When developers Wylie Gibbins and Taylor Kaplan were searching for an underserved multifamily market, they looked to Gresham.

The east Portland suburb had several factors in its favor. Rents were rising to the point that new development could be supported, and job growth was surging – in part because of the arrival of an Amazon warehouse in Troutdale and Vista Logistics Park in Gresham.

Gibbins and Kaplan, who met while working at Williams & Dame Development, formed Gibbins Kaplan Development in 2017. The business partners found they had complementary skill sets, with Gibbins focusing on finance and investor relations, and Kaplan working with architects, contractors and city officials to launch multifamily projects.

Having found a suitable market, the developers next needed access to capital, so they turned to some bigger fish in the business.

Like many industries, real estate development faces a generational gap. Older, established developers enjoy many advantages – typically a long record of successful projects, deep relationships with investors, architects and contractors, and more resources to marshal bigger and more profitable projects.

Younger developers like Gibbins, 42, and Kaplan, 34, sometimes must become a bit scrappy to find opportunities. Enter the older, more established developers.

Gibbins Kaplan Development partnered with Urban Asset Advisors on two multifamily projects in Gresham: The Archibald and Douglas Grove.

“We basically rode shotgun with them on the project,” said Tim O’Brien, president of Urban Asset Advisors. “We helped them where we could, and otherwise stayed out of the way.”

O’Brien introduced Gibbins and Kaplan to one of UAA’s longtime lenders, helping the newer developers access debt.

“We helped raise the equity for the project from local, private investors. Then we went and signed on the bank loan with them,” O’Brien said.

Gibbins Kaplan Development this past summer completed Twelve Mile Crossing, an 82-unit complex in Gresham, in partnership with McKenzie River Company. The complex has 10 three-bedroom units in addition to one- and two-bedroom units. All are occupied.

“There’s a big demand for that (unit size) and a lack of that in Gresham,” Gibbins said.

Now, Gibbins Kaplan Development has forged a partnership with another Portland developer, Capstone Partners. They plan to break ground in June on Arts Plaza Apartments, a 97-unit project in the heart of downtown Gresham expected to be completed in summer 2023. Then construction of West Powell Apartments, a 48-unit complex, is slated to begin in late summer, with completion scheduled for fall 2023.

“Part of my interest is to help promote a good project, but also to help smaller developers,” said Chris Nelson, president of Capstone Partners.

For Gibbins and Kaplan, the partnerships have enabled them to get rolling on projects and establish their firm as a player in the workforce multifamily market.

“We’ve been very fortunate with both Tim and Chris that they’ve provided a lot of mentorship in addition to partnership,” Kaplan said.

Gibbins Kaplan Development does not plan to rely on other developers for long, however. The firm recently closed on another property at 405 N. Third St., that they envision holding their first solo development. The Gresham Arts Plaza property will have approximately 20 units.

The firm has also kept projects moving by using a small roster of industry firms. MWA Architects has designed every Gibbins Kaplan Development project to date, which helps the design process run smoothly, Kaplan said.

“We know we’re not going to have a big surprise,” she said. “Everybody’s done this a few times.”

Douglas Grove and The Archibald were built by LMC Construction. Team Construction, based in Vancouver, Washington, built Twelve Mile Crossing and is performing preconstruction for the projects with Capstone Partners.

Rents in Gresham do not yet support podium construction, Kaplan said, unlike in Beaverton and Hillsboro. To make the Gresham projects financially feasible, the buildings are designed with a minimal amount of steel on the first floor.

“Not only are steel costs going up, but the lead times are going up as well,” Kaplan said. “Designing projects that are responsive to materials’ (cost) increases is increasingly important for controlling your (total) costs.”

Douglas Grove and The Archibald were envisioned as short-term holds. They were put on the market on Jan. 27 by JLL.

All of Gibbins Kaplan Development’s subsequent projects are in an Opportunity Zone and are part of Opportunity Zone funds. As such, they are expected to be 10-year holds to reach the threshold that allows investors to forego paying tax on the capital gains.

Gresham has five contiguous Opportunity Zones. The tax break has helped get Gibbins Kaplan Development’s multifamily projects off the ground, Gibbins said.

“Out here, I think it’s spurring development as the program is intended to do and producing workforce housing,” he said.

Opportunity Zones have attracted criticism for encouraging investment in areas that already had attracted developers’ interest, including Portland’s West End, where a 35-story Ritz-Carlton tower is under construction, and fast-gentrifying areas of West Oakland, California, and San Francisco.

Other developers, including Palindrome Communities and Wood Partners, have targeted Gresham for multifamily development.

“There continues to be a lot of interest in Gresham as a whole, but certainly multifamily,” said Eric Schmidt, assistant city manager for the city of Gresham.

Gibbins and Kaplan have learned how to smoothly navigate the city’s approval processes, Schmidt said.

“They’ve been a great partner with the city,” he said.

The multifamily projects align with the city’s need for more housing, Schmidt said.

“They do great work,” he said. “Each project is just getting continually more dialed in.”

Gibbins and Kaplan said Gresham had been supportive.

“She’s able to key decision makers in Gresham on the phone on the weekend,” Gibbins said of Kaplan, “which doesn’t happen in every jurisdiction.”

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A grand opening celebration was held Saturday for a new affordable housing building in Vancouver, Washington.

Isabella Court II is the second of a two-phase affordable housing project by developer REACH CDC. It contains 49 apartments available to families experiencing homelessness or at risk of becoming homeless. The four-story building is adjacent to the original Isabella Court, which opened in 2016 and provides 49 affordable housing units to seniors aged 62 or older.

“I’m excited for the inter-generational community that will develop here between our two buildings,” said Dan Valliere, CEO of REACH CDC, in a statement. “This new community creates many opportunities for collaboration, mutual support, and mentoring for the families moving into this new building.”

The new building includes 34 one-bedroom and 15 two-bedroom apartments. Rents will be affordable to families earning 50 percent or less of median family income, currently $43,950 or less annually for a family of four. A project-based rental subsidy from the Vancouver Housing Authority will make 30 of the units affordable for households earning 30 percent of MFI.

Isabella Court is REACH CDC’s seventh apartment community in Southwest Washington and the first to incorporate money from the City of Vancouver Affordable Housing Fund approved by voters in 2016. The $13.9 million project was designed by MWA Architects and built by general contractor Team Construction.

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Isabella Court II will be a mirror image of its neighbor; however, beneath the surface, it’s clear the new affordable housing project will be much different than its counterpart.

The original Isabella Court, operated by Portland-based nonprofit REACH Community Development, opened in 2016 at 3112 N.E. 62nd Ave. in Vancouver, Washington. The complex provides 49 affordable housing units to seniors over age 62. The second phase, near completion, will also offer 49 affordable housing units – but for formerly homeless individuals and families.

“It was originally designed to be a senior project, but funding priorities changed with the state of Washington, so we were told to serve families – and specifically families who were either experiencing or were at risk of homelessness,” said Anthony Petchel, director of philanthropy and communication for REACH CDC. “So we’re building out our service partnerships with the other service providers.”

The project, designed by MWA Architects, is being built by general contractor Team Construction. The building will be fully managed by REACH CDC once substantial completion is reached in just over a month.

Thirty Section 8 vouchers have been secured for homeless or at-risk families. That is being handled by the Vancouver Housing Authority – a funding partner for the project, which has a budget of slightly less than $14 million.

The building itself has four stories of wood-framed construction over a slab-on-grade foundation. There will be 34 one-bedroom units and 15 two-bedroom units as well as tenant amenity spaces on each floor.

The project is being built to the state’s Evergreen Sustainable Development Standard – a requirement for any affordable housing project that is awarded state Housing Trust Fund dollars. The standard is based on a points system recognizing sustainable building practices such as: site location and neighborhood planning; water conservation; energy efficiency and use of renewable energy technologies; and environmentally-conscious construction practices, materials and indoor-air quality.

“It’s pretty prescriptive,” said Ben Sturtz, project manager for REACH CDC. “It requires a lot on the architect, the contractor and us as the owner.”

Tradespeople are working to complete a punch list of items, especially on the fourth floor – the first completed. On floors one through three, crews are painting, and installing drywall, flooring and luxury vinyl tile. And in some units, cabinetry is being installed.

Exterior materials include masonry cladding on the ground floor, horizontal wood siding on floors two through four and a synthetic, rubber-based roofing system.

“If you were here last week there were probably 10 more trades,” Sturtz said. “We’ve done quite a bit of work since then.”

Outdoors, crews are completing concrete pours for an outdoor playground and courtyard. Also, workers are tackling utilities, including electrical.

A 12-foot retaining wall rings the property on three sides as evidence of the work required to smooth out the sloped property and properly handle stormwater drainage. A massive four-foot-deep pre-cast concrete vault was constructed underneath the parking lot.

“We had to bring in a lot of soil to bring this up and maintain that courtyard,” said Ryan Dooley, project manager for Team Construction. “Also, because of the soil type here, we had to do full retention. Stormwater is always a difficult thing, and we’re now lower than our utilities and we have to pump stuff out.”

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The Vancouver Housing Authority is looking for a new owner’s representative and provider of construction management services to represent the organization during two current residential construction projects.

One project is the three-story, 28-unit Caples Terrace building at 500 Omaha Way in Vancouver, Washington, and the other is the 30-unit Rhododendron Place building at 9002 N.E. 15th Ave. in Hazel Dell. The firm ultimately selected will be responsible for managing construction through to completion for one or both projects.

Caples Terrace currently is around 35 percent complete, with completion anticipated in July. It has a residential component with property management offices on the first floor as well as a detached maintenance facility. LMC Construction is the general contractor. The construction budget is slightly more than $6 million.

Rhododendron Place currently is around 20 percent complete, with completion anticipated by September. Team Construction is the general contractor. The construction budget is $7.8 million.

The scope of work will include managing and documenting project meetings; construction quality control monitoring, testing and inspection; taking photos and video of construction progress; documenting and coordinating construction team requests for information; reviewing and documenting construction submittals with respect to VHA construction standards, project change requests and more; managing documentation and coordinating construction team payment requests; performing field employee wage interviews; performing project close-out services; and providing expert witness services, if required.

The deadline to submit a bid is 5 p.m. on Jan. 18.

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Central City Concern is in the midst of a Portland building boom, thanks to a 2016 initiative dubbed . It has received contributions from six metro-area health care organizations and is in the process of producing three developments providing a total of 379 affordable housing units as well as health care services.

The first one to open was Hazel Heights – a $26.8 million, four-story complex with 153 residential units – 92 with one bedroom and 61 with two bedrooms. The development is located at 333 S.E. 127th Ave., near Stark Street.

Eight units are reserved for households with incomes no greater than 30 percent of the median family income (MFI), 30 units are reserved for households with incomes no greater than 50 percent of the MFI, and 115 units are reserved for households with incomes no greater than 60 percent of the MFI. Rents will range from $412 to $995 per month, depending on tenants’ incomes.

For these units, Central City Concern primarily is targeting individuals who are exiting transitional housing programs and are employed, but who may still have significant barriers to permanent housing.

“These homes are important for supporting employed people with affordable housing,” Central City Concern President and CEO Rachel Solotaroff stated at the Hazel Heights grand opening several weeks ago. “When people are housed, they have a better chance for a healthy future.”

The six health care organizations participating in Housing Is Health are: Adventist Health Portland, CareOregon, Kaiser Permanente Northwest, Legacy Health, Oregon Health & Science University, and Providence Health & Services Oregon.

The two other projects are Charlotte B. Rutherford Place and the Blackburn Center. Silco Construction finished the former project – a 51-unit apartment complex in the Arbor Lodge neighborhood – this past fall. Walsh Construction is expected to finish building the latter project – a 175-unit apartment complex with health care services in the Hazelwood neighborhood – this next summer.

Ankrom Moisan Architects designed Hazel Heights, and Team Construction of Vancouver, Washington, served as the general contractor. Like Charlotte B. Rutherford Place, Hazel Heights buildings will feature large rooftop solar arrays – a total of 88 panels.

Other major financial contributors to the Hazel Heights project included: Umpqua Bank, the Portland Housing Bureau, U.S. Bancorp Community Development Corporation, Oregon Housing and Community Services, Federal Home Loan Bank and PGE.

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Portland nonprofit Central City Concern is currently building three separate residential and medical facilities in east and northeast Portland. Two of these projects, the six-story Blackburn residential and medical facility at East Burnside and 122nd Avenue and the Stark Street Apartments at Southeast 127th and Stark Street, were opened to the 91��Ƶ for a tour recently. This video shows those two sites as they currently stand. All three facilities will be completed later this year.

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President Donald Trump’s newly introduced tariffs on steel and aluminum imports have stirred up debate across the country since they were signed into law.

Steel manufacturers are virtually alone in voicing support for the new 25 percent charge on foreign steel and 10 percent on foreign aluminum. American manufacturing and construction firms have largely rebuffed the policy, which they say will reduce demand for projects and ultimately result in job losses. Trump, however, is merely the latest in a long line of American presidents who have used tariffs to protect the domestic steel industry. Previously, George W. Bush imposed a 30 percent tariff on steel in 2002.

Many Pacific Northwest construction professionals oppose the tariffs. Industry figures say the move to tax steel and aluminum only adds to existing cost uncertainties in commercial and residential building.

“It introduces a level of uncertainty into the market,” Hoffman Construction Vice President Daniel Drinkward said. “The construction market is seeing tremendous cost uncertainties even without this. We have a labor shortage that affects our subcontractors’ ability to deliver work, and to pile this on top of it, it certainly doesn’t help.”

The tariffs were signed into law March 8, but until May 1 (pending discussions) for Argentina, Australia, Brazil, Canada, Mexico, South Korea and the member countries of the European Union. This is noteworthy, because Canada is currently the United States’ largest trading partner for steel products.

“The question is: How much will that actually impact the cost of steel?” Drinkward said of the new tariff. “Certainly, some of that capacity will get picked up by domestic steel manufacturers. And it’s also uncertain how much any reduced demand will affect prices.”

Such is the uncertainty, however, that some contractors are not yet allowing themselves to worry about the unknown.

“We haven’t seen any major concerns yet from any of the major suppliers,” INLINE Commercial Construction Vice President Brandon Flint said. “And until we start seeing that, for right now we’re just doing everything business as normal. We’ve talked about it, but at the same time, how fast will it turn around? It’s yet to be determined.”

For builders, the new tariffs follow the imposition last year of an approximately 21 percent tariff on Canadian softwood imports. The latter move has already hit both residential and commercial builders. Now with the former in place, contractors are having trouble predicting where the market is heading.

“Because they’re passing it straight through to the end consumer, unfortunately we don’t have the ability to absorb that, so it keeps building,” said Mack Thames, a senior project manager with TEAM Construction of Vancouver, Washington. “You’re just raising prices.”

Thames noted that lumber prices have been impacted by not only the tariff on Canadian softwood, but also by last year’s raging wildfire season that saw a reduction in harvests and imports alike.

Overall, materials have increased in cost by 5.2 percent from February 2017, performed by the Associated Builders and Contractors. It stated softwood lumber prices went up 5.6 percent while steel mill product prices increased by 2.3 percent.

“There are a lot of materials in construction that are commodity-based,” Thames said as he looked out across the Southeast Portland project site where his firm is building the $29.9 million Stark Street Apartments. “So my fear is that I’m already starting to see some projects shelved and put on hold, and my fear is that this continues.”

The Associated General Contractors’ Oregon-Columbia chapter declined to comment on the tariffs, but the national organization agrees with Thames.

AGC of America CEO Stephen Sandherr stated March 8 the new steel and aluminum tariffs will “cause significant harm to the nation’s construction industry,” and possibly trigger as many as 30,000 job losses. He also pointed out that companies currently engaged in fixed-price contracts will have to eat any supply cost increases, while contractors in general also will be forced to deal with a likely decrease in demand for private projects.

“The bottom line is that any short-term gains for the domestic steel and aluminum industries will likely be offset,” Sandherr said.

One of the few voices in favor of Trump’s tariffs is the U.S. steel industry. United Steelworkers officials released a glowing statement in support of the move the same day opponents expressed their displeasure.

“Adequate production and trained workers go hand in hand,” USW International Vice President Tom Conway stated March 8. “The announced relief has already sent a positive charge through the industry that the decline in steel and aluminum sectors can be reversed.”

Others, including Drinkward, aren’t so sure.

“It’s not certain to me exactly how big an impact this will have,” he said. “But it will put upward pressure on the cost of steel, and there’s just no way around it; you’re making steel harder to provide.”

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Three Central City Concern mixed-use projects now under way in Portland may not be dazzling examples of engineering or construction, but they’re already making an impression.

The Blackburn Building, the Stark Street Apartments and Charlotte B. Rutherford Place – all part of the Housing Is Health initiative – are expected to help get homeless individuals into housing units and provide health care resources to people without insurance.

“I think this one’s different, in that it’s going to be a real service to the community,” said Brian Ames, a project engineer with Walsh Construction, the general contractor for the six-story Blackburn Building at East Burnside Street and 122nd Avenue. “It’s definitely something that we need right now with the housing crisis, and we’re providing housing and a critical need to people who really need it.”

The Blackburn Building is the flagship of – a unique effort that has received a total of $21.5 million in financial support from nonprofit organization CareOregon and five major hospitals (Adventist Health-Portland, Kaiser Permanente Northwest, Legacy Health, Oregon Health & Science University and Providence Health & Services-Oregon). An additional $9 million for the initiative is coming from the Portland Housing Bureau, and private fundraising efforts will supplement investments.

All told, Housing Is Health this year alone will provide local low-income residents with 382 new housing units, along with health care and other facilities.

Besides 186 housing units, the Blackburn Building will have a health care clinic, a pharmacy and commercial space. Central City Concern, which runs 23 other facilities around the Portland area, will provide on-site support including services focusing on employment, addiction recovery and mental health treatment.

Ground was broken last year on all three projects. The Stark Street Apartments will be a 153-unit complex at the corner of Southeast Stark Street and 127th Avenue, and Charlotte B. Rutherford Place will be a 51-unit complex on North Interstate Avenue.

Recognizing substantial needs

Sean Hubert, Central City Concern’s chief housing and strategy officer, said the nonprofit has been engaged with a range of health systems in the Portland area since the early 2000s. In 2007, it established at its Old Town clinic on Burnside Street a recuperative care program that pairs houseless persons with housing and social services needed to return them to work.

“We put them in housing and stabilize them and give them primary care and help them resolve their acute health conditions,” he said.

The program, in turn, allowed the types of partnerships, Hubert said, that have resulted in initiatives like Housing Is Health.

“At this point we have a decade’s worth of data showing the reduction of recidivism and emergency room admission rates,” he said. “We’re finding housing stability and a standard of care for that population, and all that was already enabled when we started talking about these projects.”

The other factor driving development of Housing Is Health is the ongoing lack of affordable housing. Coupled with increasingly expensive rents in the metro area, it has turned out to be a time bomb for persons with substance abuse or other acute health issues.

Even hospitals accustomed to handing out hotel vouchers to patients without homes began to feel the pinch when their own employees began to struggle with the same issue.

“More generally, housing was on their radar,” Hubert said.

Central City Concern has operated transitional housing for decades now. But these days, that process is not nearly as cost-effective as it once was.

“It worked well when rent is $600 or $700 a month,” Hubert said. “But now, at $1,400 a month, that really has had an impact on our partner organizations’ ability to leverage that. The amount of people we could serve was declining and the hospitals were seeing the results of that.”

Busy building affordable units

At the $52 million Blackburn Building project site, concrete support columns extend upward two stories from ground level as the elevator shaft and other superstructure features take shape. The building’s bottom two stories will be reinforced concrete post-tension decks, while the upper four stories will be wood-framed, Ames said.

The location next to TriMet‘s 122nd Avenue MAX light-rail platform also is ideal for the target population. Coincidentally, most of TriMet’s blue line platforms are being renovated by California-based Stacy & Witbeck at present.

“This whole corridor is now zoned for high-density residential, and you’ll see a lot of that continue to change, as it already has along Burnside,” Ames said. “It should be a big face-lift for this area.”

Just around the corner from the Blackburn Building, crews of framers swarm over the wooden skeleton of the Stark Street Apartments. Consisting of two primary wings, the $29.9 million complex was designed by Ankrom Moisan Architects. Central City Concern expects tenants to come from the immediate neighborhood, while rents will range from just $412 up to $995 per month depending on household income. There will be playground amenities for children and at least 88 solar panels.

TEAM Construction of Vancouver, Washington, is the general contractor for the project. Senior Project Manager Mack Thames said the company has a track record of working on similar projects benefiting low-income residents.

“We do a lot of projects with REACH (Community Development),” Thames said, in reference to the Portland nonprofit affordable housing development and property management company. “But this is our first one in recent memory with Central City (Concern). We certainly work with the Vancouver Housing Authority and with Catholic Charities, so we do a fair amount on the nonprofit side.”

Thames showed off the four-story complex, which will feature 91 one-bedroom and 62 two-bedroom apartments. The design provides for interlocking fields of view and communal courtyards and playground spaces. The main feature will be an exterior elevator that allows residents to access either side of the south building via a sky-bridge. Exterior walkways will be built on each floor in other recessed courtyard areas, providing residents with an unusual overhead perspective.

Meanwhile, the $9.9 million, 51-unit Charlotte B. Rutherford Place complex in North Portland is on track to finish first – possibly by the end of the year.

“This will be the first time where we really brought our clinical services together with our housing in the same project,” Hubert said. “This is very exciting for us. It allows us to take all of our knowledge and put it into one projects, and to design the best model of care from a client’s perspective.”

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