Holst Architecture‘s design for a sizable mixed-use project in the Lloyd District failed to gain the Portland Design Commission‘s approval on Thursday, but the firm is optimistic about the next meeting.

Capref Lloyd Center LLC is planning two six-story buildings that will provide 677 apartments and about a dozen live-work units, five micro-restaurants, close to 40,000 square feet of retail space and four interconnected public plazas. The development site is a 700-space parking lot that currently serves the Lloyd Center mall.

Thursday’s design review hearing was the project’s first before the Design Commission.

“I think we had a good hearing today and I think that if we answer all the questions asked, that we would be prepared for a vote at the next meeting,” said Holst Architecture partner Jeff Stuhr.

He expects the Design Commission to approval the project when it returns on Aug. 6.

But there are still some kinks to be worked out. City planner Staci Monroe said city staffers did not recommend approval this time and outlined some problem areas. These include long-term viability of several green walls, the need for more details for an interactive digital art installation in one of the plazas and the use of exposed wood at the ground-floor level.

Monroe added that before the Design Commission can approve the project, the Portland Bureau of Transportation must also approve final plans for the location of the private drive for parking that traverses the project, improvements to the traffic signal on Northeast Multnomah Street and relocation of the bus stop there.

But the major concern of city planning staffers was the “sameness of architecture and form,” Monroe said. That was a major theme at the project’s three design advice request hearings.

Changes were made in that direction, she said, including a 30-inch reduction in overall width of the buildings that resulted in a 4,000-square-foot reduction in the building’s footprint, and added variety in height to articulate the massing, roof decks and changes in the color palette.

“Staff feels these changes are not enough to identify the emerging character of the diverse architecture that is starting to identify and characterize the Lloyd District,” Monroe said.

Another problem area is a modification request by Capef Lloyd Center LLC to eliminate all windows on the south side, facing light-rail tracks.

“There’s no vehicle access or sidewalks on that frontage, but (windows are) still required,” Monroe said.

Exterior finishes for the buildings include brick masonry, concrete oko panels, metal composite panels, hardwood and weathering steel, which Monroe said should be stained or replaced with another material.

Dave Otte, a principal with Holst Architecture, said the project would not compete with adjacent Holladay Park and would link the mostly residential Sullivan’s Gulch neighborhood with the Lloyd District, which is mostly comprised of office space and commercial properties.

“We are bringing the park green street up through the site, complementing the park,” he said.

Along with four major podium decks, Otte said, two roof decks overlooking plaza areas are included in updated plans, Otte said.

The 677 residential units will mostly have one bedroom, though some will be studios and others will have two bedrooms, Otte said. A dozen live-work units at ground level will have loft bedrooms.

During discussion Thursday, Commissioner Tad Savinar said the design for the main access to the site, across from the Holladay Park at Northeast 13th Avenue and Multnomah Street, isn’t inviting enough to draw the public in.

“There’s nothing to indicate there’s something inside,” he said.

But what’s inside, in the public plaza areas between the buildings, will be very inviting, with a large fountain, restaurants and landscaping, Holst Architecture associate Dustin Furseth said.

“The plaza is a moment of arrival and is larger than the center place in the park,” he said. “And we’re taking advantage of the grade change with a flowing fountain.

“The maker units are more work than live, with an industrial nature, which is good for makers.”

Another engaging feature, Furseth said, is a diagonal pedestrian path that will dissect the site from the southeast to the northwest and be lined with granite pavers in graduated colors.

“It has a tonal change, with the middle (being) the darkest, the richest granite you can get, and becomes lighter as it approaches the edges of the diagonal,” he said.

Savinar complimented advances in the landscaping design, but said he was concerned about the width of pedestrian areas along the private drive that leads to indoor parking areas. He added that he would like to see more public seating areas than those provided around the restaurants.

Although plans have not been finalized for the digital art project, which will be about 14 feet by 30 feet, Furseth said $1 million of the project’s budget will be devoted to the fountain and the art installation. Urban Art Projects of New York City has been brought in as a consultant to ensure a quality end result.

“We don’t know what it will be yet, but we would really like it to be interactive,” he said.

Savinar cautioned him that “underfunded art is not a good thing,” and said half of the $1 million should go to the art project, prompting Stuhr to walk to the applicant’s table to respond.

“I don’t think you can set a dollar amount,” he said. “I don’t think the commission has that purview.”

Block 20 residential tower approved

Before considering the Lloyd District project, the Design Commission approved the design for Hoyt Street Properties‘ new 21-story residential tower on Block 20, bounded by Northwest 11th and 12 avenues and Pettygrove and Quimby streets.

The project calls for 149 residential units with three levels of parking for 192 vehicles.

Brad Demby, an architect with Bora Architects, said the side nearest Pettygrove Street was the most challenging because of a step-down in grade and the fact that the site is in the 100-year floodplain.

Creating ground-floor retail space on all sides of the building was also a problem that was resolved, he said. All retail units will be sold instead of leased out.

After about an hour of discussion, the project was approved unanimously.

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After developing 150 condominium units at The Cosmopolitan on the Park in the Pearl District, Hoyt Street Properties didn’t hesitate before making plans for 148 units on Block 20, also in the Pearl.

The as-yet-unnamed Block 20 project builds on the success of The Cosmopolitan, the first major condo building constructed in Portland since the Great Recession ended.

The Cosmopolitan is nearly sold out, and commanding prices not seen for condos since the previous boom. The units, ranging from 700 to 3,400 square feet, have sold for $700 per square foot on average, Hoyt Street Properties President Tiffany Sweitzer said.

Block 20, meanwhile, went before the Portland Design Commission last week and will return for a second review June 30.

Hoyt Street Properties is developing condos at a time when few others are. Litigation fears and tough lending standards are influencing developers’ decisions.

But the success of The Cosmopolitan, where less than 5 percent of units remain unsold, has raised eyebrows in the industry. Unit sales have demonstrated demand for condos at a time when developers are heavily favoring multifamily rental projects.

“They’re to be commended,” Killian Pacific Vice President Noel Johnson said. “They’re achieving pricing when they’re selling condos that are higher than a lot of people thought possible.”

For now, Hoyt Street has the luxury condo market essentially to itself. Others such as Portland Development Group have projects in the pipeline, but nothing like the scale of Hoyt Street’s projects.

Portland may start to see more condo projects, Sweitzer said. After a years-long apartment construction boom in the metro area, selling condos is one way for a developer to carve out a niche.

“We’re feeling like it’s starting to get saturated with rentals,” she said. “Not that Portland’s not strong – I think it will be for a while – but I think condos will set us apart.”

At a time when some city officials and housing advocates are lobbying for greater density in Portland’s neighborhoods, the lack of condo development stands out. While many new condos come at luxury price points, some condos can be had for less than comparably sized single-family homes.

“In theory, you could build a duplex or triplex as condos and sell them, but we’re not seeing a lot of those,” said Mike Westling, who authored a recent City Club of Portland report that called for greater density and more varied housing types. “I’d like to see more of it.”

Everett Custom Homes is targeting that market. The firm plans to build 15 to 20 workforce-priced condo units this year in close-in neighborhoods of East Portland. It’s also considering building condos on lots off of North Interstate Avenue and North Williams Avenue.

The aim for those condos is for a lower price point that is in high demand. Plans for the condos call for units of approximately 900 to 1,200 square feet, and prices around $300,000.

“There’s a need for a price point out there,” Everett Custom Homes owner Vic Remmers said. “With all of the fees and the price of land for a single-family home, it’s near impossible to hit a workforce housing price point.”

Remmers said he’s pursuing permits and that his firm intends to break ground on the first condo units in about two months.

Portland’s market for single-family homes is under strong pressure from extremely low inventory. In May, Portland again had the highest price jump (12.3 percent) from May 2015 among major cities tracked by the Standard & Poor’s/Case-Shiller Home Price Index.

More condos could help relieve pressure on the housing market, Johnson said. As buyers trade up to luxury condos, they typically leave behind rentals or homes that are more affordable. But Johnson said he has no plans to build condos because of the threat of litigation and other obstacles.

Bob Ball, owner of Robert Ball Companies, developed during the boom in the early 2000s several condominium projects, including the Avenue Lofts and the Marshall-Wells Lofts in the Pearl District. Now he’s developing multifamily projects, and doesn’t expect that to change.

Combative homeowners associations and overstretched management companies make developing condos unappealing, he said.

“If you can build and achieve the same profit level for apartments, you’re more likely to do that, because you own it and control it and make sure the building is well-managed,” he said.

Ball is awaiting permits to break ground on 21 Astor, a mixed-use project at Northwest 21st Avenue and Kearney Street. Plans call for 27 multifamily units on top of 4,500 square feet of ground-floor retail space, but no condominiums.

Like many developers, Ball will continue to own 21 Astor after it’s built, and collect a steady stream of rental revenue that condo projects can’t match.

Johnson decried a long line of construction-defects litigation that he and other developers say has hobbled condo construction.

“It’s more costly to build a condo than normally it would be,” he said. “Add to that, it’s just really unpleasant to be sued. At Killian Pacific, our brand is really important to us, and we try to do projects people will really like.”

Johnson said that if Killian Pacific were to develop condos, legal costs would be incorporated into unit prices because of the near-inevitability of litigation. In essence, condo buyers would fund the developer’s legal defense in advance.

“As a developer, if you have to plan on getting sued whether the suit is justified or not, then you build that future cost of defending yourself into the budget up front, because it’s virtually a known cost,” he said.

There appears to be little prospect of change to the litigation environment, because the Oregon Legislature has stalled legislation that would guard against such lawsuits.

“Anything that looks, smells or tastes like tort reform makes one side of the political aisle nervous,” Oregon Home Builders Association CEO Jon Chandler said, in reference to Democrats who control the Legislature.

It’s unclear if condo litigation reform will stand any better chance when the Legislature reconvenes in February 2017, he said.

“We need to talk about it because the presence of those claims does tend to skew the market away from condos and towards apartments,” Chandler said. “That may be the way the market is going anyway, but it should not be nudged that way by nonmarket forces.”

Despite the downsides, some developers are beginning to revisit condos as a viable option. Portland Development Group has six condo units under development. The furthest along is a two-unit building at 4511 S.E. Madison St., off of Hawthorne Boulevard. It is the firm’s first condo project.

“My staff had been coming to me for the last year and saying, ‘Why don’t we develop condos?’ ” Portland Development Group managing partner Mike Hubbell said.

It took a while for Hubbell to be persuaded.

“Part of it was an apprehension: Is there a stigma attached to condos?” he said. “We made a decision to jump out and see how it works out for us.”

After green-lighting the first project, Portland Development Group has begun developing two more. The units are planned to be about 2,300 square feet each and cost $650,000 to $750,000.

“Sometimes you have to be willing to take a chance where no one else will,” Hubbell said.

Obtaining financing can be the greatest hurdle for big condo projects. Even for Hoyt Street Properties, securing a loan from Wells Fargo for The Cosmopolitan wasn’t easy.

“We were able to do that with The Cosmopolitan, not that it wasn’t difficult,” Sweitzer said. “We were able to do that because we’d built 12 projects prior and had a track record.”

It also helps to have access to deep pockets. Longtime developer Joe Weston is providing some of the financing for Block 20, Sweitzer said in an email.

“Without his financial strength, we would not have been able to develop either project as a condominium,” she said.

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A new 21-story condominium building is coming to the Pearl District, but its design is still being refined.

Plans call for a 246-foot tower at the northwest corner of vacant Block 20, which is bounded by Northwest Pettygrove and Quimby streets, and 11th and 12th avenues. A six-story podium to the south would have a rooftop garden and step down at the fifth floor with another rooftop terrace.

The project’s review by the Portland Design Commission on Thursday was its first, according to city planner Staci Monroe. City staffers have been working with Bora Architects on the design, she said, and requested several modifications. These include reducing the size of a large loading space, reducing the width of long-term bike parking spaces from 2 feet to 18 inches, adjusting the façade length and providing more active ground-floor use.

During the meeting, however, it was apparent that commissioners objected to the proposal for ground-floor residential units. The project’s developer, Hoyt Street Properties, is looking to provide 150 residential units and 2,000 square feet of retail space.

Commission Chairman David Wark said that because the building will face a park, it should have a more active use than residential on the ground floor. He suggested live-work units.

Commissioner Tad Savinar agreed that ground-floor residential use doesn’t work and suggested micro-retail stores or even a movie theater to provide more active use at the lower level.

Commissioner Julie Livingston said people living in units on the ground floor would tend to keep their blinds drawn for privacy and diminish the building’s active use at the sidewalk level.

Other commissioners agreed.

“Housing on the first floor was a mistake,” Wark said.

Savinar added, “The challenge is not to fall back and say you want residential on the first floor because retail doesn’t work but how can you make it work. Pearl need to be an extremely active space.”

But architect Leslie Cliffe, a principal at Bora, said after the meeting that if the design commission is adamantly opposed to ground-floor residential space, then it should be part of city code.

“It’s not actually in the zoning code, but it is what the commission is enforcing,” she said. “I feel it should be incorporated in the zoning code so we don’t get blindsided at design review.”

The design team knew from prior meetings with city staff that the commission had issues with residential space at the ground-floor level, Cliffe said, but didn’t know it was a hard-and-fast rule.

“I thought it was something we could discuss and persuade them that our location was appropriate,” she said. “What I’m understanding is that it is more of a rule, but when it becomes a rule, it should be incorporated.”

The Block 20 design will receive a second review on June 30.

Also on Thursday, the commission approved the design for a new five-story, 52-unit apartment building at 10506 E. Burnside St. in the Gateway District. The design for a 14-story apartment building at 1133 S.W. Market St., will come back for a second review on June 16.

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Pearl District developer Hoyt Street Properties is pushing forward its proposal for a 20-story condominium tower in Northwest Portland. The firm recently issued a request for design advice.

Plans for the high-rise call for 142 condominiums and above-grade parking. The project is planned for a full block bordered by Northwest 11th and 12th avenues, and Pettygrove and Quimby streets.

Block 20, as the project is known, would have a five-floor podium and a 20-floor tower. Retail space is not envisioned.

Hoyt Street Properties has been a leading developer in the Pearl, partnering with Boora Architects on projects such as Cosmopolitan on the Park, The Encore and The Metropolitan. Only eight Cosmopolitan units remain to be sold, Hoyt Street Properties President Tiffany Schweitzer said.

“It sold incredibly well, and we would like to keep that momentum going for the next project,” she said. “There’s not a lot of new, for-sale product on the market.”

Condominium sales took a hard hit during the recession, but developers have recently begun investing again.

Project backers hope to meet with city officials for design advice sometime this spring.

Also included in the city’s public notices issued Monday:

A developer is planning to build a mixed-use building with 46 apartments and 2,700 square feet of commercial space at 4917 S.E. Hawthorne Blvd. The location is within blocks of trendy restaurants such as Por Que No? and Apizza Scholls.

The owner is listed as Gretchen Malmberg. David Mullens of Urban Development Group is the applicant. Attempts to reach them for comment were not successful.

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With another condo tower in the works, the Pearl District keeps pushing north.

Hoyt Street Properties recently began work on a 20-plus-story condo project tentatively named “Block 20.” Schematic designs have been prepared ahead of a December pre-application conference with the Portland Bureau of Development Services, according to Hoyt Street Properties President Tiffany Sweitzer.

The architect is Boora Architects, and Andersen Construction will likely be involved, she said.

The site is only two blocks north of Hoyt Street Properties’ Cosmopolitan, a 28-story condo tower under construction. As of Monday, 16 of its 150 units were unsold. The project is topped off, with all glass in place. Only interior and landscape work remains before anticipated delivery in June 2016, Sweitzer said.

Also nearby is the 16-story Block 17 Apartments; units recently began to be rented. And at the corner of Northwest Raleigh Street and Northwest 13th Avenue, BRIDGE Housing‘s six-story, 155-unit Abigail Apartments project is nearing completion. A quarter-block affordable housing project on city-owned land led by Innovative Housing is under way as well.

Hoyt Street Properties has played a large role in the transformation of the Pearl District from a gritty neighborhood of warehouses and rail yards, to one of hip restaurants, office buildings and large multifamily developments. Schweitzer said the company might look to add a senior housing project on one of its four remaining undeveloped blocks.

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