The long-awaited redevelopment of Northeast Sandy Boulevard took a major step forward on Thursday.

The Portland Design Commission voted 5-0 to approve Security Properties‘ plans to transform a former PepsiCo bottling plant off of Sandy Boulevard. Those plans call for turning the 4.7-acre superblock into a dense collection of mixed-use space that leans heavily residential.

The developer is considering building anywhere from 485 to 1,297 housing units, said Dorothy Faris, a principal with Seattle design firm Mithun. That would include 39 to 195 affordable units, depending on affordability level and how many units are built overall.

“It’s a dense project; let’s not kid ourselves,” Commissioner Sam Rodriguez said. “I think that’s what we’re looking for as a city.”

Projects such as The Zipper from Guerrilla Development now appear to have presaged the gentrification of the Northeast Portland corridor, which formerly was lined with auto repair shops and dealerships.

The planned development is the first to receive approval under the city’s 2035 Comprehensive Plan rules for major sites. In exchange for bonus heights of up to 120 feet, the developer agreed to provide affordable housing and set aside major portions of the superblock for open space.

Security Properties executives said they plan to preserve the existing Pepsi Pavilion, which was built in 1962. A group of architects had lobbied for its preservation.

The pavilion will likely have a retail tenant, said John Marasco, Security Properties’ chief development officer. One possibility being discussed is the proposed James Beard Public Market, which has been searching for a home in Portland for a few years.

“We would love to resurrect those conversations,” Marasco said.

James Beard Public Market Executive Director Fred Granum, in an interview with the 91��Ƶ, said he has had no discussions to date regarding the Pepsi Blocks site.

The Pepsi Blocks encompasses five buildable parcels and the existing pavilion building. The tallest buildings are planned alongside Interstate 84, with heights stepping down to Sandy Boulevard.

Open space will weave throughout the development. Security Properties won permission to devote only 12.13 percent of the development to publicly accessible open space; the city’s standard is 15 percent. Open space will be provided by an 8,648-square-foot plaza, a 13,673-square-foot park, a 2,135-square-foot park, a pedestrian path and a woonerf-style street that will extend Pacific Street through the development.

Commissioner Zari Santner praised the project team’s “very thoughtful organization of public spaces.”

“They work well and really will contribute to the vibrancy of this development,” she said.

Santner expressed some concern that the building architecture could be too uniformly boxy.

“The massing is perfect; it’s fine,” she said. “But variety is lacking.”

Many of the buildings will have ground-floor retail space, particularly facing the woonerf. Parking will be provided in underground garages; no surface parking is proposed.

Commissioners attached conditions of approval relating to phasing. Certain building permits will be tied to simultaneous construction of the public spaces. Any change in the project’s phasing would require review by Bureau of Development Services staff.

Development will begin along Sandy Boulevard in the property’s southeast corner and move in a counterclockwise direction. The tallest residential buildings may have to wait for market conditions to improve, the developers said.

Thursday’s approval did not cover individual building designs; they will undergo separate review hearings. The project team will move forward with further design work immediately, Marasco said.

The Pepsi Blocks should serve as a model for future planned development sites, design commissioners said.

“This proposal establishes a really high bar for the master plan areas identified by the 2035 plan,” Chairwoman Julie Livingston said. “It goes further than that – it establishes a new high bar for superblock development. It’s really well done.”

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Portland’s 2035 Comprehensive Plan is one step closer to taking effect after a favorable ruling last week from the Oregon Land Conservation and Development Commission.

The state commission turned down appeals from the Multnomah Neighborhood Association objecting to the city’s “middle housing” policy and other rules intended to increase density.

“We’re pleased with the decision,” Eric Engstrom, principal planner at the Portland Bureau of Planning and Sustainability, stated in an email message.

“Among other things, it brings new mixed-use zoning to transit corridors and centers outside the Central City. This new zoning will facilitate private investment in needed housing,” Engstrom stated.

The Comprehensive Plan is the city’s wide-ranging document that will govern development within city limits as Portland grows to incorporate more than 100,000 new residents that are expected by 2035. The Comprehensive Plan is set to go into effect on May 24.

An appeal to the Oregon Court of Appeals is likely, Multnomah Neighborhood Association Chairwoman Martie Sucec said.

“That’s our plan,” she said.

Neighborhoods such as Multnomah Village have adapted uneasily to developers building apartments near single-family homes, often with little or no new parking.

In Multnomah Village, Urban Asset Advisors has constructed Multnomah Village Apartments and is planning a second mixed-use building, Multnomah Station, along Southwest Capitol Highway. The buildings have similar designs, with three stories of apartments over ground-floor retail space.

The neighborhood association has fought the developments.

“It’s going to be like a canyon on Capitol Highway,” Sucec said.

Other objections from the Multnomah Neighborhood Association centered on designating Multnomah Village a “neighborhood center” rather than a “neighborhood corridor,” which allows for building up to four stories. The neighborhood association has advocated for a three-story height limit.

“It’s not that we object to density,” Sucec said. “We object to having no role, no assurance, in where those things go.”

A written order will follow the commission’s March 15 decision. If the neighborhood association does not appeal, the comprehensive plan will be considered “acknowledged” by the state, clearing the way for implementation.

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The city of Portland is poised to delay implementation of its 2035 comprehensive plan until May 2018 to allow time for state appeals to run their course.

The comprehensive plan, a wide-ranging update of Portland’s zoning rules, is now planned to take effect May 23, 2018. It had been scheduled to take effect Jan. 1.

The delay gives the Oregon Land Conservation and Development Commission time to rule on any appeals of the comprehensive plan. The LCDC rules on appeals from the Department of Land Conservation and Development.

The city is required to submit its comprehensive plan for “acknowledgement” by the state. City officials could choose to go forward ahead of the state decision, but that path “introduces some risks,” according to a statement from the Bureau of Planning and Sustainability.

“For example, any land-use decisions made under the new plan during the ‘effective but unacknowledged’ period would have an extra burden of documenting direct compliance with state land-use goals,” the bureau’s statement said. “Staff have advised City Council against adding that complexity to the development review process.”

Added spokeswoman Eden Dabbs: “If we were to give it a green light, it would create a kind of procedural nightmare.”

The City Council is due to consider the delay at a Nov. 29 meeting. A previous agenda item on the topic was delayed because the council lacked a quorum.

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Growing cities don’t have to become seas of gleaming skyscrapers, according to Ed McMahon, the Urban Land Institute‘s senior resident fellow for sustainable development. He delivered that message last week at the White Stag Block in Portland as one of the speakers for an event that focused on housing density and affordability.

“Portland can grow without losing the things you love,” he said.

McMahon has consulted for cities across the nation. Height shouldn’t be the most important factor in new building projects, he said.

“Three things you need to think about when it comes to development are where you put it, how you arrange it and what does it look like,” he said.

Urban planners across the country have sought to avoid contributing to suburban sprawl. To increase density, the propensity has been to build taller, often at the expense of existing historic buildings.

“Increasing housing supplies does not ensure affordability if developers build oversized and overpriced luxury homes,” said Laurence Qamar, owner of Qamar Architecture + Town Planning and another speaker at the event.

New towers often come with higher prices and lower density, McMahon said. A study by the Preservation Green Lab in Seattle, he added, found that such buildings fall short in comparison to many smaller, refurbished buildings for housing people per unit. That same comparison held true for office buildings as well.

“Smaller, older buildings had more jobs per square foot,” he said. “They also had more locally owned businesses, more non-chain stores and more women- and minority-owned businesses. These are places that are worth preserving because they do outperform, on a square-foot basis, some of these larger, newer buildings.”

Nevertheless, across the country more affordable units are being torn down than built new. A National Housing Trust study, McMahon said, found that for every affordable housing unit built, two are lost due to abandonment, deterioration or conversion to more expensive housing.

“Preserving rather than building new has proven to be the most financially sustainable method of reversing the trend of one step forward and two steps back,” he said.

McMahon added that in his professional experience, well-designed duplexes and fourplexes often were welcomed into neighborhoods. He compared the compact multifamily layout of the Battery neighborhood in Charleston, S.C., to the circular sprawl of Sun City, Arizona, a census-designated place near Phoenix.

“The Battery in Charleston is double the density of Sun City, but who would even know that (by looking),” he said.

While Sun City relies on cul-de-sacs of houses, Charleston has duplexes and fourplexes that mimic single-family homes through strategic placement or elimination of garages.

“Good design makes you forget about the whole concept of density,” McMahon said. “You just like being in that place.”

Portland’s small, 200-foot blocks often make good design difficult. Qamar advocated limiting building heights to mitigate those challenges.

“Our tiny blocks increasingly yield massive buildings that rise straight up from sidewalks with little of subtlety and form,” he said.

Marshall Runkel, chief of staff for Portland Commissioner Chloe Eudaly, encouraged event attendees to stay involved as proposals such as the 2035 Comprehensive Plan and the Residential Infill Project come before the City Council.

“Over the course of the next year, there should be dramatic regulatory changes that will have influences on all of the subjects discussed tonight,” he said.

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A team of Portland State University students has unveiled its ideas for developing more than 4 acres of land near the east bank of the Willamette River.

Prosper Portland is preparing to issue a request for qualifications from developers to build on the property. The agency in November agreed to purchase 2.19 acres along Southeast Water Avenue, and lease an additional 2.18 acres, from the Oregon Department of Transportation.

The ODOT blocks, as the properties are known, are in one of the hottest areas for development in all of Portland.

Developers have rushed into the neighborhood with projects such as Killian Pacific‘s Goat Blocks, Clay Creative and Clay Pavilion, Capstone Partners‘ Custom Blocks and Beam Development‘s 811 Stark building.

For office projects, the Central Eastside Industrial District offers an evolving neighborhood with some of the city’s hottest restaurants, bars and coffee shops, proximity to downtown and plentiful transportation options.

Zoning in the area is restricted to encourage office and light-industrial uses. As part of Portland’s 2035 Comprehensive Plan, zoning limits retail spaces to 5,000 square feet per site and allows a new category: industrial office use.

The zoning seeks to preserve the district for use as an employment center, said Debbie Kitchin, who served as co-chairwoman of the Southeast Quadrant Plan committee and is a board member of the Central Eastside Industrial Council.

“We just don’t have much availability of land for that type of development,” said Kitchin, who was speaking as an individual.

The CEIC pushed for the zoning to preserve an employment center and resist turning it into another close-in neighborhood given over to housing and retail.

“I think we came to a good compromise for the Central Eastside,” Kitchin said. “There are already areas that are zoned for residential and retail,” concentrated around the East Side’s bridgeheads.

The city is also interested in adding to its property tax rolls. Under ODOT ownership, the parcels generated no property taxes for the city.

PSU graduate students were asked to evaluate development possibilities for the three blocks owned by Prosper Portland. They presented their proposals at a NAIOP Oregon meeting held Sept. 21 at the Multnomah Athletic Club.

The three Water Avenue blocks owned by Prosper Portland are individually 34,800 square feet between Taylor and Salmon streets, 34,800 square feet between Salmon and Main streets and 25,600 between Main and Madison streets.

The PSU students were asked to weigh in on the ODOT blocks as an academic exercise. Ultimately, a developer will come up with a separate proposal for the site.

The students unveiled a concept for what they called the Portland Innovation Center, consisting of two massive buildings joined by a sky-bridge. The two buildings would consist of the five-story Idea Factory and nine-story Perch. The latter building would have industrial office and “maker” space of floors five through nine. Floors two through four would consist of a parking garage with ramps in a central atrium that would be removable in case demand for parking slackens in the future.

A Dutch-style “Woonerf” – a narrow street that’s friendly to bicyclists and pedestrians – would run beneath the sky-bridge.

The student proposal met with some skepticism amid encouragement from a panel that included developers Kira Cador of Rembold and Brad Malsin of Beam Development.

One of the students, Andrew Crampton, acknowledged that sky-bridges are typically discouraged by city regulators.

“In Portland, establishing a sky-bridge is a herculean task,” Crampton said.

A sky-bridge at the site would maintain existing view corridors and break up an imposing “superblock feel,” Crampton said.

The zoning allows for a 3-to-1 floor area ratio (FAR) and a 1-to-1 bonus. The students said to make the project work, the site would need a FAR of more than 5-to-1. The students said the buildings would be filled with long-term tenants.

But long-term leases can be difficult to fill, said Paige Morgan, an executive vice president at Jones Lang LaSalle.

Malsin added that he had filled Central Eastside leases in part by using creative leasing structures.

“A lot of early-stage companies are not going to sign 10-year leases,” he said.

The panelists’ criticisms were fair, said Jamison Loos, one of the students.

“I’m glad that the panelists agreed that our proposal reflected the Innovation Quadrant and (Central Eastside Industrial Council’s) goals,” he stated in an email message. “Prosper Portland will ultimately decide what gets built, but the right development will align the interests of the city with key stakeholders in the business community.”

The choice of developer will be key to successfully building on the site, according to Loos.

“They’ll need to find the right developer who understands the context and can bring their own creativity to site-specific challenges,” he said.

Prosper Portland paid $2.485 million for the ODOT blocks. The state agency is retaining 94,000 square feet on the western portion of the parcels for future construction staging.

The PSU students also evaluated development options for two downtown parcels near the university. The first is a 0.69-acre property at 424 S.W. Mill St. The existing tenant, St. Michael the Archangel Catholic Parish, is interested in moving into a new building and adding development on the parcel. The existing church dates to 1901 and is made of unreinforced masonry.

“Currently, the church lacks the capital to seismically upgrade the building,” said Dawson Marchant, a PSU student on the downtown team.

To finance a new church, the students proposed to sell part of the property for hotel development.

The other parcel is a 0.92-acre lot bordered by Mill and Market streets and Fourth and Fifth avenues. The property is one of the last surface parking lots left in south downtown.

The students proposed a senior housing development on that parcel, which is owned by Willing Co., a foreign real-estate investment group. (The students cheekily referred to their concept for the twin parcels as the God-Willing Development Plan).

Industry experts on the NAIOP panel questioned several aspects of the students’ development proposal, including their concept to demolish the church, a historic landmark, in favor of a new building. The professionals also questioned whether the senior housing project would work if it’s subject to Portland’s inclusionary housing rules.

“The long-term value is not there,” Cador said. “I know your investor is looking for a low-risk project. I think this is a high-risk project.”

Editor’s Note: This story has been corrected from an earlier version that misattributed a quote from Andrew Crampton to another student.

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