After butting heads with local residents for more than six months, JPMorgan Chase has abandoned its plans to build a Chase Bank branch on a vacant lot on Southwest Capitol Highway in Portland’s Hillsdale neighborhood.

Chase officials twice extended the public comment period on its proposal due to neighborhood concerns, but were ultimately unable to obtain city approval for the building by the Feb. 27 deadline that was set by property owner Wardin Investment Co.

Because Chase couldn’t meet all of the requirements of the conditional lease agreement in the time allowed, the bank last week notified Wardin Investment that it was moving on, according to Ardys Braidwood, Wardin’s managing partner.

“It’s just the way things happen,” she said.

Braidwood helped design a four-tenant, one-story retail development for the site prior to the economic collapse in 2008. Interest in that project dried up after the downturn, at which point Chase Bank expressed interest.

But residents of the Hillsdale neighborhood have resisted the bank’s plans since becoming aware of them last August.

The original plans called for a branch building that occupied only 21 percent of the site, instead of the 50 percent required by the commercial storefront zoning in place in the Hillsdale Neighborhood Town Center. Chase officials negotiated with the local neighborhood association throughout the fall of 2011 and adapted the size and design of the project, but an agreement was never reached.

“The bottom line is that it just wasn’t going to be possible to come up with a mutually satisfactory design for the neighborhood association, Chase Bank, and the property owner,” said Mikal Apenes, president of the Hillsdale Neighborhood Association.

Now, a major credit union is the first to express interest in the lot, which Braidwood’s family has owned since 1908.

“We’re talking to them, and to anybody and everybody,” Braidwood said. “Nothing has been agreed upon; it just came back on the market.”

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Southwest Portland residents and JPMorgan Chase have spent several months debating the design for a proposed bank branch at 6361 S.W. Capitol Highway, in the Hillsdale neighborhood.

Now it looks like the bank may be able to circumvent much of the controversy by enlarging the branch’s building-to-parking-lot ratio with a canopy that would cover part of the lot. The “building” would not be enclosed, but it would still count toward the minimum building square footage required by city zoning code for the lot.

Though Chase may be able to go forward with its plan, the Hillsdale Neighborhood Association says it will continue to oppose it. Its concern for the site relates to a greater desire to increase density and multiuse buildings on the neighborhood’s main drag.

The design of Chase’s proposed Hillsdale branch initially called for a footprint occupying just 21 percent of the lot. But Hillsdale’s Main Street area has commercial storefront zoning, which requires that a building take up at least 50 percent of a lot.

Chase stuck with its proposal until it was informed by senior planner Douglas Hardy that the city was unlikely to approve its request for a zoning variance.

After returning to the drawing board, Chase proposed constructing a similar branch building with an additional community room for neighborhood use and a large canopy. The number of parking spaces wouldn’t change.

The strategy is OK, technically, Hardy said.

“The way the zoning code defines building coverage … it doesn’t have to literally be a building with four walls and a roof. It can be one of these canopies,” Hardy said.

“There’s some quirky things in the zoning code,” he added.

Hardy advised the bank that its proposal would eliminate the need for a variance, and that its plan wouldn’t need to be reviewed until the building permit stage. The bank hasn’t submitted a final plan to the city, according to Hardy, but alterations are not required.

Nevertheless, residents have resisted the canopy proposal. At a neighborhood association meeting on Wednesday, Hillsdale Main Street Design Committee co-chairman and neighborhood resident Richard Garfinkle said that the bank was doing the least amount possible to meet the site’s zoning requirements.

“The canopy is embarrassing,” Garfinkle said.

For residents present at the meeting, the proposed Chase bank branch – a single-tenant building on Main Street’s only vacant lot – symbolizes a missed opportunity.

“What we need most of all is apartments,” Hillsdale resident John Gould said at the meeting. “We don’t need another bank that minimizes the use (of the land).”

Residents are hoping for an eventual light-rail stop in Hillsdale, but they fear that light density could ruin those chances, Gould said.

The property is owned by Ardys Braidwood, whose family has owned the land since 1908. Braidwood is a managing partner at Wardin Investments. The company has studied the site’s potential for a two-story building with ground-floor retail and either office space or housing upstairs, she said, but “it just didn’t pencil out.”

The site isn’t deep enough to accommodate parking that would be necessary for so many tenants, she said.

Prior to the economic collapse in 2008, Braidwood helped design a four-tenant, one-story retail development for the site. After the downturn, however, interest in that project dried up, she said.

“So I sat on it, and Chase Bank came to me and asked about a long-term land lease,” Braidwood said.

If Chase can move forward with its proposed footprint despite residents’ concerns about density, the bank will still need to go through a city design review process. At the Wednesday meeting, architects from Seattle-based presented a Northwest-inspired Chase branch design that features brick, metal materials and lots of pedestrian-oriented windows – better than the “off-the-shelf” design Chase had initially proposed, according to residents.

While residents such as Garfinkle hope that Chase will change its mind about the project, the bank does not need their approval.

“Frankly, what Chase has to do is meet the code requirements,” Chase’s attorney, Gregory Hathaway of Portland-based , said at Wednesday night’s meeting. “This technically meets those requirements.”

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Chase representatives have requested, again, that the city of Portland delay its decision about the bank’s application to build a branch in the Hillsdale neighborhood in Southwest Portland.

“We made this decision in an effort to continue to try to work with the neighborhood association to find a solution that will work for everyone,” Chase spokeswoman Darcy Donahoe-Wilmot wrote in an email.

Douglas Hardy, a planner with the city’s Bureau of Development Services, said he called Chase officials at the end of last week to “give them a heads-up” that the city would likely not approve the application.

Chase is seeking an adjustment request, to build a branch building that occupies only 21 percent of the site, instead of the 50 percent required by the commercial storefront zoning in place in the Hillsdale Neighborhood Town Center.

“It’s just too far from the minimum building coverage standard,” Hardy said.

The Hillsdale Neighborhood Association last week submitted a letter to the city expressing its opposition to the request. Association President Mikal Apenes told the 91��Ƶ previously that the organization opposed the application because it had not been able to discuss it with Chase representatives.

Chase representatives met with residents in early August; however, after initial concerns were raised, residents’ requests to meet with Chase officials to discuss an alternate “design plan” did not result in meetings, according to HNA member Robert Hamilton, who was tasked with setting up the meetings.

The comment period for the application was set to end Sept. 19, but it was extended an additional 30 days, with the city slated to issue a decision around Oct. 26. Chase will have the option to change its proposal in the interim, but if the application is significantly different, then it may need to start over, Hardy said.

“(Chase officials) are re-evaluating their alternatives for the proposal,” he said. “They’ll be getting back to me.”

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A disagreement about the format of a proposed new Chase bank branch in Southwest Portland’s Hillsdale neighborhood seemed to be moving toward a potential compromise. After meeting with multiple groups of stakeholders, Chase had extended the deadline for public comment on its application by a month.

As the comment period comes to a close, however, Hillsdale Neighborhood Association members say their requests for meetings with the bank were denied, and that the HNA plans to oppose the bank’s application.

Now city staffers will decide whether to approve or deny Chase’s request for adjustment. And neighborhood representatives say approval would undo years of work to shape their town center.

The “storefront commercial” zoning that governs Hillsdale Town Center requires that buildings occupy at least 50 percent of their lots. But in Chase’s proposal, the building would take up only 21 percent of the lot; 44 percent would be used for vehicle parking and 35 percent would be dedicated to landscaping and pedestrian circulation.

Ray Lindley, a Chase market manager, said the adjustment is needed to provide “adequate parking and easy access” to the branch, but residents strongly object to the idea.

“People in the neighborhood have worked long and hard to establish the commercial storefront zoning and to develop the Hillsdale neighborhood town center,” HNA President Mikal Apenes said. “(The bank’s adjustment) would be a giant step back from the whole process.”

HNA member Robert Hamilton said the proposed size of the parking lot contradicts the neighborhood’s goals to achieve greater density and encourage use of public transit in the town center.

Hamilton tried to set up meetings with Chase to discuss the issue, and delay the bank’s application further, until the neighborhood and the bank could agree on a footprint that was “satisfactory, if not acceptable” to both parties, he said. Though multiple emails were exchanged between Hamilton and the bank, that meeting didn’t happen.

Lindley acknowledged that residents tried to set up a meeting, but added that Chase believes they were primarily concerned with “design elements,” and not the zoning issue.

“We are not even at the point of design,” Lindley said.

In his requests for meetings with Chase, Hamilton said he wanted to discuss a “design plan.” In his mind, the property would ideally hold a multistory structure to house multiple retail businesses and condominiums, to help meet density goals.

“The adjustment was the primary concern of the neighborhood association,” Apenes said. “I thought we had been pretty clear on that with Chase bank.”

The Hillsdale Neighborhood Association is drafting a letter of opposition to the adjustment application, Apenes said.

City staffers will make a decision about the adjustment application around Sept. 26, according to Bureau of Development Services spokesman Ross Caron. An appeal would go before the city’s adjustment committee.

Caron could not speak about the details of the Chase case, but said that staffers decide whether to approve applications based on whether applicants “meet the intent or the purpose of the regulation they’re asking to modify.” Comments from the neighborhood association and the public would be taken into consideration as they apply to the approval criteria, he said.

Lindley said that Chase is eager to move forward with the project. The new location would serve Chase customers who don’t have a local branch, he said. The closest one to the proposed Hillsdale site is approximately one mile away, inside the Burlingame Fred Meyer store.

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Despite some hope that an agreement could be made between Chase Bank and the residents of Portland’s Hillsdale neighborhood, neighbors say they will oppose an adjustment request that the bank has filed with the city for the construction of a new bank in Hillsdale Town Center.

Chase Bank has requested an adjustment that would allow it to create a smaller building with a larger parking lot than is allowed by zoning in the Hillsdale Town Center area. Hillsdale Neighborhood Association President Mikal Apenes said the group voted to file a letter of opposition to the bank’s request because the neighbors were unable to meet with bank representatives during the comment period about the request.

“It’s safe to say that the neighborhood strongly opposes the adjustment to the storefront zoning,” said Apenes. The neighborhood had previously requested that Chase extend the deadline on the public comment for the bank’s proposal, which the bank did. However, the bank was unavailable to meet with the neighbors during that time, Apenes said.

The neighborhood association’s opposition to the building comes mostly from the bank’s deviation from the “commercial storefront” zoning that is set throughout Hillsdale Town Center.

“People in the neighborhood have worked long and hard to establish the commercial storefront zoning and to develop the Hillsdale neighborhood town center,” Apenes said. “(The bank’s parking lot) would be a giant step back from the whole process.”

The city of Portland is expected to make a decision about Chase Bank’s request by the end of September. If the city denies Chase’s adjustment request, Apenes said the neighborhood is still willing to discuss having a bank in the neighborhood.

“We’d love to meet with them about the size, shape and design of the building,” he said.

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Chase is seeking to increase its presence in the Portland-metro area significantly, by adding more than 30 bank branches in the next three years. The company also is looking to build solid relationships with its new neighbors.

Since acquiring Washington Mutual in 2008, Chase has desired to increase convenience for customers who don’t live, shop or work near its branches in the metro area. Although Portland was a good market for Washington Mutual, it did not focus on building new branches in its last four to five years, said Ray Lindley, JPMorgan Chase market manager for Oregon and Southwest Washington.

Other banks also are expanding in the market, but not at Chase’s pace.

“Chase is doing very well financially,” he said. “We’ve come through a lot of the malaise. And (Portland-metro) is an underserved market for Chase; we think it’s a growth market.”

One neighborhood targeted by Chase is Hillsdale. Its neighborhood association took a summer break and chose not to meet in August, so members were surprised by Chase’s request to include a large parking lot with the branch building it planned to construct.

Hillsdale residents became concerned about the building proposal because the neighborhood’s main street area has zoning specifically designed to encourage a “village” feel. Dense commercial areas with storefronts are favored because they encourage pedestrian traffic.

“We had to buy some time,” said Rick Seifert, a Hillsdale resident who operates a blog and newspaper about the neighborhood. “We signaled to Chase that if (it) didn’t grant an extension and an opportunity to come up with input and alternatives, (the neighborhood association) would oppose the proposal.”

On Wednesday morning, after a Tuesday night meeting with neighbors, JPMorgan Chase executives told the city and the neighborhood association that they wanted to extend the comment period on their proposal for 30 days. Hillsdale neighborhood association President Mikal Apenes said that announcement was appreciated.

“We want to be as good a neighbor as we can in each community,” Lindley said.

Chase’s architects will meet with Hillsdale representatives to ensure the branch is compliant with neighborhood standards. Company officials also will consider possibilities of parts of the building or lot being used for meetings or a farmers market when the branch is closed.

“We hope that goes a long way to make the lot, and our building, an integral part of the community,” Lindley said.

Construction has started in the Portland-metro area on six new branches that Chase expects to open by the end of the year. The bank plans to open at least 12 more in 2012, and at least 15 more in 2013. Future construction contracts will go out to public bid, spokeswoman Darcy Donahoe-Wilmot said.

Chase isn’t the only bank growing in the Portland-metro area. Key Bank’s goal was to open 20 branches in the region between 2009 and 2012. It has opened 15 since 2008 and will continue to grow, spokeswoman Anne Foster said.

“Our goal is not to build in every state, but to seek a 10 percent market share wherever we do business,” she said.

Key Bank, which has branches in 14 states, is not at 10 percent in Portland yet.

Other banks are planning for a slower expansion. U.S. Bank will open a new branch in West Linn by the beginning of 2012, and has “a couple other things in the pipeline,” said spokeswoman Teri Charest.

“We’re the biggest bank in Oregon, so one or two (new branches) is pretty significant,” she said.

By the end of 2011, Umpqua Bank will have 12 new branches, which it calls “stores,” in markets between Portland and Seattle. Spokeswoman Eve Callahan said the company doesn’t have a target number for stores to open in 2012.

Smaller firm Union Bank acquired three Portland-metro branches in May 2010, when it bought Frontier Bank. Spokesman Alan Gulick said the firm has high expectations for growth in the market, but would not disclose whether there were specific plans.

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A $47.3 million public housing project named Hillsdale Terrace is planned by Home Forward, formerly the Housing Authority of Portland.

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The Housing Authority of Portland in the last week took two big steps forward. First, the agency adopted a new name: “Home Forward.” And then one of its large housing redevelopment projects got the funding it needed to move ahead: an $18.5 million Hope VI grant from the U.S. Department of Housing and Urban Development.

Hillsdale Terrace will be among the last Hope VI grant recipients, because the program is expected to sunset this year. For years, the housing development on Southwest 26th Avenue in the Hillsdale neighborhood has been run-down and expensive to maintain, according to spokeswoman Shelley Marchesi.

“If the housing authority didn’t get this money (it) would have had to knock it down,” said Rick Nitti, executive director of Neighborhood House, a nonprofit provider of social services. Nitti lives in the area, and his organization works with Hillsdale Terrace residents. “It’s a horrible facility,” he said. “It was built in an area without adequate drainage: there’s mold in and outside.”

Home Forward’s application for a Hope VI grant to redevelop Hillsdale Terrace was rejected in 2009. The agency completely reworked the application, in particular where HUD focuses: community connections. The second time around, Home Forward also had more money secured for the project, including some that it had budgeted for the Resource Access Center/Bud Clark Commons project; it didn’t need it after receiving federal stimulus money.

The existing 60-unit Hillsdale Terrace complex is at the end of a dead-end road in Hillsdale, nearly invisible to those nearby.

“People who live two or three blocks away don’t even know it exists,” Nitti said.

“One of the biggest design efforts is going to be that connection,” said Bill Lanning, project manager with Michael Willis Architects. MWA is working with Home Forward to design the development.

“There’s really no grid for us to connect to,” Home Forward planning and design manager Julie Livingston said of the property, which slopes to a low grade. “The site is a big hole in the ground,” she said.

Home Forward acquired properties containing three duplexes along the entrance road to Hillsdale Terrace, leading up to frontage on Capitol Highway. Livingston said that physical presence should help create a greater community connection.

In addition, the design team is looking at ways to connect the community to nearby California Street, an unfinished road that Livingston imagines as a “linear park” that could serve as a walking path for Hillsdale Terrace residents and others.

“I think the linear park idea could be surprising, delightful and well-used,” Livingston said.

The $47.3 million redevelopment project calls for tearing down existing units as well as the three duplexes on adjacent lots to create a 6.6-acre site. Then 122 residential units will be constructed in several two- or three-story buildings, as well as two community buildings where residents can access a computer lab, employment help, early childhood education and a community kitchen connected to a garden.

The existing Hillsdale Terrace has three-bedroom apartments of 1,000 square feet each, and 83 percent of the households have children. The new units will include a mix of one-, two-, three-, and four-bedroom units, with slightly larger floor plans, green building features and more daylight than the existing housing.

The plan calls for 73 of the units to be operated as public housing, 36 as section-8 affordable housing, and 13 with no rent subsidy to people who make up to 60 percent of the Portland area’s median family income.

Also, a new Habitat for Humanity project nearby will have seven houses available for purchase, with preference given to qualified Hillsdale Terrace residents.

Home Forward expects to issue a request for proposals for a general contractor this summer and then help residents relocate this fall. Demolition is planned for spring 2012. Tenants could begin moving in late in 2013, and Livingston expects the units to be leased completely before the buildings open.

Hillsdale Terrace will be the last of three (following New Columbia and Humboldt Gardens) big redevelopment projects Home Forward has led in the past 10 years, all funded by Hope VI grants. The agency operates 6,300 units it owns either solely or through partnerships.

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The Housing Authority of Portland isn’t giving up on its bid for federal funding for a $45.4 million redevelopment of a low-income housing complex it owns in Hillsdale.

Hillsdale Terrace‘s 60 units house 239 residents, and 80 percent of them make less than $20,000 per year. The 41-year-old affordable housing development is plagued by soil erosion and mold, and does not comply with the Americans with Disabilities Act.

The U.S. Department of Housing and Urban Development last year rejected HAP’s application for federal money; however, the public corporation now is partnering with Habitat for Humanity in an attempt to secure $18.5 million in revitalization grants.

The HOPE VI federal program provides grants to transform the nation’s worst public housing projects into mixed-income developments. The 15-year-old program has demolished 96,200 public housing units to produce 107,800 units of new or renovated housing, including 56,800 to accommodate for the most poverty-stricken families, according to HUD.

At Hillsdale Terrace, HAP plans to demolish 60 units of low-income housing and replace it with 122 units of housing for multiple income levels.

After HAP’s application was rejected last year, its director of development and community revitalization, Michael Andrews, met with a HUD representative to see how it could strengthen its next one. He discovered that HAP missed out on grant money by a narrow margin.

“Our first application was well received but not as competitive as it needed to be,” Andrews said. “We’ve spent the last year making it stronger.”

He said HAP did that by forming a new partnership with Habitat for Humanity that will allow several Hillsdale Terrace residents to buy permanent homes, and by developing an improved site plan to connect housing to nearby neighborhoods.

HAP plans to purchase property nearby for seven new homes to be built by Habitat for Humanity’s Portland Metro/East chapter, according to Steve Mezenetti, the nonprofit’s executive director. The plan is to give Hillsdale Terrace residents an opportunity to purchase a home via financial assistance offered by Habitat for Humanity. The homes are expected to meet Earth Advantage standards for energy efficiency.

“By partnering with HAP, we may have additional financing toward purchasing property in Southwest Portland,” Mezenetti said. “These houses will provide an opportunity for families to move out of subsidized housing and become homeowners.”

Another criterion for HOPE VI grants is for the project to connect low-income housing with the community. Historically, that is a challenge for low-income housing, Andrews said. Hillsdale Terrace, for example, is on a hill back from busy Capitol Highway. To remedy this, HAP this year purchased three pieces of land surrounding the property so that the redevelopment can take place at street level.

“The topography in Southwest (Portland) makes this a challenging site,” Andrews said. “But we’ve found ways to connect. We’ll have two pedestrian connections and we’ve developed a partnership with a church on the Southwest corner of our site to develop a community garden to provide food for our residents.”

The project also has more financial backing than last year, Andrews said. HAP missed out on points last year under HUD’s category for financial leverage. This year, HAP has $6 million from its own budget, $5 million from the city of Portland and approximately $4 million in state low-income housing tax credits.

“The tax credit from the state is something we didn’t have the last go-round,” Andrews said. “It’s one more thing that shows we’re ready to proceed with this project.”

HAP plans to submit its HOPE VI application before the Nov. 22 deadline. The organization expects to hear back from HUD next summer.

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The small southwest Portland community of Hillsdale is growing.

Richard Brown Architects is designing a new 7,800-square-foot commercial structure called The Braidwood Building at the site of a former gas station on Southwest Capitol Highway .

The Hillsdale community recently established a set of neighborhood design guidelines that Brown had to follow during the design process.

“The new code requires 15-foot-wide sidewalks,” Brown said. “They are trying to make the area more walkable so we designed the building right up against the sidewalk to activate the retail space.”

Though the community wanted a parking-free development to encourage people to commute by foot or bike, Brown said that retailers need at least some parking to be successful. Part of the retail space was reduced to make way for parking.

Though he won’t seek third-party certification for the project, Brown has designed the structure with skylights for day lighting, a high performance building envelope, natural ventilation and efficient HVAC systems.

“We’re doing the certifying on our own by using good building practices,” Brown said.

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