Harsch Investment Properties – Daily Journal of Commerce /news/tag/harsch-investment-properties/ Building and Construction News in Portland, Oregon and the Pacific Northwest Fri, 08 May 2020 23:45:15 +0000 en-US hourly 1 https://wordpress.org/?v=6.6.6 /files/2023/08/favicon.webp Harsch Investment Properties – Daily Journal of Commerce /news/tag/harsch-investment-properties/ 32 32 Nonprofit found to make use of former Multnomah County jail /news/2020/05/08/nonprofit-found-make-use-former-multnomah-county-jail/ Fri, 08 May 2020 23:45:15 +0000 /?p=246611 Helping Hands Reentry Outreach Centers has signed a five-year lease agreement for the former Wapato Jail building.

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Helping Hands Reentry Outreach Centers has agreed to a five-year lease at the former Wapato Jail building, now known as the Bybee Lakes Hope Center, in North Portland. (Sam Tenney/91ĘÓƵ file)
Helping Hands Reentry Outreach Centers has agreed to a five-year lease at the former building, now known as the , in North Portland. (Sam Tenney/91ĘÓƵ file)

Helping Hands Reentry Outreach Centers has signed a five-year lease agreement for the former Wapato Jail building, real estate investor announced recently.

Schnitzer, president of , agreed to lease the 155,400-square-foot Bybee Lakes Hope Center for the token amount of $1 a year.

“After two years of looking for the right partner, we are now entering into a five-year lease with Helping Hands Reentry Outreach Centers to renovate and repurpose the project formerly known as Wapato,” Schnitzer stated in a news release. “Since purchasing the property in 2018, we have entertained numerous proposals from credible nonprofits to help homeless and others in need.”

Schnitzer stated that he was impressed after meeting with Helping Hands founder Alan Evans, who was homeless for 27 years before establishing the nonprofit in 2002. It’s based in Seaside, and now has 11 facilities in Multnomah, Clatsop, Yamhill and Tillamook counties.

The lease agreement is a milestone in the yearslong effort to put the never-used jail building to some useful purpose. Schnitzer had pushed for a social-service tenant, saying he would otherwise demolish the building. In October 2019, Schnitzer went so far as to unveil plans for a 314,000-square-foot warehouse. The former jail, completed in 2004, is in an industrial area dotted with fulfillment centers and other facilities.

Developer , who acquired the building from , sold it to Harsch for $5 million in April 2018.

The project team that will convert the jail into a shelter and reentry center was assembled by construction manager . , an affiliate of – the ex-jail’s original builder – has been selected as general contractor. Architecture and engineering services were awarded to

Otak will work with VLMK Engineering + Design, Interface Engineering and Knot to provide functional architecture, way-finding and interior design.

The Bybee Lakes Hope Center will pair supportive services with transitional housing. Helping Hands will open three of the nine wings at the facility and house up to 228 beds in the first year of operation, Harsch announced. At full capacity, the center will be able to serve 525 individuals.

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Demolition next for Wapato Jail, owner says /news/2019/10/10/demolition-next-wapato-jail-owner-says/ Thu, 10 Oct 2019 23:20:10 +0000 /?p=195277 Real estate magnate Jordan Schnitzer will demolish the Wapato Jail in about two months, he said Thursday, unless a social service provider steps up to operate it as a homeless shelter.

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Harsch Investment Properties president Jordan Schnitzer speaks Thursday during a press conference at the Wapato Jail, which Harsch plans to demolish to build a warehouse. (Sam Tenney/91ĘÓƵ)
president speaks Thursday during a press conference at the , which Harsch plans to demolish to build a warehouse. (Sam Tenney/91ĘÓƵ)

Real estate magnate Jordan Schnitzer will demolish the Wapato Jail in about two months, he said Thursday, unless a social service provider steps up to operate it as a homeless shelter.

Schnitzer, president of Harsch Investment Properties, held a press conference at ‘s jail that never operated as one. He revealed his plan for the property: construction of a 314,080-square-foot warehouse called the Bybee Lake Commerce Center. It could be leased to two separate tenants as a fulfillment or manufacturing facility employing 30 to 100 people, he said. A site plan showed one tenant space of 174,720 square feet and another of 139,360 square feet.

“The industrial warehouse business is the biggest part of our real estate business,” he said.

Schnitzer in April 2018 purchased the Wapato Jail property from another developer, , shortly after he had bought it from Multnomah County for $5 million.

Schnitzer said Thursday he was ready to move on after 18 months of trying to make a shelter out of the facility. He said he’d talked with Kay Toran, president and CEO of Volunteers of America Oregon, and others about operating a shelter there.

“We still have not gotten anything in writing,” he said. “We could lease this for $1 a year; we don’t need to make a profit on this.”

Schnitzer criticized political leaders for not doing more to address homelessness.

“We need the political leadership to stand up,” he said. Current leaders, he said, “can’t be blamed for it being built … I think they’d just like to see it torn down and out of sight and out of mind.”

Schnitzer estimated taxpayers have spent $100 million building, maintaining and servicing bonds on the property since the jail was completed in 2004.

“Doesn’t it make you sick?” he said.

Demolition of the facility would cost about $1.4 million, Schnitzer said.

The Wapato Jail building has been vacant since it was completed in 2004. (Sam Tenney/91ĘÓƵ)
The Wapato Jail building has been vacant since it was completed in 2004. (Sam Tenney/91ĘÓƵ)

Multnomah County’s board of commissioners voted in April 2018 to sell the property, with only Commissioner Loretta Smith dissenting. County officials, with the exception of Smith, expressed doubt the property would ever be functional as a homeless shelter or social services center, citing its isolated location, poor transit access and steep operating expenses.

The property is also zoned for industrial use, and the state Land Use Board of Appeals ruled in a past case that Portland’s code prohibits a “mass shelter” in an industrial zone.

Multnomah County spokesman Denis Theriault stated Thursday that the county would not “throw good money after bad.”

“We’re glad that Jordan Schnitzer has reached the conclusion that he can’t afford to warehouse people in this remote jail,” Theriault stated in an email. “For us, it was never about the cost alone. Our community, our homeless service providers, business leaders like Business for a Better Portland and, most critically, people with lived experience have told us it’s the wrong building in the wrong place,” he stated.

If Schnitzer does build industrial space on the property, it will have to compete with steady delivery of industrial projects. The Portland- area saw 1.75 million square feet of industrial space arrive this year through September, according to . Absorption was 1.3 million square feet, and the overall vacancy rate grew to 4.1 percent.

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A building to meet a district’s growing needs /news/2019/05/24/building-meet-districts-growing-needs/ Fri, 24 May 2019 20:43:03 +0000 /?p=189504 The 7 SE Stark building in the Central Eastside Industrial District will have four levels of office space and substantial parking.

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Core and shell work on 7 SE Stark, which contains four stories of office space over parking, tenant amenity space and commercial space, is slated for completion this summer. (Sam Tenney/91ĘÓƵ)
Core and shell work on , which contains four stories of office space over parking, tenant amenity space and commercial space, is slated for completion this summer. (Sam Tenney/91ĘÓƵ)

7 SE Stark building is either a major new office project with ample parking, or a major new parking project with an office component.

has erected the core and shell of the 10-story building in the Industrial District. Exterior and interior work is ongoing, with completion expected in late July.

designed the 200,000-square-foot building to feature a modern concrete-and-steel structure and extensive exterior glass.

Parking is the differentiator at 7 SE Stark. The first six floors are dedicated to structured parking – 275 stalls. The building offers at least two stalls per 1,000 square feet, dwarfing most modern office developments in Portland’s Central City. Some of the parking will be rented out to other users in the fast-growing Central Eastside office market.

The building is a response to a pronounced lack of parking for the Central Eastside’s growing employment base, said Jake Lancaster, managing director at in Portland.

“There’s a tremendous need for parking in the neighborhood as it evolves from its industrial roots,” he said.

The area has several adaptive reuse spaces, including Autodesk‘s office at the Towne Storage building, with limited parking.

Parking may be a key selling point for 7 SE Stark, said President Kevin VandenBrink, who is not involved in the project.

“While no one wants to admit that parking is an issue, the tenants have told us you still need to find ways to get people into and out of those spaces,” he said.

The Central Eastside is becoming more of a “24/7 neighborhood” where people live and work, Lancaster said. The building is pinched on a half-acre parcel between Interstate 5 and Union Pacific tracks. Eateries such as Olympia Provisions, Steven Smith Teamaker and Wayfinder Beer operate nearby.

The staggered facade of 7 SE Stark allows for multiple terraces on each office floor, providing views in all directions. (Sam Tenney/91ĘÓƵ)
The staggered facade of 7 SE Stark allows for multiple terraces on each office floor, providing views in all directions. (Sam Tenney/91ĘÓƵ)

On Wednesday, Lancaster led a tour of 7 SE Stark as construction winds down. He pointed to a small, modern lobby that will be decorated with murals commissioned by , Harsch’s owner and a noted art collector.

The top floor has a floor plate of approximately 17,000 square feet, while the three lower office floors offer about 20,000 square feet apiece. Lancaster said the brokerage would be willing to split the top floor with potentially more than one user, but is looking for tenants willing to take an entire floor for the three others.

The office floors have 12 decks in total, and offer sweeping views, including the Willamette River and downtown to the west.

Lease rates are expected to be $33 to $35 per square foot on a triple-net basis, Lancaster said. Other expenses will add $10 to $12 per square foot.

The entry of 7 SE Stark to the office market comes as construction continues nearby on other office projects, including District Office from Beam and Urban Development + Partners, and Tree Farm from Guerrilla Development. Gerding Edlen‘s 5 MLK mixed-use project will bring 120,000 square feet of office space to market in early 2020. Oregon Square from American Assets Trust also has office space on the market.

Central Eastside office tenants are no longer limited to the “funky spaces” in adaptive reuse projects that typified the area a few years ago, VandenBrink said.

“It has kind of grown up on the Eastside now, where you have tenants paying rents even with the Pearl (District) or the (Central Business District),” he said.

With rents even across the area, leasing decisions often come down to noneconomic factors, VandenBrink said.

“It comes down to what feels right, who has the best amenities (and) what spaces are most efficient for the layout and the employees,” he said.

Harsch acquired the property via a limited liability company for $375,000 in 2012, according to records. The seller was Francis Development LLC.

Noel Rodriguez, an apprentice sprinkler fitter with UA Local 669 and an employee of Cosco Fire Protection, applies thread sealant to sprinkler heads on an office floor at 7 SE Stark. (Sam Tenney/91ĘÓƵ)
Noel Rodriguez, an apprentice sprinkler fitter with UA Local 669 and an employee of Cosco Fire Protection, applies thread sealant to sprinkler heads on an office floor at 7 SE Stark. (Sam Tenney/91ĘÓƵ)

 

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Voters boost efforts to acquire or build affordable housing /news/2018/11/08/voters-boost-efforts-to-acquire-or-build-affordable-housing/ Fri, 09 Nov 2018 00:18:08 +0000 /?p=181939 Voters in the Portland-metro area said yes to affordable housing, overwhelmingly approving a $652.8 million bond measure.

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Voters in the Portland- area said yes to , overwhelmingly approving a $652.8 million bond measure.

Metro‘s bond won Tuesday with 65.6 percent of the vote. The money will be used to build or acquire affordable housing, or acquire land, in Multnomah, Washington and Clackamas counties, and the cities of Portland, Beaverton, Hillsboro and Gresham.

“The outcome (Tuesday) helps to demonstrate how the greater Portland region is interested in addressing these issues at the regional level,” Metro spokesman Nick Christensen said.

A statewide ballot measure, Measure 102, also passed, enabling public agencies to issue bonds for projects involving federal tax credits. Housing advocates said they could better leverage local dollars in concert with federal funding.

Metro will act as the aggregator of bond funds and set goals and guidelines for spending. However, individual deals will be decided by city and county agencies.

“Regionally, it’s sort of an unprecedented collaboration around housing and housing affordability,” said Sean Hubert, chief housing and strategy officer at , a nonprofit affordable housing developer.

The regional approach means affordable housing projects will be spread across the area, instead of each city and county taking an individual approach and perhaps leaving gaps in supply.

“It’s really groundbreaking,” REACH Community CEO Dan Valliere said. “It’s one of the first times nationally where you have a metropolitan-wide affordable housing measure. … It’s flexible, and we can make sure we’re developing it everywhere.”

The Metro housing bond targets deep affordability, with approximately 40 percent of the dollars set to benefit renters at 30 percent or below area median family income.

“That’s hopefully a good precedent for public policy,” Hubert said.

The sheer amount of money will help make a dent in the problem, combined with new spending flexibility, Hubert said. Measure 102 allows federal low-income tax credits – the single largest source of affordable housing subsidies – to be paired with local bond money.

The timing of the bond sale has not been determined, Christensen said.

“The biggest thing is getting the bond sale done and the best value for the region’s taxpayers,” he said.

Metro and affordable housing developers have prepared for the bond’s passage and are ready to move quickly, officials said.

“For us, it’s great because there are already a bunch of projects teed up around the region,” Valliere said. “They were kind of waiting in line. Now some of those can move quicker.”

Also on Tuesday, voters overwhelmingly approved issuing $158 million in bonds for Oregon City schools. The money will be used to relieve overcrowding by rebuilding Gardiner Middle School and remodeling Ogden Middle School, improve safety and security at schools, upgrade aging schools, and build new career and technical education facilities, according to the district.

Meanwhile election results also likely drove a stake through the idea of using the former as a homeless shelter. Loretta Smith, one of the few local leaders to support the idea, was trounced by Jo Ann Hardesty, who opposed it. Gubernatorial candidate Knute Buehler, who had reportedly voiced support for fast-tracking conversion of the Wapato Jail into a shelter, also fell short in his campaign against Gov. Kate Brown.

The Bureau of Development Services last week issued a $1 million demolition permit for the Wapato Jail facility at 14355 N. Bybee Lake Court. , president of the property’s owner, , did not return a call seeking comment on his plans for the property. Schnitzer has said he intends to build storage facilities on the property if it can’t be transformed into a homeless shelter.

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Making the most of every nook and cranny /news/2018/10/04/making-the-most-of-every-nook-and-cranny/ Thu, 04 Oct 2018 21:24:20 +0000 /?p=180701 Between a freeway and railroad tracks, a new mixed-use building is rising in Portland’s Central Eastside.

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Crews prepare for a deck pour at the 7 Southeast Stark office project in the Central Eastside.
Crews prepare for a deck pour at the 7 Southeast Stark office project in the . (Josh Kulla/91ĘÓƵ)

These days in Portland, buildings are popping up everywhere.

For example, in the Central Eastside, at the junction of Southeast Stark Street and Water Avenue, a 10-story mixed-use building is being squeezed into an industrial space mere feet away from Interstate 5 to the west and Union Pacific railroad tracks to the east.

“You can see the close proximity of the building to the freeway,” Superintendent Mark Rado said during a walk around the site last week, pointing out how close workers were to passing vehicles. “The building itself is a little further away, but because we need a work deck, we’re even closer; you can see that Aluma deck there. That one is probably about 10 feet away, and that one up there is probably 15.”

The started as an innovative parking solution, but evolved into one of the few Central Eastside work-space buildings to be constructed from the ground up. The building, known as “,” will hold approximately 70,000 square feet of office space and 265 parking spaces for motor vehicles. Secured bike parking and a fitness center with locker rooms also will be included.

Josh Marquez, a journeyman carpenter with Local 1503 and an employee of Marion Construction, builds formwork at the 7 Southeast Stark project.
Josh Marquez, a journeyman carpenter with Local 1503 and an employee of Marion Construction, builds formwork at the 7 Southeast Stark project.

to stand out among the vintage industrial shells that dominate the immediate vicinity. Floor-to-ceiling glass windows will provide occupants views of the city. As the structure rises, portions of the façade will “erode” back toward the core, and the top will feature several shared terraces. The bottom six stories will be devoted to public parking.

“We think there’s tremendous demand in the neighborhood for parking,” Senior Vice President and Regional Manager Steve Roselli said. “It has the added bonus of getting you above the freeway and the railroad noise. It gets you up there to where you’re in a world of your own.”

The building will feature six stories of post-tensioned concrete topped with four stories of structural steel with slab-on-metal decks. Crews are about six weeks away from finishing structural concrete work, Rado said.

“We start structural steel after Thanksgiving,” he said. “Today we’re loading our PT deck number six, and we have three more decks to pour, but right now we’re loading rebar and PT on the deck and getting ready to pour next week.”

Hunter Fennimore, right, a journeyman carpenter with Local 271 and an employee of Marion Construction, disassembles a temporary platform. Aaron McGraw, a journeyman laborer with Local 737 and also an employee of Marion Construction, observes.
Hunter Fennimore, right, a journeyman carpenter with Local 271 and an employee of Marion Construction, disassembles a temporary platform. Aaron McGraw, a journeyman laborer with Local 737 and also an employee of Marion Construction, observes.

The is not necessarily a new direction for Harsch Investment Properties, Roselli said, but rather a reflection of earlier property investments made in Portland’s inner east side.

“We’re a pretty active developer in markets where we can find land for our light industrial products, but there are no industrial sites left up here,” he said. “So, we’re a very active developer in Las Vegas and Sacramento and now starting in Tucson. It just happens that in Portland, where we’re based, we have a lot of downtown blocks that are or will be redevelopments as the market dictates.”

Harsch Investment Properties purchased the 7 Southeast Stark site five years ago when it was a surface parking lot. Then it six months ago purchased the site to the east with the intention of either redeveloping the existing warehouse or replacing it with something new.

“We have quite a few sites around town in Portland that are redevelopment sites that could certainly sustain much higher and better uses,” Roselli said. “Several of these blocks that we bought on the east side qualify.”

The building will feature floor-to-ceiling windows on the office floors and several shared terraces on the top floor. (Works Progress Architecture)
The building will feature floor-to-ceiling windows on the office floors and several shared terraces on the top floor. (Works Progress Architecture)

Nearby, Harsch Investment Properties has its eyes on 151 S.E. Alder St. The firm was working with Works Progress Architecture on a potential 10-story mixed-use building there; however, plans were put on hold, Roselli said.

“This one went first; it made more sense because we could do more parking,” he said in reference to 7 Southeast Stark. “That one, being a corner block, it’s more limited and we’ll hold for now.”

Substantial completion of the project, Roselli said, is expected by June 2019. , with JLL agent Jake Lancaster handling inquiries.

Josh Marquez, a journeyman carpenter with Marion Construction and a member of Local 1503, builds formwork in preparation for a concrete pour at 7 Southeast Stark.
Josh Marquez, a journeyman carpenter with Marion Construction and a member of Local 1503, builds formwork in preparation for a concrete pour at 7 Southeast Stark.
The 7 Southeast Stark project is being built feet away from Interstate 5 at Water Avenue. This stretch underneath the freeway was formerly the site of sizable homeless encampmnent that was swept by ODOT prior to construction. (Josh Kulla/91ĘÓƵ)
The 7 Southeast Stark project is being built feet away from Interstate 5 at Water Avenue.
Journeyman carpenter Ryan Eiford, an employee of Marion Construction and a member of Local 1503, builds formwork on the 7 Southeast Stark project. (Josh Kulla/91ĘÓƵ)
Journeyman carpenter Ryan Eiford, an employee of Marion Construction and a member of Local 1503, builds formwork on the 7 Southeast Stark project.
Robert Sanchez, a journeyman carpenter with Carpenters Local 271 and an employee of Marion Construction, builds formwork in preparation for a concrete pour at the 7 Southeast Stark.
Robert Sanchez, a journeyman carpenter with Carpenters Local 271 and an employee of Marion Construction, builds formwork in preparation for a concrete pour at the 7 Southeast Stark.
Francisco Gonzalez, a journeyman ironworker with R2M2 Rebar and Stressing, lays down a coil of post-tensioning cable in preparation for a deck pour.
Francisco Gonzalez, a journeyman ironworker with R2M2 Rebar and Stressing, lays down a coil of post-tensioning cable in preparation for a deck pour.
A mobile crane is being used for the project due to a constrained site bounded by Interstate 5 to the west and Union Pacific railroad tracks to the east.
A mobile crane is being used for the project due to a constrained site bounded by Interstate 5 to the west and Union Pacific railroad tracks to the east.
The 10-story 7 Southeast Stark office project being built by general contractor Hoffman Construction being erected on a parcel bounded by Union Pacific railroad tracks and Interstate 5.
The 10-story 7 Southeast Stark office project being built by general contractor Hoffman Construction being erected on a parcel bounded by Union Pacific railroad tracks and Interstate 5.
Crews with R2M2 Rebar and Stressing and Marion Construction lay down post-tensioning cables and build formwork prior to the a deck pour, the project's sixth.
Crews with R2M2 Rebar and Stressing and Marion Construction lay down post-tensioning cables and build formwork prior to the a deck pour, the project’s sixth.

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At Wapato Jail, three developers vie for role /news/2018/04/25/at-wapato-jail-three-developers-vie-for-role/ Wed, 25 Apr 2018 15:50:50 +0000 /?p=174933 Portland developer Marty Kehoe has sold a controlling interest in the Wapato Jail property to Jordan Schnitzer’s Harsch Investment Properties.

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Marty Kehoe has sold a controlling interest in the Wapato Jail property to Harsch Investment Properties. (Courtesy of Multnomah County)
has sold a controlling interest in the property to . (Courtesy of )

Developer was having lunch at a downtown Portland seafood restaurant weeks ago when he ran into Multnomah County Commissioner Loretta Smith.

The conversation turned to the Wapato Jail, and Smith told Schnitzer a public use should be found for the long-vacant county property, Schnitzer recalled. He agreed and began to look into purchasing it himself.

Now Portland developer Marty Kehoe has sold a controlling interest in the Wapato Jail property to Schnitzer’s Harsch Investment Properties.

Schnitzer said he accepted fee title on the limited liability company controlling the property Friday. Kehoe is remaining on board the project as an adviser, Schnitzer said.

Yet, in keeping with the comedy of errors in the Wapato Jail’s history, Kehoe and Schnitzer appear to have differing visions of the property’s future.

Schnitzer said Tuesday he will meet next week with Portland developer , founder of the nonprofit Oregon Harbor of Hope, to discuss using the jail building as a homeless shelter with associated social services.

“If anyone can help figure this out, it’s Homer,” Schnitzer said.

But Kehoe said the property would not be used as a homeless shelter.

“All I can say is that’s not the plan,” he said. “That’s never been the plan.”

It was only last week that Kehoe completed the purchase of the Wapato Jail from Multnomah County for $5 million after he’d submitted an initial $10.8 million offer that tied up the property for months. Schnitzer said he purchased the property from Kehoe for $5 million. The two had arranged a transaction before the sale from the county closed, Schnitzer said.

“We entered into a transaction with him that if he did it, it would basically transfer with us,” Schnitzer said.

Williams was also bidding for the Wapato Jail at the time. He submitted a $7 million purchase offer that county commissioners opted not to entertain.

Now all three developers are involved in deciding Wapato’s future. Williams will have the “first shot” at finding a public use for the property, Schnitzer said.

“He is a brilliant real estate dreamer and developer,” Schnitzer said of Williams, pointing to his experience developing projects in the South Waterfront District and the Pearl District. “Now he is devoting his life, he said, to help the homeless, and I admire that. The first crack is yours.”

Schnitzer left the door open to other uses for the 18.24-acre property zoned for industrial use.

“If we can’t find a public purpose for it, we’ll try to repurpose the building for record storage or other use,” Schnitzer said. “If we can’t find a way to repurpose it, we’ll tear it down.”

Oregon’s Land Use Board of Appeals rejected a past attempt to use an industrial-zoned property as a mass shelter.

During the time Multnomah County owned the property, county officials – with the notable exception of Smith – were skeptical it could ever be used as a homeless shelter. They cited the jail’s physical layout, operating costs and distance from transportation and service agencies in Portland’s core.

In 2016, the county’s Department of County Assets evaluated the potential use of the Wapato Jail as a homeless shelter. The county report found doing so would have a start-up cost of $950,000 and ongoing costs of $140,000 a month, including the need for five full-time-equivalent staff members.

The report noted it was unknown if the building’s physical systems would perform at full operation.

County Chairwoman Deborah Kafoury did not immediately respond Tuesday to a message seeking comment.

County commissioners “did the best thing in terms of stopping the drain of dollars,” Schnitzer said. The county was paying $300,000 a year in maintenance costs.

Schnitzer said the Wapato Jail purchase is part of his family’s legacy in giving back to Portland.

“All of us, it breaks our heart to see all of these homeless folks,” he said. “It also hurts to see them on doorsteps hurting merchants who need their business to survive.”

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Centennial Mills plan will be sought … again /news/2017/06/16/centennial-mills-redevelopment-plan-will-be-sought-again/ Fri, 16 Jun 2017 22:13:06 +0000 /?p=164770 Prosper Portland, the agency formerly known as the Portland Development Commission, plans to issue a request for offers for Centennial Mills in coming months.

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Prosper Portland plans to petition proposals for the redevelopment of the Centennial Mills property in the coming months. (Sam Tenney/91ĘÓƵ file)
plans to soon petition offers for redevelopment of the property. (Sam Tenney/91ĘÓƵ file)

Developers will be asked to submit offers for Centennial Mills this summer.

Prosper Portland, the agency formerly known as the Portland Commission, plans to market the property again in coming months, said Will Thier, senior project coordinator.

The move to solicit developers comes after the City Council in March endorsed a full-site redevelopment of the industrial riverfront property. The council directed Prosper Portland to include as much on the site as possible.

The full-site redevelopment option also requires Portland Police Bureau’s mounted patrol unit to vacate the site permanently.

Prosper Portland has struggled to strike a workable deal with a developer for the site along Naito Parkway. The agency received bids for the property as far back as 2007, and let a memorandum of understanding with expire in November 2015.

The PDC acquired the property in 2000 from ADM Milling Co.

The property faces competing demands for affordable housing, open space and market-rate development.

In Centennial Mills’ current iteration, Prosper Portland envisions 425 total residential units, including 149 affordable units set aside for renters earning less than 60 percent of the Portland area’s median family income.

The property would also include 20,000 square feet of creative-office space and 17,000 square feet of ground-floor retail or commercial space.

Despite a hot market for property in urban Portland, the site faces a number of encumbrances to development, including an existing historic flour mill and a low floodplain.

Some developers have expressed discomfort with Prosper Portland’s development and disposition agreements, which typically carry far stricter requirements than for a comparable privately owned property, and carry additional political risk.

Prosper Portland Chairman Tom Kelly said the property’s eventual use should be subject to public scrutiny.

“I just want to make sure we have as robust as possible public process,” he said at Wednesday’s meeting.

Board member Mark Edlen urged the agency to enlist an experienced broker to market the property.

“The brokerage community is going to drive the highest value for us,” he said.

A neighbor, Larry Mazer, spoke for residents of the nearby Waterfront Pearl condos. He said residents are OK with adding low-income units to the area – they just want to be consulted.

“We’re not here to say not in my backyard,” Mazer said.

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In wake of elections, developers ponder future /news/2016/11/17/in-wake-of-elections-developers-ponder-future/ Thu, 17 Nov 2016 22:01:18 +0000 /?p=158306 Political uncertainty was foremost on the minds of developers and real estate investors at NAIOP Oregon’s development forum on Wednesday.

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Jordan Schnitzer, second from left, speaks during the NAIOP Oregon Chapter's annual Developers Breakfast Wednesday at the Sentinel Hotel. Also pictured are, from left, moderator Mark Friel, Rob Hinnen, and Eric Clapp. (Sam Tenney/91ĘÓƵ)
, second from left, speaks during the Chapter’s annual Developers Breakfast Wednesday at the Sentinel Hotel. Also pictured are, from left, moderator Mark Friel, Rob Hinnen, and Eric Clapp. (Sam Tenney/91ĘÓƵ)

Political uncertainty was foremost on the minds of developers and real estate investors at NAIOP Oregon‘s forum on Wednesday.

Locally, Mayor-elect Ted Wheeler’s incoming administration was the source of hope among developers. But the election of Chloe Eudaly as city commissioner was cited as an uncertainty. And a raft of city policies, including inclusionary zoning and rent control, loomed over the discussion held at the Sentinel Hotel.


Steve Barragar, president of NAIOP Oregon and regional leasing director for , said he recently met with Wheeler.

“We left the meeting feeling very hopeful about his administration moving forward,” Barragar said.

Portland’s city leaders need to provide a more business-friendly environment, said Jordan Schnitzer, president of Harsch Investment Properties.

“From my perspective, we haven’t had business-friendly leadership statewide or citywide in many years,” he said.

Schnitzer’s comments came despite a development boom that has reached a fever pitch this fall.

He also waded into the City Council race that bounced incumbent Steve Novick. Schnitzer referred to Eudaly as “that gal that beat Steve Novick.”

“We have someone on City Council not a lot of folks in this room have a relationship with or know,” he said. “Is that good or bad? Time will tell.”

Eric Clapp, managing director of LLC, said Portland is friendlier to development than some markets in California. He said he’s worked in places such as Laguna Beach, California, and Napa Valley that “make Portland look business-friendly.”

Rob Hinnen, founding partner of developer , said President-elect Donald Trump’s pledges of new infrastructure spending “could certainly be good for our business.”

The pace of multifamily development in Portland is unsustainable, Hinnen said.

“I’ve felt like it’s been overheated for a while,” he said. “I might be wrong about that – eventually I’ll be right.”

Wood-frame apartment construction in particular has seen sharp increases in construction costs, Hinnen said.

“I do think the cycle is mature,” he said. “It’s time to be careful in how deals are structured. Understand your debt, understand your equity, understand your covenants.”

Developers have less exposure than before previous recessions, Hinnen said, minimizing the downside risks if the market turns south.

Cairn Pacific is busy transforming the Slabtown area of Northwest Portland with a mix of multifamily, office, retail and parking development.

Westport Capital Partners is at work along with Sentinel Development on a renovation of the Towne Storage building at the east end of the Burnside Bridge. The seismic retrofit of the 101-year-old building is complete, and construction is under way, Clapp said.

Westport Capital Partners was persistent in looking for a Portland property to develop, Clapp said.

“It’s an emerging city with a lot of good fundamentals,” he said.

Harsch will start construction this month on a nine-story creative office and retail building at 151 S.E. Alder St. in the , Schnitzer said. The 90,000-square-foot building is being designed by Works Partnership Architecture.

Looking outside the Portland market, Harsch has in recent months bought up industrial properties in Nevada and California.

Schnitzer said Harsch is holding off on building a multifamily tower at 18th Avenue and Alder Street, near Providence Park, to wait on Portland’s market to absorb recent multifamily construction.

“If we get started on this, it’ll probably be (2019),” he said.

Hinnen said that timing makes sense. Cairn Pacific also has plans for projects to begin then, he said.

“That sounds like the right timeframe when the construction industry will be hungry again,” he said.

The developer is pursuing city approval for a multifamily project at the George Morlan Plumbing building, at 2222 N.W. Raleigh St. Construction could begin around 2019.

Rents may be flat or falling at the moment, and more buildings are offering concessions, Hinnen said.

“Long-term I’m very bullish about apartments in Portland,” he said. “I might be cautious in the short term, but bullish in the long term.”

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PDC readdressing Centennial Mills /news/2016/04/15/pdc-readdressing-centennial-mills/ Fri, 15 Apr 2016 20:50:59 +0000 /?p=148919 Portland Development Commission is searching for a reset on Centennial Mills, a downtown waterfront property that has seen a series of false starts.

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Brett Horner, left, a planning manager with Portland Parks & Recreation, discusses possible access points to Centennial Mills during a project open house at the Pordland Development Commission. (Sam Tenney/91ĘÓƵ)
Brett Horner, left, a planning manager with Portland Parks & Recreation, discusses possible access points to during a project open house at the Portland Commission. (Sam Tenney/91ĘÓƵ)

 

Portland Development Commission is searching for a reset on Centennial Mills, a downtown waterfront property that has seen a series of false starts.

On Wednesday, the PDC hosted an open house to give an update for industry professionals and neighbors.

is representing the city agency as the listing agent with brokers Cara Nolan and Graham Taylor. The property most likely will be marketed for four to six weeks, followed by a call for offers, Nolan said.

Multifamily and office development could be the best fit, but at this point, backers are open to ideas.

“We’re going to let the market decide,” Nolan said.

The project has been in limbo since November, when the PDC pulled out of a memorandum of understanding with ‘s .

Matt Johnson with KPFF Consulting Engineers said everyone involved in redevelopment of the property is waiting for a developer to come through with the right solution.

“It’s a chance to try again, step up again and see what can be done,” he said.

Mark Edlen, a PDC commissioner and chief executive of Development, said plenty of enthusiasm exists for a Centennial Mills project.

“Obviously, there are a lot of competing interests,” he said. “Our job is to sort through those and come to the best decision.”

The PDC also wants public space as part of the mix, including a possible Greenway Trail connection.

Neighbors who attended the evening open house said they were tired of the drawn-out process and resulting uncertainty.

“I’m disappointed PDC has been on again, off again so many times on this,” said Steve Young, who lives in Waterfront Pearl.

Young also served on the citizens advisory committee for The Fields Neighborhood Park. He is among residents who are keen to enhance public access to the river, as well as the views from their windows.

“I trust that the heights will be in keeping with the stepdown idea, where the highest building isn’t right at the water’s edge,” he said.

Centennial Mills’ second act has faced long delays. The PDC acquired the property in 2000 from ADM Milling Co. A framework plan was completed in 2006. A first phase of selective demolition is under way; warehouse and elevator structures are being dismantled.

Eric Foster, another Waterfront Pearl resident, said he’s been watching the demolition since he moved in. He agreed that the process was too drawn out, and Wednesday’s meeting didn’t appear to move things forward.

“We’re disappointed,” he said. “We thought a developer would be presenting us his ideas, and the PDC would be telling us about the options.”

A looming question is whether the site’s historic stone buildings can be preserved. The PDC estimates that redevelopment of the flour mill at 45,000 gross square feet would cost $19.7 million, while redevelopment of the feed mill at 21,500 gross square feet would cost $10.8 million.

The ongoing demolition is leaving those buildings alone for now.

Johnson said that both concrete buildings have fared best among those on the property, but they’re in poor shape nevertheless.

“It would take an extraordinary effort to save them,” he said.

 

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Public meeting to focus on Centennial Mills /news/2016/01/14/public-meeting-to-focus-on-centennial-mills/ Thu, 14 Jan 2016 23:46:04 +0000 /?p=144358 Harsch Investment Properties President Jordan Schnitzer is among scheduled speakers for a public event about Centennial Mills.

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Harsch Investment Properties president Jordan Schnitzeraddresses a group of building professionals during a session held at Centennial Mills to discuss redevelopment opportunities for the site in 2013. Schnitzer will be holding a public meeting to discuss the project on Jan. 21. (Sam Tenney/91ĘÓƵ file)
president addresses a group of building professionals during a session held at to discuss redevelopment opportunities for the site in 2013. Schnitzer will be holding a public meeting to discuss the project on Jan. 21. (Sam Tenney/91ĘÓƵ file)

After the city of Portland let expire a memorandum of understanding for Harsch Investment Properties to develop the abandoned Centennial Mills site, the firm’s president, Jordan Schnitzer, complained that the city didn’t hold enough public meetings. So now Schnitzer has decided to hold one of his own.

Schnitzer will be at Pure Space, at 1315 N.W. Overton St., on Jan. 21 to speak about the “redevelopment opportunities and potential for Centennial Mills.” President Patricia Gardner and historian Chet Orloff also will speak at the public event, which is slated to start at 6 p.m.

The Portland Commission bought the five-acre Centennial Mills site in 2000. After several failed redevelopment attempts, the city last year began demolition of five warehouses and three grain elevators.

The PDC backed out of the MOU with Schnitzer in November. He said he was “profoundly disappointed in (the) PDC and the mayor.”

“The need for political vision and leadership is imperative as Portland struggles to maintain and restore our treasured historical sites,” Schnitzer said in a statement.

Susanne Orton, spokeswoman for Harsch Investment Properties, said that at the event Schnitzer will show illustrations and talk about the different development concepts for Centennial Mills. The presentation will be followed by a public discussion, she said.

“We are hoping to have a lot of public participation and attendance,” she said.

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