China’s real estate bubble may have just popped at Lloyd Center in Portland.

When a lender to Lloyd Center, KKR Real Estate Finance Trust Inc., announced during an investor call Oct. 26 that it would move to foreclose on the mall property, little was known about the mall’s owner, EB Arrow.

Based in Dallas, EB Arrow is a relative newcomer to U.S. commercial real estate. It was formed in 2018 when a Dallas company, Arrow Retail, accepted a major investment from EBA Investments Ltd., a subsidiary of China Everbright Ltd. China Everbright Ltd. is in turn part of China Everbright Group, a state-owned firm whose stock is publicly traded on the Hong Kong exchange.

Everbright has repeatedly been honored as China’s top real estate fund. EB Arrow did not respond to messages seeking comment.

EB Arrow’s default comes as highly leveraged Chinese real estate firms, including China Evergrande Group and Fantasia Holdings Group Co. Ltd., have reportedly missed payments amid widespread concern among economists that a state-backed real estate bubble may be bursting. In August, China demolished 15 unfinished residential towers in Kunming because the project team ran out of money.

Lloyd Center’s debt troubles stem from a 6-year-old loan. In October 2015, Lloyd Center’s owner accepted a $110 million loan that may have sealed the fate of the forlorn, 1.1 million-square-foot shopping mall.

The refinance loan was placed in “nonaccrual status” in October 2020 after EB Arrow was unable to make payments, according to KKR. Then, during last month’s conference call, KKR announced it would foreclose on the property.

“We intend to foreclose and to take ownership of the asset, enabling us to optimize value over the near and medium term,” said Patrick Mattson, president and chief operating officer of the New York-based lender, according to a transcript.

Mattson revealed KKR would seek to redevelop the property.

“Upon taking title, which is targeted for the fourth quarter, we will begin to prepare for a comprehensive redevelopment of the site, which we expect will include multiple uses, including residential and creative offices,” Mattson said.

The mall’s ownership records are cloaked in Delaware shell companies, and some news outlets have reported that the mall is owned by Cypress Equities, a Dallas real estate firm. That is no longer the case.

A leasing manager with Cypress Equities said Cypress is the manager of the mall, and not the owner.

“We don’t have anything to do with what’s going on with the bank,” said Darrell Gage, Cypress’ senior director of property management. “It’s EB Arrow.”

Gage declined further comment.

Lloyd Center is listed on EB Arrow’s website under the header “Our Properties” alongside six other shopping centers.

Redevelopment plans

Mattson promised a “more fulsome update” on Lloyd Center during KKR’s next earnings call. The company’s next quarterly update is likely to come in late January 2022.

“We plan to take ownership of the property before the end of this year, which will enable us to begin working with local partners to prepare for a long-term redevelopment of the site,” a KKR spokesperson stated in an email.

KKR appears likely to link forces with a local developer. KKR is known as an aggressive lender and investor, with a history of hostile takeovers, including one of RJR Nabisco, and a leveraged buyout of Toys R Us. It is not known primarily as a developer.

As a redevelopment play, the Lloyd Center property has much going for it, real estate professionals said. It’s close to jobs and amenities in central Portland, it has easy access to Interstate 84, and it’s near plentiful light-rail and bus service.

At 32.78 acres, the property would likely have a mix of uses if redeveloped.

“Due to the size, I think it’s going to have to be a creative mix of a lot of different product types, and I assume that’s their thinking as well,” said Vanessa Sturgeon, president and chief executive of TMT Development.

Lloyd Center was Portland’s first mall when it opened in 1960. But it has languished for years. Anchor stores such as Macy’s and Nordstrom left, causing smaller retailers to shutter as well. Weakness in retail, already beset by online shopping, was dramatically worsened by the COVID-19 pandemic. The gap between underperforming malls like Lloyd Center and better-positioned malls such as Washington Square widened.

The news that Lloyd Center would be foreclosed upon emerged Monday, thanks to local architect and blogger Iain Mackenzie spotting the disclosure in a KKR investor call.

Some local developers welcomed KKR’s move to redevelop the property.

“I think everybody would agree at this point that redevelopment is a good thing,” said Wade Lange, vice president and regional manager in Portland for American Assets Trust, a property owner and developer in the Lloyd District

Neighboring property owners and boosters have watched for years as Lloyd Center emptied. Information was scarce, and rumors multiplied. When KKR’s announcement came, “it kind of felt like the other shoe had finally dropped,” Lange said.

Any investment in Lloyd Center is welcome, Sturgeon said.

“It’s exciting to see an institutional investor back in the Portland market after so many years of not being an attractive place for institutional investment due to rioting and the condition of the city,” she said.

Ownership had tried for years to reposition the mall. Plans to transition more Lloyd Center space away from retail never came to fruition. Cypress Equities in 2018 inked a deal with concert promoter Live Nation to operate a venue at Lloyd Center. The plan moved through Portland’s design review process, but redevelopment never occurred.

A parking play?

Lloyd Center has approximately 1,252,000 square feet of retail space and 107,000 square feet of offices, according to EB Arrow’s website.

It also has parking – lots of it – and some developers think that’s the play.

“The mall buildings probably aren’t worth very much, but the parking garages surrounding the mall are probably worth a ton,” said Noel Johnson, a Portland developer. “It’s a parking play.”

Structured parking garages are very expensive to build, and new parking is subject to greater zoning scrutiny than in decades past. It’s possible KKR or a subsequent developer could design a development that incorporates some or all of the existing garages.

“Form follows parking,” Johnson said.

In a 2019 leasing flyer, EB Arrow boasted the property had 5,500 parking spaces. However, previous estimates by Go Lloyd, a nonprofit community association that conducts parking studies in the neighborhood, had counted 3,200 structured stalls and 400 surface parking spaces.

At the 91��Ƶ’s request, Go Lloyd recounted Wednesday. Lloyd Center has sold certain holdings and also lost parking in renovations, leaving approximately 3,995 stalls, said Owen Ronchelli, executive director of Go Lloyd.

Zoning at the site allows for a maximum height of 225 feet. The floor area ratio ranges from 6:1 at the mall itself to 9:1 in the south parking lot and cinema areas, according to the Portland Bureau of Planning and Sustainability.

Government-backed development is not likely.

“From a public investment standpoint, there just aren’t funds available,” Prosper Portland spokesman Shawn Uhlman said.

Development at the site could be reviewed as a Central City Master Plan, city planner Troy Doss stated.

“It’s bittersweet, honestly,” Ronchelli said. “Lloyd Center was an institution for sure, and they were a good community partner too,” he said, mentioning local management financed programming in Holladay Park.

“It’s been kind of sad to watch its decline.”

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There was a moment, before the coronavirus pandemic hit, when some owners of empty or underperforming spaces in Portland struck upon a common solution.

Live events, particularly concerts, would cure what ailed commercial landlords. Where retail was weak, events would prove strong. Where once had been a Nordstrom – a pillar of the increasingly musty anchor-store concept – there would soon be a Live Nation concert venue.

That was the driving idea at the Lloyd Center mall. And in the South Waterfront, plans for a mixed-use district at Zidell Yards had given way to a semi-temporary events venue with capacity for 10,000 attendees.

The venues would prove a keystone to thriving, walkable entertainment districts. 91��Ƶ would draw foot traffic. While there, attendees surely would spend money at adjacent retail shops, restaurants and bars.

At the time, concert venues were hot – a JLL report in May 2019 noted a burst of facility renovations, including a $56 million auditorium upgrade in Philadelphia and a $35 million amphitheater update in Atlanta.

Remember when we used to go to concerts?

That concept collapsed sometime around March 11, when the World Health Organization declared a global pandemic, an NBA player tested positive for COVID-19, stock indexes fell precipitously and actor Tom Hanks announced on Instagram that he had contracted the virus.

Suddenly crowds, particularly indoors, seemed like a terrible idea.

That left two notable Portland developments in the lurch.

The Zidell project has not moved forward since a Design Commission hearing in October. The project appears to be on pause. Tom Henneberry, chief operating officer for ZRZ Realty, declined to comment, and referred questions to Live Nation, which did not respond to a request for comment.

Hacker was designing the venue.

“We are currently not engaged in work on this project,” Audrey Alverson, the architecture firm’s marketing director, stated in an email.

At the Lloyd Center, Cypress Equities had inked Live Nation to a long-term lease in 2018 to build a concert venue. At the time, the mall’s manager said the venue could open in 2020.

Cypress Equities’ plans for the venue centered on a 4,000-seat theater and multiple secondary venues in the former Nordstrom space on the mall’s west end.

Cypress Equities, based in Dallas, did not respond to a request for comment. Live Nation Entertainment also did not respond to a request for comment. Live Nation, based in Beverly Hills, California, is a publicly traded company that earned $11.5 billion in revenue in 2019.

At the South Waterfront, the Live Nation amphitheater would connect from the western base of Tilikum Crossing. Plans submitted to the Bureau of Development Services described a 10,000-seat amphitheater featuring a performance stage, raised seating, a large plaza, trailers and other supporting structures, and a perimeter fence. The venue was “intended to occupy the site for seven years with the possibility of an extension.”

Design commissioners told the project team that the concert venue could improve its response to the surrounding area, particularly when the venue is not being used.

“The proposal needs to do more to relate to the neighborhood on a year-round basis,” Staci Monroe, a BDS reviewer, wrote in an October 2019 summary memo.

The project is “off to a good start … but has a long way to go,” she stated.

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Lloyd Center‘s owners spent a lot of time and money in the past two years trying to make sure the mall’s east end is in fashion. This season, they’re back with a new look.

The first program didn’t quite fit, but the Portland Design Commission assured them the new approach promises to be much more attractive. And with a little further persuasion, Cypress Equities may have its return approved.

The Dallas-based developer revisited the Design Commission on Thursday seeking significant changes to a design approved by the commission in April 2018. Those plans called for a remake of the mall’s east end with a Regal movie theater and office space.

“It was a hard decision to make,” Kirk Williams, Cypress Equities’ managing director, told the commission. “We had it designed. We could have gone forward. But we did not want to go forward with a design that would not be successful.”

Changes were made in response to tepid retail demand and some issues with the office design, he said.

“The retail market – let’s say the commercial markets – are very fluid,” Williams said. “Change is happening very quick. Sometimes information is coming faster than we can design. From lease-ability, particularity on the office level, we had challenges – significant challenges.”

The new design from LDA Design Group of Burbank, California, and 505 Design‘s Boulder, Colorado, office, calls for stacking the movie theater in a taller structure. Ground-floor office space has been removed in favor of bringing the theater lobby to the ground floor. The former Sears building will become an office building, with a design that lets in natural light.

The theater lobby will now front the corner of Northeast 15th Avenue and Multnomah Street.

“You guys always wanted the theater lobby at the corner of 15th and Multnomah, and guess what – we’re giving it to you,” said Nick Igel, partner at 505 Design.

Prospective office tenants had said the office space in the Sears building was too dark, Williams said. Changes will include an atrium to bring in natural light.

“We’ve taken two buildings that were very inward looking to as outward looking as we can,” Igel said. “There’s a huge transition to what’s there now and what we’re proposing.”

The theater building will grow from the previously approved design’s height of 78 feet, 9 inches, to 106 feet, 4 inches, with a smaller footprint. More glazed glass will be added to the frontages.

Commissioners said some aspects of the new design, like a pedestrian breezeway fronting the office building, are better in line with guidelines.

“This is a huge improvement,” Commissioner Jessica Molinar said. “The move from office to theater adds so many more people, so much more activity – a much better response to guidelines.”

Molinar was less enthused by a stair tower that takes up a street corner – something discouraged by city design guidelines – and she expressed concern about an oriel window that hangs over the sidewalk.

Thursday’s meeting marked at least the 10th Design Commission hearing for Lloyd Center since 2017. In addition to the east end changes, a major renovation is coming to the mall’s west end for a Live Nation concert venue to become an anchor.

Taken together, the changes represent a major shift away from traditional anchor retail stores to entertainment spaces. Brands such as Sears, Nordstrom, J.C. Penney and others have hemorrhaged retail locations.

“We’re keenly listening to the market, and it is telling us what to do,” Williams said in a brief interview after the meeting concluded. “The market always wins.”

The project team will proceed to a Type III design review hearing, said Don Linane, a partner at LDA Design Group.

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Lloyd Center has signed a long-term lease with concert group Live Nation Entertainment to operate a new music venue inside the mall.

Live Nation plans to build a 4,000-seat primary venue and “multiple secondary venues” in the former Nordstrom space, Lloyd Center General Manager Bob Dye said. A box office will be on the ground floor, and the music venues will take up the entire third floor.

The deal further shifts the Lloyd Center away from a pure retail outlet to a model that includes entertainment and nightlife attractions.

“This continues our redevelopment creating a family-friendly entertainment and retail venue,” Dye said. “We’re not getting away from retail; we’re adding the entertainment and lifestyle component.”

Meanwhile, work is under way to renovate Regal Cinemas‘ movie theater in the mall as part of the second phase of its redevelopment. The first phase included renovation of the ice rink, remodel of a three-story spiral staircase and completion of a new food court.

The concert venue could open in 2020, Dye said.

“The Lloyd has been recognized as Portland’s fastest-growing neighborhood, and we’re excited to offer new entertainment options for the neighborhood and the community,” he said.

Live Nation Entertainment, based in Beverly Hills, California, is one of the nation’s largest concert promoters. The publicly traded company earned $10.3 billion in revenue last year. Attendance at Live Nation concerts grew 21 percent to 86 million.

“Portland is a great music market with a strong fan base,” Liam Thornton, Live Nation’s executive vice president of development of clubs and theaters, said in a prepared statement. “This midsize venue will fill the gap between the smaller club venues and larger arenas already present in Portland, bringing fans even more entertainment offerings.”

The new concert venue will be larger than the Arlene Schnitzer Concert Hall, which seats up to 2,776 concertgoers.

Lloyd Center is owned by Cypress Equities of Dallas.

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Beauty may be only skin deep, but Portland design commissioners would like a little more beauty on the skin of a proposed Lloyd Center movie theater conversion.

The proposal calls for renovation of the four-story Sears space at the east end of the Lloyd Center into a 14-screen movie theater for Regal Cinemas, along with office and retail space. The theater would also have a restaurant and bar and concessions.

The project went before the Design Commission for advice Thursday. Commissioners largely backed a staff report that recommended denial.

Commissioners criticized aspects of the design from LDA Design Group of Burbank, California, and 505 Design of Boulder, Colorado, particularly the metal cladding on stories two through four. The design proposes metal panels in 12 gradations of brown and red tones meant to mimic brick masonry, a material used on Lloyd Center exteriors in the past and present.

“There’s too many things going on,” Commissioner Tad Savinar said.

Commissioner Andrew Clarke agreed.

“Simplicity of the façade would go a long way to a much better building,” he said.

Commissioners urged the designers to return with a more straightforward exterior as shown in examples brought by the applicants, including the Garage Museum of Contemporary Art in Moscow, Russia.

The masonry-colored metal façade reflects the Lloyd Center’s past and future, architects said.

“We think metal’s a futuristic material,” 505 Design partner Nick Igel said.

The renovation of the Sears space would expand the building by approximately 20,000 square feet, to 166,308 square feet. The movie theater would occupy 76,400 square feet on the third floor. Levels one and two would serve as office or retail space.

The proposed renovation would reach 86 feet in height, well below the 150-foot limit for the site. Aesthetically, the ground floor emphasizes glass and transparency. Commissioners praised the ground-floor design for contributing to an active pedestrian streetscape. The metal box sits atop the glass base.

Some commissioners said the project was limited by its use – based on an existing building, and needing a dark interior to serve as a movie theater.

“I just think it’s a difficult project to pull off when you have spaces that need to be dark in a box that already exists,” Clarke said.

He said the metal cladding needs “better articulation.”

Lloyd Center owner Cypress Equities of Dallas is looking to transform the retail space as part of a move among malls nationwide away from traditional anchor stores. Retailers such as Macy’s, J.C. Penney’s and Nordstrom have closed stores in malls across the country.

Sears sold the Lloyd Center space to the mall owners for $11.5 million in August 2016. Sears later announced it would close the store.

The Lloyd Center recently underwent a $50 million makeover that involved rebuilding and shrinking the mall’s iconic ice rink. The mall’s owners have also been eager to take advantage of the office market, leasing 36,500 square feet to Providence Health & Services.

The project is tentatively scheduled to return before the Design Commission for a work session Feb. 15. A design review hearing would follow at a later date.

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One of the most significant moves in Cypress Equities‘ $50 million remodel of the Lloyd Center mall has gained Portland Design Commission approval.

Commissioners on Thursday voted 3-1 to approve plans to carve out a new pedestrian entrance and plaza between Macy’s and Lloyd Center’s southwest parking structure on Northeast Multnomah Street. The plaza is expected to include stormwater and conventional planters with attached benches, storefronts, a new sky bridge, and a glass-lined entrance revealing a large spiral staircase inside. The stairs, an element of the original 1950s mall design, will be restored.

As a condition of approval, commissioners requested several revisions to the plaza design by Portland-based firms Waterleaf Architecture, Interiors & Planning and GreenWorks. These included switching out the birch trees proposed for the plaza planters with a species that would create less shade, removing one of the planters to open up access to a covered area adjacent to the parking garage and eliminating plans for fixed wooden benches.

Thursday’s hearing was the third time the Design Commission has reviewed plans to create a new plaza at Lloyd Center across the street from Holladay Park. The project team took careful note of the commission’s feedback at previous hearings and incorporated it into the revised design, said John Fainter, vice president of development with Dallas-based Cypress Equities. He said company officials believe replacing a portion of the mall’s parking spots with a plaza will be worthwhile.

“Our consultants have done a good job of hearing you all,” he told the commission. “We think that by creating this space it will pay off in the long run.”

During a check-in hearing in February to discuss the proposed plaza design, commissioners expressed lingering reservations. They emphasized that they’d like the space to feel less barren and more inviting. Other concerns included providing adequate rain protection and visibility into a planned bike parking area.

In response, revised plans call for awnings that extend the length of the space and relocating the bike parking outside of the plaza to a more visible and accessible location on the west side of a mall truck ramp, said Mark Mikolavich, a Waterleaf Architecture associate. Seating that extends off the stormwater planters and trees were added to enliven the space, he said.

“The intention was to provide more landscaping variability and also draw in the feel of (Holladay Park),” he said.

The latest plans propose a water feature using rain runoff from an existing downspout on the Macy’s wall facing the plaza. The bike parking on the west side of the plaza was replaced with a covered area that could house food carts.

“We’ve made some significant moves,” Mikolavich said. “I think we’ve created a more flexible space that can incorporate a variety of informal and formal activities.”

Overall, commissioners said they were pleased with the changes, but expressed concerns that the covered area when unoccupied with food carts would turn dark and uninviting. Vice Chairman Ben Kaiser noted that when the trees in nearby planters matured they would create too much shade, darkening the space.

“Five or six years from now, I don’t think that will be very appealing,” he said.

Commissioner Jeff Simpson suggested replacing birch trees with a less bushy species.

“To me, the solution may be a change in the variety of trees,” he said. “Maybe it’s a tall, columnar tree that goes in that planter.”

This suggestion was incorporated into the conditions for approval, along with a commission consensus for removal of one of the planters to make the covered area feel less walled-off.

Commissioner Guenevere Millius said she appreciated the addition of an awning that extends the length of the plaza.

“I think there was a lot of push from us to provide rain protection and depth, and this is an ingenious solution,” she said.

Commissioner Tad Savinar, who cast the sole vote against approval, said he would like to see the plaza include more public art than a stormwater wall feature.

“Art is made by artists,” he said. “It’s not really public art.”

Kaiser told the development team that the commission has scrutinized the design of the planned plaza because it will be part of the new face of the rapidly redeveloping Lloyd District.

“It’s in the center of what’s quickly becoming a very important part of our city,” he said. “I’m kind of trying to make up for years of neglect. This is the biggest positive step forward.”

Construction of the plaza is scheduled to start in January 2016. A contractor has not been selected yet.

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Plans to carve out a new plaza on the Lloyd Center side that faces Northeast Multnomah Street still need tweaking, according to the Portland Design Commission.

Commissioners offered feedback Thursday to the Portland-based Waterleaf Architecture, Interiors & Planning team designing Dallas-based Cypress Equities‘ $50 million mall remodel. The hearing focused on one of the most significant changes – punching out a portion of the parking garage to create a plaza next to Macy’s, facing Holladay Park.

“The vision is to open the mall to the community,” Mark Mikolavich of Waterleaf Architecture told the commission. “It’s to establish this entrance as the front door to the south. It’s a transformation that turns the mall outward literally.”

But, as in previous hearings for the project, commissioners said the plaza designs still missed the mark. Several said they’d like to see a more inviting outdoor space. Commissioner Tad Savinar suggested adding more elements besides outdoor café tables with umbrellas, such as benches, a fountain or public art.

“I’m not talking about clutter,” he told the design team. “Take the umbrellas out (and) this is a concrete slot. That’s not what the client is looking for and that’s not what we want.”

Mikolavich and Waterleaf Architecture partner Bill Bailey sought feedback on several revisions to the plaza design based on previous comments from the commission. These included moving the curtain wall that gives approaching pedestrians a glimpse of the interior closer to the street, mounting a set of flagpoles on the wall of Macy’s instead of extending them to the ground and eliminating plans for a green wall in the plaza. The design team also proposed several options for the placement of canopies along either side of the plaza.

“We’re hoping to get some clarity, some feedback, on these design ideas,” Bailey said. “We really do want this session to focus on the plaza design.”

After seeing the current plans, commissioners said they were left wanting more. Commissioner David Keltner said it would be nice if the plaza felt like a place where people could relax.

“You’ve definitely accomplished your goal of getting people from the street into the mall,” he said. “Is there the ability to have a zone or layer that says, ‘You can stop here for a minute?’ ”

Several commissioners said they’d prefer that the flagpoles extend to the ground.

“To me, it’s kind of awkward,” Commission Chairman David Wark said. “Can you still mount it on the wall, but bring it all the way down?”

Savinar said his primary concern was that the plaza design acknowledged its users.

“There’s a place that a human being can inhabit; that’s what I’m looking for,” he said. “In order to make this a true entrance for people, you have to make it beyond architecture.”

In addition to feedback on the Lloyd Center plaza, commissioners on Thursday held two design advice request hearings. The first was for Hub at Portland, a proposed 15-story, mixed-use development designed by Chicago-based Hartshorne Plunkard Architecture in partnership with Portland-based Myhre Group Architects at 325 and 333 S.W. Harrison St. The second hearing discussed the Market Street Apartments, a planned nine-story apartment building, at 1133 S.W. Market St., designed by Portland-based SERA Architects.

A hearing for the Hub at Portland, developed by Austin, Texas-based Core Campus, attracted a large number of neighboring residents, who testified that the proposed development would create too much shade over nearby Pettygrove Park, be inconsistent with other buildings in the neighborhood, exacerbate traffic congestion in the area and contribute to noise pollution.

Plans for the U-shaped building call for 400 units of mostly student housing, 35,000 square feet of ground-floor retail space for a potential grocer and below-grade parking for 97 vehicles.

Commissioners generally agreed with residents, and said that the design didn’t adequately respond to the surrounding district.

“It really feels like you’re just filling up the site,” Commission Vice Chairman Ben Kaiser told the design team. “It’s your right, but it’s not acknowledging the neighborhood – and there’s nothing else that big.”

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The Regal Lloyd Mall 8 theater will show its last movie at the end of January, with construction crews moving in to start a renovation on Feb. 1.

Dave Squire, executive managing director of Newmark Grubb Knight Frank‘s Portland office, confirmed on Friday that the cinema is closing to make way for 40,000 square feet of creative office space.

“It’s a 30,000-square-foot footprint and we’re adding 10,000 square feet by building a mezzanine within the space and punching out some windows,” Squire said. “We’re looking for one tenant – a call center, a creative office or an institutional tenant that needs more space – anyone who needs a large block of space because we can’t break it up.”

Newmark Grubb Knight Frank on Friday hosted an open house and lunch for brokers to drum up possible tenants for the space.

“There is a ton of capital being invested in the Lloyd District right now and it’s really poised for a space like this with big, open, high ceilings and plenty of parking,” Squire said. “The mall was built in 1962, when there was no light rail, no public transit, and we’ve got 550 parking stalls on the third floor that are never used.”

Squire said this space provides a unique opportunity by offering ample parking and easy access to public transportation.

“Where else in the central city is available for free parking and is also within walking distance of the light rail,” Squire said.

The new tenant should expect to pay between $26 and $27 per square foot, Squire said. The renovation should be complete and ready for occupants by the end of summer.

“Our team is working on some great new office space that will feature high ceilings and large windows,” said Todd Minnis, chief investment officer for Cypress Equities Real Estate Management, the owner and developer of the Lloyd Center project. “The space would be ideal for utilization by an office tenant whose employees would have direct access to the many improvements and amenities at Lloyd Center.”

The space formerly occupied by Nordstrom, at the mall’s west end, also is available.

“Our team is working on a number of options, but it will most likely be a grouping of tenants that will energize the large plaza area immediately across from (American Assets Trust’s) new residential development.”

American Assets Trust, nearly finished with its mixed-use superblock development Hassalo on Eighth, is gearing up to begin a similar project on a superblock known as Oregon Square. American Assets Trust also has plans to redevelop another superblock just north of Hassalo on Eighth and directly across Northeast Ninth Avenue from Lloyd Center. The company has not formally announced its plans for the site nor has it indicated when development would begin.

The theater renovation and Nordstrom remodel are just two components of the $50 million Lloyd Center revamp that includes altering the ice skating rink, adding a three-story spiral staircase, constructing a new plaza and updating existing entrances and pedestrian areas.

“Our redevelopment of Lloyd Center focuses on reconnecting with the center’s history,” Minnis said. “We recognize the importance of the ice rink and have worked to make that the focal point of the shopping center. In addition, bringing back the spiral staircase and showcasing it at the new gateway entrance provides a touch of nostalgia while opening up the mall to natural sunlight and improving visibility and connectivity with the Lloyd District community.”

The new pedestrian entrance on Northeast Multnomah Street, directly across from Holladay Park, opens directly into the heart of the shopping center. The spiral staircase – reminiscent of a similar spiral staircase removed in 1989 – will be visible through the glass wall of the new entrance, according to plans.

Cypress Equities in 2013 purchased the mall for $148 million and in January 2014 announced plans for an extensive renovation. In the transaction the firm also purchased a superblock directly east of Holladay Park. Plans submitted to the Portland Bureau of Development Services indicate that the new owners intend to redevelop the property.

“This project is too early to discuss,” Minnis said. “However, we are considering our options to develop a more mixed-use component on the property in the future.”

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While designing the next evolution of Lloyd Center, Waterleaf Architecture, Interiors & Planning partner William Bailey has frequently examined its past. Plans from when the Northeast Portland mall was built as an open-air structure in 1959 and later covered in 1989 have lent critical context to a $50 million remodel project, he said.

“As we redesign these spaces, we have to know how they were designed,” he said. “We test a lot of ideas that come up and get inspiration from that original design work.”

Dallas-based Cypress Equities a year ago purchased the mall for $148 million and in January announced plans for a multiyear renovation to elevate it into a premier Portland destination.

“I think what we’re really trying to do is create a sense of community there, and the architecture is very important,” said Todd Minnis, Cypress Equities’ chief investment officer. “People (say), ‘Is this a mall or a fortress?’ ”

When the company hired Waterleaf to design the remodel, Bailey immediately suggested taking advantage of the mall’s proximity to Holladay Park and making it more inviting to pedestrians, bicyclists and mass transit riders. He also pushed for preservation or restoration of some features, including a grand spiral staircase that was a signature of the original design but later removed.

“A lot of what we’re trying to do is (make) the most of the original design and mid-century modern ideas,” he said.

Plans call for exterior improvements. New pedestrian entrances are proposed for the mall’s south and east sides. Existing entrances and garage facades will be updated with new storefronts and signs.

“It breathes new life into blank facades and it sets a precedent of opening the mall back up to the community,” Bailey said.

Two 2,500-square-foot storefronts for smaller retailers will be added along Northeast Multnomah Street under a 25-foot-long overhang. Those spaces will flank Macy’s.

The side of the mall that faces Multnomah Street will be much livelier after the remodel, Bailey said.

“The idea is to make Multnomah much more of a pedestrian-friendly, retail-friendly environment,” he said.

Part of the parking garage will be carved away to expose the Macy’s entrance – one of the most used at the mall – on Multnomah Street. The space will be converted into a plaza with additional storefronts and bike parking. Plaza glass windows will look into the mall, including the ice rink and new spiral staircase.

At the entrance to the southeast parking garage an original salmon sculpture fountain will be refurbished and new lighting added. Original terrazzo surrounding the Northeast Halsey Street entrance and covered by tile in 1989 will be re-exposed and restored.

“We’re going to be finding those elements and exposing those when we can,” Bailey said. “This is the kind of thing that thrills us. These are some of the gems we’re finding.”

Many of the interior improvements will make navigation easier, he said.

“There is no place to go to perceive the whole mall,” he said. “There is a lot of what we have been calling ‘visual noise.’ One of the goals of the project is to make the mall more comprehensive and clarify and simplify architectural components and let the storefronts do what they do best and be the visual focus.”

The transformations of the ice skating rink and food court will be the most dramatic. The square rink will be converted into an oval that better caters to recreational skaters and moved eastward under a skylight, Bailey said. That will place it closer to the larger, revamped food court, which will be at the top of three levels cut into concentric circles with views of the rink.

“It will become a central focus, as it should be,” he said.

The rink’s antiquated ice-making equipment will be upgraded. Other improvements geared to increase energy efficiency include an upgrade of the heating and ventilation system and LED lighting installations.

Various interior finishes, such as tile flooring and carpets, will be refreshed too.

Bailey, who has a background in historic preservation, said he enjoyed discovering the mall’s history and designing a remodel that is respectful of that.

“The fact is we are rediscovering our mid-century modern heritage,” he said. “Lloyd Center has changed a lot over the years, but it has those mid-century modern concepts – and where we can enhance those, we’re doing that.”

The project is scheduled for a design review hearing before the Portland Design Commission in November.

Crews from general contractor S.D. Deacon are scheduled to start work on the first phase of construction this fall. The entire project is anticipated to wrap up by fall 2015.

Lloyd Center remodel

Location: 2201 Lloyd Center, Portland

Cost: $50 million

Anticipated construction start date: fall 2014

Anticipated construction completion date: fall 2015

Owner: Cypress Equities

Architects: Waterleaf Architecture, Interiors & Planning; HKS Architects

Landscape architect: GreenWorks

Structural engineer: DCI Engineers

Mechanical, electrical and plumbing engineer: PAE

Civil engineer: MGH Associates

General contractor: S.D. Deacon

Other associates: Rink Management Services, Luma Lighting Design, Johnson Controls

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Unlike when Lloyd Center was built, pedestrian access will take precedence in the design for a planned remodel.

When the Northeast Portland mall was developed in the 1960s, the automobile was king, Portland-based Waterleaf Architecture, Interiors & Planning partner William Bailey said. These days, shoppers are just as likely to arrive on foot, bike, bus or light rail, he said.

“The thing that has changed at Lloyd Center is the multimodal approach,” Bailey told the Portland Design Commission on Thursday.

Bailey and Waterleaf associate Mark Mikolavich sought design advice from the commission concerning plans for Cypress Equities‘ effort to revitalize Lloyd Center. The Dallas-based company nearly a year ago purchased the mall for $148 million and in January announced plans for a multiyear renovation to elevate it into a premier Portland destination.

Initial plans include exterior renovations to improve pedestrian and vehicle entrances. New pedestrian entrances are proposed for the mall’s south and east sides. Existing entrances and garage facades will be updated with new storefronts and signs. Additional storefronts along Northeast Multnomah Street are also being considered.

More storefronts along Multnomah Street, beyond the parking garage’s ground-floor level, will help engage pedestrians, Bailey said.

“It establishes this no-man’s land,” he said. “That’s why adding those storefronts is appropriate.”

This will also encourage more connectivity between the mall’s south end and nearby Holladay Park, he said.

“The success of Lloyd Center is very much tied to the success of Holladay Park as well the light rail station at Holladay Park,” Bailey said.

The firm also proposes carving away part of the parking garage to expose the Macy’s entrance – one of the most heavily used at the mall – on Multnomah Street. The space will be converted into a plaza with additional storefronts and bike parking. Plaza glass windows will look into the mall, including the ice rink.

“One of the goals that we had was to create openness that goes straight to the ice rink, the heart of the mall,” Bailey said.

An existing awning with a hole that once allowed rain to land on a planter in front of Macy’s will be preserved in the process. Design commission chairwoman Guenevere Millius suggested that designers take advantage of the void in the canopy.

“I really like the canopy and exposing it, but there’s a hole in it,” she said. “Have you thought about reintroducing something under it?”

New signs for the mall over the parking garage entrances that incorporate screens made from wooden slats will increase visibility, Mikolavich said. Using wood was important to the design scheme, he said.

“We’re looking at using wood because wood is a core element to the branding of the mall,” he said. “We feel it’s sympathetic to some of the other building elements of the mall. It’s an orienting element as well.”

Commissioner Ben Kaiser cautioned against using wood because it isn’t as durable as other building materials.

“If you can find something that looks similar, fake it,” he said. “If you can shift out of the wood it would be more timeless. I like the lattice entry. I think you can pull off what you want with metal.”

Commissioner Tad Savinar agreed.

“That main entry from Multnomah is really stunning and there’s no wood there,” he said. “(It’s) really mining what’s there.”

Millius said it was clear that Waterleaf is aiming to design a renovation that respects the mall’s history and significance to the surrounding community.

“I appreciate the level of care that you guys are taking to this,” she said. “We all want to see this be a very careful, thoughtful execution.”

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