Auditors: Future of Historic Kenton Firehouse in Jeopardy After Mismanagement

Update: 9:40 pm: This story has been updated to note the relationship between the former executive director of North Portland Community Works and the Secretary of State.

The Portland City Auditor's Office says mismanagement of the Historic Kenton Firehouse led to state Rep. Travis Nelson (D—44) using the city-owned space rent-free for the past two years.

Auditors responded to a 2022 fraud hotline tip concerning the city's Office of Community and Civic Life’s longstanding arrangement with former nonprofit North Portland Community Works. The city bureau had no formal contract or agreement with the nonprofit, leading to murky record keeping and questions about past financial transactions.

According to a fraud hotline report released Wednesday, Civic Life's failure to follow city contracting guidelines led to waste and a lapse in rent collection on the space for the past two years. North Portland Community Works was entrusted to oversee upkeep and maintenance of the city-owned Historic Kenton Firehouse in 2000. To pay for repairs and upkeep, the nonprofit collected rental fees from community groups using it as an event space, and public officials using it as office space.

North Portland Community Works ceased operations in 2022, and the Civic Life office has failed to collect any fees or rent for the space since then. The firehouse's website indicates groups previously paid $250 for three hours of time and $50 for each additional hour to use the space for events.

The report lays blame on the city bureau for failing to properly oversee the third party management of the building. Civic Life is currently overseen by Mayor Ted Wheeler. City Commissioner Dan Ryan oversaw the bureau from 2023 to 2024. 

The firehouse is currently used by Nelson, whose district is in Portland. Nelson, who represents House District 44, has maintained his district office there rent-free since he took office in 2022. Nelson was appointed to replace Tina Kotek, who vacated the seat to run for governor. He won the seat in an election later that year. 

Auditors didn’t name Nelson as the elected official using the firehouse free of charge, but Nelson’s staff confirmed to the Mercury late Wednesday that his district office is within the city-owned building. 

Nelson’s chief of staff, AmyBeth Altenhofen, said the city has never sent them an invoice for rent. That’s because the Civic Life office asserts it doesn’t have authority to do so. Auditors noted that the city bureau didn’t take over that responsibility from North Portland Community Works when the nonprofit stopped operating.

“Requests from the community for renting the space have been waitlisted by Civic Life and office space previously rented by public officials is currently being used for free by a public official,” the fraud hotline report states.

“The Kenton Firehouse building has been the location of the House District 44 in-district office for more than 10 years,” Althofen says. “We understand from the city auditor that the building operator — the Portland Bureau of Civic Life — now asserts that it lacks legal authority to collect rent. We cannot speak to that and have no information about the bureau’s legal authority but stand ready to pay rent for the in-district office whenever the proper invoicing authority is established.”

Nelson took office the same year the nonprofit dissolved. 

Staff in the Portland City Auditor’s Office told the Mercury it appears Kotek paid rent for the space when she used it, but a lack of consistent accounting and record keeping made it difficult for auditors to determine whether North Portland Community Works was paid by the city to manage the space, and which entities had rental agreements with the nonprofit. 

Auditors recommend Civic Life either shore up its authority to collect rent and lease revenue, or transfer the building to a different department like Portland Parks & Recreation or the Office of Management and Finance. If neither option is tenable, the city could sell the building.

In response to the fraud hotline investigation, the Civic Life bureau agreed with the recommendations from auditors and said it’s working toward establishing a rental fee collection process, in hopes of preserving community access to the site.

Records show Civic Life staff reached out to the former executive director of North Portland Community Works, Tom Griffin-Valade, in 2022, to ask what the nonprofit previously charged for long-term lease agreements. City staff said they were trying to establish a lease agreement with Rep. Nelson's office. Griffin-Valade directed Civic Life staff to check "a file drawer in the firehouse," noting he had not been involved with the organization for at least three years. Griffin-Valade is the husband of Oregon Secretary of State LaVonne Griffin-Valade.

Auditors say the lack of a formal agreement between the Civic Life office and the nonprofit led to unclear roles and responsibilities for upkeep of the historic building. It was unclear how much rental fee revenue the nonprofit was collecting, and how much went toward maintenance and upkeep. The lack of documentation also meant the city had no way to confirm whether North Portland Community Works was collecting sufficient fees to cover the annual maintenance on the historic building during its management tenure.

“We also found that the mismanagement of the Firehouse and lack of documentation risks the appearance of fraud because the City did not have records to show that rental fees were appropriately used for the maintenance and restoration of the Firehouse,” the report notes.

Auditors concluded city controls for asset management and revenue were bypassed, leading to waste and inefficiency, and the future of the historic firehouse is now in jeopardy.

“The arrangement between Civic Life and North Portland Community Works presented risks to the City and the public,” City Auditor Simone Rede stated in a news release. “The City can’t collect fees to operate the Historic Kenton Firehouse without an agreement in place. That increases costs to taxpayers and limits public access to this community space.”

The Civic Life bureau told auditors that without a mechanism for collecting rental fees to pay for the nearly $30,000 annual maintenance, the public could lose access to a community space that’s been in use for nearly 50 years.