A cohort of affordable homeownership projects is emerging in Portland, Milwaukie and Gresham, funded by Metro’s affordable housing bond, that aims to give lower-income residents and people of color a starting rung on the homeownership ladder.

The program is spread among six separate projects totaling 158 units. Metro has committed to date $19 million, or less than 3 percent of the $652.8 million housing bond voters approved in 2018, to homeownership projects.

Nevertheless, it represents an effort by public officials and private developers to expand affordable housing beyond the rental market.

“This particular type of investment is really critical to addressing our region’s housing crisis,” said Patricia Rojas, regional housing director for Metro. “Homeownership is a pillar of the American dream, and it’s a tool that people have been able to use for economic mobility and for building generational wealth.”

The projects are beginning to make their way through permitting processes and into construction. Community Development Partners has submitted an early assistance request to build eight townhomes at the intersection of Northeast Alberta Street and Mallory Avenue in Portland.

The project across the street from the developer’s offices in Alberta Abbey is CDP’s first venture into the tricky world of affordable homeownership. Developers say financing affordable homeownership projects generally is more difficult, with fewer funders and more complications.

“Homeownership is harder to pull together compared to rental housing,” said Sarah Schubert, Northwest development director for CDP. “There’s fewer sources out there. There’s a lot of legal structuring.”

The projects use a variety of funding mechanisms, including Metro bonds; funds from the state Local Innovation and Fast Track Homeownership Program, or LIFT, administered by Oregon Housing and Community Services; local system development charge waivers; and construction loans.

CDP plans to make the three-story Alberta townhomes available to homebuyers at 65 percent of the area median income. Prices are expected to be around $275,000, but that is subject to change according to federal income rules.

“We’re pretty excited about this project, even though it’s small,” Schubert said. “It’ll be a learning experience and helpfully we can replicate it in other areas. We think it’s an important project for the community.”

Scott Edwards Architecture is designing the Alberta Alive townhomes project, which is being co-developed by Self-Enhancement Inc.; no general contractor has been selected.

CDP owns the property, which is currently used as a small surface parking lot. It’s part of a portfolio of socially minded housing projects from CDP and SEI called Alberta Alive that also includes rentals. Some of the projects are on land donated to the Portland Housing Bureau by the Strong family, a prominent Black family in the Alberta neighborhood.

The project originally envisioned rental and homeownership properties on the same lot. But CDP found it made sense to split the projects, which have separate funding mechanisms.

“The homeownership and rental combined didn’t pencil out,” Schubert said.

CDP is interested in building more homeownership projects, the developers said.

“This is a competitive edge we should have over our peers,” said Thomas Eldridge, a CDP development manager who is working on the townhomes project.

Local government housing agencies are increasingly asking for a homeownership component in their requests for proposals, Eldridge said. CDP is eyeing another opportunity in McMinnville that calls for a homeownership component, he said.

The Alberta lot has room for up to 20 units, but local residents made clear that they wanted a less-dense housing project, CDP officials said.

The townhomes will be awarded according to the city of Portland’s North/Northeast Housing Strategy Preference Policy, which weighs the applicant’s historic ties to the neighborhood and the effects of urban renewal and displacement.

“This is a project that’s in North-Northeast Portland, that’s in an area that had a thriving Black community that’s been gentrified,” Schubert said. “It’s pretty significant to be able to provide homeownership opportunities.”

Metro is also looking to boost homeownership by historically marginalized groups that were kept from owning homes by redlining and other barriers.

“That historic practice has had lasting impacts,” Rojas said. “It’s important that we try to reconcile that.”

Metro has awarded funding to projects in jurisdictions that have reached certain affordable housing goals, officials with the regional government said.

The projects use a community land trust model. That places limits on how much appreciation homeowners can realize, providing some protection against a new owner reselling the property for fair-market value.

“They can’t just flip it like a market property,” said Jimmy Oporta, housing coordinator for Metro. “It is intended to maintain its affordability and pass it on to the next homeowner, or maybe even to the next generation of people within that same family.”

The other projects are:

• Carey Boulevard, 53 townhomes from Habitat for Humanity in the University Park neighborhood. Just over half the homes will be for owners at or below 60 percent area median income, and the rest will be pegged to between 61 percent and 80 percent AMI.
• Shortstack Milwaukie is focused on “missing middle” housing, including duplexes, triplexes and cottage courts. The 15-unit project in Milwaukie’s Ardenwald neighborhood will use mass timber to construct two-story homes.
• In Gresham, West Coast Homes and Habitat for Humanity are building 11 two-bedroom townhomes at a mix of income levels. The project is in the Rockwood town center area.
• Twenty affordable homes at Myrtlewood Way, formerly known as Glisan Townhomes, at 17640 N.E. Glisan St. The units range in size, including 13 three-bedroom homes of 1,237 square feet; 5 four-bedrooms of 1,550 square feet; and 2 five-bedroom units of 1,655 square feet.
• In the Hillsdale neighborhood, Gooseberry Trails will have 52 units from Habitat for Humanity ranging from two to five bedrooms. The 5-acre development will feature shared green space, a playground and potentially a community garden. Construction began in July.

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The city of Portland is forging a new program to provide affordable commercial space in city-owned buildings.

The will offer leases below market rate and technical assistance to selected commercial tenants, with a preference for businesses owned by women and persons of color.

At first, the city is offering affordable commercial space in four buildings where projects managed by Prosper Portland are ongoing. The buildings are Alberta Commons in Northeast Portland, the Southwest 10th Avenue and Yamhill Street parking garage in downtown and two small buildings at Southeast 92nd Avenue and Foster Road in Lents: Oliver Station and Lents Commons.

In total, the available space represents at least 12,000 square feet – and likely more after the parking garage’s affordable retail space is determined.

Prosper Portland has received more than 30 applications for the program, said Alison Wicks, a project coordinator for the city agency. It’s accepting applications for the first three buildings; the 10th & Yamhill garage will open for applications at a later date.

The program has been a “long time coming,” Commissioner Nick Fish said. The city missed opportunities to maintain affordable commercial space during the most recent recession, he said.

“We were building very attractive affordable housing developments throughout the city, but we never viewed the commercial spaces as a community asset,” Fish said during a City Council meeting last week. “In fact, in many ways, we got it completely wrong.”

Nonprofit housing developers were not able to effectively use the ground-floor commercial spaces in affordable housing developments, Fish said.

“It was not in their wheelhouse to know how to market it and sell it,” he said. “That was not their core expertise.”

Mayor Ted Wheeler said the program is emblematic of a recent refocus in mission at Prosper Portland, which in May rebranded (the agency was formerly the Portland Development Commission) to place a greater emphasis on equity and shared prosperity. In August 2016, Kimberly Branam was promoted to executive director. Seats on the agency’s board have turned over too.

“I’m thrilled with the new direction of Prosper Portland, and I think this is a great example of the direction we’re going to see Prosper Portland go under new leadership,” he said.

The program is in part a reaction to increased rental rates and scarce vacancies, Wicks said. But affordable commercial space is needed for businesses owned by women and persons of color in any economy, she said.

“Those are businesses that will consistently have barriers to entering into a retail space,” she said. “That’s something that even in a downturn would be exacerbated.”

Prosper Portland is looking to form an ongoing partnership with the Housing Bureau to provide affordable commercial space, said Kyra Straussman, Prosper Portland’s director of development and investment.

“What’s happening here is an innovation nationally, so it’s not like we have a lot of examples to run with,” Straussman told the City Council.

Alberta Commons will have about 5,100 square feet in total for four program participants, who will receive business coaching from Micro Enterprise Services of Oregon, a Portland nonprofit group.

Lents Commons will have 3,725 square feet of affordable commercial space, likely split between two tenants, Wicks said.

Oliver Station will have approximately 4,000 square feet of affordable commercial space through an agreement with developer Palindrome Communities, likely divided by two to three tenants.

The downtown parking garage, which is on the verge of a major renovation, will have 21,000 square feet of commercial space, although it’s unclear how much of that space will be dedicated to program participants.

Prosper Portland is working with brokers on each project now, and is in discussions with prospective tenants, Wicks said. Some tenants could be chosen by the end of the year, with tenant build-outs beginning in early 2018.

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The developer of a Northeast Portland commercial site has applied for adjustment review to serve a proposed two-building project.

Notices have gone out to neighbors of the property on the northwest corner of Northeast Martin Luther King Jr. Boulevard and Northeast Alberta Street. Applicant Phillip Brown of Majestic Realty plans to build 20,000 square feet of leasable space, plus 93 surface parking spaces, according to plans submitted to the Bureau of Development Services.

The site is bisected by a public alley, and current plans call for 27 spaces to be configured so that drivers must back out using the alley. That aspect triggered the adjustment review.

In this instance, the Portland Zoning Code allows up to four parking spaces to be designed so that vehicles back out into the alley.

The 1.67-acre property (composed of seven adjacent vacant parcels) is owned by the Portland Development Commission and located in the King neighborhood. Majestic has proposed building a retail shopping center, with Colas Construction as the primary contractor. A letter of intent was signed for Colorado-based Natural Grocers to be the anchor tenant, after Trader Joe’s declined.

A decision on the use of the alley will be made by BDS staff. Written comments will be accepted up to 5 p.m. on Feb. 2.

Plans accompanying the notice were prepared by Portland firm Mackenzie.

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The Portland Housing Bureau is moving full steam ahead with plans to build more affordable housing in North and Northeast Portland.

Since the Portland City Council last week unanimously approved a proposal for implementing Mayor Charlie Hales‘ pledge to invest $20 million to increase access to affordable housing in those neighborhoods, PHB staffers have worked on initial steps, said Traci Manning, the bureau’s director.

The five-year strategy aims to address concerns about a history of gentrification in the area. The proposal is based on feedback gathered during an extensive community outreach campaign and calls for construction of at least 100 new units of affordable housing.

“The team is churning away as we speak,” Manning said. “Creating the affordable homes will take a bit longer, but we’d like to move on those right away.”

One of the first projects expected to benefit is a $4.5 million, 40- to 80-unit affordable housing complex with ground-floor retail space on a 32,400-square-foot, city-owned lot known as the Grant Warehouse site, at Northeast Martin Luther King Jr. Boulevard between Northeast Cook and Ivy streets. Plans call for larger, family-size units and family-friendly amenities.

Manning said she was unsure when the city will start soliciting proposals from firms interested in designing and constructing the complex, but noted that a project timeline will likely be established in the next couple of weeks.

Another $3.5 million investment will create 30 to 60 affordable housing units via redevelopment of additional properties owned by the city, Multnomah County, nonprofit agencies or private developers. Identifying these properties will be a long-term effort in collaboration with the Portland Development Commission and the resulting projects aren’t scheduled to move forward until 2017, Manning said. At this point, no sites have been selected for future affordable housing projects in the area, she said.

“I have nothing in my sights right now,” she said.

The PHB also plans to spend $3 million to buy more land for future affordable housing projects. The remaining $9 million will be spent helping homeowners repair their properties and creating homeownership opportunities.

Along with the $20 million investment, the housing strategy calls for increasing the PHB’s goals for hiring minority-owned, women-owned and emerging small businesses to work on affordable housing construction projects. The bureau’s current MWESB subcontracting goals are 20 percent of construction costs, but officials would like to increase that percentage for projects in North and Northeast Portland, Manning said.

This goal, along with plans to include construction trade pre-apprenticeship programs on affordable housing projects in the area, will be achieved through a continued partnership with the National Association of Minority Contractors‘ Oregon chapter, she said.

“It’s important to us, but we don’t know how we’ll work it out,” she said. “People want jobs … The economic benefits that accrue will accrue to the community.”

While developing the affordable housing strategy, PHB staffers also worked closely with industry firms with extensive experience in the area, such as Portland-based Colas Construction and Carleton Hart Architecture. Carleton Hart principal Bill Hart said city staffers reached out him for feedback on the proposal because the firm has designed a lot of affordable housing projects in those neighborhoods.

The mayor’s pledged investment in affordable housing stems from concerns raised by community members over the lack of transparency in a November 2013 PDC deal to sell the 1.79-acre lot at the corner of Martin Luther King Jr. Boulevard and Northeast Alberta Street to California-based Majestic Realty.

The developer planned a commercial development that included Trader Joe’s as an anchor tenant. Amid the controversy, Trader Joe’s pulled out in February 2014. Natural Grocers has since signed a letter of intent to take its place. Colas Construction crews are scheduled to start work on the project this month.

Meanwhile, an oversight committee will be formed by this summer, Manning said. Members will hail from the targeted neighborhoods and oversee all projects that result from the five-year plan. This will help combat a long history of input from North and Northeast Portland residents being left out of city development plans, Manning said.

“The idea of this committee is it is community-based,” she said. “Anybody funded under the plan will report to them.”

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Portland-based Colas Construction, a minority-owned firm, is getting its foot in another doorway via a deal to build a high-profile grocery store and adjacent commercial building in Northeast Portland.

That agreement between Natural Grocers, the Portland Development Commission and Majestic Realty, announced by the city Thursday, will bring the Lakewood, Colo.-based grocer to a site previously pegged for a Trader Joe’s store.

For Colas Construction, which had been selected as the builder for the Trader Joe’s store, the agreement represents a huge opportunity to grow and for minority-contracting firms to take on more such projects in the future, said Andrew Colas, the firm’s president and co-owner.

“There are a lot of barriers in the construction industry,” he said. “If you don’t have a portfolio for a certain type of work, it’s difficult to get that type of job. We haven’t built a grocery store before, but every company needs that first opportunity.”

Since Trader Joe’s announced in February that it was pulling out of the project, Colas Construction had worked with Majestic Realty to identify cost estimates for potential alternatives. Then Natural Grocers, which has four other stores in the Portland area, signed a letter of intent to open a store at the site – Northeast Martin Luther King Jr. Boulevard and Alberta Street.

The road to Majestic Realty’s deal with the contractor began via Colas’ longtime friendship with Adam Milne. He owns Old Town Pizza, which is located near the 1.79-acre property that Majestic Realty purchased from the PDC in November.

Majestic Realty officials reached out to local business owners around the property, and Milne recommended that they speak with Colas. That meeting, however, was just the first step, Colas said.

“I’ve met with countless developers, but at the end of the day they prefer to work with someone who has done those types of projects before,” he said. “There are countless barriers to getting that first job.”

The connection led to a lunchtime meeting with Edward Roski, Majestic Realty’s president and chairman who also is a co-owner of the Los Angeles Kings and Los Angeles Lakers franchises. The meeting brought out a deep connection between the two business owners, Colas said.

“He was not looking for a company that had built 10 other grocery stores,” he said. “He was intrigued because he was the same age as I was when he took over his father’s business. Both of us were second-generation companies. He wanted a family-owned business (to build the project).”

While Colas Construction has self-performed bigger projects than the estimated $8 million Natural Grocers project, including the $14 million IronCrest Estates project in Gresham and the June Key Delta Community Center project in North Portland, this will be the company’s most highly visible project to date, Colas said. His hope is that it will spur growth.

“There’s certain barriers you have to overcome as a small growing business,” he said. “We want to grow so we can continue to hire a diverse workforce.”

Majestic Realty ultimately chose Colas Construction, PDC spokesman Shawn Uhlman said, because it knew the contractor could do the work.

“Considering Majestic is a large real estate development company, they had the opportunity to choose any contractor they wanted,” he said. “Colas was chosen based on who they are, what they do and how they do it. They weren’t given this. They earned it.”

Community leaders who previously expressed concerns about the lack of transparency in the PDC’s sale of the 1.79-acre lot to Majestic Realty in November, were always on board with the project being built by a minority-owned firm.

“Northeast leaders were very excited about (the agreement),” said Dana Haynes spokesman for Mayor Charlie Hales. “They believe it will promote jobs in the area and are excited that it’s Colas Construction that will be doing the work.”

The design process will include development of a community benefits agreement, which will guide minority contracting goals and how they are met through the development process, Haynes said.

�ճ����Portland Housing Bureau also announced a series of workshops featuring discussions about how to create an affordable housing strategy for the area. The city plans to invest $20 million in affordable housing in North and Northeast Portland over the next five years. The first workshop will be held Sept. 18 at 6:30 p.m. at the Highland Christian Center in Northeast Portland.

Construction of the Natural Grocers-anchored development will begin by February 2015, Colas said.

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After a highly publicized debate over gentrification killed a proposed Trader Joe’s development in Northeast Portland, Mayor Charlie Hales is looking to commit $20 million to combat displacement and spark resurrection of the $8 million project.

The Portland Development Commission planned to sell a 1.79-acre parcel at the northwest corner of Northeast Martin Luther King Jr. Boulevard and Alberta Street to Los Angeles-based developer Majestic Realty for construction of a 20,000-square-foot retail center. Proposed anchor tenant Trader Joe’s pulled out after community stakeholders targeted the project amid claims that the PDC’s actions, past and present, were causing displacement of longtime residents.

The controversy even received national attention when talk-show host Conan O’Brien about it in a monologue.

On Monday, following a meeting with members of the African-American community in Northeast Portland, Hales announced that he would reach out to Trader Joe’s.

Dana Haynes, spokesman for Hales, said that after the retailer pulled out, the mayor’s office received hundreds of comments from residents, business leaders and African-American community stakeholders who said they supported the project.

“The mayor wants Trader Joe’s to know that,” Haynes said. “The reason he called the meeting … was to say, ‘Look, I really want to go after this thing, but I need to tell them I’m going with wholehearted support.”

Some of it came via an online petition that the Oregon chapter of the National Association of Minority Contractors initiated; it called on the mayor to bring a commercial project to the site. The petition pointed out that, though the property is zoned for commercial and residential use, site constraints make mixed-use development too costly. The organization also noted that upwards of $15 million in subsidies could be required to make an affordable housing project feasible. NAMC-Oregon suggested that other sites would be more appropriate for affordable housing; its plea has garnered support from approximately 700 individuals.

Cyreena Boston Ashby, director of the Portland African American Leadership Forum, which criticized the development plan, said in a prepared statement that her organization never opposed Trader Joe’s, but rather a lack of transparency and community engagement in the city’s land development processes.

Hales is now proposing to set aside $20 million in tax increment financing over five years for new affordable housing projects in the Interstate Corridor Urban Renewal Area. That plan would need to be approved by the PDC’s board of commissioners and Portland City Council, but Ashby said it would be a victory for all people who have been displaced and marginalized over the past 20 years. PAALF could not be reached immediately for comment, but Haynes acknowledged its objections.

“We heard there are historic problems that the city needs to own about investments and disinvestments that have had consequences – unintended and intended,” he said. “Absolutely there is a historic tradition of not doing well by certain parts of our community. Having said that, Trader Joe’s would mean jobs and economic vitality for that region.”

The $20 million injection would add to $16.6 million currently earmarked for affordable housing in the area. Shawn Uhlman, spokesman for the PDC, said accounting details will be ironed out in early April during a series of budgetary work sessions.

The PDC also is proposing creation of a Community Benefits Agreement for the Trader Joe’s site. It would include goals for minority contracting, as well as a commitment that 50 percent of tenants in the development’s second building be local businesses. Haynes said city staffers have already contacted the retailer and Majestic Realty to discuss the prospect.

Approximately 50 community members attended Monday’s meeting with Hales. He said in a prepared statement that the city could not change the past, but it could learn from it to create a future where longtime African-American community members enjoy new economic opportunities.

“Step one is to get this popular grocer to come back to the table,” Hales stated. “That will mean jobs. Step two is our commitment for more affordable housing. That will keep people from being displaced. Step three will be a long-term commitment to the economic vitality of the Interstate Corridor area. And that’s going to take all of us as a team.”

Getting there, however, will require some legwork.

“Let’s not sugarcoat this,” Haynes said. “It will be an uphill climb. When Trader Joe’s said they were moving on, they walked out the door … The mayor’s job is to get them to walk back through the door.”

Meanwhile, Andrew Colas, president and chief operating officer of Colas Construction – the general contractor chosen for the project – recently traveled to Los Angeles to talk with development stakeholders.

“I went down there and I met with Majestic, and I met with representatives from Trader Joe’s,” said Colas, who also is the president of NAMC-Oregon. “And really, the biggest thing was I presented the petition that NAMC-Oregon put together to support bringing the project back … I left the meeting cautiously optimistic that there was a chance that they might come back.”

He added that the two groups were waiting to hear from Hales.

The post Hales encouraging Trader Joe’s project revival appeared first on Daily Journal of Commerce.

The deal is off.

After facing opposition for nearly three months, Trader Joe’s is pulling out of a city-sponsored development in Northeast Portland, and the developer, Majestic Realty Co., is putting its efforts on ice.

The news is a major blow to Vanport Square business owners, who lauded the project for the increased traffic they expected it to bring to their isolated center. But the announcement also is a big coup for the Portland African American Leadership Forum, which is battling gentrification in the area.

“This is a people’s movement for self-determination,” said Steven Gilliam, a member of PAALF, at a press conference at the site on Monday. “Our opposition to this development was and always will be rooted in the broken promises of the past that the (Portland Development Commission) and the city have made. We have from day one insisted that low-income housing be included as part this development. This was not about Trader Joe’s. This was about the displacement of our people from inner Northeast Portland, and the failure of the Portland Development Commission to stop that displacement.”

According to PAALF, more than 10,000 African-American community members in North and Northeast Portland were displaced to the outskirts of the city between 2000 and 2010. The organization now is seeking to create opportunities through development for some of those people to return.

In November, PDC commissioners voted to sell the 1.79-acre parcel (on the northwest corner of Northeast Martin Luther King Jr. Boulevard and Alberta Street) to Majestic Realty for a discounted price of $502,160. The property’s appraised value of $2.87 million was based on its potential to accommodate mixed-use housing, but Majestic doesn’t develop housing.

Instead, it proposed constructing two retail buildings totaling 20,000 square feet, and surface parking for 100 vehicles. The vacant site previously failed to attract much interest from developers since Vanport Square was constructed in 2008.

Trader Joe’s did not respond to requests for comment, though it did issue a succinct statement through its director of public relations, Alison Mochizuki.

“Given negative reactions from the community – about our arrival, we will not be opening a store in the area,” Mochizuki stated. “We open a limited number of stores each year, in communities across the country. We run neighborhood stores and our approach is simple: if a neighborhood does not want a Trader Joe’s, we understand, and we won’t open the store in question.”

Majestic also declined to comment beyond a prepared statement, saying that it has decided to take a “time out” from the project so that the PDC and the community at large can discuss some of the “larger issues” at hand.

Adam Milne, the owner of Old Town Brewing Co. – one of the 16 businesses at Vanport Square – declined to comment on the news, but issued a prepared statement.

“Today is a disheartening day,” he stated. “The promise of a few blocks of walkable retail was the main reason the small businesses of Vanport Square risked everything to locate on MLK. Trader Joe’s would have been so good for our neighborhood. There aren’t any winners today. Only missed tax revenue, lost jobs, less foot traffic, an empty lot and a boulevard still struggling to support its local businesses.”

In a similar joint statement from Portland Mayor Charlie Hales‘ office and the PDC, the city said it respects the decision made by Trader Joe’s and Majestic, but considered it a loss for Northeast Portland. On Friday, the PDC announced that it would take steps to improve its communication with the community, such as creating a citizen work group to direct future city investments and forming a project-specific community benefits agreement. Shawn Uhlman, spokesman for the PDC, said the city intends to stick to those plans, though it’s not certain yet when and how.

Another casualty of the development’s derailment is Colas Construction. On Friday, the minority-owned company had been named by Majestic as its general contractor for the $8 million project. Shortly after receiving word of Majestic’s choice, Andrew Colas, the company’s president and second-generation owner, said similar opportunities don’t come along often. He said his company’s selection would ensure that other minority-owned and women-owned businesses would be able to participate.

During Monday’s press conference, media questioned PAALF members about how their efforts had resulted in a lost opportunity for Colas Construction. Gilliam replied that PAALF’s efforts were never about one company, but about mitigating displacement. He added that Trader Joe’s pulling the plug didn’t disqualify Colas, or other minority-owned firms, from competing for future work on the site.

“I think the demands we’re making, if honored, will help address some of the structural racism in our community that undermine the wealth, and the individual success of specific businesses, like Colas,” said Rachel Gilmer, director of PAALF’s Leadership Academy, a training program.

PAALF called for public account of all tax increment financing dollars spent in the Interstate Corridor Urban Renewal Area to date; creation of a legally enforceable community benefits agreement to ensure that employment opportunities go to members of the area’s African-American community; and creation of a Vanport small business assistance fund to help support the 16 small businesses at Vanport Square while community members develop a new plan for the adjacent site.

PAALF expects that process to progress over the course of several community visioning sessions, and is slated to announce the time and location of the first meeting on Tuesday.

The post Trader Joe’s a no-go in Northeast Portland appeared first on Daily Journal of Commerce.

Andrew Colas, president and second-generation owner of Colas Construction, has always wanted to see his company’s sign on the heavily traveled stretch of Northeast Martin Luther King Jr. Boulevard. He considers selection of his firm to serve as general contractor for an $8 million project in the corridor a milestone, professionally and personally.

“We’re an African-American-owned construction company,” he said. “I drive through Martin Luther King Jr. Boulevard pretty much on a daily basis, and as a contractor I’ve always wished you could see a construction company that is African-American building on this historic street. It’s something that has a lot of meaning.”

The Portland Development Commission earlier this week announced that Majestic Realty Co. chose Colas Construction to build the planned Trader Joe’s development at the northwest corner of Northeast MLK Jr. Boulevard and Alberta Street. There will be two buildings totaling 20,000 square feet and surface parking for 100 vehicles; one building will house Trader Joe’s, and the other will hold smaller retailers.

The project has been a source of debate since November, when PDC commissioners voted to sell the 1.79-acre property at a huge discount to Majestic Realty. While nearby business owners hailed the project, other community stakeholders began rallying in opposition, arguing that it would contribute to ongoing gentrification.

On Wednesday, Dedrick Muhammad, the senior director of the NAACP National Economic Department, published a in the Huffington Post that spotlighted the proposed development, as well as Portland, as a case study in gentrification and economic disparity. On Monday, the Portland African American Leadership Forum will hold a press conference at the development site to discuss those issues, as well as possible development alternatives. PAALF declined to comment on the selection of Colas Construction as general contractor.

Colas is acutely aware of that debate, but said the selection of his company to manage construction of the project will give him the opportunity to distribute work to other minority contractors.

“We probably talked to four to six different contractors over the last few months,” said Phillip Brown, a project manager for Majestic Realty. “Colas was one of those, and they came recommended to us both by business owners at Vanport (Square), as well as a few other people in town … We felt like Colas was the most qualified.”

Brown said Colas Construction’s status as a minority-owned business did not sway Majestic’s decision. Its agreement with the PDC, he said, stipulated that a certain percent of the contractors hired would be minority-owned, women-owned, and emerging small business certified.

As to the possibility of the development becoming mixed use, Brown said Majestic does not do residential development, and that the company’s plan is based on a study conducted by the PDC in 2000 identifying a need for a grocery store on the site. He said Majestic has performed a huge amount of community outreach in recent weeks to determine whether that plan is still valid.

“I know 100 percent of the people aren’t going to agree with us as to what should be on that site,” he said. “That’s why we’re trying to get a general consensus as to what the community wants. So far, especially in the last two weeks, we’ve had a significant amount of support from residents and people saying, ‘Hey, we like what you’re doing. Please do it. Don’t give up on this project.’ ”

Incidentally, Aneshka Dickson, the vice president and chief financial officer of Colas Construction, and Colas’ sister, is also a PDC commissioner. She said, however, that there is no conflict of interest in this case because she recused herself early on from the PDC’s decision-making process.

“If there’s any job that could be a potential conflict of interest, even if we’re just looking at it, or bidding it, or talking to someone – it might have nothing to do with the PDC – I always just want to be very careful that construction work that we look at or consider, that I don’t vote,” she said.

While Colas has partnered with R&H Construction on several larger projects in the past, Dickson said the company is taking this one on alone. It won’t be the firm’s largest project – her father once managed a $13 million project in Gresham – but it’s perhaps the most significant.

“I think it’s the largest in terms of the impact for a company like ours because we’re working with a national firm,” she said. “It’s also on the boulevard, and when people of color are constantly going down that street, and you see a lot of development, and projects happening, there’s a certain desire that you have to be a part of that.”

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African-American community stakeholders’ opposition to the proposed Trader Joe’s development in Northeast Portland isn’t about the retailer. It’s about a reckoning — for the city of Portland and the Portland Development Commission.

“They need to have a reckoning, and they really need to tell the truth about themselves, and they need to own up to the fact that they have not done business correctly,” said Cyreena Boston Ashby, director of the Portland African American Leadership Forum. “There needs to be a conversation about how they do business moving forward … This is not about Trader Joe’s. It’s not about a food desert. It’s about not lying (and) not doing secret, clandestine deals with a developer in California around the corner, and letting it be disclosed by the media last minute. That’s unacceptable.”

City-sponsored development in the Boise and Eliot neighborhoods – once the heart of Portland’s black community – has forced out countless residents, according to PAALF. The organization’s opposition to the Trader Joe’s project is rooted in a message it wants to deliver to future developers in the area: It won’t stand for it anymore.

A look into the past

The subject came to a head in November, when the PDC announced that it would subsidize the sale of a 1.79-acre parcel of vacant land on Northeast Martin Luther King Jr. Boulevard. The buyer was California-based Majestic Realty, which was planning a development featuring an unspecified grocer. Minutes before voting to approve the sale, PDC commissioners revealed that the tenant was Trader Joe’s – a detail the agency could not disclose beforehand due to a confidentiality agreement.

PAALF considered the announcement a slap in the face. Just one month before, the group invited PDC Executive Director Patrick Quinton, Portland Mayor Charlie Hales and other senior staffers to a bus tour of Northeast Portland. It was a ghost tour of sorts, in which the bus visited sites where once-important community landmarks were lost to gentrification.

Quinton said the tour offered compelling insight into the community.

“It’s really powerful to hear the stories of some of the longtime residents, of how things used to be and the sense of loss,” he said. “… There was a time when the agency viewed any outside investment in an under-invested neighborhood as a positive thing, without regard for what the use was of that investment or who would benefit from it.”

Part of the PAALF’s objective for the tour was to help city officials visualize the community’s story. But it was also about getting gentrification objections on the record.

“Our definition going forward is: ‘the forced removal and population replacement from land of one group by another,’ ” said Avel Gordly, a community activist and former state senator. “Gentrification is a process, not just an event. It is intentional and planned with specific policies, programs and development decisions used to accomplish the objective of moving one group of people out, and another group of people in. Specifically in Portland, it’s resulted in the forced removal of African-Americans to the outskirts of the city while middle- and upper-income whites moved in.”

According to data compiled by Portland State University, while the Eliot neighborhood’s black population declined roughly 15 percent from 2000 to 2010, its white population grew more than 17 percent. The Boise neighborhood’s black population shrank 21 percent over the same period, as the white population nearly doubled to 63.8 percent of the total.

Those neighborhoods developed in part as a result of the real estate community’s refusal during the first half of the 20th century to sell property to African-Americans anywhere else in the city. Gordly’s parents were able to purchase their home on North Williams Avenue (a home they still own today) only with the help of a Jewish friend who posed as the buyer.

Under the banner of urban renewal, hundreds of black families were displaced in the 1950s and 1960s to make way for numerous construction projects. The first rerouted Interstate 5 through residential neighborhoods in east Portland; the second created Memorial Coliseum; the third was a planned Emanuel Hospital expansion that never happened.

Eager for a remedy

Fast-forward to 2013, and PAALF isn’t merely seeking a solution. It wants restitution.

“We’re in a place where we really can’t move forward unless we remedy the past,” said Rachel Gilmer, director of the African American Leadership Academy, a PAALF training program.

Following the PDC’s approval of the Trader Joe’s deal, PAALF sent a to the city demanding immediate suspension of that project as well as all development in the Interstate Corridor Urban Renewal Area (ICURA), until it is allowed to weigh in with more sustainable development models. The organization is researching several options, including creation of new community land trusts, limited-equity housing cooperatives and housing trust funds. Ultimately, PAALF’s hope is to create opportunities for displaced neighborhood residents to return.

Late last week, the PDC responded to PAALF with a letter signed by Quinton and Hales, acknowledging that its role in North and Northeast Portland had “contributed to the destructive impact of gentrification and displacement on the African-American community.”

Quinton, however, said that times have changed. Rather than stop all work in the area, he’s hoping to blaze a new trail.

“I don’t think that it’s reasonable to put a halt to all the work we’re doing in North and Northeast Portland, including the Trader Joe’s development,” he said. “What I do think we take away from the letter that’s constructive is there is a strong need for folks from PAALF and other community leaders to come together around a conversation about what we can do more to promote economic development for longtime residents in Northeast Portland, and the African-American community.”

The PDC’s letter cites numerous ongoing initiatives to assist minority-owned businesses and low-income residents in the neighborhood. For example, the PDC is committed to investing 30 percent of tax increment financing in affordable housing – a policy that has put approximately $36.9 million into play since 2001, according to the agency. The letter also refers to a 2008 “Gem List” that identifies a series of community development objectives in the ICURA.

The last straw

Specifically, PAALF’s beef with the Trader Joe’s development comes down to three issues: the central employment (EX) zoned property won’t include any housing; it lacks a community benefits agreement; and the PDC is granting a sizable subsidy (approximately $2.37 million) to a wealthy, out-of-state company rather than one based in the community.

Quinton responded that the PDC has pitched the property to developers for 10 years with little interest, much to the dismay of business owners at adjacent Vanport Square. The Trader Joe’s project will be the third phase of that development, which created shop space for 16 businesses with a promise to follow up with an anchor business. The PDC is now fulfilling that promise.

Meanwhile, PAALF questions the city’s commitment to the black community in North and Northeast Portland, and is calling for systemic change.

“Going forward, everything we do has to be about the intentional making right – making policies that are fair, just and equitable,” Gordly said. “And having people in place that have those principles embedded in their DNA – and if they don’t, they don’t get to work in this arena.”

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