91ÊÓƵ

Tom Keenan, president of Portland Bottling Co., feels like his company is being squeezed out of the Central Eastside Industrial District.

Portland Bottling, which occupies two full city blocks on Northeast Couch Street, has been bottling nonalcoholic beverages for distributors worldwide since the 1940s. Freight is a huge component of the business: Between Portland Bottling and Franz Bakery across the street, roughly 130 semitrucks visit the site each day.

But in recent years, maneuvering those trucks has become problematic. As technology and industry evolve, industrially zoned properties are becoming home to a growing number of creative/tech companies instead of suppliers and manufacturers. It’s changing the face of the CEID.

“They’re both classified as industrial users, but they look and smell different,” said Troy Doss, a senior planner for the Bureau of Planning and Sustainability.

While traditional industrial users might have fewer employees and more truck traffic, tech companies typically have more employees and a greater need for vehicle parking – a conflict for the district. As such, operators of vehicles like forklifts are increasingly sharing roads with software engineers. Their companies are finding appeal in the district’s edgy atmosphere and comparatively low price per square foot.

That’s fueling interest from multifamily developers who see a growing, well-paid workforce and opportunity.

“There’s probably a debate, if not concern, about whether the Central Eastside Industrial District will become the next Pearl District,” said Brad Fowler, a principal at Fowler Andrews LLC. “I don’t think that’s necessarily true. I think the Central Eastside has, obviously, a lot of opportunity … I think it makes for a more active area if you have more around-the-clock type uses, and of course having housing there to support employment and other services does a lot for the area.”

Fowler Andrews was one of the first multifamily developers on the scene with a 70-unit, mixed-use building it completed in 2012. It leased up in four months. Fowler said he hopes to begin construction this summer on a similar building on the adjacent property.

Other projects are in the works.

Hood River-based Key Development is planning to construct a 12-story, 290-unit building near the east end of the Burnside Bridge; Portland Foursquare Church is building more than 100 units at Southeast 12th Avenue and Sandy Boulevard; and an unnamed group is considering development of a 144-unit apartment at Southeast 11th Avenue and Oak Street. Multiple people named Gerding Edlen the developer, but the company did not immediately return calls to confirm.

More housing means more traffic, and more traffic makes it harder for companies like Portland Bottling to operate.

“What you’re seeing is older firms that can no longer exist in the area that are bigger usually, and real freight dependent, moving out of the district,” said Todd DeNeffe, the owner of Cascade Commercial Real Estate. “That’s just a natural evolution.”

For instance, DeNeffe helped Dealer Supply move its headquarters from a three-block, traffic-constrained site on Produce Row to Northwest Portland. Harsch Investment Properties snatched up the site, and DeNeffe said the company plans to subdivide the former warehouses into creative spaces.

DeNeffe said many Central Eastside Industrial District sites are zoned “EX” for central employment. The designation allows multifamily use that has existed for decades, but only recently attracted opportunistic investors.

Real estate professionals are eager to see what becomes of three Oregon Department of Transportation plots between Southeast Water Avenue and Interstate 5. DeNeffe said the Portland Development Commission is considering two groups’ development proposals, including one that is a joint pitch from Harsch Investment Properties, Langley Investment Properties and Beam Development.

Terry Taylor, the Central Eastside Industrial Council’s executive director, said there is no doubt that mixed-use and/or housing projects will affect the district’s makeup. Four large companies, he said, have already left because of traffic congestion and rising fees. Meanwhile, Portland Bottling is one of several high-profile companies proposing a ballot initiative to curb rising water and sewer rates.

“I hope that’s not a trend that continues, but when employers start leaving like that, it becomes the start of a transition,” Taylor said.

Next month, BPS will begin planning efforts for the Southeast Quadrant Plan to try and address some of those issues. Doss said the Central Eastside Industrial District is home to 17,000 jobs, many with industrial businesses like Portland Bottling.

Keenan is weary. He cited the West Burnside/Couch Street couplet and the Northeast 12th Avenue overcrossing projects, which made nearby bottlenecks safe for bicyclists, but diverted truck drivers down narrow side streets unfit for trailer traffic.

He doesn’t know how much longer companies like his will fit the mold, and feels like city planners are intentionally trying to drive him away. He said Portland Bottling is considering relocation, and that Franz Bakery is too.

Franz Bakery officials didn’t return calls seeking comment, but Taylor confirmed the report.

“They’re doing their best to move us out too,” Keenan said of city officials. “They won’t admit it publicly, but they are trying to get rid of the industrial sanctuary.”