The quest to build the first mass-timber high-rise in the U.S. has been placed on hold indefinitely.

Citing skyrocketing labor costs, inflation and fluctuations in the tax credit market, Portland developer project^ on Monday announced the postponement of Framework, a proposed 12-story mixed-use tower for the Pearl District. Plans had called for 60 units of affordable housing and approximately 90,000 square feet of floor space in a cross-laminated timber structure. But the project team encountered financial challenges that proved too much to overcome, at least for now.

“Over the last four years, the Framework team has worked with private entities and public agencies that have understood the nature of this project and have supported our efforts to bring this pioneering model to fruition,” Anyeley Hallova, developer with the Portland-based project^, said in a statement released Monday on frameworkportland.com. “Although beset with market challenges beyond our control, we are very proud of Framework’s achievements and the new standards we’ve established for the use of CLT in the U.S.”

The statement was released on behalf of the project team and notes that “the postponement is a result of changing market conditions over the past two years, including inflation, escalating construction costs and fluctuations in the tax credit market. All have impacted the project’s bottom line.”

The estimated price tag of Framework was $29 million.

As recently as March, at the International Mass Timber Conference at the Oregon Convention Center, Portland Mayor Ted Wheeler was promoting Framework in glowing terms after the city allocated $6 million for the project through the Portland Housing Bureau‘s Fast Starts program.

“This isn’t just another building material,” Wheeler said at the conference. “This has the opportunity to help us solve our community’s key challenges around development, around sustainability, around climate change and around employments in rural parts of America. That’s what’s at stake here.”

Now that $6 million will go elsewhere, according to Wheeler.

“We’re disappointed to miss out on an opportunity to create 60 units of affordable housing for only $6 million in city resources,” he told the 91��Ƶ in a text message exchange. “The housing bureau will repurpose the funds to other projects.”

Last year, Framework, designed by LEVER Architecture, won the $1.5 million U.S. Tall Wood Building Prize from the U.S. Department of Agriculture, the Softwood Lumber Board and the Binational Softwood Lumber Council. Other members of the project team included D.R. Johnson Lumber Co. of Riddle, the supplier of CLT components, as well as KPFF Engineering and general contractor Walsh Construction.

LEVER Architecture did not respond promptly to requests for comment.

Financially, the project team was banking on a mix of public and private monies. In addition to $6 million from Fast Starts, it received grants from the U.S. Forest Service, Metro, the Hewlett Foundation, the Harbourton Foundation, the Edwards Mother Earth Foundation and the Oregon Community Foundation.

But with a $2 million funding gap remaining, according to several recent media reports, it became clear why a March 1 ground-breaking event was canceled and never rescheduled.

The project team’s statement specifically focuses on labor costs in the booming Portland construction market. It mirrors the national situation, where contractors are increasingly unable to find sufficient skilled workers.

“Since the inception of Framework,” the statement reads, “Portland has witnessed an increasingly tight construction market with increasing building costs, which have significantly impacted progress for Framework and other construction projects.”

Despite the postponement, parties involved with the project, including the property owner, remain hopeful it can be revived.

“Framework has been steadfast in its commitment to social equity and economic opportunity and in its mission to promote rural Oregon economies and deliver affordable housing,” Beneficial State Bank CEO Kat Taylor said in the project team’s statement. “We look forward to the opportunity to advance a 2.0 version of the project.”

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Construction of the tallest wood-framed commercial building in the United States is poised to start in Portland in the near future, and Mayor Ted Wheeler took to the podium Thursday to tout that fact.

Planned in the Pearl District as a 12-story mixed-use building, Framework will feature cutting-edge cross-laminated timber. The 148-foot-tall building will offer approximately 90,000 square feet of floor space and 60 units of affordable housing in one of the city’s most affluent neighborhoods.

Wheeler spoke at the third annual International Mass Timber Conference at the Oregon Convention Center in support of the project, which has garnered international acclaim and substantial grant money. Even the city has put its money where its proverbial mouth is, awarding Framework some $6 million via the Housing Bureau’s Fast Starts program backing affordable housing.

“It’s the first high-rise structure in the U.S. (to be) built from cross-laminated timber,” Wheeler said. “And in addition to being (a seismically) resilient building, this technology allows us to build taller and more environmentally sustainable buildings.”

Last year, Framework, designed by LEVER Architecture, won the $1.5 million U.S. Tall Wood Building Prize from the U.S. Department of Agriculture, the Softwood Lumber Board and the Binational Softwood Lumber Council. The project also has received grants from the U.S. Forest Service, Metro, the Hewlett Foundation, the Harbourton Foundation, the Edwards Mother Earth Foundation and the Oregon Community Foundation.

Private financing also will help pay for the approximately $29 million project, although the process to finalize those terms has resulted in delays.

Developers aim to use at least 50 percent locally sourced wood in construction, which will take an estimated 14 months to complete.

D.R. Johnson Lumber Co. of Riddle is the supplier of the CLT components of the project, while engineering is being carried out by KPFF Engineering of Portland. Walsh Construction will be the general contractor.

Framework also will demonstrate the long-term potential of mass-timber construction, including CLT, Wheeler said.

“We’ve taken a timber innovation and put it in the heart of Portland, Oregon,” Wheeler said. “We have made it uniquely about the needs of Portland in terms of sustainability, environmental resilience, earthquake resilience and concern about the cost of housing in our community.”

Ground was initially supposed to be broken by March 1, but that date has now been pushed back.

Wheeler, a grandson of late timber magnate Coleman Wheeler, mentioned that mass-timber construction has potential to bolster the timber industry in Oregon. But questions will need to be answered first.

“It’s essential to sustainably manage our forests,” he said. “As new technology like CLT comes on line we’re going to see more conversation about sustainable harvest methods used in production.”

Framework, he acknowledged, has not been without controversy. Opponents have questioned the project cost, which is greater than a comparable concrete and steel structure, and the source of the wood to be used in the building.

Locally, environmental groups are worried that mass-timber technology will encourage timber companies to overharvest Oregon’s private and state-owned forests. That sentiment was expressed in a letter sent in January to Wheeler from the Audubon Society of Portland and representatives of a host of local groups, including Oregon Wild, the Center for Sustainable Economy, the Sierra Club’s Oregon chapter and others.

“This isn’t just another building material,” Wheeler said. “This has the opportunity to help us solve our community’s key challenges around development, around sustainability, around climate change and around employments in rural parts of America. That’s what’s at stake here.”

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