The Portland Development Commission board today agreed to delay redevelopment on the parking structure at Southwest 10^th Avenue and Yamhill Street to assure developers of the nearby Galleria Building that there will be parking available for an incoming Target store.

As the Daily Journal of Commerce reported earlier this week, Target is in the process of finalizing a lease in the historic Galleria Building. The PDC did not identify Target as the potential tenant of the building, but the resolution identified a “retail use of approximately 80,000 square feet.”

According to , the commission has reserved funds for a potential redevelopment project at the 10^th and Yamhill garage, which is owned by the city of Portland. The report stated that the retailer that plans to move into the building “requires assurance” that there will be no reduction of parking in the garage for the first two years it is open – a period slated to end in 2015.

At this morning’s PDC board of commissioners meeting, the board unanimously passed a resolution to authorize the agreement with Galleria Building owner Bill Naito Company. The agreement will require Target to begin construction on the store by May 15, 2012 and to occupy at least 80,000 square feet, and in return the PDC won’t reduce the amount of parking available in the 10^th and Yamhill garage until two years after the store opens.

PDC Board Chair J. Scott Andrews said the agreement makes sense for the PDC and won’t delay any projects to redevelop the 10^th and Yamhill property, which are already a few years off. He added that the retailer is expected to create jobs and foot traffic downtown.

The post PDC strikes parking garage deal with downtown Target store appeared first on Daily Journal of Commerce.

Target is finalizing its lease agreement to open a store in downtown Portland, according to sources close to the deal.

The Historic Landmarks Commission on Oct. 10 unanimously approved alterations to the Galleria Building, which occupies the entire city block bounded by Southwest Morrison and Alder streets and Southwest Ninth and 10th avenues. Because the building is listed on the National Register of Historic Places, approval for the exterior alterations was the last major hurdle related to city requirements.

The 101-year-old building, initially home to the Olds, Wortman & King department store, needs several significant modifications in order to accommodate Target. Even though the building has been altered many times over the years, the addition of loading bays for supply trucks was a tough sell to some preservationists. But the building’s owner, the , and architecture firm in May requested design advice from the Historic Landmarks Commission as they moved forward with the development.

Renderings and documents submitted to the city confirm Target’s involvement, although neither the owner nor the architect could identify the incoming tenant on the record.

“The city is getting the preservation and maintenance of an important building in the downtown core, and also getting use out of it,” said Carrie Richter, chairwoman of the Historic Landmarks Commission.

The entrance of a national big-box retailer into the historic building required some compromises from both sides, but people involved with the project seem satisfied with the approved plans.

“I’m pleased that a resolution was reached,” said Art DeMuro, who was the chairman of the Historic Landmarks Commission when the request for design advice was submitted, but whose term ended last month. “I know there was a lot of excitement about accommodating that particular user and it’s great that there was a resolution not only to accommodate them, but to actually improve the historic integrity of this very significant building.”

DeMuro, who reviewed all alterations made to the building over the years in response to the request for design advice, suggested historic refurbishments that would make the next remodel a “net gain” for the building. Adherence to the commission’s design advice was critical, according to project architect Phil Chubb.

“We took the feedback to heart,” he said, “and the Naito Company was willing to do the things that would help clean up some of the conditions at the Galleria that the landmarks commission was interested in doing.”

One of the most significant changes to the historic facade will be the addition of loading dock doors so that Target trucks can enter and exit the building from Southwest Alder Street. But the design team came up with an innovative solution.

“Those doors will be one-of-a-kind – totally custom,” Chubb said. “We’re spending quite a bit of money to make the loading dock doors as invisible as we possibly can – and that was really important to the landmarks commission and to us, but it’s not an easy thing to do.”

A state-of-the-art seismic upgrade also is planned.

“Never mind the exterior improvements to the look of the building; the bones being reinforced are critical – that’s a huge step to the building’s historic integrity,” said Tim Heron, city planner for the Bureau of Development Services. “It won’t fall down if we get a shake, which we all know we’ll get sooner or later.”

The Nines Hotel and Portland State University’s Lincoln Hall are the only two buildings in Portland to feature the braced-frame technology planned for the Galleria. The so-called viscous dampers were adopted from a device used on military cannons to absorb recoil shock. Unlike a more conventional bracing system, the dampers don’t need to be stacked throughout the building or installed along its perimeter.

“The Galleria is full of existing tenants, each with peculiar needs, and this allows the flexibility to place lateral frames at positions that work for everyone instead of being this invasive thing,” Chubb said.

The design also includes a custom replica of the historic entry canopy on 10th Avenue.

Costs related to the marquee, seismic upgrade and custom loading dock made some of the other suggested improvements untenable. Some minor changes made in the 1970s, when the building was turned into the Galleria Mall, will remain as is, according to Chubb.

Target will lease approximately 100,000 square feet of the Galleria Building, which presently houses Brooks Brothers and other tenants. The retail space will be split between 40,000 square feet on each of the second and third floors; a ground-floor lobby and the loading dock facility will account for the remaining 20,000 square feet.

The main entrance to the Galleria will remain on 10th Avenue, but Target will have its own entry off of Morrison Street, near 10th Avenue, leading to its ground-floor lobby.

“It’s really just a nice return of that building to a full retail sort of facility, and it just happens to be a building that takes up a whole city block and can provide that kind of floor space for downtown retail use,” Chubb said. “It’s a nice marriage of modern retailing and a downtown site like that.”

The post Target finalizing lease for downtown Portland store appeared first on Daily Journal of Commerce.

faced an interesting challenge when it was tasked with renovating a space for Willamette Family Medical Center in Salem. The challenge was in the plug: the center’s new building was a former Circuit City building, and that building’s distinctive “plug” was hard to cover up.

The architects estimated it would cost $84,000 to revamp the entry system—but that line item was pulled in budget reviews.

So they painted it.

Specifically, designers on the project researched something called , a painting design used in World War I to make battleships seem smaller by breaking up their shapes with jagged colored lines.

The designers had to reduce the scale of the “plug” and the building solely through paint.

“We tried to distance ourselves as much as we possibly could (from the old design),” said project manager Ben Taylor. “It’s not ‘Circuit City’ red.”

The creative solution was a necessary one for the medical center: the renovation penciled out to about $100 per square foot.

The team also used painting techniques to bring the big box down to the pedestrian scale, addressing a problem that Taylor said is typical of big-box buildings.

“Not much is done (on big-box buildings) to provide order or repetition on a facade that makes it more pleasing to walk against,” Taylor said. Their renovation attempted to solve that problem.

Clark/Kjos is far from the only firm that has been faced with the challenge of redefining a Circuit City.

When Circuit City went bankrupt in 2009, it left 771 U.S. locations, many with the signature “Circuit City plug” entryway. Some new tenants or owners were able to afford to remove the plug. And many weren’t. (More examples and photos after the jump!)

John’s Incredible Pizza in Tigard is an example of a project that embraced the Circuit City entryway and moved it forward. Its playful over-sized doorway is its own signature structure. (Read our story about that renovation: Subscription required.)

Those who took over other locations have not been so successful at camouflaging the building’s distinctive shape. How obvious is it that these buildings are housed in the former home of a bankrupt technology reseller?

The post Hey, didn’t that building use to be a Circuit City? appeared first on Daily Journal of Commerce.

Real estate development these days can require finding new purposes for empty buildings so that inactive areas can be reinvigorated.

That kind of business suits Corvallis-based Dickerhoof Properties.

“Building new is kind of boring because you know what’s going to happen,” said Darren Dickerhoof, a partner in the company. “There’s just something exciting about tearing into a wall of an older building. You never know what you’re going to find.”

Darren Dickerhoof and his father, Gene, and his brother, Matt, have found a niche over the last decade buying past-their-prime shopping outlets and vacant big-box stores and then converting them into smaller, modern retail spaces.

The Dickerhoof brothers grew up helping their dad build high-end homes in Carmel, Calif., and Pebble Beach, Calif. Both Darren and Matt pursued construction engineering management degrees at Oregon State University. Gene later joined his sons in Corvallis, and the Dickerhoofs began building homes. Eventually, they turned to rehabilitations of commercial spaces such as office buildings and apartment complexes.

Then, in 2001, the Dickerhoofs purchased a large, aging retail center in Corvallis. They spent $500,000 remodeling it into a neighborhood shopping center anchored by a Grocery Outlet. That project set them on their way.

“Since our first project we’ve stuck exclusively with retail,” Darren Dickerhoof said. “We’ve repositioned about 650,000 square feet of retail over that time and built about 100,000 square feet of new retail space.”

In one project, the company purchased the nearly vacant Jefferson Square Mall in Klamath Falls and converted it into a modern shopping development with spaces for Petco, Office Depot, Borders and Famous Footwear.

Earlier this month the Dickerhoofs purchased a vacant Costco building in Warrenton. They plan this summer to tear half of the building down and convert it into parking. The remaining space will become three retail spaces; Big 5 Sporting Goods and Jo-Ann Fabrics & Crafts have signed leases, and 6,700 square feet of space is available. More than three acres of the original parking lot was sold to neighbor retailer Fred Meyer.

The biggest reason for buying old buildings instead of building new ones, Darren Dickerhoof said, is that shopping centers and big box stores are always in the best locations for retail. Moreover, communities often grow around large retail developments. This is an attractive selling point to national retailers, he said.

The Dickerhoofs also have discovered that, especially in Oregon, government officials and community members prefer projects that use existing buildings rather than build new green ones.

“It’s a lot less of a headache, that’s for sure,” Darren Dickerhoof said. “People see it as more of a community benefit – which it is – than building on an empty lot.”

The company’s efforts received recognition from both the city of Klamath Falls and the city of Corvallis. Dickerhoof Properties also has built relationships with national retailers such as Grocery Outlet and Big 5.

“With them, it’s always hard to do the first project,” Darren Dickerhoof said. “But after the first deal, if you treat them well, they will partner with you.”

Such connections, he said, have helped the company navigate through the recession.

“We have been lucky, because I never could imagine how quickly things got back in 2008,” he said. “We were just lucky that we had good tenants and good projects.”

The post Oregon development firm thinks outside the big box appeared first on Daily Journal of Commerce.

A big-box store doesn’t have to remain such a space, especially after the big-box tenant has moved out.

This may be the case with the former Best Buy building at 11703 N.E. Glenn Widing Drive near Portland International Airport. Brokers for the property say the building could become another big-box spot, but because the zoning is flexible, it also could be transformed to fit a more creative use.

“One of the great features of this building is the zoning,” said broker Jim Lewis of Cushman & Wakefield. “It has the most flexible zoning that there is. We are seeing a lot of retailers backfilling these types of locations because big-box concepts are not necessarily as prolific in our market as they used to be.”

The 36,360-square-foot building is up for lease at $1,350 per square foot, triple net. It is also for sale for $6 million.

The building was constructed in 1997, but Best Buy later moved into the newer Cascade Station development nearby. The ex-Best Buy building is near a Home Depot and a Michaels.

Lewis and fellow Cushman & Wakefield broker Anne Hecht envision a medical or office distribution user moving into the now vacant space.

While a renovation for a big-box retailer would include changes to the entry facade and be “relatively minor,” Lewis said, a renovation for something more out-of-the-box would be more expensive. However, the space can be built to suit.

“People are sitting with empty big boxes,” Hecht said. “They have to look at what it could be besides a Best Buy. If you’ve got the zoning that allows you to do something else, in today’s market, that’s going to be very important.”

For details on purchasing the property, contact Hecht or Lewis at 503-279-1700 or jim.lewis@cushwake.com.��

Block by Block is a weekly look at commercial real estate around Portland. Send suggestions for properties to BlockxBlock@djcOregon.com.

The post Former Best Buy building near airport for sale appeared first on Daily Journal of Commerce.

Target has plans to open a store Hayden Island, according to a notice of proposal released on Friday by the city of Portland Bureau of Development Services.

The new 139,000-square-foot, stand-alone Target store would be constructed at the Jantzen Beach Shopping Center. The store would replace the existing Target, which is located at 1400 N. Hayden Island Drive.

The proposed project must go through a Type II design review, which requires city administrative approval, because project officials want to adjust some access way requirements. Most of the adjustments would slightly change spacing and orientation requirements within the parking lot in order to accommodate trees and other landscaping.

As part of the design review, local neighbors or business owners can provide comments to BDS that will be taken into account when determining whether to approve the proposal. All comments must be submitted to BDS by 5 p.m. on June 17.

Target officials refused to comment on the proposed store, only saying Target’s corporate policy is to not comment on projects that are more than a year from construction.

Plans for a new target store in the Galleria Building in downtown Portland surfaced earlier this month.

The post Target planning new store at Jantzen Beach Shopping Center appeared first on Daily Journal of Commerce.

Wal-Mart projects in Oregon

In addition to expanding a store in the Lents neighborhood, Wal-Mart officials are involved in other projects around the state.

• Developers TMT Development and PACLAND are in the early permitting process to build an 80,000-square-foot Walmart store at the southern end of Delta Park East in North Portland.

• Wal-Mart last month announced that it plans to convert a 43,000-square-foot former Ashley Furniture HomeStore, at 17275 NW Cornell Road in Beaverton, into a 43,000-square-foot Walmart neighborhood market store.

• Remodels and expansions are in the works for Walmart stores in Newport, Cottage Grove and Dallas. All three projects are in the permitting process.��

The Lents neighborhood in Southeast Portland for years has lacked a full-service grocery store.

But when Wal-Mart introduced an expansion plan that called for the addition of groceries to its store at Southeast 82nd Avenue and Holgate Boulevard, the Lents Neighborhood Association pushed for even more improvements.

Since last July, Wal-Mart officials have talked with both the neighborhood association and the Portland mayor’s office about how to add 21,500 square feet of space to its existing 134,000-square-foot store. And after nearly a year of give-and-take, the retailer recently submitted plans for administrative approval from the city.

“We don’t have a place to get fresh produce by biking or walking,” said Nick Christensen, chairman of the Lents Neighborhood Association. “Say what you will, but there’s a need for groceries in Lents, and this fills a niche.”

For nearly eight years, Wal-Mart officials have received comments from customers about the need for an expansion of the 15-year-old store, said Jennifer Spall, a senior public affairs manager for the retailer based in Bentonville, Ark.

“Let’s just say the Lents store isn’t what we use as an example when we are pitching a new store,” Spall said.

Wal-Mart initially decided to add space to accommodate deli, bakery, fresh produce and organic items. Officials also planned a modest face-lift for the building’s facade. But when company officials briefed Mayor Sam Adams‘ office and Lents residents on expansion plans, both parties said they wanted more.

Residents expressed interest in the addition of an entrance for pedestrians on Holgate Boulevard, installation of solar panels and construction of improvements to aid pedestrians and bicyclists.

Wal-Mart responded with some dramatic changes. Architects added windows above the main entrance to let in more natural light and create a more inviting space. They also added the pedestrian entrance that will have a grab-and-go section.

A raised pathway for pedestrians and bicyclists will be built through the middle of the parking lot and lead to a covered bike plaza. The plaza’s roof will have solar panels, which will fully power the surrounding lighting.

Store officials also are looking into the possibility of drafting an agreement with the neighborhood association that would limit late-night deliveries and ensure a store manager would be present at some association meetings.

“I’ve been pleasantly surprised (working with Wal-Mart),” Christensen said. “Adams came to the plate and led negotiations between the store, his office and us, and I think something good has come out of it.”

Spall concurred, noting that Christensen and Lents residents were straightforward in their requests.

Store officials now are waiting on a determination of completeness, which basically acknowledges that correct documentation is in place. City approval could be granted in about 60 days.

Wal-Mart officials would then issue a prequalification/request for proposals for the project, Spall said. The firm would like to use a local general contractor and subcontractors, but the work will be bid competitively with no advantage given to local firms, she added.

“The expansion will take between nine and 12 months,” Spall said. “We will operate through the entire project.”

Wal-Mart officials plan to add 85 employees, including about 57 full-time staffers, to help run the expanded store. All 85 positions will include benefits.

“There was a concern that this expansion would impede on us getting a grocery store in the neighborhood, which is an important part of economic development (in Lents),” Christensen said. “But from my perspective, this expansion won’t deter a store like New Seasons because they don’t really compete.”

The post Walmart in Lents neighborhood to expand appeared first on Daily Journal of Commerce.

A decision by Vancouver City Council to loosen requirements on privately financed roads at a commercial parcel in Vancouver, Wash., is paving the way for development to occur at the vacant 43-acre site.

The council on Monday voted to amend a development agreement between the city and the three property owners, two private developers and Wal-Mart, the proposed first tenant. The deal allows the property owners to forgo construction of a 1.25-mile stretch of road previously required before commercial structures could be built.

City officials said the move is intended to help spur activity at the site where development has been pegged for more than a decade.

“We just didn’t want to let a great piece of developable property go to waste while we still had a stake in it,” said Thayer Rorabaugh, transportation policy director for the city of Vancouver.

The property has been primed for development since bought 250 acres in the area, and zoning for 43 of them were converted from light industrial to commercial. Birtcher sold a portion of the property to another development firm, Eastgate Plaza LLC, which in turn sold a portion to Wal-Mart.

Vancouver officials created a development agreement that required approximately $10 million of public-service site improvements – such as roads and sewer lines – before development could occur. One of the requirements was an extension of 59th Street to help offset the anticipated increase of traffic on Northeast Fourth Plain Road; it is the only improvement not completed yet.

But soon after the development agreement was in place, Eastgate and Birtcher entered a legal battle over which one had to provide the public improvements. The dispute, which ended with a ruling that Eastgate had to pay for the work, ultimately led to both developers opting to hold off on development.

“Birtcher has completed a few smaller projects on the industrially zoned land, but hasn’t seemed that interested in doing anything on the commercial land,” Rorabaugh said. “And Eastgate just isn’t in the position to build right now.”

Sitting on the sideline during the squabble was Wal-Mart, which was poised to build one of its supercenters once the improvements were finished. Now that the street expansion is no longer required, Rorabaugh expects Wal-Mart to start predevelopment soon.

“(Wal-Mart) has been ready to move on this project the whole time,” he said. “I expect that we will meet with officials from the company within the next week.”

Not all city councilors were as gung ho as Rorabaugh about accelerating the development process. Councilor Pat Campbell said that while he believed the project’s impacts would be positive, costs could be saved if the amendment were fully assessed first.

But the council voted to direct city staffers to proceed with work on the amendment, which will go before the council for a final vote sometime in April.

Once Wal-Mart begins working on its store, the city hopes other development will follow. Before the legal dispute, Eastgate had proposed $80 million worth of development that included a Home Depot store and a few fast-food restaurants.

In order to expedite this process, city staffers will work to retool the remainder of the development agreement. This could include drafting more amendments, a new development agreement or a development agreement for each property owner.

“We are keeping an open mind about changes to the development agreement,” Rorabaugh said. “As long as we stand to benefit in some way, we will look into any idea.”

The post Vancouver amends development agreement for Walmart appeared first on Daily Journal of Commerce.

The Keizer City Council on Monday approved a master plan for a new 116,000-square-foot, large-format retail store and a 36,000-square-foot, mixed-use building to be built on a parcel near Interstate 5.

But the council’s approval of the master plan is another blow to a citizen-driven ballot measure being voted on today that would stop the development.

Because the development application was submitted to the city before the ballot measure went for a vote, the ballot measure, if approved, won’t apply to the development, according to city attorneys. The development application would have to be appealed successfully to the Land Use Board of Appeals or the Oregon Court of Appeals in order for the measure to apply.

At issue is the development of a 36-acre parcel known as Area C that is part of the Keizer Station development. It includes nearly 650,000 square feet of mixed-use, retail space. The parcel is vacant and sits between the commercial development and a residential neighborhood. Nearby residents formed the advocacy group Keep Keizer Livable and have been fighting the development, which they believe to be a Walmart, since it was first pitched four years ago.

After the city began the planning process for the development last year, the group gathered the 3,770 signatures needed to get a measure put on a special ballot, said Kevin Hohnbaum, one of the cofounders of the group. If approved, the measure would limit all developments outside of the already developed Area A of Keizer Station to a 65,000-square-foot maximum, which is about 10,000 square feet larger than the average Fred Meyer, he said.

Even though there has been ample and vocal disdain for the project, City Attorney Shannon Johnson said at the meeting that the council was only to judge the development based on its compliance with city codes.

The approval of the master plan sets a directive for city staff to prepare an order that would approve the development application. It will be presented to the council for formal approval sometime next month.

The post Keizer approves master plan for big-box store appeared first on Daily Journal of Commerce.

A couple of Home Depot stores in California these days are not only drawing customers seeking to improve their homes, but also scientists seeking to improve energy efficiency in the company’s buildings.

Scientists have teamed up with Home Depot construction officials as part of U.S. Department of Energy run by the Pacific Northwest National Laboratory out of the Richland, Wash.-based lab’s Portland office.

The goal is to help companies exceed energy savings from the American Society of Heating, Refrigerating and Air-Conditioning Engineers’ Code 90.1-2007 by 50 percent or more. That is no small task, said Michael Baechler, the lab’s senior buildings program manager.

“That’s not an easy number to achieve,” Baechler said. “We’re trying to help them get really aggressive levels of energy efficiency.”

The three-year process creates a symbiotic relationship between the lab and the company. The lab gains several sources of data collection for information on the real-world effectiveness of new energy technologies. Home Depot and other companies gain between $200,000 and $700,000 worth of lab assistance via scientists, technology and resources to help find the best ways to increase energy savings. The companies also cover 20 percent of project costs.

After studies are finished, companies can choose to incorporate new technology or features, although it’s too soon to know exactly which would work best for the company and which would not, said David Oshinski, director of construction for the company.

“Some of these things we may or may not incorporate into our existing stores; it depends on the things we do and what is most feasible,” he said.

Part of the lab’s goal is to encourage and help groups with a significant number of buildings across the country to save energy in the future. It’s in the nation’s interest to do that, Baechler said.

“You want to get new technologies into the market, make them easily accessible and get the costs down as quickly as possible,” he said.

For the first part of Home Depot’s project, which began a few months ago, lab contractors set up equipment in two California stores to monitor energy efficiency of several products and processes already in use.

“They put meters on all sorts of things,” Oshinski said. “You can use that information as a baseline to see where you are in the energy model.”

For example, some monitoring devices were added to HVAC systems, store lights, computers and around insulation in ceilings and walls, he added.

Home Depot already uses several energy-saving features in its stores, but this project will go well beyond that, said Stephen Holmes, a spokesman.

Some existing features include energy-efficient, rooftop air-conditioning units; LED lighting for building signs; computerized energy management systems for lighting and HVAC systems; and white rooftops to minimize heat buildup.

The company’s previous efforts have led to more than 2.6 billion kilowatt-hours of power savings since 2004, he added.

That makes the energy-saving technology effort even more complex and interesting, said Ron Nesse, the lab’s program manager for the project.

“They’re doing more than we’d hoped,” Nesse said of Home Depot officials. “They’re using this as an experimental device, but they also want to use it as a possible flagship idea for sustainability and energy efficiency at their other stores.”

After data is gathered on things like insulation, parking lot lighting and building size specifications, scientists will work with the company to provide advice and technology during construction of a new Home Depot store in Lodi, Calif., Nesse said.

“Some of the technologies we’ll be testing are proprietary, but there will be some off-the-shelf things we’ll look at as well,” Nesse said. “In the parking lots, for example, we’ve suggested some new LED lighting types.”

One of the interesting parts of this project is that technology savings can’t impact the look of the facility or its overall operations, he added.

So for the parking lot at the new store, special LED lights can’t look different than those used in other lots where the store will be built.

“It’s going into a mall-like area,” Nesse said. “And one of the concerns there is that the lights match. We’re helping them pick lights that do that, and in general we don’t think you can tell the difference. We’re also looking at going back to the developer of that mall and gauging their interest in using the same energy-efficient lights throughout the complex.”

Also, the general size and shape of the store can’t be altered, because it’s part of the company’s brand, Nesse said.

“We might be able to do some things like changing ceiling heights, but we can’t change the design very much overall,” Nesse said.

The company also hopes to use lab expertise to estimate the impacts of various uses of skylights, dimness of lights in certain areas, the thickness of insulation, and the size and height of vestibules, Oshinsky said.

“Our goal is looking toward the future,” Oshinsky said. “If companies don’t start working on things like this now, then when we get to 2030 (and the 2030 energy challenge), it will be much harder to meet goals.”

The project will wrap up in August 2013, and construction of the new facility should be finished by then. Home Depot hasn’t yet broken ground on the site and didn’t want to release a date for that because it hasn’t announced it to the local community yet, Holmes said.

“The project’s really about the future,” Holmes said. “We’ve done a lot of feasibility studies before as a company, and we are always interested in finding the best ways of doing things.”

The post Home Depot partners with lab for energy study appeared first on Daily Journal of Commerce.