WIEDEN RETRACTS BID FOR MILLIONS FROM HUD: AID WAS SOUGHT TO REHAB BUILDING

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Wieden & Kennedy has withdrawn a request for $10.5 million in federal aid to help build a new office building in Portland, Ore., following some local controversy.

Wieden, with 1995 billings of $435 million and the addition of significant new business from Miller Brewing Co., Microsoft Corp. and Coca-Cola Co. last year, has outgrown its downtown Portland headquarters in the Dekum Building, an elegant historic edifice that was once a department store and now also houses the agency's basketball court.

PLAN TO CONVERT WAREHOUSE

Wieden wanted to convert an old cold-storage warehouse in the trendy Pearl District into a 220,000-square-foot office-and retail space-to accommodate its growing staff.

The agency also has been adding post-production facilities in Portland to free its creatives from some travel to Los Angeles.

Teaming with developers, Wieden applied for and won the city of Portland's help in asking the U.S. Department of Housing & Urban Development for a $2.5 million grant and an $8 million loan guarantee to help finance the $26 million project.

Under the Economic Development Initiative program, the city told federal officials the project, which the agency hoped would be complete by summer 1998, would create 210 new jobs for low- and moderate-income residents.

In December, HUD conditionally approved the request, one of only 11 granted in a nationwide competitive process.

NEWSPAPER COVERAGE

Soon after, however, The (Portland) Oregonian began writing about the project and the funding effort.

Public comments by Wieden executives led HUD to question the agency's commitment to training and hiring low-income workers, said Alex Sachs, a HUD public affairs specialist.

"The application became controversial," said Mr. Sachs. "The objective is job creation for low- to moderate-income residents."

On Jan. 8, HUD put the project on hold; two days later, Wieden asked city officials to pull the application.

"It is unusual for something like this to occur," Mr. Sachs said.

WIEDEN THREATS?

City officials subsequently said Wieden, which has eschewed high-rise space in favor of a site with an industrial feel, has threatened to move the business out of the city.

Neither President-Creative Director Dan Wieden nor other executives at the

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