91ÊÓƵ

Developer George Hale isn’t worried that his latest condominium project, 12.5 at the corner of Northeast Knott Street and Seventh Avenue, isn’t selling like hotcakes. Of its 13 units, two units have sold and there are offers on two others.
In Portland’s recent past, condo projects in the city have reached pre-sales records, some – like South Waterfront’s John Ross or The Harrison condo conversion in downtown – selling nearly all of their units before the projects were even off the drawing boards.
But Hale, whose expertise is infill, says the tides are changing. Portland’s housing market is cooling, and 12.5 is on track with the city’s 20-year sales history. Plus, 12.5 isn’t for everybody, he says. People either love it or hate it, and he’s only interested in those who love it.
Hale – whose infill projects include row houses and townhouses in Southeast, Northeast, North Portland, Redmond and Gresham – argues infill is about pushing the limits of urban design, not about fitting with the neighborhood. It’s about incorporating modernity into historical neighborhoods, and with the influx of a young creative class entering the home-buying market, Hale says that customer base is waiting for more.

91ÊÓƵ: Are there some parts of Portland that are more open to infill than others?
George Hale: Typically I think of infill as like an older, established neighborhood. It used to be different because in those neighborhoods, you used to have a lot of houses that either got burned down or got so dilapidated that (they were) torn down because people figured an empty lot was better than a dilapidated house. I found it easier to do infill because nobody else was building new houses in these older neighborhoods. I always thought these neighborhoods are great. They’re close to the city. You’ve got this core of shops that you can walk to. I thought if I’m going to live somewhere, this is where I would want to live. That’s why I was building the infill. I could understand it. I knew the kind of person who would want to live there. I filtered everything through my eyes.

91ÊÓƵ: One of the arguments against infill is that it gentrifies a neighborhood. What do you think about that?
Hale: I don’t think that’s a bad thing. For the most part, you see lifecycles of neighborhoods. Particularly gentrification of close-in Portland is driven by a couple factors. One is the urban growth boundary. To develop we have to do it inside the UGB. Number two, I think Portland is a really cool place to live. I think close-in is a neat place to be. That’s part of what’s driving the gentrification of the historically overlooked areas.
91ÊÓƵ: Another argument that comes from established neighborhoods is that proposed infill projects look out of place. How do you reconcile that as an infill developer?
Hale: That’s the nature of infill. A lot of times things aren’t going to fit it. Take the 12.5 condos for example. Does that fit into the neighborhood? I think you can argue yes and no. Does it look like the old 1920s and 1930s houses? No. But that’s today’s representation of what those houses were.
91ÊÓƵ: We’ve also got in place the Design Commission and the Historical Landmarks Commission, and they’re scrutinizing each project that comes along. I’ve heard arguments from developers who say they could have done so much more but had to scale it back because of the commissions that are in place. What do you think about that?
Hale: To tell you the truth, I don’t know 100 percent about what’s going on there. I try and stay away from a lot of those design overlay districts because I like to have creativity in my projects, and they control the creativity.
I will say that in a lot of districts, having a second set of eyes look at it and drive the design probably helps. Look at downtown Lake Oswego. They redesigned a block downtown, a mixed-use building with retail and offices. The city was very involved in driving that design, and it’s really done a lot for the downtown.

91ÊÓƵ: That brings up an interesting dichotomy, the difference between urban infill and suburban infill. It’s seeped out into the suburbs, where people are calling it new urbanism. People want to live in the suburbs and not feel like they’re in suburbia. When you’re working in the suburbs, do you have to take on a different mindset?
Hale: I think so, just because your demographic is different. Your end user is different. As a developer you have to target your markets. Typically they are different in suburbia.
You’ve got a lot more families. You’ve got a lot more people with kids. Close-in Portland, you do have families but I think for the most part you also have a higher concentration of young people, single people, couples with no kids. It’s a lifestyle choice.

91ÊÓƵ: Do you have a family?
Hale: Yes, three kids.

91ÊÓƵ: Did you ever live in close-in Portland?
Hale: Yes, we lived in Southeast. Then I moved to Raleigh Hills and now I live in Lake Oswego.

91ÊÓƵ: Was it because of your family?
Hale: It was partly driven by that.

91ÊÓƵ: So the mindset you take when you develop for suburbs, you can relate to because you have started a family and left the city.
Hale: Yes. But I feel like I can relate to the single, downtown person more than I can the suburbanites. I enjoy relating to the downtown creative types more. They’re more artistic, whereas the suburban stuff is very “Leave it to Beaver.”
What’s happening is that modern design is now creeping into family life. It’s more acceptable today to have kind of a modern-designed house. When you’re doing modern design for families, the person who wants a modern-designed family home is incredibly specific about what they want. So you have to do a custom house. We’re more spec builders here.

91ÊÓƵ: When you first started developing 12.5, you weren’t that interested in sustainable features, but you turned around on it. What was that about?
Hale: A couple of things happened. I met the contractors (Barrs and Genauer Construction), and they’re completely into sustainable development. Then I read an article about Wal-Mart. They wanted to use their weight to have a better impact on the world. I thought if they’re going to do it, I should probably do it too.

91ÊÓƵ: What was it about sustainability that made you not consider it in the first place?
Hale: It was the cost. It does cost more to do sustainability. There’s no doubt about it. And I thought people don’t really care. They’re not going to want to pay. And I still don’t know if the buyer wants to pay more. They want sustainability but they don’t want to pay more.

91ÊÓƵ: The 12.5 is completely built. Most of the time you hear of condo buildings being pre-sold before construction. Does it make you nervous that 12.5 isn’t selling like that?
Hale: Yes and no. Historically speaking, you have a condo project and if you’re not 95 percent sold out before it’s finished, something’s wrong. That’s happened over the last two or three years. But in reality, if you look over the last 15 to 20 years, we’re exactly where we’re supposed to be. It’s on track with normalcy. As developers we have to step back from what happened in the recent past and think about what’s normal. Yes, it’s scary because as a developer you always have this fear that it’s not going to sell. But you know theoretically it’s going to.

91ÊÓƵ: What becomes the point where you say, “OK, these really aren’t selling and we need to lower the price”?
Hale: It’s a function of traffic, feedback you get from people, feedback from buyers and real estate agents. It’s a combination of all that. Right now we have great traffic. I know our competition. We really don’t have any. Unique buildings like this, that’s more than just a house and a place to live; it’s artwork. People walk in and either hate it or love it.

91ÊÓƵ: You said you really don’t have any competition. What did you mean by that?
Hale: Well, competition as far as modern-style town houses. Right now if somebody wants a condo that’s close in, there are a couple three- or four-story buildings. But for a modern-style condo where you drive into your garage and go right into your unit, there really aren’t a lot around.

Tearing down a legend
A resident of Lake Oswego, Hale found himself in a sticky situation earlier this year when he bought and intended to tear down the house adjacent to his own – a house that happened to be designed by Pietro Belluschi, the man behind the Portland Art Museum and the Equitable Building in Portland.
91ÊÓƵ: What’s the story behind the (Pietro Belluschi) house?
Hale: So, the Belluschi house is next door to where I live. What’s been going on in my neighborhood is that people tear down houses and build a house next to it in its place. So, my wife and I decided to buy the house and build a house that we really like there and that we think is going to go well next to our house.
I bought it, applied for a demo permit, and it turns out it’s this Belluschi house, a famous architect. Me, I look at the house and its garbage. The guy who lived there for 60-something years did nothing to it. It was all dry-rotted. I met with a man named Tim Mather (owner of MCM Construction in Lake Oswego). He said this was an architecturally significant house and asked if he could take it. I said, “If you want to, go for it.” So he spearheaded taking the house apart, numbering it and putting it in storage and rebuilding it. I don’t know that he knows where it will go yet, but there’s a pool of four or five people who want it.
91ÊÓƵ: Did you feel like the bad guy for wanting to tear it down?
Hale: I didn’t. My wife’s uncle was one of the partners at Boora (Architects), and I ran it by him. He said not all great architects make great architecture. I’m glad somebody found value in it and is going to do something with it, but I don’t think it was really architecturally significant.
91ÊÓƵ: Would it be a blow to your ego to know that somebody might do that to your projects one day?
Hale: Emotionally, sure. When you build something you invest your time and effort into it. It’s a little part of you. But intellectually, I’d say if it’s past its lifecycle, that’s what has to be done. It’s all part of the nature of infill.