religious beliefs of the Synod of the Lutheran Church of Missouri were a major contributor to the closure of Concordia Portland. At Friday’s hearing, Multnomah County Circuit Judge Eric Dahlin did not directly rule on HotChalk’s claim.

But, Dahlin made a different judgment that might ease the process of selling the old Portland campus.

Court ruling could speed up sale of Concordia Portland property

At the court hearing on Friday, Judge Dahlin overturned a “lis pendens” that HotChalk had filed on the Concordia Portland property. A lis pendens is a notice informing the public that a property is the subject of a pending lawsuit.

The Concordia campus in northeast Portland has remained empty since the university closed last year, and the owner of the property – the Lutheran Church Extension Fund, or LCEF – is working on selling it. But the LCEF said the lis pendens made the sale more difficult, creating a “cloud” over title to the property, according to legal documents. The LCEF also said HotChalk had no direct involvement with the property to justify lis pendens.

“[T]The fact remains that HotChalk is nothing more than a garden-type unsecured creditor of [Concordia Portland] who has never possessed an interest of any kind in the [Portland] properties ”, one reads in a legal document of the LCEF.

Justice Dahlin agreed that HotChalk has no direct connection with the property. And he said that since HotChalk is only asking for a monetary reward, the underlying lawsuit does not involve the Portland campus at all.

“Ultimately it comes down to whether the litigation will impact the property,” Dahlin said. “If there’s only one claim for damages, even though HotChalk wins on that claim, they don’t get any interest in that property. They would get the money… but they wouldn’t get the property itself.

LCEF says it has assets valued at over $ 1.8 billion and therefore would be able to pay HotChalk regardless of the outcome of the sale or whether or not it has an interest in the property. .

The LCEF also argued that removing this lis pendens would actually be the best thing for either party.

“HotChalk ignores the fact that removing the lis pendens notice would actually improve his prospects of recovering any money judgment he might get against the LCEF,” LCEF lawyer Thomas Sand wrote in a court document. “Removing the lis pendens would allow LCEF to sell the property at the highest possible price.”

It is not clear how quickly the LCEF can proceed with the sale of the property now that the lis pendens have been written off.

LCEF spokesman Joe Russo told the OPB ahead of Friday’s hearing that the organization had “spoken with several parties who may be interested in purchasing the property,” but he did not. ‘provided no further information.

HotChalk seeks to link Concordia closure to Synod interference

The next set of rulings before Judge Dahlin has less to do with Portland ownership, but could explain why Oregon’s largest private university closed in February 2020.

HotChalk’s attorneys hoped to convince Dahlin that the interference of the Missouri Synod had contributed to the closure of Concordia Portland. To prove this, HotChalk wants to access internal church communications. But the synod argued on Friday that the company should not have access to around 2,000 emails and other records it considers confidential.

In its legal complaint, HotChalk claims the Missouri Synod and the Concordia university system had opposed Portland campus services for LGBTQ students, including its Gender and Sexuality Resource Center and the Queer Straight group. Alliance. The objection led to interference in the operations of the University of Portland, HotChalk says, including preventing the university from hiring a new president.

Lawyers representing the synod argued on Friday that HotChalk should not have access to internal church communications related to religious doctrine, church governance or employment decisions – including any discussion of presidential candidates at Concordia Portland.

Some of the Synod’s sentiments towards Concordia Portland’s actions regarding its LGBTQ community are already common knowledge.

“A club promoting homosexuality is not possible, under the Constitution and the statutes of the Synod, on a campus of Concordia”, declared the president of the Synod, Matthew Carl Harrison, during a press conference. February 2018 Board of Directors, according to previous OPB reports.

Dahlin did not make a decision Friday on whether to grant the synod’s protection order and prevent HotChalk from accessing internal documents.

Instead, he chooses to pick 25 documents at random from a pool of files to make a more informed decision.

“I would need to see something here to get a better idea… to have more context,” Judge Dahlin said.

Dahlin asks the Synod to challenge this request or produce a list of random documents from which the judge can choose by the end of this year.

A trial date has not yet been set for the case. However, the judge and lawyers have raised the possibility of scheduling it for spring 2023.

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