A 167-unit Northeast Portland apartment building has sold for $30.7 million to a California investment group.

Grant Park Village Quimby, completed in 2018, was purchased by Laurel Property Group of Beverly Hills, California. LPG specializes in managing multifamily properties for family offices and wealthy investors.

The seller was the property’s developer, Capstone Partners, alongside PCCP, a Los Angeles-based real estate investment manager.

The transaction values the 117,333-square-foot asset at $183,832 per unit, or $262 per square foot.

“Grant Park Village Quimby represents exactly the type of institutional‑quality, transit‑oriented asset that investors are seeking in today’s market,” Joe Nydahl, a CBRE executive vice president, stated in a news release. “The property’s finishes, location fundamentals and the limited future supply pipeline in the Grant Park submarket position it well for long‑term performance.”

Nydahl and Josh McDonald represented both the buyer and the seller in the transaction, with support from Scott Williams and Ryan Jameson of CBRE Debt and Structured Finance.

The building at 1580 N.E. 32nd Ave. is in the Sullivan’s Gulch neighborhood and sits adjacent to its sister property, Grant Park Village Henshaw. The properties are north of Interstate 84 and next to a Fred Meyer store.

The apartments in Grant Park Village Quimby are studios or have one or two bedrooms; they average 554 square feet. The midrise community features modern unit finishes and a range of resident amenities, including a fitness center, a resident lounge, an outdoor courtyard and a pet spa.

The property sale was recorded on April 21, according to Multnomah County records.

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When developers Wylie Gibbins and Taylor Kaplan were searching for an underserved multifamily market, they looked to Gresham.

The east Portland suburb had several factors in its favor. Rents were rising to the point that new development could be supported, and job growth was surging – in part because of the arrival of an Amazon warehouse in Troutdale and Vista Logistics Park in Gresham.

Gibbins and Kaplan, who met while working at Williams & Dame Development, formed Gibbins Kaplan Development in 2017. The business partners found they had complementary skill sets, with Gibbins focusing on finance and investor relations, and Kaplan working with architects, contractors and city officials to launch multifamily projects.

Having found a suitable market, the developers next needed access to capital, so they turned to some bigger fish in the business.

Like many industries, real estate development faces a generational gap. Older, established developers enjoy many advantages – typically a long record of successful projects, deep relationships with investors, architects and contractors, and more resources to marshal bigger and more profitable projects.

Younger developers like Gibbins, 42, and Kaplan, 34, sometimes must become a bit scrappy to find opportunities. Enter the older, more established developers.

Gibbins Kaplan Development partnered with Urban Asset Advisors on two multifamily projects in Gresham: The Archibald and Douglas Grove.

“We basically rode shotgun with them on the project,” said Tim O’Brien, president of Urban Asset Advisors. “We helped them where we could, and otherwise stayed out of the way.”

O’Brien introduced Gibbins and Kaplan to one of UAA’s longtime lenders, helping the newer developers access debt.

“We helped raise the equity for the project from local, private investors. Then we went and signed on the bank loan with them,” O’Brien said.

Gibbins Kaplan Development this past summer completed Twelve Mile Crossing, an 82-unit complex in Gresham, in partnership with McKenzie River Company. The complex has 10 three-bedroom units in addition to one- and two-bedroom units. All are occupied.

“There’s a big demand for that (unit size) and a lack of that in Gresham,” Gibbins said.

Now, Gibbins Kaplan Development has forged a partnership with another Portland developer, Capstone Partners. They plan to break ground in June on Arts Plaza Apartments, a 97-unit project in the heart of downtown Gresham expected to be completed in summer 2023. Then construction of West Powell Apartments, a 48-unit complex, is slated to begin in late summer, with completion scheduled for fall 2023.

“Part of my interest is to help promote a good project, but also to help smaller developers,” said Chris Nelson, president of Capstone Partners.

For Gibbins and Kaplan, the partnerships have enabled them to get rolling on projects and establish their firm as a player in the workforce multifamily market.

“We’ve been very fortunate with both Tim and Chris that they’ve provided a lot of mentorship in addition to partnership,” Kaplan said.

Gibbins Kaplan Development does not plan to rely on other developers for long, however. The firm recently closed on another property at 405 N. Third St., that they envision holding their first solo development. The Gresham Arts Plaza property will have approximately 20 units.

The firm has also kept projects moving by using a small roster of industry firms. MWA Architects has designed every Gibbins Kaplan Development project to date, which helps the design process run smoothly, Kaplan said.

“We know we’re not going to have a big surprise,” she said. “Everybody’s done this a few times.”

Douglas Grove and The Archibald were built by LMC Construction. Team Construction, based in Vancouver, Washington, built Twelve Mile Crossing and is performing preconstruction for the projects with Capstone Partners.

Rents in Gresham do not yet support podium construction, Kaplan said, unlike in Beaverton and Hillsboro. To make the Gresham projects financially feasible, the buildings are designed with a minimal amount of steel on the first floor.

“Not only are steel costs going up, but the lead times are going up as well,” Kaplan said. “Designing projects that are responsive to materials’ (cost) increases is increasingly important for controlling your (total) costs.”

Douglas Grove and The Archibald were envisioned as short-term holds. They were put on the market on Jan. 27 by JLL.

All of Gibbins Kaplan Development’s subsequent projects are in an Opportunity Zone and are part of Opportunity Zone funds. As such, they are expected to be 10-year holds to reach the threshold that allows investors to forego paying tax on the capital gains.

Gresham has five contiguous Opportunity Zones. The tax break has helped get Gibbins Kaplan Development’s multifamily projects off the ground, Gibbins said.

“Out here, I think it’s spurring development as the program is intended to do and producing workforce housing,” he said.

Opportunity Zones have attracted criticism for encouraging investment in areas that already had attracted developers’ interest, including Portland’s West End, where a 35-story Ritz-Carlton tower is under construction, and fast-gentrifying areas of West Oakland, California, and San Francisco.

Other developers, including Palindrome Communities and Wood Partners, have targeted Gresham for multifamily development.

“There continues to be a lot of interest in Gresham as a whole, but certainly multifamily,” said Eric Schmidt, assistant city manager for the city of Gresham.

Gibbins and Kaplan have learned how to smoothly navigate the city’s approval processes, Schmidt said.

“They’ve been a great partner with the city,” he said.

The multifamily projects align with the city’s need for more housing, Schmidt said.

“They do great work,” he said. “Each project is just getting continually more dialed in.”

Gibbins and Kaplan said Gresham had been supportive.

“She’s able to key decision makers in Gresham on the phone on the weekend,” Gibbins said of Kaplan, “which doesn’t happen in every jurisdiction.”

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Capstone Partners and Cairn Pacific have sold L.L. Hawkins and Slabtown Marketplace for $78 million to an institutional investment company, unloading the multifamily and retail assets that pioneered redevelopment in Northwest Portland’s Slabtown neighborhood.

L.L. Hawkins, 1515 NW 21st Ave., has 113 apartments in studio, one- and two-bedroom floor plans, along with 11,087 square feet of ground-floor retail spaces. Completed in 2015, the six-story project was the first apartment building in the area.

Slabtown Marketplace, which shares a block with L.L. Hawkins, is a renovated freight warehouse that was built in 1952 and made into a retail redevelopment, also in 2015. The 36,000-square-foot building at 2170 N.W. Raleigh St. hosts a New Seasons grocery store, Breakside Brewery and YogaSix.

L.L. Hawkins and Slabtown Marketplace were sold in a single transaction. The buyer declined to be identified, and the information was not yet available in Multnomah County records. Chris Nelson, principal of Capstone Partners, said the buyer was a “large institutional investor.”

The sale represents a successful exit for Capstone and Cairn Pacific, both local developers. “It was a good outcome, for sure,” Nelson said.

The projects jump-started the transformation of the Slabtown area from an industrial zone into a mixed-use neighborhood.

“It was kind of the first step in the evolution of a great neighborhood,” Nelson said.

Developers including Cairn, Prometheus and Guardian Real Estate Services have followed up with more projects that have begun to fill out the neighborhood. Greystar recently gained planning approval to build two multifamily structures totaling 363 apartments on Northwest Savier Street.

Capstone and Cairn Pacific partnered with a venture capital investor, who was not identified, on L.L. Hawkins and Slabtown Marketplace.

“It is bittersweet to sell this project,” Nelson added in an email. “The project was certainly a catalyst for the neighborhood, but we decided it was a good time to sell with the strong investor interest for core multifamily and grocery-anchored retail investments in A-plus locations.”

CBRE represented the sellers.

“L.L. Hawkins was the first multifamily property built in Slabtown and truly compliments one of the most desired locations within Portland,” Joe Nydahl, first vice president at CBRE’s Portland office, stated in a news release. “LL Hawkins is one of the highest-quality projects to trade in the Portland market, featuring desirable ground-floor retail as well as a pedestrian thoroughfare connecting Slabtown Marketplace, offering residents convenient access to high-quality retail including New Seasons Market.”

Nydahl, Phil Oester and Josh McDonald of CBRE’s Pacific Northwest Multifamily group and Philip Voorhees, Jimmy Slusher and Joseph Blatner of CBRE’s National Retail Partners – West group represented the seller in the transaction.

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Multifamily production fell 5.2 percent in Portland in 2019 as developers reacted to rising costs and a flood of project deliveries by pulling back.

The Bureau of Development Services issued permits for projects comprising 4,634 multifamily units last year. That was down from 4,887 permitted units in 2018.

“I think it’s going to slow down even more,” said Sam Rodriguez, senior managing director at Mill Creek Residential Trust, a major multifamily developer in the city. “The deals have gotten thinner. Cost has gone up. Construction costs are escalating across the board at about 5 percent a year, and then rents have flattened. And there’s still concessions in the market.”

Multifamily housing production has fallen far from 2017’s high mark of 5,993 units permitted. That year, developers racing to get ahead of inclusionary housing requirements pushed projects across the finish line at a clip that was an astonishing 44.4 percent gain from the prior year.

That boom in housing production continues to echo, with new buildings stabilizing slowly and competition for tenants holding the lid on rents.

While lower, 2019’s housing production rate was in line with the years prior to 2017.

The Bureau of Development Services does not regularly publish permit data totals. The city agency released the numbers in response to a 91��Ƶ public records request.

The multifamily market has bifurcated since inclusionary housing requirements took effect on Feb. 1, 2017, according to developers and permits. More small multifamily projects are moving ahead with fewer than the 20 units that trigger inclusionary housing requirements. Weekly permit intakes released by BDS are replete with 19-unit building proposals.

Other projects that are moving ahead tend to be large: full-block or superblock developments such as Security Properties‘ Pepsi Blocks and Press Blocks projects, and NBP Capital‘s RiverPlace development. Conspicuously missing are the midsize projects that characterized multifamily development before 2017.

“It’s a pretty difficult environment,” said Gus Baum, director of development for Security Properties. “Construction pricing continues to be unpredictable, but high.”

Within weeks, Security Properties is planning to seek permits for Pepsi Blocks’ first phase, Baum said. The first phase includes an approximately 200-unit multifamily building and construction of a woonerf, a shared street through the property at Northeast Sandy Boulevard and 25th Avenue.

Security Properties is phasing the project to allow the bulk of market-rate units to hit the market later.

“The Pepsi Blocks, because it’s a planned development, we’ll hopefully do a greater than minimum share of affordable units in the first phase,” Baum said.

Funding for affordable housing is washing over the housing market in the wake of the city’s $258.4 million housing bond and Metro‘s $652.8 million bond.

“There’s a lot of money for affordable projects because of the bonds, and that’s taking away resources for market-rate projects,” Baum said.

For now, flat rents and steadily escalating costs give little reason to expect a turnaround in Portland multifamily development, developers said.

“It’s still a pretty soft market to be delivering product,” said Chris Nelson, co-founder of Capstone Partners, a Portland-based developer.

After years of steep increases, rents in Portland have flatlined, making multifamily development less enticing. Average rent for a two-bedroom Portland apartment was down 0.1 percent in February compared to a year ago to $1,330, according to an Apartment List report.

Rents nationally grew 1.7 percent during the same period, led by Phoenix (3.5 percent), Austin, Texas, (3.4 percent) and Charlotte, North Carolina (2.5), Apartment List reported.

Developers have reacted by diversifying their portfolios by product type and geography. Capstone is one developer that has looked to the suburbs, building a multifamily project in downtown Tigard.

Tigard and Beaverton have worked to attract developers including Capstone and Rembold Properties to bring urban-style projects to the suburbs.

“It’s been a strategic focus of those municipalities to activate their urban cores, and part of that is bringing households to the urban cores,” Nelson said.

Otherwise, Capstone has largely stepped back from multifamily development, instead building industrial facilities for Amazon and other users, and some office spaces.

Policymakers and developers are evaluating the city’s inclusionary housing policy. In the past three years, the city has permitted or is in process to permit at least 601 units from 91 projects. The City Council softened certain requirements, but developers have called for further changes.

Other regulations have added costs, developers said. A requirement for bird-safe window glazing in the Central City has dented project pro formas. For one Mill Creek project, the cost for the window package almost doubled, from $500,000 to $900,000, because of bird-safe glazing, Rodriguez said.

“Things like that are just making it more difficult,” he said.

Portland multifamily permits

Apartments/condominiums in projects with three or more units

2019: 4,634

2018: 4,887

2017: 5,993

2016: 4,149

2015: 4,582

2014: 4,344

2013: 2,763

2012: 1,835

2011: 900

2010: 638

Source: Bureau of Development Services

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A Salem warehouse operated by Amazon has been sold for $105.5 million.

The Mill Creek Logistics Center encompasses 1,018,020 square feet on 61.75 acres east of Interstate 5.

Jones Lang LaSalle represented the seller, a joint venture partnership of developer Capstone Partners and San Francisco-based finance partner PCCP (formerly known as Pacific Coast Capital Partners). Information on the buyer was not immediately available; the owner is still listed in Marion County records as a Capstone Partners entity.

“The one nice thing about being in Salem is you can serve the south end of the Greater Portland area, and you can go south very easily,” said Buzz Ellis, managing director of Jones Lang LaSalle in Portland. “That’s why I think we’ll continue to see logistics centers built in Salem.”

Other developers – most notably Specht Development – are also investing in Oregon’s I-5 corridor. Specht has 60 acres of industrial land in Woodburn that could accommodate up to 2 million square feet of warehouse space, according to the company.

Amazon agreed to a 12-year lease at the Mill Creek Logistics Center. The facility at 4775 Depot Court S.E. was designed by Mackenzie and built by general contractor Perlo Construction.

Capstone Partners may not be done building at the property. The Portland-based developer has remaining parcels large enough for one facility of about 1 million square feet and another of about 570,000 square feet, said Chris Nelson, co-founder of Capstone Partners.

“We’re real bullish on the potential for new projects on that site,” he said.

Capstone was the original master developer of the property, which had been owned by the state of Oregon. Plans to develop the site were delayed by the Great Recession.

“We had a very long-term view,” Nelson said. “We started to circle around the site again, and then this user (Amazon) came along and it made it a little easier go.”

Nelson said he expects future logistics properties will be marketed as build to suit instead of built on speculation because users are demanding a high level of individual customization.

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Capstone Partners‘ Custom Blocks project has gained its first tenant.

Archrival, an advertising agency with a focus on youth culture, will lease 5,000 square feet at the southwest corner of the development located at 1350 S.E. 10th Ave. in Portland’s Central Eastside Industrial District.

Custom Blocks encompasses 72,000 square feet of commercial space formed from eight separate buildings. Capstone Partners hired Scott | Edwards Architecture to design a renovation to join the structures on two blocks.

Core and shell completion is on track for late February or early March.

The North Block contains 22,790 rentable square feet; spaces range from 1,200 square feet to 10,000 square feet, including 7,111 square feet for a brewery, production kitchen or event space.

The South Block is 48,804 square feet, with spaces available from approximately 9,000 square feet to 23,000 square feet.

Capstone and Premium Property USA are partners in the joint venture.

Rob Moneyhan of Urban Works Real Estate represented Archrival in the lease negotiations. Brad Carnese, Mark Carnese and Doug Deurwaarder of Cushman & Wakefield represented Capstone and Premium Property USA.

Archrival has worked with advertisers such as Red Bull and Adidas. The agency currently operates out of Washington High School and expects to move to Custom Blocks by July, according to a news release.

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The Leland James building in Northwest Portland has attracted a trio of tenants to the fast-developing Slabtown area.

Software and analytics firm Jet Reports International Inc. is moving its corporate headquarters from Tigard to take 30,000 square feet in the Leland James building. Jet Reports will be joined by local coffee maker Good Coffee and Orange Theory Fitness on the ground floor.

The building has 117,000 square feet of space on four floors. Jet Reports’ office will be on the fourth floor, including a heavy-timber penthouse pop-up built inside and a portion of the third floor.

The office space is about one-third leased, Capstone Partners co-founder Chris Nelson said. The rest of the building remains available.

Capstone Partners and Cairn Pacific developed the building at Northwest 22nd Avenue and Raleigh Street in a partnership. It was designed by SERA Architects and constructed by JBA-Andersen Construction. Dave Squire and McCoy Doerrie of Newmark Knight Frank represent office space in the Leland James building. Andrew Rosengarten and Jake Lancaster of JLL represented Jet Reports in the transaction. LRS Architects is assisting Jet Reports with design of the internal space.

“Our Tigard location no longer meets the dynamic needs of our staff, and we’re excited to see how this beautiful new space will spark our creativity and improve employee engagement,” Jet Reports vice president of finance and operations Michael Smythe stated in a news release.

The Portland office market had an overall vacancy rate of 10.3 percent in the fourth quarter, according to Cushman & Wakefield. Almost 1.5 million square feet of office space was under construction at the end of 2017, with 500,000 square feet pre-leased.

The office market, Nelson said, is “good, not great.” He pointed to a couple of newly signed large leases as signs of strength – Amazon agreed to take 85,000 square feet in the Broadway Tower now under construction, and Oregon State University signed up for nearly 40,000 square feet in the newly renovated Meier & Frank building.

“There’s good activity,” Nelson said. “It could certainly be better.”

Capstone Partners is nearing completion of the Custom Blocks, which will offer 72,000 square feet of creative office and retail space in Southeast Portland.

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Walsh Construction Co. is working in Northeast Portland on an apartment building that is the second phase of a mixed-use development for Capstone Partners. Grant Park Village Phase II, a five-story multifamily structure with a below-grade parking garage, is being erected on a 1.48-acre lot on Northeast 32nd Avenue adjacent to the first phase, which was completed by Walsh in 2014.

As with the first phase, Grant Park Village Phase II was designed by LRS Architects. The building features four floors of wood-framed construction over ground-floor, post-tensioned concrete and a below-grade parking garage with 100 spaces. The market-rate building has 167 apartments – four two-bedroom units, and the rest a mix of studios and one-bedroom units.

The U-shaped building wraps around a ground-floor courtyard. Residential amenities include a ground-floor community/game room, a fitness center, a library area, and a bike workshop and wash space. A fifth-floor amenity room will have an eastern-facing open-air patio and a kitchenette. The building will have a combined 198 long- and short-term bike-parking spaces.

The building’s upper three floors now have drywall, insulation is being installed on the second floor, and MEP systems are being dropped to the ground floor. The contractor is expecting permanent power this week, and is mobilizing for elevator installation. Finish work is slated to start shortly, with flooring installation scheduled to begin on the fifth floor next week. The project is expected to be completed in June.

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Amazon, one of the nation’s largest companies, is increasingly making its presence felt in the Portland area with a major industrial footprint and intriguing moves in the office and retail markets.

The company has firmly planted its flag in Oregon’s largest city, and Portland is among the hopeful applicants to host Amazon’s massive second headquarters.

What was once merely a book-selling website located in Seattle is now increasingly a physical force in local economies throughout the nation. And in Portland, Amazon’s dizzying pace of development has sent shockwaves through the industrial market, where it’s far outpacing any other client.

The company is surrounding the Portland-metro area with massive distribution facilities. Consider:

Amazon last year opened a 303,000-square-foot sortation center at Hillsboro’s Majestic Brookwood Business Park.

Last month, Amazon announced it would build a 1 million-square-foot facility on a Port of Portland parcel on North Lombard Street, with Trammell Crow Co. as developer.

In Troutdale, Amazon is building an 855,000-square-foot fulfillment center, also with Trammell Crow.

And in Salem, Capstone Partners is the developer of a 1 million-square-foot facility where Amazon will distribute large items such as gardening tools and pet food.

Individually, these large projects are a boon to the developers, contractors and subcontractors who all benefit from the retailer’s local growth spurt. Collectively, they indicate Amazon will be a major force in Oregon’s 21st-century economy, employing thousands of workers, spurring development and changing how consumers shop.

Amazon’s wave of industrial development is coming amid a constrained supply of industrial land. Much of the Portland area’s industrial land is spoken for, and Oregon’s urban growth boundaries make expansion difficult.

In comes Amazon with more than 3 million square feet of industrial development in the past two years.

“Amazon clearly is a major player in the market and is affecting the supply side,” Specht Development CEO Greg Specht said.

Amazon’s logistical strategy is designed to get packages to customers in hours, rather than days, said Tom Forte, a senior research analyst for D.A. Davidson. Amazon is gradually adding to its Prime Now service across the country.

Forte noted that Prime Now is available in New York City, where’s he’s based, but not at Stanford, where he’s currently working. Forte predicted Prime Now will spread first to major metropolitan areas, and then nearby suburbs.

“They’ll add that capability over time,” he said.

Amazon offers Prime Now in Portland, with two-hour delivery of Amazon products, groceries and local restaurant takeout. The new fulfillment centers will help Amazon promptly deliver a range of products, Forte said.

Amazon’s fulfillment centers are an important part of its Prime service, spokeswoman Ashley Robinson stated in an email message.

“There are a lot of contributing factors that go into our thought process on where to place a new fulfillment center,” she stated. “Most importantly, we want to make sure a fulfillment center is placed as close to the customer as possible to ensure we can offer a great Prime service and fast shipping speeds to customers. We also look at the workforce and we’ve found great talent in abundance in both the Salem and Portland communities.”

In some ways, Amazon is mimicking and furthering the logistics of Walmart Inc., which was known to build warehouses and retail stores in clusters.

Amazon’s strategy in recent years has been to “build first, buy second,” Forte said. In Portland, the company has done both.

Amazon bought into Portland with Elemental Technologies. Now AWS Elemental, the company was acquired by Amazon and tucked into its profitable Web Services division. Elemental has its office in the former Oregonian building at 1320 S.W. Broadway.

Amazon is rumored to be seeking additional office space in Portland. Some brokers have suggested Broadway Tower, a building now under construction that will offer 175,000 square feet of office space, would be a natural fit. The office space is represented by Kidder Mathews.

The office space at Broadway Tower is approximately 50 percent leased, said Kevin Joshi, senior vice president at Kidder Mathews. He could not disclose the tenants, he said.

Joshi said he expects the office space to be more than 90 percent occupied when Broadway Tower opens in October 2018.

Amazon is well-known for its use of nondisclosure agreements for local firms it works with, and several of its local business partners did not respond to requests for comment.

Amazon has also dipped its toe into brick-and-mortar retail sales, with the Portland-metro area again in the forefront. Amazon in 2016 chose Washington Square in Tigard for the third location of its brick-and-mortar bookstore.

Amazon recently opened a delivery center in south downtown to speed shipping to Prime customers.

Amazon also expanded its presence in Portland with its acquisition of Whole Foods. The grocery chain has eight Portland-area locations, and another in Vancouver, Washington. Amazon announced in June it would acquire Whole Foods for approximately $13.7 billion and integrate the grocer into Amazon Prime.

Portland was one of 238 cities to submit a proposal for Amazon’s second corporate headquarters by the Oct. 19 deadline. Greater Portland Inc. is leading the effort to woo Amazon. The centerpiece of Portland’s pitch is the soon-to-be-vacant U.S. Postal Service property.

Yet Amazon’s needs may exceed the space available in Portland. Amazon says it wants a second headquarters equal to its base in Seattle, where the retailer has an astonishing 8.1 million square feet, spread across 33 buildings.

In total, the Portland-metro area has only 27.2 million square feet of Class A office space, with a 9.1 percent vacancy rate, according to a Jones Lang LaSalle report.

Robinson declined to comment on the HQ2 process beyond Amazon’s issued materials.

Portland’s Broadway Corridor master plan, a guiding document for development of the Postal Service site and surrounding blocks, calls for building only 582,237 square feet of office space as part of 3.8 million square feet of total development. That’s smaller than one lease Amazon confirmed in downtown Seattle earlier this month, with the company reportedly taking 722,000 square feet in Rainier Square, a skyscraper now being built.

Amazon expects to spend up to $5 billion in construction for the second headquarters, which could eventually be used by up to 50,000 employees. For Portland, that raises the question of where the employees would be housed in the metro area’s already-tight housing market. Portland had fewer than 6,000 active single-family home listings in September, according to the Regional Multiple Listing Service (RMLS).

Geographic proximity will be a major factor in Portland’s bid, for good or ill. That hasn’t stopped even cities in Washington and British Columbia from trying.

Portland will point to its burgeoning tech scene and cheaper labor pool as selling points.

“They’ve been so successful in Seattle, it’s driven up the cost of talent,” Forte said. “Now they either need to diversify or spread out.”

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One of Portland’s best-known nonprofit organizations owns a sprawling tract of undeveloped land on the inner Eastside.

Now, the Oregon Museum of Science and Industry is on the verge of offering to developers 11 acres of developable land with capacity for 1.7 million square feet of space. The commercial zoning is flexible, allowing a range of uses including office and retail – and residential possible with a conditional-use waiver.

OMSI plans to go public in January with a broadly defined request for proposals. In essence, OMSI will tell developers: Show us what you’ve got.

“We really want this to be market-driven and financeable,” said Carol Gossett, OMSI’s property development manager.

OMSI’s master plan does not dictate certain uses on the various sites, leaving open the possibility for a variety of mixed-use buildings near the museum. OMSI intends to offer ground leases on the available property, which would generate steady income for the nonprofit.

“We’re hoping for exciting and interesting and complementary development, but we really want to see what’s out in the marketplace,” Gossett said.

The proposal, if carried out, would transform a swath of land north of Tilikum Crossing‘s eastern bridgehead. Though OMSI’s property would represent a logical extension of the burgeoning Central Eastside office market that developers such as Cairn Pacific, Beam Development and Capstone Partners have brought to life, the possibilities are nearly limitless.

The property is broken up into seven developable parcels ranging from 0.69 acres to 4.49 acres. Maximum building heights vary from 80 feet to 250 feet. Floor area ratios – governing how large a building can be – also vary on OMSI’s property, topping out at 12-to-1.

OMSI’s master plan calls for active ground-floor uses on many of the parcels and underground parking structures. OMSI also plans to raise a wooden walkway near the Willamette River to provide pedestrian access.

OMSI proposes to relocate Water Avenue north of Tilikum Crossing to the east. According to OMSI’s proposal, the existing stretch of Water Avenue would become a two-way bikeway. That would allow for internal circulation in the site, Gossett said.

The new route for Water Avenue would move the street east of its current location, following railroad tracks and a former ramp that was once intended to be part of the proposed Mount Hood Freeway, an east-west highway expansion plan that was halted in the 1970s.

Relocating Water Avenue isn’t crucial to OMSI’s master plan, but it is desirable, Gossett said.

“What we can do is begin development – if we choose to do so – without the relocation of Water Avenue,” she said. “But we’re very interested in pursuing that and getting Water Avenue relocated.”

OMSI has discussed the plan with the Portland Bureau of Transportation, whose buy-in is necessary for a major street realignment.

“They’ve been very thoughtful about the planning process and they participated in the planning process,” Gossett said. “We’re still talking about it, so that’s a good sign.”

Developers are investigating the parameters of building on the OMSI land.

“It’s a key piece of what’s going to happen there (in the Central Eastside), and we’d certainly take a hard look at it,” said Chris Nelson, principal at Capstone Partners.

Nelson said he would prefer to see employment-based development there rather than housing.

“I guess my view of it (is) it should be employment with activity generation, with some supportive retail,” he said.

The Portland Housing Bureau is looking for locations to build affordable housing, with a $258.4 million voter-approved bond to spend. But Director Kurt Creager said the Central Eastside has little available tax-increment financing, and the city already owns land in the area. A Portland Fire & Rescue station is being eyed as a potential site for future affordable housing development.

“That has been the subject of some conversation bureau-to-bureau that is approaching ripeness,” Creager said.

The Housing Bureau would first look to develop the fire station property before looking at other opportunities in the Central Eastside, Creager said.

OMSI was given the land by Portland General Electric in 1987. The museum moved in 1992 from Washington Park to its current location on the east bank of the Willamette River. Since then, the MAX orange light-rail line and Portland Streetcar have bifurcated the property.

OMSI’s master plan was guided by the New York office of Snohetta, an international design firm based in Norway. Snohetta was also the lead design firm on plans for a new Willamette Falls Riverwalk in Oregon City.

The New York office of BuroHappold Consulting Engineers, an English firm, provided engineering consulting services to OMSI.

OMSI’s master plan hinges on state approval, technically known as “acknowledgment,” of Portland’s new comprehensive plan, of which the Central City 2035 plan is a component. If the plan receives acknowledgment from the Department of Land Conservation and Development, it would take effect on Jan. 1.

OMSI’s master plan comes amid other large-scale development master plans in Portland, including the Broadway Corridor in Northwest Portland and Zidell Yards in the South Waterfront District.

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