Developer Walter Bowen, whose company developed the tower with Portland’s Ritz-Carlton, claims a former top lieutenant took advantage of Bowen’s advanced years, affixing his signature to financial documents without his consent.
Bowen and his development company, BPM Real Estate Group, made the allegation in a lawsuit filed last week against former BPM executive Barclay Grayson in Multnomah County Circuit Court. Attorneys for the company and Bowen, 83, accused Grayson in the civil complaint of conduct they characterized as elder financial abuse.
Grayson filed his own lawsuit against companies tied to BPM earlier this year, saying they had failed to honor a sale agreement for a penthouse condo at Block 216. Grayson’s attorney, Thomas R. Rask III, declined to comment on specific claims in Bowen’s complaint while the case is pending but issued a blanket denial.
“We strongly deny the allegations,” Rask said.
Under increasing financial strain, BPM in July handed its gleaming Block 216 tower on Southwest Washington Street with the Ritz-Carlton hotel over to a lender to avoid a costly foreclosure, and it separately surrendered a different hotel developed by BPM just a few blocks away. The two properties are emblems of downtown Portland’s struggles to rebound economically from COVID-19 and reputational damage from 2020 demonstrations and riots.
BPM’s website has been down for weeks. All the while, escalating business disputes are generating hundreds of pages of court records that open a window onto the privately held firm and its principals.
The CEO and his associated businesses filed suit Aug. 15 alleging that Grayson, BPM’s former senior vice president, used a stamp with Bowen’s signature to sign personal guarantees without Bowen’s permission. In doing so, the lawsuit claims, “Grayson took or appropriated money or property belonging to Bowen.”
A spokesperson for the Portland Police Bureau said it could not locate any reports of allegations involving Grayson or Bowen. A spokesperson for Bowen did not immediately have comment.
The stunning claim follows a May lawsuit by Grayson alleging his former employer refused to let him close on a Ritz-Carlton penthouse atop the Block 216 high-rise.
Taken together, the court papers illustrate a remarkable rupture between the two men who brought the building to fruition.
Real estate power brokers often say that Portland is a small town, where everybody knows one another. Several real estate sources, however, said that Bowen largely kept to himself but had a close coterie of business associates at BPM.
“People seem very loyal to Walt,” said Pat Walsh, who worked on contract as BPM’s press agent for more than a decade ending in September 2021, when he took a full-time job in Eugene.
Grayson appeared among the most loyal, thanks in no small part to the fact that Bowen hired him in 2003 following Grayson’s conviction for mail fraud and subsequent 14-month prison sentence in an investment scandal.
At Block 216’s groundbreaking event in 2019, Bowen specifically praised the efforts of Barclay “Bulldog” Grayson, saying Grayson’s “indefatigable” work ethic brought the project together.
Previously confidential papers filed as evidence in a New York lawsuit reveal that the men were poised as recently as January to own neighboring penthouses. Bowen has rented an upper floor Ritz-Carlton condo but was expected to buy a penthouse after selling his Lake Oswego mansion last year. Grayson has also been trying to offload his own Lake Oswego home.
The financial implosion of Block 216 since its 2023 debut and other deals strained their relationship, court papers show.
The New York lawsuit emerged in response to plans to hand the keys back to lender Ready Capital after the building severely underperformed, with too few guest bookings at the hotel, too few offices leases and too few condos sold.
Ready Capital said it is working to turn things around since taking over last month, starting with scouting buyers for the more than 100 remaining unsold condos.
“We are moving quickly to stabilize the asset,” Ready Capital CEO Thomas Capasse said on an earnings call this month.
The January term sheet filed in New York noted plans to sign energy company Avangrid, which currently has an office at Montgomery Park in Northwest Portland, as a tenant, but it’s not clear how far the lease talks advanced. An Avangrid spokesperson declined to comment.
Bowen’s lawsuit last week states BPM fired Grayson in early July after he allegedly withheld information regarding one of the company’s undeveloped properties, which the company had long been trying to sell. The lawsuit alleged Grayson refused to name a potential buyer unless Bowen paid him a “Barclay fee” of 3.5%, the court documents state.
The company also claimed Grayson on multiple occasions handed Bowen documents to sign, then retained the only copy. It also claimed Grayson misused a construction subsidiary of BPM, called BDC Construction, for the buildout of the Ritz-Carlton penthouse he wanted to buy.
The return of Block 216 back to its lender has left many in Portland real estate circles wondering how much of Bowen’s personal wealth, which he built as the operator of senior living facilities before turning to skyscraper development, is left.
While that remains unclear, the January term sheet stated that if Bowen agreed to turn over the building to Ready Capital, he could expect a consulting agreement with the new owners “with to-be-determined roles and responsibilities” that were slated to earn him $1 million annually for three years.
Bowen had recruited investors through the federal opportunity zone program, which allows them to defer taxes on capital gains, to complement loans that funded construction.
Of the $600 million-plus project, public filings show, opportunity zone investors poured in more than $64 million. Because opportunity zones mainly act as a tax deferral strategy with few protections against investor losses, investors should expect little to none of their money back now that the lender has taken over, said Mohsen Manesh, a University of Oregon business law professor.
“The project’s equity investors have effectively been wiped out,” Manesh said.
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