Prosper Portland and Lan Su Chinese Garden are working together on plans for a full-block mixed-use development in Old Town Chinatown.

On Wednesday, Prosper Portland’s board approved moving forward with the $8 million purchase of Block 24. Lan Su is under contract with the current owner, NW Natural.

The 0.9-acre property became available after NW Natural decided to move from One Pacific Square to the new 250 Taylor building. Block 24 is currently a surface parking lot.

Lan Su board members said the organization plans to construct a new five-story building that would link to the garden. The building would include a cultural center, a café, a theater, an event space, administrative offices and more. A sunken plaza able to accommodate outdoor events would join the two properties. A private developer will be sought for the project.

Overall, Lan Su is planning to build 50,000 square feet for its own purposes.

“That is definitely ambitious and definitely bold, but we think all of those activities in combination would create a really lively and engaging ground-floor opportunity on Block 24,” said Susan Hartnett, vice president of the Lan Su Chinese Garden board of directors.

The cultural center would play an important role, Hartnett said.

“As we deal with the impacts of COVID and a likely recession, looking to retail may not be the best thing, so the culture and heritage center is a great opportunity to create active uses on the ground floor for that whole block,” she said.

A hotel, retail space, office space or housing – driven by market demand – would fill the rest of the building, officials said.

Prosper Portland will use a $4 million inter-fund loan from Portland Parks & Recreation to assist with the purchase. Tax increment financing will be used as well.

The property was appraised in February at $9.5 million. The purchase price below that value reflects the cost of environmental remediation, said Karl Dinkelspiel, development manager for Prosper Portland.

The project will be a joint effort of Lan Su, Prosper Portland and likely a third-party developer, Dinkelspiel said. The developer would be selected in 2021 or 2022 after a request for interest, he said.

The project aligns with Prosper Portland’s long-term goals to boost economic opportunity in Old Town Chinatown. An action plan for the neighborhood was approved in 2014 and renewed last year.

Block 24 is bounded by Northwest Flanders and Glisan streets, and Second and Third avenues. It’s directly east of Block 25, where Key Development is working on another major proposal. Combined, the two projects would add tens of millions of dollars in economic development to Old Town Chinatown.

“There’s a lot of potential hopefully about to be unlocked there,” said Shawn Uhlman, spokesman for Prosper Portland.

The parcel is zoned central commercial. It has a base 6-to-1 floor-area ratio, with an additional 3-to-1 bonus available. The property has a 350-foot base height, although it’s unlikely the project would be anywhere near that tall, Dinkelspiel said.

Raymond Cheng, Lan Su’s board president, said the building would have a rooftop garden. He added that Lan Su has been working on a design with Li Chung “Sandi” Pei, a son of the late, legendary architect I.M. Pei, who died last year. Sandi Pei co-founded PEI Architects in New York City.

An early rendering from PEI Architects showed a 26-story hotel tower that would dwarf Lan Su Chinese Garden. That was an early concept put forward before Prosper Portland became involved in the project.

“It’s clear to everybody involved that it’s too early to say what exactly could be there,” Uhlman said. “It could be a hotel. It could be housing. All options are on the table.”

The building’s use “depends on what the market will bear,” he added.

Cheng said he met with Mayor Ted Wheeler to discuss the project more than a year ago.

“We are looking forward to making this happen, and making this a transformational project,” he said.

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Prosper Portland is preparing to take over approximately three-quarters of a block in Old Town Chinatown, with long-term plans to offer the property for redevelopment.

The site is Block 25, a 0.62-acre parcel that has been used for parking by NW Natural. The utility company is decamping from its building nearby, One Pacific Square, for a new office at 250 S.W. Taylor St.

Prosper Portland plans to move toward issuing a request for proposals. The agency will reach out to the Old Town Chinatown community, spokesman Shawn Uhlman said.

“We’re looking at a robust process over the summer months and the early fall,” he said. “That could help define what goes into an RFP – probably, it will end up being an RFP at this point. That, I would assume, would probably be in late fall.”

Block 25 is bounded by Northwest Third and Fourth avenues and Flanders and Glisan streets. The block is northwest of Lan Su Chinese Garden. NW Natural was given the right to use 116 parking spaces on the lot as part of the utility’s 99-year lease agreement with the city for construction of the Chinese garden in 1995.

The parking agreement will terminate 60 days after NW Natural vacates, which is anticipated sometime in 2020. The city gets revenue from evening and nighttime parking on the block.

Two other properties on the block are owned by Blanchet House – a charity group that offers meals and housing. No changes are planned to those properties for now.

“We’ll certainly track what their plans are as we’re thinking about redevelopment, and I’m sure it will come up in the community as well,” said Lisa Abuaf, development manager for Prosper Portland.

At an April 11 meeting, Prosper Portland approved an intergovernmental agreement to accept conveyance of the property from the city’s Office of Management & Finance.

Future redevelopment of the block is seen as part of an action plan to revitalize Old Town Chinatown. Earlier portions of the plan included redevelopment of the Society Hotel and Block 8L at Northwest First Avenue and Davis Street.

The area is part of a historic district with design guidelines required for any redevelopment.

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An Old Town Chinatown office tower will get an update now that an institutional investor has purchased it.

The distinctive tower at 220 N.W. Second Ave., near the riverfront, has served as NW Natural‘s headquarters since the building was completed in 1984. However, the utility company is preparing to move into the office tower being constructed at Southwest Third Avenue and Taylor Street, so the building at 220 N.W. Second Ave. became available for repositioning.

Menlo Equities sold the building to an undisclosed institutional buyer who was advised by local partner Specht Development Inc., according to a news release from Holliday Fenoglio Fowler, which brokered the sale. The price was not disclosed and had not yet appeared in public records. Menlo Equities previously bought the building in January 2015 for $48.5 million.

The new owner plans to modernize the lobby, add first-floor amenities to be shared by tenants and activate existing retail spaces, according to HFF.

The HFF investment advisory team included director Logan Greer, senior managing director Michael Leggett, senior managing director Gerry Rohm, senior director Ben Bullock, director Dave Otis and analysts Jeff Hodson and Kevin Freels.

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