PORTLAND — A Miami-based development company hopes to buy more than three acres of city land in the Bayside Neighborhood.

Federated Cos., which also owns the Bayside Village Apartments on Marginal Way, is planning to buy eight lots along Somerset Street for a mixed-used development.

The city would sell the lots between Elm and Franklin streets, totalling 3.25 acres, for $2.28 million, or about $700,000 an acre. It would pay the 8 percent brokerage fee and the cost of environmental liability insurance.

The land had been on the market for $3.6 million.

The Community Development Committee, a subcommittee of the City Council that has been discussing the sale in executive session for months, is scheduled to vote on the agreement Wednesday at 5 p.m. in City Hall.

The CDC vote is only a recommendation to the full City Council, which would take up the sale at a future meeting.

Federated Cos. founder and Chairman Jonathan Cox on Monday said he has had preliminary discussions with potential tenants of the mixed-used development.

But Cox said it is too early to identify them or any other details about the development, which may consist of housing, retail, parking and perhaps offices.

“We’re in the very preliminary stages of planning,” Cox said.

City Economic Development Director Greg Mitchell said the sale is contingent on the project getting the necessary regulatory approvals and other property inspections.

The agreement would give the company about one year to complete it’s due diligence, Mitchell said.

“I think this is a fair and responsible deal,” he said.

Mitchell and Cox said details about the potential development will be worked out through a public process that would include meetings with city staff and planners, as well as neighborhood meetings.

“Our final submission will be something we will work really closely with the neighborhood and the city to determine,” Cox said. “We’re really looking to develop a project that’s in the best interest of the community, so getting their feedback is a critical component of that.”

Mitchell said staff will propose using a portion of $9 million in federal funding towards the construction of a minimum 500-space public parking garage.

CDC Chairwoman Cheryl Leeman said she expects a favorable vote from the three-person committee.

Leeman said the agreement contains benchmarks for development to ensure the project moves forward through a public process and in accordance with the city’s Bayside Vision.

“We don’t want people to land bank the property,” she said. “We were very clear about that.”

The agreement requires Federated, which has offices in Miami and Boston, to put $25,000 down at the time of signing. It will have 60 days to inspect the property, after which another $25,000 deposit is required. 

The company will have 180 days to get its permits, but may ask for three, 30-day extensions at a cost of $3,000 per extension.

The city maintains a right to repurchase the land if construction does not begin within two years of permits being granted.

“We understand with the economy there’s going to be a certain period of respite,” Leeman said. “We feel that’s the time they ought to be putting things together.”

Cox said the company is excited to work out the details of the project, which would remake the Somerset Street area of Bayside. He said he hopes the project will create a synergy with the recently acquired Bayside Village, which is 60 percent leased for the fall.

“We hope that our project will enhance our other property in the neighborhood and surrounding properties,” he said. “We’re overall pretty excited about the opportunity.”

Formed in 1999, Federated is a national real estate investment group focused on acquisition, development, construction and management of multifamily apartment communities and retail properties.

The company manages more than 7,500 units of residential housing with a total value of more than $1.5 billion. It has also developed retail property for many national restaurants, retailers and financial institutions.

Randy Billings can be reached at 781-3661 ext. 100 or rbillings@theforecaster.net. Follow him on Twitter: @randybillings.