Sometimes, a neighborhood’s street layout can be harmful to public health.

At least that’s why the Portland Bureau of Planning and Sustainability is undertaking the Southeast 122nd Avenue pilot project, a study of the land-use, transportation and connectivity problems in the Powellhurst-Gilbert neighborhood and how they affect residents’ health.

Planners and public health advocates alike say the Southeast Portland neighborhood lacks sufficient through streets, sidewalks and paved roads, and that those deficiencies lead to obesity in residents and navigational problems for drivers of emergency vehicles.

“(Powellhurst-Gilbert) doesn’t have the sidewalks, commercial services or gathering places that other neighborhoods do,” said Barry Manning, who is heading up the project for the Portland Bureau of Planning and Sustainability. “We don’t think this is conducive to healthy living.

Residents are relieved to know the project is under way, said Powellhurst-Gilbert Neighborhood Association president Mark White.

White, an eight-year Powellhurst-Gilbert resident, said the neighborhood’s layout is sprawling and unconnected. Emergency vehicles, he said, have trouble navigating the roads.

White witnessed it firsthand on May 31, when Jefferson High School senior Borisshell Washington was shot and killed in Raymond Park, just blocks from White’s house. White said he heard the shot and the sirens that followed, and then rushed out of his home and saw an ambulance and fire engine creeping toward the park.

The drivers seemed lost, he said, because their emergency vehicles turned around and onto another road before returning and finally traveling on Holgate Boulevard to reach the park.

“It’s not good to put so many (people) into a place that has poor connectivity for vehicles,” White said.

He said he believes much of the damage in the neighborhood has already been done and that it will take close to a decade for any improvements to take place.

But Manning said the current study would lead to more formal plans starting in 2010.

The Bureau of Planning and Sustainability this past summer received a grant from the Northwest Health Foundation to continue to study health issues. The foundation has already determined that Powellhurst-Gilbert residents are the most obese in the city, and wants to work with the bureau to change that.

Chris Kabel is the program officer at the Northwest Health Foundation. He said there are more partnerships between planners and public health officials today than in the past. “For the most part, health has never been an explicit goal of planners,” he added. “This is something that we feel the city can take a lead on.”

There’s a compelling body of evidence that land use and transportation influence health, Kabel said. They affect whether a person chooses to walk, bike or drive. They affect where people purchase food. They also affect which doctors, if any, people see.

Most of the neighborhood’s problems, Manning said, date back to when it was part of unincorporated Multnomah County.

Before the neighborhood was annexed by the city, development was suburban and semi-rural. The neighborhood was characterized by low-density development on large lots, with spotty apartment complexes in outlying areas and commercial services located only at major street intersections.

Then, in 1996, the city rezoned the area to make it denser. This resulted in an infill building boom, especially near Southeast 122nd Avenue.

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The building at 4831 N.E. Fremont St. in Beaumont Village has thousands of neighbors. Most of them are dead.

The unassuming, 80-year-old cinder-block building is home to a number of businesses, ranging from a yoga studio to a pizza parlor. But the north side of the building abuts the Rose City Cemetery and Funeral Home, one of the largest and oldest cemeteries in Portland.

Tyler Sheils, broker for the property through Grubb & Ellis, said he thinks the cemetery adds a serene, park-like atmosphere behind the building. And some of the building’s tenants have told him the same thing.

“I’ve heard from (Bikram Yoga’s owner) that he really likes having the cemetery there,” Sheils said. “He likes looking out over it. I guess I always thought that was kind of odd.”

Soon, someone else can have that opportunity. Starting in December, the 6,579-square-foot class-C building will have 2,550 square feet of space available. The monthly lease rate is $16 per square foot.

The space is in the newer section of the building, which is connected to the cinder-block section and is considered part of the same complex. Sheils said the space would be ideal for a firm that specializes in marketing, software or architecture.

The building’s older, cinder-block portion was originally used as a lumberyard. Later, Pine Crest Products, a textiles company, stayed until it outgrew the space.

Sheils said the neighborhood includes a mix of recognizable restaurant chains and smaller boutique shops, and has a sense of community. Residents tend to regularly patronize the same shops.

“The only time people tend to move out of here is when they’ve outgrown the space,” he said.

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Retail real estate saw another rise in total vacancy in the third quarter of 2009, inching up to 8 percent for all submarkets averaged, according to a Norris, Beggs & Simpson report.

It was a 1-percent increase over the second quarter and the latest indication that an economic recovery should not be expected until well into 2010, said Jack Gallagher, a vice president of Norris, Beggs and Simpson.

Gallagher said the suburban submarkets have been affected by the bankruptcies of Joe’s Sports & Outdoors, Linens ‘n Things and Circuit City. However, he added that those spaces will likely be filled by other discount stores within the year.

One mid-size retailer, Dick’s Sporting Goods, has already taken advantage. In the Portland-metro area it is moving into a total of 150,000 square feet of space at three former Joe’s stores. A bonus for general contractors is that the transition is requiring renovations. Robertson & Olson Construction, a Vancouver, Wash., firm, is performing two of the projects.

S.D. Deacon has been angling for many of the eight Dick’s projects in Oregon and Washington; it is presently working on one in Bend and one in Eugene, said Molly Land, a project manager for the company. S.D. Deacon also has bid on another store conversion project in Puyallup, Wash.

“These jobs keep contractors busy, too,” Land said.

There is less to cheer about in the downtown retail sector, however. “The holidays are probably not going to be as strong as people would like them to be and will probably not perform as well as past years,” Gallagher said.

General Growth Properties, which owned owns Pioneer Place, filed for bankruptcy earlier this year and subsequently put the downtown mall up for sale.

The third quarter was fine for downtown retail, said Megan Doern, spokeswoman for the Portland Business Alliance.

“A lot of the larger retailers that closed over the last few months were not in downtown, which was helpful,” she said.

Doern also noted that the city plans to move forward with its Downtown Retail Strategy.

The retail strategy is part of the city’s more comprehensive Economic Development Strategy, which is intended to create 10,000 new jobs along the corridor in the next five years.

The city intends to create new jobs by subsidizing development activity, possibly through the creation of a downtown urban renewal area or with low-interest loans. The city has also considered using public matching funds to be used on development projects.

The city’s justification for placing emphasis on the downtown retail core is that it accounts for 13 percent of the regional employment base and generates 15 percent of the city’s property tax revenues.

Gallagher added that he expects other regional and national chains to enter the Portland-metro market in 2010. These companies, he added, are waiting for the economy to turn around.

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They may offer different amenities, charge different rates and cater to different visitors, but all of Portland’s hotels are being affected by the recession.

The occupancy rate for the city’s hotels has fallen 12 percent in 2009, in keeping with a national trend in which the hospitality industry expects rough months ahead.

To date in 2009, Portland’s hotels have been able to keep only 63 percent of their rooms occupied and have 10,000 more room nights to fill this year over 2008. The economic downturn and the entrance of a slew of hotels to the market have combined to drive occupancy rates down, said Deborah Wakefield of Travel Portland.

A hotel building boom prior to the economic downturn brought the city Hotel Modera, The Nines, the aloft Hotel at Cascade Station and others. Now the market is diluted, Wakefield said.

“The timing could have been better, of course, but when those projects were on the drawing board, people were fat and happy,” she said.

Hotel general managers are looking to try anything to attract visitors.

Gus Castaneda is the general manager of the Mark Spencer Hotel, which straddles the Pearl District and downtown. He said his hotel in 2009 has seen a 6-percent decrease in occupancy through September compared to the same period last year. To remedy this, the Mark Spencer has reduced room rates and begun using Web-based marketing techniques to attract visitors. His marketing team checks the hotel’s Web site traffic at least three times a day.

“You have to be very aggressive right now to stay ahead of the wave,” he said.

He said he expects two or three hotels to face financial challenges in the coming year, when they may find themselves upside down on their loans.

At The Heathman Hotel, general manager Chris Erickson had a rosier outlook. More competition, he said, will ultimately drive more people to the city. The numbers of visitors have stayed relatively flat throughout the recession.

“Right now, people can get great deals,” he said, adding that more people are visiting Portland these days than cities about the same size.

The concern, locally and nationally, is that underperforming hotels will be easy pickings for investment firms that specialize in buying distressed properties, said Tony Cassie, regional manager of the Portland office of Marcus & Millichap.

At the national level, per-room revenue has dropped by 18.3 percent and created a strain on the operations of many properties, Cassie said.

“Hotels are worth a lot less. They’re worth a lot less, and that’s the reality,” Cassie said. “We just haven’t reached the crescendo yet.”

Carl Cook, president of Seattle-based investment firm Quantum Equities, said investment firms were hitting banks hard to build war chests to buy distressed properties.

Despite the gloom and anxiety, there are signs that Portland’s hospitality industry may be able to shoo away the firms with vulture funds, Wakefield said.

“The fact is that we are a big (meetings) city, and that’s helping us to some degree,” Wakefield said.

In July, the Elks held in Portland its Grand Lodge convention, which generated $30,000 in tours alone and an additional $7 million for the city, according to Wakefield. From Nov. 9-21, the city will host the Supercomputing convention, which is relying on 31 hotels to accommodate its attendees.

In the past, sometimes all of the city’s hotels were booked, Wakefield said. But she believes that won’t happen again for a while, even after the economy rebounds.

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When Scott Conway, president of First Cascade Corp., saw the bid results for the renovation of the Chehalem Cultural Center in Newberg four months ago, he noticed something odd that he hadn’t seen in 25 years: The two lowest bids came in at the exact same dollar amount.
More importantly, that amount was well below what he would consider the market cost of the project.

Conway wasn’t surprised. He and other building professionals consider it a sign of the times, as firms balance their desire to stay in business with their desire to stay competitive.

“There’s more competition now everywhere,” Conway said. “When you have more companies, 15 or 16 companies, bidding on a project, stuff like (identical bids) can happen. It’s the law of averages.”

The beneficiaries of lower bids are building owners, who are seeking more renovation work for less money. The recession may be slowing the sale of new and old buildings, but construction costs have dropped by nearly 11 percent since the beginning of the year, according to the . So some building owners are investing in small projects while waiting to sell when the economy rebounds.

Building owners with money on hand are looking to renovation work with a newfound sense of enthusiasm, said Susan Steward, director of Portland’s chapter of the Building Owners and Managers Association.

Art DeMuro, president of Venerable Properties, said he can sense a growing hunger in contractors as they scramble for even the smallest scraps of a renovation project. The company owns several historic properties throughout the city and has been heralded for its historic renovations of buildings such as the White Stag Block.

Venerable Properties is planning to renovate two of its buildings: the Belmont Building and the Oregon Casket Building. Both are for sale, but there are no potential buyers right now.

“I see existing-building owners investing further in the buildings they currently own, with more minor renovations,” DeMuro said. “It’s certainly more feasible than selling in a market that doesn’t have many buyers.”

Kimberly Fuller, general manager for the Urban Renaissance Group, said the firm will soon start renovations on the 99-year-old Spalding Building. The work will include elevator modernization, a lobby renovation, upgrades of the building’s restrooms and improvements to tenant common areas.

“It can be a lot more cost effective to renovate a building into a sustainable building than to build one,” Fuller said. “In a down market like this, you wait until the time is right to invest.”

Contractors, though, say the extra renovation work isn’t generating much extra revenue, at least for now.

Ken Triplett, co-owner of Triplett Wellman Contractors, said there’s only a marginal difference between working and idling. However, he added that companies would rather get jobs to pay for overhead expenses, such as owner salaries, than lose out on work.

“We’re still seeing so many (renovation) projects where contractors have underbid,” he said. “We’d have to lose money to do those projects.”

For example, a month ago, Triplett Wellman bid to remodel a public health building in Salem. The estimated cost of the project was $1.5 million, but the low bid came in at $1 million.

It was the largest percentage differential – 33 percent – he’d ever seen between a project’s estimated cost and the winning bid.

DeMuro said he knows that contractors are bidding so low, but added that Venerable Properties may act as its own general contractor for the Belmont Building. He said that’s because he believes construction costs are leveling off and may increase by the beginning of next year.

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The Patrick Building was constructed in 1878 and stands as one of the oldest buildings in the Yamhill neighborhood. But the building has had a rough couple of years.

Its owner, John Beardsley, had liens placed against many of his buildings in 2007 as the economy started its slide into the recession. The Patrick Building, at 828 S.W. First Ave., was one of them.

Another was the Harker-Poppleton Building next door.

The broker for the Patrick Building, Denise Razzeto of Norris & Stevens, said the defaults have been cleared up so the banks wouldn’t take the properties. She added that owners of historic properties are generally struggling right now, so their lease rates are competitive.

“These older buildings do happen to be cheaper,” she said. “When we come out of the recession, smaller users will want to rent them. We are already seeing that.”

The 16,000-square-foot building leases for about $18 per square foot. The Patrick Building is distinguishable by the amount of cast iron used in its construction, a common architectural trait of Portland buildings constructed in the late 19th century.

Razzeto said the building would be ideal for small law firms or other service-based companies. The typical floor size in the building is 5,351 square feet, she said.

“Some people just want to have a sense of character,” Razzeto said. “But right now, with people worried about moving into new space, it’s not as hard to bring people into space that is driven by character and history. We end up doing more cold-calling because of that.”

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The demise of the development agreement between Metro and the developers of the long-planned Convention Center Hotel means agencies will now focus their attention – and money – on other projects within the Oregon Convention Center urban renewal area.

The latest plans for the Convention Center Hotel came to an unceremonious end on Sept. 29. Metro’s Chief Operating Officer Michael Jordan sent a letter to the project’s development team at Garfield Traub Development and Ashforth Pacific, terminating the development agreement.

At the time, the Portland Development Commission was poised to commit about $4.5 million to the development of the Convention Center Hotel, also known as the Headquarters Hotel. Now that money can be used on surrounding projects, according to the PDC.

Rick Williams, president of the Lloyd District Transportation Management Association, said in-depth talks between government agencies, neighborhood stakeholders and developers will now focus on emphasizing which urban renewal projects to move forward.

“The Convention Center Hotel’s demise is a blow psychologically, but it’s also a project that’s been around for 20 years, so it doesn’t actually change much,” Williams said. “Now we start looking at other projects we already have.”

Those projects include the 19-story , which would be located on a PDC-owned parcel of land directly west of the Convention Center. The project’s developers at StarTerra, a subsidiary of Schlesinger Cos., have remained guarded about the project.

Mick O’Connell, vice president of real estate development at Schlesinger Cos., said he wants to be a part of discussions about the future of the area surrounding the Convention Center.

He added that scuttling the Convention Center Hotel for a time would not change the fundamentals of developing the 100 Multnomah Building. The developers have yet to secure an anchor tenant for the building.

Nearby, at 1010 N.E. Grand Ave., developer Joe Weston wants to build a 31-story condo tower on a vacant block at 1010 N.E. Grand Avenue. Another apartment project is planned east of the 100 Multnomah Building.

All of those projects have been held back by the area’s weak real estate market, which would receive a boost if PDC

Developers have been hesitant to move forward with those projects because of the area’s weak real estate market. Redirecting the hotel money could help jump-start those projects, Williams said.

How that money will be spread among projects is still up in the air though, said Eric Jacobson, a PDC project manager who is working on the 100 Multnomah Building project.

Even though the PDC will now emphasize the renewal area’s other projects, the Convention Center Hotel will likely reemerge in the future, Jacobson said.

The city has been stymied on the project in the past and was able to rebound. Discussions of developing a Convention Center Hotel of 500 rooms or more have taken place since the early 1990s. The city has grappled with ways to appear more appealing to the lucrative convention industry.

Williams said due to the for the hotel project, he still expects it to be completed at some point in the future, even if other projects are emphasized first.

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With $3.3 million in federal stimulus money coming its way for Old Town/Chinatown’s Resource Access Center, the Housing Authority of Portland can now spend some of its own money for other low-income housing projects.

HAP had planned to use some of its own general funds to pay for the eight-story, $46 million project that will provide shelter and counseling to the city’s male homeless population, said Michael Andrews, HAP’s finance manager.

But now, that money can be diverted to Hillsdale Terrace, an existing subsidized housing project that HAP considers one of its dingiest and most deserving of renovation.

The six-acre property, on the boundary between Multnomah Village and Hillsdale in Southwest Portland, needs several million dollars in renovation work. Previously, HAP received a Hope VI grant, which was set aside for that project. Hillsdale Terrace will be the agency’s first large-scale renovation project since Humboldt Gardens, which started in 2005.

HAP was one of 35 housing authorities nationwide to receive federal stimulus money. In addition to the $3.3 million, the agency previously received $11.9 million from the stimulus package that will allow HAP to proceed with projects that were negatively impacted by the recession and stricter lending standards.

At the national level, the grant is part of an additional $1 billion in Public Housing Capital Funds designated by the Recovery Act to be awarded competitively.

Grant applications such as HAP’s had to fit into four funding categories, according to the federal government’s Web site: improvements that either addressed the needs of the elderly or people with disabilities, provided gap financing or created energy-efficient, green communities.

HAP applied for the grant after making changes to the Resource Access Center’s design to save money.

“We had to reset a number of our assumptions on (the project) because of how the economy looked,” Andrews said.

For example, the project went from being a full-block building to taking up only half of a block. Walsh Construction will break ground on the project in November, when the housing authority plans to hold community events to celebrate the project.

Shelley Marchesi, spokeswoman for HAP, said the project will keep dozens of construction jobs in Portland. Once constructed, it will be an integral part of the city’s 10-year plan to combat homelessness, she said.

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The possibility of a shifting political landscape north of the Columbia River could impact the issue of tolling the area’s bi-state bridges.

With a month to go before the mayoral election for Vancouver, Wash., the two candidates continue to draw distinctions between their stances on the Columbia River Crossing project and whether tolling should be a part of its funding package.

On one side, there’s 14-year incumbent Mayor Royce Pollard, an established figure in Vancouver politics. He wants a 12-lane bridge, paid for in part by tolls on both the new Columbia River Crossing and the existing Glenn Jackson Bridge.

On the other side is City Councilor Tim Leavitt, an engineer by trade who formerly sat on the board of C-TRAN. He supports the bridge, but thinks placing tolls on it would unfairly impact Vancouver residents who work in Portland.

“The problem is, we do not have enough jobs on our side of the river to support our population,” Leavitt said. “More of us travel to Portland to work.”

The result of the election could affect the tenor and pace of discussions surrounding bridge tolls, according to Portland State University professor Richard Clucas, even if Pollard wins.

“If (Leavitt) loses, but it’s still a close election, that could send a message that there’s a new mandate (about tolling),” Clucas said.

Though Vancouver’s mayor will have little actual power in setting any possible toll rates, a changing of the guard based on the tolling issue could send a message that shapes the area’s political agenda, Clucas added.

Current discussions about the Columbia River Crossing between Portland and Vancouver have focused on using tolls to help offset the bridge’s projected $4.1 billion price tag. The mayors of both Vancouver and Portland sit on a committee that will make a recommendation about how to pay for the bridge.

For his part, Pollard has stayed committed to his vision of the new bridge as a 12-lane structure paid for by a combination of state money, federal money and tolls, even as he’s had trouble securing a lead in the polls.

To date, the candidates remain neck and neck. Primary results last month showed Leavitt with a 50-vote lead over Pollard, while candidate Charlie Stemper was forced out of the race when he came in third in the primary election.

Opinion research expert Tim Hibbitts said it’s not a good sign for an incumbent to find himself trailing in the polls so close to Election Day, which is Nov. 3. But Hibbitts’ research indicates it’s a national trend, as voters have become increasingly discontent with the status quo. More than feeling strongly one way or the other about the tolling issue, voters may feel less trusting of long-serving politicians.

“So we’ve got this other climate overlaid on top of the actual issues,” Hibbitts said. “It makes things very interesting.”

Like Pollard, Leavitt has stuck to his message on the issue. He has said Vancouver residents could expect to pay as much as $2,000 a year on tolls, depending on the times of day they cross the bridge.

Pollard bristles at Leavitt’s suggestion that tolling could cost motorists $5 to $12 per trip. He said his goal for tolling was $1 to $2, but didn’t want to commit himself to a tolling cap.

“I have a tipping point (for tolling), sure,” Pollard said. “But I am not going to share it with you. I don’t think I’d share it with anybody.”

He said protracted talks about tolling would prevent construction of the project from moving forward.
Leavitt said other options for paying for the bridge exist, however. One solution would be to raise the property tax rates of the Portland-metro area.

Even though the candidates are battling it out on the campaign trail, the effort may only prolong the inevitable. The governors of both states have come out in favor of tolling.

For now, tolling remains an integral part of the funding package, said Mandy Putney, spokeswoman for the Columbia River Crossing project.

But there are still unanswered questions about how tolling would work. Today, a committee tasked with studying tolling for the Columbia River Crossing will start analyzing a range of tolling scenarios.

The committee will conduct the analyses throughout the year, and will present its findings to the Oregon and Washington legislatures in 2010. Putney said the mayoral race could make it more difficult to sell the idea of tolling to people not accustomed to it.

“We’re just trying to understand traffic effects for the tolling,” Putney said.

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College Station is a project in flux.

For one thing, the building’s name has changed to The Beacon. The project also has a different size and scope after the original plan to make the project a 15-story tower catering to nearby Portland State University was turned down by both the university and the city.

Developer Jerry Eekhoff and project architect Brian Laramee of Inflektion Workshop have spent the last month scaling down the project. They hope its reinvention as a 12-story, mixed-use complex will win approval when they reintroduce it to the city’s design commission. The board has denied approval for the building, saying it was too tall and too close to a building that the university owns.

The commission’s concerns weren’t the first ones voiced about the project. Earlier this year, PSU filed a complaint about the project with the city. In the complaint, the university said that the proposed building would obstruct views from the Broadway Building, a student housing building on Sixth Avenue, according to the city. The Eekhoff project will be located one block over on Southwest Sixth Avenue and Southwest College Street.

Faced with the need to reduce the number of levels in his building in order to move closer to city approval, Eekhoff made another adjustment to his project. Student housing usually requires space be set aside for common areas. With five fewer floors, he decided he could maximize the space he would be left with by shifting to more general workforce housing, according to Laramee.

The resulting project now features 158 apartments. The building also will be set back farther from the Broadway Building, so it won’t obstruct the building’s views as much as the previous design.

“We’ve had to actually make it denser over the last few months,” Laramee said, “but we still believe we’re in a positive spot.”

Chris Caruso, a planner with the Bureau of Development Services, also thinks the project is moving in a better direction now.

“It was taking up the entire footprint of the property and shooting straight up,” Caruso said. “They wanted to build what was within their right to build, just way more of it.”

The project’s next meeting with the Portland Design Commission will likely take place in December, Caruso said.

Even though The Beacon has shifted away from student housing, the neighborhood is slated to see some development of that nature in the future. Portland State University plans to build its own 900-bed student housing project within a block of Eekhoff’s building. PSU will partner with a private developer on the project, university spokesman Scott Gallagher said. The university hopes to have that building finished by 2011.

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