A drilling machine operator was hospitalized with serious injuries on Friday after a rotary drilling machine tipped onto its side at a construction site on the Oregon Health & Science University campus in Southwest Portland.

Portland Fire & Rescue crews responded to the incident, which resulted in the operator being pinned inside the cab of the machine. The construction crew assisted the rescue by positioning a jack to lift the cab off of the victim, according to the fire department. The extrication took 15 minutes.

The operator was transported to a trauma center with serious injuries; there were no other victims, the fire department reported via social media.

Skanska USA Building is leading construction of the project near 545 S.W. Campus Drive — the address of the Elks Children’s Eye Clinic at the Casey Eye Institute.

The operator’s identity has not been released by authorities.

Skanska issued a statement on Friday afternoon: “At approximately 10:45 a.m. today, a rotary drilling machine on-site at OHSU‘s Hospital Expansion Project tipped over. We are investigating the cause. We understand the operator of the drilling rig (an employee of Pacific Foundations) sustained injuries, and is under the care at OHSU Hospital. We do not have permission to release the operator’s name.”

The post Drilling rig tips over; operator injured appeared first on Daily Journal of Commerce.

Portland State University and its partners have named a new building in memory of a tragic chapter in the region’s history.

The seven-story structure in south downtown previously known as Fourth and Montgomery has been renamed the Vanport Building. The name recognizes Vanport (now north Portland), a largely Black city that flooded on May 30, 1948, resulting in many residents’ deaths.

The 175,000-square-foot Vanport Building is a cooperative project of PSU, Oregon Health & Science University, Portland Community College and the city of Portland.

Vanport was a haven for Black Portlanders who were kept out of other local neighborhoods during World War II. But after the war ended and the flood devastated the neighborhood, Vanport fell into disrepair.

“Vanport represents an important part of Oregon history that we must acknowledge and learn from,” OHSU President Danny Jacobs stated in a news release. “The Vanport Building offers us an opportunity to honor those who were harmed, while reaffirming our commitment to creating an anti-racist future for Portland.”

A noose was found at the construction site in May 2020. The discovery of the racist symbol led general contractor Andersen Construction to file a police report and conduct an internal investigation, but the perpetrator has not been identified.

The building, designed by SRG Partnership, opened in January. It is home to PSU’s College of Education, the OHSU-PSU School of Public Health, Portland Community College’s dental hygiene and dental assisting programs and the city of Portland’s Bureau of Planning and Sustainability.

A mural by Portland artist Alex Chiu and an exhibit by Bryan Potter Design, titled “The Spirit of Vanport,” occupy space near the building’s entrance.

“There’s a collective, deep sense of loss for what this city could have been had the flood not happened or, more importantly, if city leaders had rightly valued the community,” stated city Commissioner Carmen Rubio, who oversees the Bureau of Planning and Sustainability. “We take a small step in honoring Vanport’s value, and in reminding ourselves to value all our communities every day, by choosing this name.”

The post Cooperative development named Vanport Building appeared first on Daily Journal of Commerce.

A noose was discovered in May at a construction site in downtown Portland, the contractor and client revealed recently.

The object – a symbol of racial intimidation – was found on May 20 at the site of the 4th and Montgomery Building, according to a Portland State University statement issued Tuesday. PSU indicated it was notified of the discovery on June 9, but did not explain why it waited to publicize it.

Andersen Construction is the general contractor for 4th and Montgomery. Andersen officials filed a police report and launched both an internal investigation and a third-party investigation, the company stated.

“First and foremost, Andersen Construction is disgusted and outraged with a hate symbol like this being displayed anywhere, let alone one of our own job sites,” the company stated. “We acknowledge the negative emotions and outright pain this abhorrent event caused and to the individuals at our project directly impacted, and to our Black community at large, we are so very sorry.”

“This act of hatred is heartbreaking,” PSU stated. “It is reprehensible. And it is particularly troubling at a moment when our country seems to be waking up – finally – to the legacy of slavery and our collective failure to address anti-Black racism. Incidents like this one, and similar incidents happening around the country, remind us how deeply racism is embedded in our culture and how far we have to go to attain justice for Black Americans.”

The seven-story, 175,000-square-foot project is a collaboration of PSU, Portland Community College, Oregon Health & Science University and the city of Portland, all of which will occupy space in the building.

Crews broke ground on the project in December 2018, and completion is expected this fall.

The post Noose found at public project site in Portland appeared first on Daily Journal of Commerce.

As the coronavirus pandemic slows development and construction in Portland, health care projects are moving to the front of the permitting line.

In recent days, the Bureau of Development Services has issued permits for tents at Legacy‘s Emanuel and Good Samaritan hospitals, Providence Portland Medical Center and Providence Gateway. Oregon Health & Science University received a permit to modify an existing auditorium building for patient intake.

“Our Facility Permits Program is working around the clock and working closely with hospitals and health facilities to make sure we can get their permits in the pipeline and approved as quickly as possible,” BDS spokesman Ken Ray said.

In some cases, health care building permits are being issued the same day they come in.

“According to our Facilities Department, BDS has approved all of our permits,” Brian Terrett, a spokesman for Legacy Health, stated in an email. “They also indicated that minor projects that were reviewed by the Facility Permit Program at BDS are working well, and Legacy has benefited from that process.”

BDS’ assigns staffers to work with large institutions, including hospitals, which have ongoing permitting needs for frequent renovations, building maintenance and updates such as fire alarm installations.

While health care projects are advancing, many other developments are not. BDS remains . Permitting is limited by nearly all BDS staffers working remotely using a computer network with limited capacity. As a result, BDS has limited new permitting intakes to projects designated as critical “Tier 1” or “Tier 2.”

Tier 1 includes hospitals and clinics fighting COVID-19, and ongoing infrastructure projects such as the Portland International Airport terminal upgrades and city water plant construction.

Tier 2 includes projects that have building permits in hand and are already under construction.

Meanwhile, other projects are waiting. New commercial construction permits are not being accepted. BDS has exceptions for affordable housing – those are included in tiers 3 and 4.

As other work grinds to a halt, designers and contractors that have bet heavily on health care stand to benefit. Among them is NBBJ, a Seattle-based architecture firm that opened a Portland office last fall.

NBBJ is the designer of two projects for OHSU – the Elks Children’s Eye Clinic now under construction and a 14-story hospital tower not yet under way. (OHSU did not respond to requests for comment). NBBJ is also designing Legacy Emanuel Medical Center’s renovation and expansion in North Portland, and a project for St. Charles Medical Center in Bend.

“We’re grateful to have that level of investment in health care,” said Carl Tully, an NBBJ principal who works in Seattle and Portland.

Health care projects are proceeding at a normal pace, Tully said.

“We have projects in all phases of progress right now,” he said. “The encouraging thing is we have not had any slowdown, whether it’s being able to have inspections on site, having permits approved, or having permits going through the intake process pretty flawlessly.”

Other firms are looking to help. ZGF Architects‘ health care practice in Portland scrambled to design a modular unit to provide relief for hospitals burdened by a surge of COVID-19 patients. ZGF was approached by TCM Corp., Western Partitions Inc. and Cherry City Electric to provide programming design.

The modular units would be prefabricated regionally and delivered by trucks to hospitals in need of overflow space. They would be placed on a concrete pad, parking lot or other paved area.

“The concept here is these modules would be primarily to off-load lower-acuity patients out of hospitals,” said Richard Shiga, a ZGF principal who is spearheading the design work.

Regulatory agencies have been helpful, Shiga said.

“One of the most interesting things about this process has been the conversations with the state and the city,” he said. “It’s been amazing. Both the state and city have gone out of their way to make it as quick and easy and efficient as possible.”

The units’ size is based on what can be put on a truck and shipped quickly, Shiga said. The companies are in the process of fabricating a prototype. Their goal is to be able to fabricate, ship and set up the modular units within 72 hours.

Shiga said the units are flexible enough to accommodate different purposes if the need arises. Ideally, they may not be needed at all, as Oregon hospitals have so far had adequate capacity to handle coronavirus patients.

“This is the kind of project where if this never needs to happen,” Shiga said, “we’re all for it.”

The post Health care projects receiving high priority appeared first on Daily Journal of Commerce.

As the COVID-19 pandemic reached the Portland-metro area, a massive shortfall of personal protective equipment (PPE) for health care professionals quickly became evident.

With hospitals, clinics and first responders geared up for day-to-day operations, stocks of crucial equipment such as N95 respirators and filters, latex gloves, gowns and face shields were already low. Then a sudden and massive increase in PPE usage in health care settings led administrators to scramble for answers.

A number of building industry organizations became aware of the situation and stepped up to help. Because certain types of PPE, particularly N95 respirators, are widely used in construction, many firms were in a position to act quickly.

“I have neighbors who are in the medical profession, or that have family members who are, and there is a real and serious shortage of personal protective equipment throughout the region,” said Ryan Baker, a Mackenzie senior associate and a member of its structural engineering team. “We’re all thinking about the safety of our first responders and medical professionals who are doing everything they can to keep us healthy while, at the same time, considering the safety and health of their own families.”

After reading an email from a Portland Neighborhood Emergency Team, Baker suggested to Mackenzie’s disaster recovery task force and business continuity team that the firm donate its unused N95 masks from employee work kits. Mackenzie employees Cesar Villanueva and Mike Rueter then coordinated a company-wide roundup and delivered the masks to the designated Multnomah County drop-off site.

That’s just the tip of the iceberg when it comes to homegrown solutions. Agencies are seeking specific equipment, which should be unused and in good condition. This includes latex-free gloves (sealed boxes only); procedural masks; surgical masks; N95 respirators and N95 filters; other respirators such as P100s and PAPRs, and associated supplies and parts; face shields; splash shields; gowns; hand sanitizer and disinfecting wipes.

“We first started talking about it around March 17 or 18 as news stories started coming out,” said Kirsten Adams, public affairs counsel for the Associated General Contractors’ Oregon-Columbia chapter. “As soon as we started hearing about the need, we tried to do something about it. Someone with OHSU reached out to me, and they were looking for PPE, so we were thinking about how to get this information out to our members and how do we act as a conduit for this.”

AGC quickly created a COVID-19 web page for members and issued a plea for donations at its March 20 board meeting. The group first connected with the Oregon Health Authority and its Salem drop site before coordinating with Oregon Health & Science University on another drop site in the South Waterfront District.

“We want to make it as easy as possible to get this into the hands of the people who need it most,” Adams said. “We’ve given our members as many options as we can.”

Trade groups, including unions, also responded to the call for PPE.

“We’re reaching out to everybody we know in our industry, and we’ve been able to collect a bunch of extras (N95 masks) from contractors who’ve had them,” said Robert Camarillo, executive secretary of the Oregon State Building and Construction Trades Council. “We were among the first group to be contacted.”

Camarillo added that unions around the country are mounting similar efforts.

“I talked to a business manager and he was dropping (equipment) off at a fire station earlier in the day,” he said. “And he said it was impressive to see how many people were donating.”

The AFL-CIO, added, has been doing the same around the country.

“That’s the labor movement jumping into action,” he said. “Everybody is making the necessary adjustments to adapt and help where they can, and we want to be there too.”

Other individual firms around the metro area are stepping up.

“We found and donated a few boxes that we had available to the hospitals,” said Todd Duwe, director of business development for Perlo Construction. “We are actually making our own masks currently. We gave away our N95s for the health care workers. We donated what we had to our health care clients we work with, so we are making our own now.”

The latter is a story in its own right.

“We have our own in-house counsel; she happens to be a seamstress,” Duwe said. “So she is making an initial batch of 500 (face masks) right now. In between looking at these Washington contract review items, she is sewing masks; I am not kidding. Everybody in the company is shifting a little to deal with this.”

Villanueva said early preparation, including Mackenzie’s creation of a disaster recovery task force, allowed action to be taken immediately.

“The team put in a lot of effort years ago to provide each employee with a small waist pack that had some basic first aid items and supplies to assist them in an emergency situation,” he said. “Gathering the N95 masks from those (packs) and dropping them off was the least that we could do. We were so happy to be able to help, and just thankful to our frontline medical teams.”

Awareness is critical, Adams said.

“We’re trying to keep it at the forefront of people’s minds,” she said. “Gathering hand sanitizers is a real need, and we’re trying to do as many little things like that as we can.”

The post One industry reaching out to another in need appeared first on Daily Journal of Commerce.

The Trail Blazers’ Damian Lillard must be helping Adidas sell a lot of basketball shoes.

The company’s North American headquarters is on an expansion kick in North Portland, and generated the construction permit with the single highest dollar amount in the city of Portland in 2019, according to the Bureau of Development Services.

Adidas’ building permit for two new office buildings at 5070 N. Greeley Ave., issued on Sept. 16, ascended above the rim with a $149 million valuation. The permit was for a five-story office building with five stories of underground parking, a second new building, additions to a third building and surrounding East Village site improvements, including required landscaping and screening.

The Adidas permit was by far the most valuable. The one with the second-highest value was $81 million for the Fourth and Montgomery building, a south downtown collaboration shared by Oregon Health & Science University, Portland State University, Portland Community College and the city of Portland. The permit for the seven-story, three-quarter block project was issued on May 16.

Development in 2019 was “a little choppy,” said Sam Rodriguez, senior managing director of Mill Creek Residential Trust, a major multifamily developer. Mill Creek is developing Modera Glisan, which had a permit that ranked fourth on the list.

The economy recovered quickly after flashing recessionary signals in the fall.

“The good news is we’re not at the end of a cycle – at least it doesn’t feel like that,” Rodriguez said.

Rents have remained stable amid deliveries of thousands of new apartments. A slowdown in new proposals offers hope for future projects, Rodriguez said.

“It seems like we’re reaching equilibrium moving forward, which makes development possible,” he said.

The office market appears to be at a similar point as multifamily. Projects totaling more than 1.6 million square feet were under construction or renovation in November, according to Jones Lang LaSalle, but that number is expected to soon decline.

“While the elevated level of office development remains historically high for Portland, it is set to slow down considerably over the next year when all but Block 216, J.K. Gill and Arete will deliver,” a JLL office report stated.

No one type of project dominated the bureau’s list of most expensive projects. The top 10 includes three office buildings, four multifamily buildings, a middle school, a hospital expansion and a hotel. Multifamily buildings were seven of the next 10 most-valuable projects.

The permit data comes from the Bureau of Development Services, which collated the most valuable permits at the 91��Ƶ’s request. It includes new construction permits issued between Jan. 1 and Dec. 19.

The list does not include some large projects, such as the 35-story Block 216 tower for Ritz-Carlton – it has received excavation permits, but not building permits. Other major construction projects under way, such as the Hyatt Regency at the Oregon Convention Center, were working based on permits from prior years.

The data is also necessarily limited to city boundaries – leaving out major projects in, for example, unincorporated Washington County, where Adidas’ largest competitor resides.

Here are the top-dollar building permits in Portland during 2019:

1. Adidas East Campus expansion, 5070 N. Greeley Ave., issued Sept. 16. Two new buildings, a building addition and outdoor improvements. $149.1 million, Turner Construction Co.
2. Fourth and Montgomery, 1810 S.W. Fifth Ave., issued May 16. New seven-story, three-quarter-block mixed-use building with classrooms and offices for Oregon Health & Science University, Portland State University, Portland Community College and the city of Portland. $81 million, Andersen Construction.
3. Legacy Emanuel West, 2835 N. Kerby Ave., issued May 17. Five-story core-and-shell building with two stories of below-grade structured parking. $73.7 million, Andersen Construction.
4. Modera Glisan, 1430 N.W. Hoyt St., issued Feb. 14. A 12-story, three-quarter-block mixed-use building with 291 apartments, 201 parking spaces and retail space for Mill Creek Residential Trust. $63.8 million, MCRT PNW Construction LLC.
5. ART Tower, 1510 S.W. Alder St., issued Oct. 7. A 21-story building with 314 apartments, 5,500 square feet of ground-floor retail space and 215 parking stalls in four undergrounds levels for developer Wood Partners of Atlanta. $55.2 million, Andersen Construction.
6. TriMet administration building, 9800 S.E. Powell Blvd., issued March 5. Administration and operations building for TriMet with expanded employee parking. A separate permit was issued for a bus fueling and washing building. $51.4 million, JE Dunn Construction Co.
7. Kellogg Middle School, 3400 S.E. 69th Ave., issued July 10. Three-story, 100,000-square-foot Portland Public Schools building with a covered play area, play field, parking lot and vehicle access road. $44 million, Todd Construction.
8. E2 Building (Block 40), 3883 S.W. Moody Ave., issued Dec. 9. Seven-story, 245,000-square-foot, mixed-use building with 232 apartments, retail space and two levels of underground parking for Alamo Manhattan of Dallas. $43.5 million, Andersen Construction.
9. Saltwood North, 1650 N.W. 21st Ave., issued Aug. 6. Six-story apartment building with 177 residential units, ground-floor retail space, residential amenity space and two stories of underground parking for Cairn Pacific and Prometheus Real Estate Group. $40 million, Bremik Construction (A separate permit valued at $35 million was issued for Saltwood South, at 2050 N.W. Raleigh St. Bremik Construction is the general contractor).
10. Hyatt Centric Hotel, 601 S.W. 11th Ave., issued Jan. 8. A 15-story, 215-room hotel for Mortenson. $37.4 million, Mortenson Construction.

The post A review of some sizable building investments appeared first on Daily Journal of Commerce.

A Dallas-based developer’s plans for a five-building redevelopment of property in the South Waterfront District have a long way to go to gain approval, the Portland Design Commission indicated on Thursday.

The development would sit on four blocks near the Willamette River. Portland Bureau of Development Services staffers raised questions regarding access to the Willamette River, traffic impacts and the layout of a greenway through the area.

The project’s first review hearing before the Design Commission was Thursday. Commissioners were nonplussed by Alamo Manhattan‘s proposal, saying they were unsure how to even begin evaluating what one commissioner described as an incomplete land-use application for a massive redevelopment.

Alamo Manhattan proposes to build approximately 1,232 residential units, 20,000 square feet of retail space and 965 parking spots. The design would locate two high-rise buildings closest to the river, with three mid-rise buildings on the two western blocks, in contrast with city guidelines that call for building heights to step down to the river. The buildings closest to the river would rise to 244 feet, 9 inches, just below the 250-foot maximum height. The interior block buildings would be approximately 72 to 73 feet tall.

“This is very unusual that we’re reviewing five massive buildings and a greenway,” Commissioner Zari Santner said. “How come the bureau accepts an application that is so insufficiently complete?”

“The applicant can deem it complete,” BDS planner Staci Monroe replied. “There is nothing in the code that prohibits it.”

Monroe agreed that it was not typical to review several buildings and related infrastructure at once.

“It’s an insane amount of work to put this into one land-use case,” she said.

Santner suggested the developer’s plans were not close to meeting guidelines.

“There’s nothing that stops us from asking the applicant to keep coming back until we get to something that’s approvable,” she said.

Alamo Manhattan President Matt Segrest offered no indication that the developer would break up the land-use application into smaller parts.

“I recognize this is a huge chore here,” he said. “It is. There’s no way around that. We want to get this approved as soon as we can as well.”

The staff report did not recommend approval – a routine stance in the early stages of a land-use application. However, the staff report details at least 29 distinct guidelines not yet met by the proposal. Furthermore, the city’s environmental services and transportation bureaus, as well as the BDS site development section, stated they were not able to support the application.

The design team includes WDG Architecture, HLR Architects, landscape architect Linda Tycher and Associates and engineering firm Otak.

The property is slightly north of The Old Spaghetti Factory, and bounded by Southwest Bond Avenue, Southwest Lane Street, Southwest Lowell Street and the river.

Two design advice hearings for the project took place in February and August. The project team is scheduled to return before the Design Commission on Feb. 6, 2020.

Also on Thursday:

OHSU expansion wins approval

The Portland Design Commission unanimously approved plans for Oregon Health & Science University’s 14-story hospital expansion on Marquam Hill.

Commissioners praised the proposal presented by the design team of NBBJ, based in Seattle, and Mayer/Reed, which handled the outdoor plaza.

“The response that we’re looking at today is significantly stronger than when this building (design) came into the room,” Design Commission Chairwoman Julie Livingston said at Thursday’s hearing.

The building will be located slightly west of the Elks Children’s Eye Clinic, which was also designed by NBBJ.

The plaza and outdoor spaces were a focus of the Design Commission’s attention throughout the review process. The designers responded to earlier criticism that the plaza’s pathways weren’t well integrated and lacked separation between pedestrians and cars. The final design expanded outdoor seating, added street trees and also created a landscape buffer between the sidewalk and street.

“Your collective feedback has greatly improved the hospital design as well as the public plaza,” said José Sama, a principal with NBBJ, which recently opened a Portland office.

The post Work remains for South Waterfront redevelopment appeared first on Daily Journal of Commerce.

Construction companies will not be subject to the city of Portland’s new clean energy excise tax after all.

City commissioners voted unanimously Thursday to amend city code to exempt construction companies as well as sales of residential garbage and recycling services and qualified retirement plans from paying a 1 percent surcharge on gross revenue from retail sales within Portland. The surcharge was imposed by Measure 26-201, approved by voters in 2018, and applies to Portland retailers with total annual retail revenue greater than $1 billion and Portland annual retail revenue over $500,000.

The measure created the Portland Clean Energy Fund (PCEF), which will provide both money for clean energy projects and training for workers. But commissioners admitted Thursday that the measure as approved by city voters applied to a larger portion of the business community than previously assumed.

“It wasn’t until after it passed that we found out the definition was much broader than we anticipated,” said Commissioner Jo Ann Hardesty, a longtime and staunch supporter of the PCEF, which is intended to provide economic opportunities to underprivileged communities. “I wouldn’t have supported a tax on anyone’s retirement account, period. I don’t think adding a tax to affordable housing or school construction or garbage hauling for residential homes was something we ever envisioned would take place.”

The Portland Business Alliance had lobbied City Hall, as well as a work group of PCEF stakeholders, to add the exemptions approved on Thursday. Many professionals within the construction industry had previously raised concerns about the tax’s potential impacts.

Preemptive action was taken by some parties, including Oregon Health & Science University, which in September directed general contractors working on its numerous building projects to include the tax in their proposed budgets.

Although financial data for large firms is typically kept under wraps, industry officials told the 91��Ƶ in October that without changes to the ballot measure sizable general contractors including Hoffman, Fortis, Turner, Skanska, Mortenson, JE Dunn, Howard S. Wright and others would likely be subject to the city’s tax.

Meanwhile, the amendment will mean less money for the PCEF. Thomas Lannom, director of the city’s Office of Management & Finance‘s Revenue Division, told the City Council that anticipated revenue from the clean energy surcharge could fall by as much as $10 million. That rankled several citizens who showed up Thursday to protest the amendment.

“It’s a little bit disingenuous to say exempting construction projects helps low-income and affordable housing,” Portland resident Charles Johnson said.

Johnson suggested that exemptions should be for affordable housing projects themselves, and not construction in general.

Mayor Ted Wheeler said that while he wholeheartedly supports the PCEF, he also endorses the exemptions.

“I acknowledge these changes are less than ideal,” he said, “but this program will continue to be a model for the rest of the country.”

The post Contractors will be exempt from Portland tax appeared first on Daily Journal of Commerce.

Seattle-based architecture firm NBBJ recently opened a Portland office to capitalize on its relationships with local health care institutions.

The firm has opened for business in the Board of Trade Building at 310 S.W. Fourth Ave., with capacity for up to 25 employees.

NBBJ is designing Oregon Health & Science University‘s 14-story expansion on Marquam Hill, the OHSU Elks Children’s Eye Clinic and the Legacy Emanuel Medical Center‘s renovation and expansion in North Portland. NBBJ also designed a new wing of the St. Charles Medical Center in Bend.

“We wanted to better serve our clients,” said Jose Sama, a partner in the new Portland office.

NBBJ has worked with Skanska on several projects, and is looking to deepen its local connections with that contractor, Sama said.

“We have a good relationship with them, and we’re looking at identifying opportunities with other contractors and developers,” he said.

NBBJ searched for a small office of 3,000 to 5,000 square feet on the west side of the Willamette River. The firm looked at more than a dozen properties in downtown and the Pearl District.

NBBJ signed a lease in early September, and opened the office after installation of approximately $100,000 in information technology infrastructure. The space was renovated recently.

“It was basically move-in ready,” NBBJ principal Larry Parrett said.

NBBJ was founded in 1943 in Seattle by four partners. Boeing was an early client, and the firm performed public housing and health care work in postwar years.

“Culturally, Portland is very similar to Seattle,” Parrett said. “We feel like we fit right in.”

The city offers other advantages as well, he added.

“There’s a lot of design and staff talent in Portland,” he said.

Despite talk among presidential contenders of reducing health care spending, the sector’s long-term prospects remain promising, according to Parrett.

“We’ve been doing this a long time, and health care – just like other markets – goes in waves,” he said. “There’s always a lot of work in health care. It’s one of the most recession-proof markets there is.”

The post Seattle-based architecture firm expands into Portland appeared first on Daily Journal of Commerce.

In November 2018, Portland voters were asked to support a 1 percent gross-receipts tax on large retailers to fund green-energy projects and job training. The tax was promoted as applying to “large retail corporations, such as Wells Fargo, Apple, Comcast and Banana Republic,” according to campaign materials.

Nearly a year later, clients of large construction companies are surprised to find themselves footing the bill. Major institutions such as Oregon Health & Science University have told general contractors to include the tax in projected budgets, and some pending project teams are waiting on further clarity.

“What was sold to voters is it was a tax on large retailers,” said Dan Drinkward, vice president of Portland-based Hoffman Construction. “We were surprised by the guidance that came out of the city that said it applied to construction firms, and we are working with the city and have had informal conversations with other stakeholders to try to clarify the rules so it would not apply to construction firms.”

Months after the measure’s passage, the city’s Revenue Division in April interpreted the initiative’s wording broadly, issuing guidance that construction firms and other service providers qualify as retailers subject to the tax.

“Basically, construction is a service,” said Scott Karter, spokesman for the Revenue Division.

The city so far has collected about $11 million from the tax, Karter said. The Revenue Division declined to specify how much of that came from the construction industry because, he said, it could lead to identifying individual taxpayers.

The Portland Business Alliance is leading an effort to persuade the City Council to carve out exemptions.

“I’m very hopeful that those conversations will be fruitful and the clarification will come through the city that construction is not affected,” Drinkward said.

It’s not clear what degree of support a construction exemption has among commissioners. A spokesman for Mayor Ted Wheeler, who controls the key bureaus, declined to comment.

With the possibility of a change in city policy uncertain, developers, builders and clients are beginning to take the tax into account.

“The uncertainty is affecting projects right now,” Drinkward said. “It’s a significant impact to project budgets. Schools, hospitals, airports and other important projects are grappling with how to put this into their budgets, adjust their scope, or otherwise plan for this.”

OHSU has directed its general contractors to include the 1 percent tax as a budgeting line item, and to incorporate the tax into the guaranteed maximum price, according to a Sept. 17 email from Jennifer Taylor, OHSU’s director of design and construction, to general contractors.

“OHSU is aware of a potential cost increase associated with the city’s clean energy surcharge,” spokeswoman Tracy Brawley stated in an email response to questions. “Until the city presents its plans for implementing this program, the specific impact to OHSU is unclear.”

The tax essentially adds 1 percent to the cost of any large project. Drinkward gave the example of the new Lincoln High School, an upcoming Portland Public Schools project with a $200 million price tag. The tax could affect what ends up being included in the project, he said.

“You know, it’s $2 million,” he said.

The tax applies to all “retailers” with more than $1 billion in annual global revenue, and $500,000 in revenue generated within the city of Portland.

While the revenue data of the privately held major construction firms are not public, industry officials said firms including Hoffman, Fortis, Turner, Skanska, Mortenson, JE Dunn, Kiewit, Howard S. Wright and Knife River are likely subject to the city’s tax.

A representative of a business-backed tax policy group said Portland’s gross-receipts tax, which was passed by initiative rather than the legislative process, was not drafted artfully.

“They attempted to create a retail sales tax borne by business, and in doing that, they created a whole bunch of issues,” said Nikki Dobay, Portland-based senior tax counsel for the Council on State Taxation, a policy and advocacy group based in Washington, D.C.

“There’s no definition out there of a retail service,” she said. “That’s going to be a major issue for many taxpayers.”

Traditional retail sales taxes, of course, are paid at the point of sale. That is not the case for Portland’s gross-receipts tax.

“They’re trying to implement it in a manner more similar to an income tax,” Dobay said.

Portland’s construction industry has enjoyed flush years since the Great Recession, riding population and jobs growth that brought expansions in the office, multifamily, hospitality and industrial sectors. Even with warning signs of a slowing global economy, hundreds of millions of dollars in voter-approved school and affordable housing projects should continue to buoy the local construction industry, Drinkward said.

“What this tax could do is push some development out of Portland,” he said.

On Sept. 25, the City Council appointed five people to a newly created Clean Energy Fund Benefits Committee that will award grants generated by the tax revenue.

The post Big builders placed under tax umbrella appeared first on Daily Journal of Commerce.