Prosper Portland Takes Back Two Old Town Buildings
After Made in Old Town failed to secure promised private funding and defaulted on a $7 million loan, Prosper Portland's board voted to reclaim two Old Town buildings. The settlement releases the startup from further repayment.
TL;DR
Prosper Portland's board voted unanimously to reclaim two Old Town buildings after the shoe startup Made in Old Town failed to raise promised extra funding and defaulted on a $7 million loan. The settlement releases the company from further repayment while the agency prepares to re-lease the properties.
Context
In 2025 Prosper Portland lent Made in Old Town $7 million to acquire the buildings at 208 and 234 NW 5th Avenue. The startup also secured a $2 million state grant and told the agency it would raise an additional $4.4 million from private investors to build a nine-building campus for shoe design and manufacturing. When the private money did not arrive, loan payments stalled in January 2025.
The project's leadership turnover added pressure. Its recently hired executive director resigned early this year, prompting Prosper Portland's executive director to request an urgent update on the venture's viability. Public reports noted that the startup had relied on public funds to leverage more public money rather than securing mostly private capital as originally promised.
Key Facts
On May 13 the Prosper Portland board voted unanimously to take possession of the two properties. The vote followed a material default defined by the startup's failure to obtain the promised $4.4 million in extra funding. The accompanying settlement agreement releases Made in Old Town from any remaining loan repayment obligations.
Prosper Portland stated it will attempt to activate the buildings swiftly, though leasing downtown office space remains challenging given current vacancy rates. The agency's May 13 meeting minutes note that the project struggled to sign tenants, retain leadership, and meet its funding targets.
What It Means
The agency now holds the assets and will explore options to recoup part of its $7 million exposure, including selling, leasing, or repurposing the space for other uses. Downtown Portland's office market shows elevated vacancy, which may affect how quickly new tenants can be found.
Local officials have warned that similar public-private partnerships need clearer private-funding commitments to avoid repeat defaults. Observers will watch whether Made in Old Town can continue operations without the loan burden and how Prosper Portland adjusts its future lending criteria for development projects.
Continue reading
More in this thread
Conversation
Reader notes
Loading comments...