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PORTLAND-Mayor Vera Katz is set to formalize the city's effortto obtain additional federal money for Sage Hospitality's$100-million acquisition/conversion plan of the Meier & FrankBuilding. The project calls for conversion of the upper 10 floorsof the 15-story, 650,000-sf historic structure into a high-endhotel. May Department Stores Co., which owns all but one-sixteenthof the white terra cotta-clad building, would use revenue from thesale of the upper floors to renovate and compress its Meier &Frank department store into the five lower floors. The latest chunkof federal money would be in the form of a Section 108 loan fromthe US Dept. of Housing and Urban Development. In addition to thehotel conversion, the money would also help fund a seismic upgrade.In May, Denver-based Sage was granted $72.5 million in New MarketTax Credits that, when sold, will net Sage about $20 million. Atthat time, Sage Hospitality EVP Ken Geist told GlobeSt.com thereare "probably a hundred" deal breakers that could kill the deal andsaid it would be early next year before he can be sure the projectcan work. (For the previous story, clickhere)One of the unresolved issues is the one-sixteenthownership May doesn't own, sources familiar with the situation tellGlobeSt.com. The sliver of ownership is in the hands of the OregonEpiscopal School and descendants of the original land owners.Negotiations for the purchase are ongoing. Currently, Meier &Frank pays $20,000 per year to lease the piece it doesn't own, butthat amount was set in 1925. The lease expires in 2025.Ifeverything does work out, the upper floors of the building willbecome a 325-room Renaissance hotel. Renaissance is a high-endbrand of Marriott. The Meier & Frank building would be thefirst Renaissance-branded hotel in the Portland market.