A $41.9 million construction permit was issued recently by the Portland Bureau of Development Services for work at the Pop Blocks.

Splash Apartments will be an eight-story, 219-unit development at 875 N.E. 27th Ave., in the Kerns neighborhood. Two wings, in a perpendicular layout, will be connected via seven sky-bridges – one each for floors 2-8. At ground level, there will be 13,000 square feet of retail space and approximately 200 parking spaces. Forty-four apartments will be reserved for residents at 60 percent (or less) of the area median income.

Seattle-based Security Properties is the developer and owner of Splash Apartments. Mithun‘s Seattle office is handling design. The development will rise on a 61,000-square-foot parcel that also holds the prominent, 59-year-old, bowstring-truss Pavilion Building. It will be restored and become mixed-use space; a separate, $2 million permit for work there was issued in late August. The site also will gain a woonerf (a Dutch-style multimodal street) as an extension of Northeast Pacific Street.

The Pop Blocks (formerly “Pepsi Blocks”) development planned for five acres was approved by the Portland Design Commission in December 2018. Five distinct parcels were granted increases in allowable building height from 55 feet to 120 feet and floor area ratio from 3.0 to 5.0.

The contractor for Splash Apartments is R&H Construction. A construction start date will be announced soon, a Security Properties representative stated. Work is expected to finish in the first quarter of 2024.

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The Portland Design Commission on Thursday declined to hold a vote on a land-use permit for the Pepsi Blocks development’s first phase because of unresolved issues with the Portland Bureau of Transportation. From a design perspective, commissioners favored plans; however, staff advised them to push back a vote until PBOT approves a loading zone and woonerf – a shared street designed primarily for pedestrians.

Located at 2505 N.E. Pacific St., near the Sandy Boulevard corridor, the development would arise on land that previously was long occupied by a Pepsi bottling plant. While most of the existing facilities will be destroyed, an iconic bow-truss structure at the entrance will be preserved; it is to become one or two restaurants.

A Seattle-based team has been working on the Pepsi Blocks for some time now, with owner Security Properties bringing in Mithun to design the 230,000-square-foot expanse of mixed-use buildings and KPFF Consulting Engineers handling the civil engineering duties. The project received its first design advice hearing in May, when it was met with mostly positive reception from the commission.

The first phase of the project involves construction of an eight-story, 87-foot-tall building with 219 residential units and 15,000 square feet of retail space. The first phase also includes two levels of below-grade parking, a landscaped public plaza with art and the woonerf.

Two problems are primarily keeping the project from moving forward. First, the applicants requested an adjustment to loading zone requirements. A main loading zone is required on-site, but the owners requested to place it off-site on an adjacent right-of-way.

Another issue is the woonerf. The city of Portland has only a few examples of precedent for the feature, which is a somewhat new trend adopted from Europe. Since many of the city’s codes predate the woonerf’s use in Portland, the designation is currently for a public street, which makes it liable for several other strict codes.

The applicants are trying to change its designation to an “on-site vehicle area.” That more accurately represents the woonerf’s purpose because it is designed primarily for pedestrians, but there must be vehicle access in case of an emergency.

PBOT has not yet approved these adjustments, and because of that, the Design Commission cannot vote unless it issues a denial, which would greatly delay construction. For this reason, commissioners opted not to vote, and instead rescheduled a future land use review. Then they used the time allotted to talk more about the actual design guidelines.

The Pepsi Blocks’ design was universally lauded. Special praise was given to the project’s integration within the neighborhood, as commissioners said it would create a lively and pedestrian-friendly environment that Sandy Boulevard hasn’t seen in a long time – perhaps ever.

“Public realm is where this thing is quite exceptional,” Commissioner Don Vallaster said. “It gives more back to the city than any project we’ve seen in a really long time.”

Commissioner Brian McCarter said the project sets a very high bar for the potential future of Sandy Boulevard, and Commissioner Jessica Molinar said she wished the project was built already. A few minor criticisms were directed at project aspects such as window tint and certain colors, but commissioners said they would not hesitate to approve the project following resolution of its more pressing issues.

“This is a great thing for the city of Portland,” Design Commission Chairwoman Julie Livingston said. “This is going to be a really great addition to the neighborhood.”

Pepsi Blocks plans will return before the Portland Design Commission for a land-use review on Sept. 19.

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Redevelopment of the former PepsiCo bottling plant in Northeast Portland inched closer to fruition Thursday, when the first part of the project went before the Portland Design Commission for advice. The development, led by Seattle firm Security Properties, was approved as a whole by the commission in December, but each step of the building process will undergo its own design review process.

The first phase of the project, in the site’s southeast corner, will involve constructing the first mixed-use building, redesigning the iconic arched-roof Pepsi pavilion for restaurant or retail space and constructing an outdoor plaza that extends southeast to Sandy Boulevard. The initial construction will also involve creation of the woonerf, a Dutch-inspired one-way shared street that will run between buildings for pedestrians, cyclists and slow-moving cars.

Seattle-based Mithun is the architect and landscape architect for the project. Commissioners carefully deliberated on the various details of the development’s first phase, and were overall excited about the plan, and criticism was mostly given to some of the more particular details.

Commissioner Jessica Molinar expressed concerns about the scale of the development, with the residential towers expected to come in at 87 feet tall. At such a contrast to the surrounding area, it might not blend well into the neighborhood, she said.

Molinar was also skeptical of the proposed plaza, which she said might be too far away from the main intersection at Sandy Boulevard to attract other residents of the area. Commissioner Samuel Rodriguez likewise said plans for the plaza need to be more developed, but said he understood that it was in preliminary stages and would be more thoroughly planned later.

The plaza was otherwise acclaimed for its planned structural and water features, which will go beyond aesthetics and help drown out noise from Interstate 84 nearby.

Another major point of consideration was the mixed-use building itself. While housing about 200 residential units, it will also feature retail spaces at ground level. Several commissioners said they were unconvinced that a work/life balance could be maintained in such a space.

A final suggestion was made to move the location of a loading space currently planned along the woonerf. Commissioners suggested that large trucks moving into such a place would distract from the public realm.

The commission praised plans for materials and manufacturing details.

The mixed-use building will be made up of two distinct towers, which will form a large “L” shape. One each residential floor the towers will be connected by an open-air bridge. The facades of the towers will contrast as they face toward the pavilion and plaza, with one to be made of metal and the other a stucco/cementitious material.

Balconies will not protrude from the building but will instead be recessed, allowing residents to enjoy the outside while being free from inclement weather.

The Pepsi Blocks development team is expected to seek a land use review by September, with construction to commence as soon as possible following approval.

The post Advice given for Pepsi Blocks’ first phase appeared first on Daily Journal of Commerce.

The long-awaited redevelopment of Northeast Sandy Boulevard took a major step forward on Thursday.

The Portland Design Commission voted 5-0 to approve Security Properties‘ plans to transform a former PepsiCo bottling plant off of Sandy Boulevard. Those plans call for turning the 4.7-acre superblock into a dense collection of mixed-use space that leans heavily residential.

The developer is considering building anywhere from 485 to 1,297 housing units, said Dorothy Faris, a principal with Seattle design firm Mithun. That would include 39 to 195 affordable units, depending on affordability level and how many units are built overall.

“It’s a dense project; let’s not kid ourselves,” Commissioner Sam Rodriguez said. “I think that’s what we’re looking for as a city.”

Projects such as The Zipper from Guerrilla Development now appear to have presaged the gentrification of the Northeast Portland corridor, which formerly was lined with auto repair shops and dealerships.

The planned development is the first to receive approval under the city’s 2035 Comprehensive Plan rules for major sites. In exchange for bonus heights of up to 120 feet, the developer agreed to provide affordable housing and set aside major portions of the superblock for open space.

Security Properties executives said they plan to preserve the existing Pepsi Pavilion, which was built in 1962. A group of architects had lobbied for its preservation.

The pavilion will likely have a retail tenant, said John Marasco, Security Properties’ chief development officer. One possibility being discussed is the proposed James Beard Public Market, which has been searching for a home in Portland for a few years.

“We would love to resurrect those conversations,” Marasco said.

James Beard Public Market Executive Director Fred Granum, in an interview with the 91��Ƶ, said he has had no discussions to date regarding the Pepsi Blocks site.

The Pepsi Blocks encompasses five buildable parcels and the existing pavilion building. The tallest buildings are planned alongside Interstate 84, with heights stepping down to Sandy Boulevard.

Open space will weave throughout the development. Security Properties won permission to devote only 12.13 percent of the development to publicly accessible open space; the city’s standard is 15 percent. Open space will be provided by an 8,648-square-foot plaza, a 13,673-square-foot park, a 2,135-square-foot park, a pedestrian path and a woonerf-style street that will extend Pacific Street through the development.

Commissioner Zari Santner praised the project team’s “very thoughtful organization of public spaces.”

“They work well and really will contribute to the vibrancy of this development,” she said.

Santner expressed some concern that the building architecture could be too uniformly boxy.

“The massing is perfect; it’s fine,” she said. “But variety is lacking.”

Many of the buildings will have ground-floor retail space, particularly facing the woonerf. Parking will be provided in underground garages; no surface parking is proposed.

Commissioners attached conditions of approval relating to phasing. Certain building permits will be tied to simultaneous construction of the public spaces. Any change in the project’s phasing would require review by Bureau of Development Services staff.

Development will begin along Sandy Boulevard in the property’s southeast corner and move in a counterclockwise direction. The tallest residential buildings may have to wait for market conditions to improve, the developers said.

Thursday’s approval did not cover individual building designs; they will undergo separate review hearings. The project team will move forward with further design work immediately, Marasco said.

The Pepsi Blocks should serve as a model for future planned development sites, design commissioners said.

“This proposal establishes a really high bar for the master plan areas identified by the 2035 plan,” Chairwoman Julie Livingston said. “It goes further than that – it establishes a new high bar for superblock development. It’s really well done.”

The post Dense development proposal wins approval appeared first on Daily Journal of Commerce.

If only Portland urban planners and developers could latch onto a concept that would further deter drivers while providing ample space for pedestrians and bicyclists to move through the city.

If only Seattle could have done it first, repeatedly and well.

If only it could originate in the Netherlands, lending the concept a sheen of Dutch good-government cool and a funny name.

Enter the woonerf.

At some point this year, Portland urbanists began talking about woonerfs – a shared-street concept popular in the Netherlands. They’ve hardly stopped since.

The word, pronounced “voo-nerf,” has injected itself into plans for two major developments. The concept is unfamiliar enough that planners and designers still say it with uncertainty. Woonerf, pronounced with an American accent, sticks out like a stroopwafel at a donut shop.

Woonerfs slow vehicle drivers and provide room for bicyclists, pedestrians and even riders of Portland’s proliferating fleets of scooters. Woonerfs, typically narrow streets with park-like amenities, tend to activate adjacent spaces; ideal placement would be beside food markets or other high-traffic retail spaces, or open spaces.

“It’s really a roadway that shifts the priority off the use of that space for cars or vehicles to pedestrians and bicyclists,” said Jake Woland, a woonerf designer with HEWITT in Seattle. “So cars are allowed on the woonerf, but (drivers) are meant to understand that they’re subordinate in that space and it’s for pedestrians and bicyclists.”

Woonerfs align with many of Portland’s stated goals, from cutting carbon emissions to reducing the number of drivers commuting into the central city. Woonerfs also are a piece of Portland’s efforts to make itself less car-centric.

The Portland Design Commission has been ground zero for the woonerf discussions. So far, two woonerfs are on the drawing boards in Portland.

Seattle developer Security Properties plans to build a woonerf at the Pepsi Blocks redevelopment along Sandy Boulevard. The woonerf would cut through the four-block site, continuing Pacific Street westbound with a slow-speed, one-way route. It would run adjacent to an open lawn. The large, flexible lawn could “spill into” the woonerf, with the goal of activating both spaces, Dorothy Faris, a landscape architect with Mithun of Seattle, told the Design Commission.

The woonerf would form the circulatory system for the 4.7-acre site, which is expected to have five buildings, beginning with two multifamily structures totaling 335 units and 28,500 square feet of retail space.

The second woonerf planned in Portland would be built downtown on Southwest Ninth Avenue between Washington and Alder streets. Part of the city’s Green Loop, the woonerf would run past the proposed 35-story Block 216 mixed- use tower and the newly renovated Woodlark Hotel.

The Block 216 project includes a planned food hall that would open onto the woonerf along Ninth Avenue, replacing existing food carts. The development team is led by Walt Bowen of BPM Real Estate Group.

The onset of the woonerf era has developers and city planners scrambling to figure out how to adapt the concept to local streets and regulations.

Woonerfs can be closed to auto traffic for festivals and other special events. But typically, they are open to auto traffic. Curves and narrow lanes provide visual cues that discourage drivers from entering.

“We do that for a couple of reasons – so that any cars on the cross streets get the sense that at the very least they need to slow down, but if they have another option that feels more direct, they need to take that,” Woland said.

Don Vallaster, a member of the Design Commission, indicated he would support keeping the Pepsi Blocks woonerf open to auto traffic.

“I don’t think you want to get rid of cars on the woonerf,” he said during the Sept. 6 meeting. “I think that’s part of the urban context also.”

So far, the woonerf concept has attracted enthusiastic support from city planners, developers and advocates of non-motorized transportation.

“They are a really good way to go where there’s a low volume of auto traffic and high volumes of other users,” said Jillian Detwiler, executive director of The Street Trust, a nonprofit group that advocates for bicyclists and other nonmotorized road users. “It makes for a very flexible space for people.”

Plantings, seating areas and low curbs are commonly used to provide a welcoming atmosphere for pedestrians.

“It really becomes a place for congregation as well for people on the street,” said Lori Mason Curran, spokeswoman for Vulcan Real Estate, a Seattle developer that is building two woonerfs.

One of Vulcan’s woonerf projects is for Facebook in the South Lake Union neighborhood. The woonerf will be on Eighth Avenue North between Thomas and Harrison streets.

“It is a street, so there will be cars, but they won’t be able to go very fast,” Curran said.

The woonerf will be pinched by twin buildings with 390,000 square feet of office space and ground-floor retail space amid a canopy of mature sweetgum trees.

Google will also have a woonerf in Seattle between two office buildings at Block 31, located at 625 Boren Ave. N. in Seattle. The through-block woonerf will connect Terry Avenue North and Boren Avenue North.

Tech clients are supporting the woonerf concept, Curran said.

“It is a design feature that Vulcan is very keen on,” she said. “As we sit down with these tenants on build-to-suit projects, it doesn’t take any time to get clients on board and to see the benefits for them and their employees.”

Another Seattle woonerf is Bell Street Park, which opened in 2014 in the Belltown neighborhood. Bell Street Park is an example of taking a street from cars and creating a park-like public space, Woland said.

“Where real estate is really expensive, the city always owns the roadway, and you may find a place where a woonerf is appropriate,” he said.

Seattle University also has a small woonerf situated between ballfields.

Pike Place, along the world-famous market, has one-way traffic over cobblestones, with cars proceeding at a crawl as pedestrians freely stroll in the street. The historic thoroughfare has all the characteristics of a woonerf, Woland said.

Meanwhile, Portland, ever sensitive to preserving its reputation as a leading city for urban planning, is sending a delegation of transportation officials to Seattle to learn more.

So as the trend catches on, is Portland about to become a series of intersecting woonerfs? Not likely.

Wide streets, for one, do not make appropriate woonerfs, experts said. A Portland street such as Broadway or Burnside is unlikely to ever go Dutch.

The other major stumbling block is that the infrastructure of American cities was not built with woonerfs in mind. Streets are designed so buses and fire trucks, with their wide turning radiuses, are able to enter them.

Designers must also be mindful of the maze of utilities that lies underground.

“The other challenge that we had pretty consistently is utilities are installed in roadbeds early in a city’s life and they have a rigorous logic that expects a rectilinear road grid,” Woland said. “If there’s a water main problem, the utility has to be able to get to that water main no matter what.”

Portland planners are working through the issues. The Design Commission devoted an entire meeting to the proposed Green Loop woonerf adjacent to Block 216. Then at another Design Commission meeting on Sept. 6, the Pepsi Blocks woonerf was discussed in passing. Some planners were hoping for more.

Kurt Krueger, development review manager for the Bureau of Transportation, left the hearing table as commissioners moved onto other topics.

“I was more interested in the woonerf,” Krueger said as he decamped.

The post The wonderful world of woonerfs appeared first on Daily Journal of Commerce.

Designers with Mithun, a Seattle-based architecture firm, are working to integrate a public plaza into the multi-block Pepsi Blocks development planned off of Sandy Boulevard in Northeast Portland.

The Pepsi Blocks, a 4.7-acre site that for decades held a beverage packaging and shipping facility, will also feature a woonerf – a slow-speed, one-way street. It will run westbound through the site, filling a gap in Pacific Street.

The woonerf will bend through the site to encourage slower speeds, said Dorothy Faris, a Mithun principal and landscape architect.

The project appeared before the Portland Design Commission for design advice on Thursday. The Pepsi Blocks team is likely to return for a meeting that focuses on building design before proceeding to a Type III design review.

The project is poised to be the first to undergo the city’s new planned development review process. That will make the project eligible for a 5-to-1 floor-area ratio, in exchange for meeting affordable housing, open space and other requirements.

Some design commissioners said the site plan appears too crowded, particularly next to the plaza and the existing pavilion building, which would be retained, according to current plans.

“I wonder if we’re pinching the pavilion too much,” Commissioner Tad Savinar said. He suggested notching surrounding buildings to give the pavilion “more breathing room.”

The highest buildings – 120 feet – are proposed along Northeast Holladay Street, stepping down to 60 feet for the buildings facing Sandy Boulevard.

Security Properties‘ first phase would include the pavilion renovation, construction of two new apartment buildings with underground parking and construction of the public plaza.

The multifamily buildings would have a total of 335 units and 28,500 square feet of retail space. Parking would total 350 spaces.

Commissioner Andrew Clarke said the proposed retail spaces should reflect the “organic nature” of the existing shops on Sandy Boulevard.

“There’s kind of a sterility to the (proposed) retail,” he said. “It’s more oriented to a different kind of neighborhood.”

Elevated hallways also caught the attention of commissioners. They debated whether the hallways constitute sky-bridges, which are discouraged by city design guidelines.

Mithun partner Bert Gregory said the elevated walkways did not meet the definition.

“These are not sky-bridges,” he said. “They are not over the public right of way.”

The Design Commission rarely approves sky-bridges, Savinar said.

“It’s just a heads-up that there may be a discussion later on,” he said.

Commissioners also signaled the design elements facing Sandy Boulevard and Holladay Street will be reviewed carefully.

Commission Chairwoman Julie Livingston said the Sandy Boulevard-facing aspect will be important to the project’s appearance.

“This is so incredibly visually important as one travels westbound on Sandy,” she said.

Security Properties is considering building live-work units to face Holladay Street, Gregory said. The units would have ground-floor “maker space” with residences above. Townhouses would not work well on Holladay, he said.

Commissioners said Holladay Street would benefit from ground-floor activity.

“That is a very obscure street,” Commissioner Don Vallaster said.

Security Properties purchased the site from PepsiCo in August 2017 for $27 million, according to public records. The property at 2505 N.E. Pacific St. encompasses four city blocks off of Sandy Boulevard between 25th and 27th avenues.

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Developers looking to build in Portland are increasingly coming to the same conclusion: In this market, it’s time to go big or go home.

Large projects are in development or under construction all over the Portland-metro area, including a 35-story mixed-use downtown tower from Walt Bowen’s BPM Real Estate Group and Downtown Development Group, Gramor Development‘s The Waterfront Vancouver and the Oregon Museum of Science and Industry master plan. Security Properties of Seattle is on the verge of breaking ground on a 24-story mixed-use tower at the Press Blocks in Goose Hollow, and beginning the design review process for the PepsiCo superblock redevelopment on Sandy Boulevard.

A number of factors are pushing developers in the direction of large projects, according to sources:

• Institutional lenders and investors are behind many of Portland’s largest current projects, and they prefer to dole out capital in large chunks rather than small ones. Big projects need big loans. Some lenders are also willing to accept smaller returns and remain patient while large projects get built.

“They’re willing to do lower and lower yields than we’ve seen before,” said Tom DiChiara, founding principal at Cairn Pacific.

Cairn Pacific’s major backer is Prometheus Real Estate Group of San Mateo, California. Prometheus has taken a long-term position on Cairn Pacific’s Slabtown projects in Northwest Portland, DiChiara said. Cairn Pacific is the developer behind the George Morlan Plumbing building and the Leland James, L.L. Hawkins and New Seasons mixed-use projects in the fast-changing industrial area.

• In the 10th year of economic growth, most developers have successfully completed profitable projects in recent years and are flush and confident enough to do something bigger. Developers figure if they made a little money with a smaller project a couple of years ago, they can make more with a larger project now.
• The loss of income due to inclusionary housing rules, which require developers to either devote 15 or 20 percent of units to qualifying tenants below market rate or pay a hefty fee, hurts less in a large project.

“Part of it is that there’s economies of scale, especially when construction costs start going up,” said Sam Rodriguez, senior managing director of Mill Creek Residential Trust, a major multifamily developer in Portland. “Inclusionary housing, for example – it becomes at some point somewhat neutral.”

• Many costs are fixed or grow only modestly with larger scale. The same holds true for permit approval: a multifamily project of 350 units and one of 150 units face similar design review processes.
• Land costs are high.

“You paid for the land,” Rodriguez said. “In theory, the more density you put in, the less you’re paying per unit.”

• Population and job growth are driving demand for ever-increasing density in central Portland.

“Demand is driving most of the need,” said Bob Thompson, founding principal of TVA Architects. “The demand for housing, it’s just over the top.”

TVA Architects designed Fremont Place Apartments, a 17-story tower that won approval from the City Council in May after an appeal from the Pearl District Neighborhood Association. The firm is also designing a potential future $1 billion Major League Baseball stadium for the Portland Diamond Project in a partnership with global firm Populous.

“That’s an exciting project that is a reflection of the growth we’ve seen,” Thompson said.

A number of headwinds suggest the red-hot pace of development could cool. Construction costs are causing some developers to carefully consider whether to pull the trigger, and subcontractors are so backlogged that projects are facing delays.

“The labor pool is just completely tapped,” DiChiara said. “Everybody is behind schedule, the cost is higher and the quality is lower. It’s a tough recipe.”

Furthermore, new projects face increasing competition, particularly in the multifamily and office sectors, as earlier projects deliver. DiChiara said he expects to see some developers hit pause on large projects.

“I can’t really see how any of them make economic sense,” he said. “I think a lot of people, frankly, don’t know their costs, and they’ll be shocked when they come in.”

Then there’s the question of when the broader economy could cool. Interest rates have risen, and a flattening yield curve is showing foreboding signs. A slowdown may be in the offing, DiChiara said.

“I don’t have concerns about the long term here,” he said, “but I think the next year or two could be a little bumpy.”

The post Portland developers thinking big appeared first on Daily Journal of Commerce.

The developer of a planned 4.7-acre superblock property off of Northeast Sandy Boulevard is proposing a dedicated pedestrian path and a public plaza as part of the mixed-use development.

Security Properties, based in Seattle, is also proposing to retain the existing Pepsi Pavilion building after requests by neighbors and architecture enthusiasts.

“A lot of people think it’s a good idea to retain that if we can figure out how to do that,” said John Marasco, chief development officer for Security Properties.

The pavilion building would likely be used as retail space, Marasco said. “You might be able to do some mezzanine space, but really the idea is an open concept retail area,” he said.

The 1962 building with a vaulted design was included in the city’s 1984 Historic Resource Inventory as a significant example of “Fifties modern” architecture.

Security Properties and architect Mithun, also of Seattle, are scheduled to go before the Portland Design Commission on Thursday with preliminary plans for the site.

“We need to get in front of the design review board and see if they buy into our concept plan for the site or if we have to go back to the drawing board,” Marasco said.

Some previously unreported aspects of the project have emerged in public documents and interviews. Though subject to change, the early plans give an idea of the developer’s intentions for the vast site within reach of downtown Portland. The design advice hearing will deal with massing and site plans; designs for individual buildings will wait for a later hearing.

Security Properties is proposing a Woonerf – an active alleyway intended primarily for pedestrians that is common in the Netherlands – to enable access through the four-block site.

“We like the idea of reestablishing that east-west connection, but we don’t want it to be a cut-through for cars,” Marasco said. “So our idea is to do a highly landscaped Woonerf, which is where pedestrians and cars can cohabitate, but is mainly intended for people and bikes.”

Security Properties previously employed a Woonerf at Peloton Apartments on North Williams Avenue.

The developer is also studying how to incorporate affordable housing at the former PepsiCo bottling plant site. Marasco suggested Security is interested in providing units affordable at or below 60 percent of area median income.

The city’s inclusionary housing policy requires developers to provide 15 percent of a project’s units at 60 percent of area median income, or 20 percent of units at 80 percent of area median income. Developers also have the option of paying a significant fee in lieu of providing affordable housing on site.

“At this point, we haven’t made a decision,” Marasco said. “We’re actually looking at the potential to do housing at or below 60 (percent of area median income) as opposed to doing it at or below 80. The other thing we’re looking at is satisfying the entire low-income requirement in the first phase.”

The first phase would also have market-rate units, Marasco said. “What we’re looking at is truly mixed use and mixed income,” he said.

Security Properties purchased the superblock from PepsiCo in August 2017 for $27 million, according to public records. The property at 2505 N.E. Pacific St. encompasses four city blocks off of Sandy Boulevard between 25th and 27th avenues.

Financing is increasingly difficult to secure, Marasco said.

“Probably the most significant (hurdle) is how you finance it,” he said. “I would say because of the perception of overbuilding there that the lenders are a bit more cautious today. If you have any sort of weak financial statement, it’s going to be tough to finance a project.”

The Pepsi superblock project fits a trend of larger projects moving forward as developers look to achieve profitability with scale. Neighborhood groups have in some cases fought the developments, forcing delays and design changes. The Kerns Neighborhood Association did not respond to an inquiry regarding the PepsiCo blocks proposal.

Sandy Boulevard has seen more investment from developers looking to build housing and high-revenue office space in underdeveloped areas from Goose Hollow to the Central Eastside Industrial District. Security is awaiting building permits to begin work on a 24-story mixed-use apartment tower at the Press Blocks in Goose Hollow.

The post Seattle developer refines Sandy Boulevard plans appeared first on Daily Journal of Commerce.

Security Properties is moving forward with its superblock project at the site of a former PepsiCo bottling facility near Northeast Sandy Boulevard with a focus primarily on housing.

The Seattle developer recently requested a pre-application conference with Portland Bureau of Development Services staff to discuss zoning at the site.

“Most of the property is likely to be housing, but there’s likely to be significant amounts of both retail and office,” said John Marasco, chief development officer at Security Properties.

Security Properties bought the 4.7-acre property encompassing four city blocks from PepsiCo in August 2017 for $27 million, according to public records. The property encompasses four city blocks off of Sandy Boulevard between 25th and 27th avenues.

Security has forged a financial partnership with a Chinese firm, Beijing Jade Investment Group, for the project.

The property has 1.2 million square feet of developable area. The floor area ratio, which governs possible building heights, for the site is 5-to-1.

Marasco said he’s unsure how many housing units the property could support.

“We’re doing our homework to figure out how we want to allocate that density,” he said.

The superblock site is likely to be developed in phases, Marasco said.

“We really like how that neighborhood’s developing,” he said. “Because of the size of the property, we thought it would be a good idea to plan something where we could develop some of it now, and continue to develop it as the neighborhood continues to gentrify.”

Retail development in the Northeast Portland corridor and quick access to downtown will be attractive to future tenants, Marasco said.

Security Properties has shown an ability to develop big projects in Portland, including the Heartline mixed-use project in the Pearl District and the 24-story, 337-apartment Press Blocks tower set for Goose Hollow that has received the City Council’s blessing.

Security has worked with Mithun, a Seattle architecture firm, on each Portland project. Mithun is involved in the PepsiCo project as well, but Marasco said there’s a chance other architecture firms could be brought in later to design individual buildings.

Marasco, who grew up in Portland, said Security Properties has kept a close eye on growth here.

“It’s a market we’ve followed for quite some time,” he said. “It’s seen a lot of growth and has a lot of momentum, and we’re excited to be part of the new growth there.”

Since buying the property, Security has agreed to a lease-back arrangement with PepsiCo to give the soda bottler time to move its operations.

The proposal may be the first development subject to Portland’s Mixed Use Zones Project and Map Refinement Project as part of the 2035 Comprehensive Plan.

Developments of 2 acres or more can be awarded bonus height in exchange for providing affordable housing and public open space as well as adhering to other design guidelines.

Security Properties is the first developer to come to the city with a large-site project that would be subject to the master-planning process, said Marty Stockton, a city planner.

“We don’t have a lot of 2-acre sites in the city,” she said. “They’re pretty rare.”

Marasco said he’s eager to learn more from city staff.

“We’ve got a lot of questions because I think it will be the first project that’s gone through the master plan that would be subject to rezone,” he said.

Editor’s Note: An earlier version of this story inaccurately stated the development would be subject to the Central City 2035 Comprehensive Plan. The project site is outside the Central City.

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A Seattle-based developer is betting heavily that Sandy Boulevard will be the choice of a new generation.

Security Properties Inc. has closed on the purchase of a 4.7-acre Northeast Portland tract that has been used since the 1960s as a PepsiCo bottling and distribution facility, the developer announced Thursday. It plans to redevelop the superblock site offering market-rate and affordable housing, offices, retail space and other product types during the next several years, the developer stated in a news release.

The redevelopment would use the city of Portland’s Large Site Master Plan guidelines.

“We look forward to creating Portland’s next dynamic urban village through the city’s newly adopted 2035 Comprehensive Plan,” said John Marasco, chief development officer at Security Properties, in a prepared statement. Marasco was not immediately available for comment.

Security Properties is partnering with Beijing Jade Investment Group as its initial financial partner for the project. The sale price was not disclosed, and was not yet available via Multnomah County’s online property records.

“We’re excited for this partnership as well as the opportunity to create a thoughtful, amenity-rich community that further contributes to Portland’s urban development,” Beijing Jade Investment Group Vice President Xiaorong Zhai said in a prepared statement.

Security Properties will serve as master developer of the PepsiCo property. The company is in the process of interviewing architects to begin conceptual design for the multiphase redevelopment project.

The nearly 5-acre site offers a large canvas for development. In a public notice for an early assistance meeting with the Bureau of Development Services to discuss zoning, Security Properties revealed it’s considering four to five mixed-use buildings on the site, potentially including parking, retail, housing, offices and senior housing.

Sandy Boulevard is a key Northeast Portland arterial road that has retained a gritty character while other corridors such as Williams Avenue and Alberta Street have gentrified.

“We see Sandy becoming Portland’s next great boulevard, and this Large Site Master Plan will play a significant role in its continued transformation,” Gus Baum, director of development at Security Properties, said in the news release.

Sandy Boulevard’s width and lack of pedestrian-friendly design has proved an obstacle for some projects. Yet developers have begun to bring amenities to the corridor. Guerrilla Development‘s Kevin Cavenaugh has built projects including restaurant-focused building The Zipper and office project New New Crusher Court to Sandy Boulevard.

Based in Seattle, Security Properties has expanded its presence in Portland with the Peloton Apartments on North Williams Avenue and Heartline in the Pearl District. Security is also the developer of a 250-foot-tall residential tower in Goose Hollow on the Press Blocks site. That project recently received design approval.

Editor’s note: 91��Ƶ photographer Sam Tenney contributed to this report.

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