Two projects in the Portland-metro area – the proposed Willamette Falls Riverwalk and the completed Yard – received honor awards recently from the American Society of Landscape Architects as part of the .

The Willamette Falls Riverwalk in Oregon City was one of four projects to receive an honor award in the analysis and planning category. The Interstate 25 Conservation Corridor Master Plan in Douglas County, Colorado, received the category’s award of excellence.

The Riverwalk, designed by Snohetta, is the anticipated first phase of a plan to remake Oregon City’s frontage of Willamette Falls. The waterfall, blocked for decades by a paper mill, is considered a potential tourist attraction.

“Here we see the combining of public access, habitat, historic and cultural interpretation, and economic development in a project that’s very tangible in terms of its potential to being implemented,” the awards jury wrote.

Snohetta is an international design firm with headquarters in Oslo, Norway, and U.S. operations based in New York City. The design firm’s client is Metro and a coalition of government agencies. The landscape architects are Mayer/Reed and Dialog Design.

Yard, a 21-story mixed-use building with a landscaped podium at the east end of the Burnside Bridge, was one of two projects to receive an honor award in the residential design category. 2.ink Studio was the landscape architect for Yard. The Balcones Residence in Austin, Texas, received the category’s award of excellence.

Yard “sets itself apart from a competitive marketplace, and the market has responded positively to it,” the awards jury wrote.

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Key Development‘s follow-up to Yard will have little in common with the controversial Burnside bridgehead tower.

Instead of an imposing building envelope and black exterior panels, Yard‘s sibling will be much smaller and feature warm, reddish-brown bricks.

“We’re trying to make it more of a classic Central Eastside building than a striking, contemporary project, which we’ve kind of already done with Yard,” said Claudia Munk-von Flotow, chief operating officer of Key Development, the developer of Yard and the new project on Block 76 West. “It’s really not the little sister to Yard as we once concepted it to be.”

The mixed-use project was known in planning as SideYard – a play on it being a smaller neighbor to the 21-story project built first. Now that Yard has sold to an institutional buyer – the largely residential building was snapped up by a Thailand-based investor for $126.68 million in December 2016 – the SideYard name no longer made sense, Flotow said.

The Block 76 West building will rise to five stories and include 23,569 square feet. It’s being designed by Skylab Architecture, which also designed Yard. Andersen Construction, which previously built Yard and Guerrilla Development‘s Fair-Haired Dumbbell nearby, recently broke ground on the new project.

The program for Key’s building at 365 N.E. Couch St. hasn’t been finalized, but it’s likely to be two floors of retail space and three floors of office space, Flotow said. The retail spaces will likely face Northeast Couch Street and Third Avenue.

No vehicle parking will be provided. However, the development will include bicycle-friendly features such as “rolling curbs.”

Key Development, based in Hood River, has a lead on a potential ground-floor tenant: Ferment, a brewery that is opening a production facility and small taproom in Hood River. The company may be interested in a Portland location, Flotow said. Ferment is led by Dan Peterson, a former head brewer at Hood River brewery pFriem.

Block 76 West’s structure will set it apart: Key opted to use cross-laminated timber. The structure will be a CLT diaphragm with brick cladding. The CLT materials will be provided by D.R. Johnson, a timber manufacturer based in Riddle.

“We have done lots of conventionally framed, heavy-timber buildings,” Flotow said. “We’ve never done a CLT project. For us it’s both an aesthetic thing and time efficiency, especially with such a heavy building push and a labor market that’s not super available to do heavy-timber construction projects.”

Using CLT materials with precut holes and connections accelerates the building schedule, Flotow said.

“It makes for a really efficient construction process,” Flotow said. “You can just fly your structure a lot quicker.”

Flotow said she is not concerned by the recent delamination of CLT subflooring during construction of a building at Oregon State University in Corvallis. CLT is a proven technology with an established safety record in Europe and Canada, she said.

“There’s piles of literature of test results from both a structural and a fire-protection point of view that is giving us some confidence,” she said. “I don’t think we’re putting ourselves at a huge risk by going for a CLT diaphragm.”

Andersen Construction even sent a manager to Germany to learn about CLT, Flotow said. Andersen’s experience building in the cramped Burnside bridgehead area factored into its selection as general contractor, she said.

“They have efficient ways of staging and scheduling to stay on schedule and on budget,” she said.

The building is on track to open in spring 2019.

The post Another building being squeezed into hot spot appeared first on Daily Journal of Commerce.

Rents in Portland have fallen for consecutive months, suggesting new supply is making a dent in meeting the city’s housing needs.

In October, rents here were 0.4 percent lower than a year earlier, and 0.8 percent lower than September, according to Apartment List. The new data indicate rental housing costs have crested after strong increases in recent years.

The median rent was $1,140 for a one-bedroom apartment, and $1,350 for a two-bedroom apartment, according to the rental website. October was the second month in a row rents declined in Portland. The city’s decline was steeper than the nation’s, where rents slipped 0.1 percent.

“Demand is weak, relative to the supply,” said Sam Rodriguez, senior managing director of Mill Creek Residential Trust, a major multifamily developer in Portland. “That’s why you’re seeing this very anemic growth compared to the growth we had before.”

Other data also indicates rents are retreating. At Hassalo on Eighth, a Lloyd District development with 657 apartments, rents were $1,671 as of Sept. 30, down 4 percent from $1,735 a year earlier. (Hassalo on Eighth is owned by American Assets Trust, a publicly traded company).

Managers of some rental properties are offering concessions, particularly in the luxury market. At Yard, for example, prospective renters are being offered a month free and a free gym membership. A month free is being offered for some units at Slate. Up to six weeks free is being offered at NV in the north Pearl District.

But the decrease in rents for luxury units has not trickled down for middle-income renters, said Jamey Duhamel, policy director for city Commissioner Chloe Eudaly.

“It’s softening at the high end,” Duhamel said. “That has not in any way translated to lower rents for folks who are stretched thin, or even the average renter.

“We definitely don’t see any slowdown in the need,” she added.

Nevertheless, supply in certain markets, including the Pearl District and Central Eastside, has surged as major apartment projects have opened.

“As developers, this is what we normally do – we overbuild,” Rodriguez said. “That puts a lid on rents for a while.”

Construction has continued apace. Portland’s crane count stood at 32 in July – more than New York, which had 18, according to Rider Levett Bucknall, a firm that tracks the data. Seattle had the most cranes, with 58.

The city of Portland has responded to a tight rental market with a slew of housing regulations. Inclusionary housing rules took effect Feb. 1, requiring developers of projects with 20 units or more to provide a portion of affordable units, or pay a hefty fee. Portland also instituted relocation assistance, requiring landlords to compensate tenants when issuing no-cause evictions or raising rent by 10 percent or more.

Developers responded to inclusionary housing by rushing to apply for projects before the rules took effect. Some of those projects are now under construction, while others are stalled.

“We’ve got a very, very large pipeline,” Rodriguez said. “I’m not sure how much of that is going to get done. A lot of it is in design review.”

Rodriguez is a member of the Portland Design Commission, which performs design review. Multifamily developers are grappling with inclusionary housing, which dents their revenue, he said.

“Everybody’s trying to figure out inclusionary housing,” he said. “We’re struggling to make deals work.”

Rodriguez predicted rents will again grow in about a year as the current supply is absorbed and few additional apartments get built.

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For eight years, the Portland Development Commission patiently cobbled together four blocks at the eastern end of the Burnside Bridge.

City leaders thought the area could serve as a gateway to downtown from East Portland, and so the PDC in 1998 began acquiring properties there.

Revitalization of the area had a long way to go. The Convention Plaza building was a second-rate office property, and the surrounding area had little going on.

Yet the site offered 4 acres of close-in land fronting the Willamette River on one of Portland’s busiest streets.

Development there would be aided by maximum height allowances of 200 feet, a generous floor-to-area ratio of nine-to-one and central employment (EXd) zoning.

Today, the area is bustling with construction and activity. Guerrilla Development‘s colorful Fair-Haired Dumbbell is under construction, while Beam Development and Urban Development + Partners‘ Slate and Key Development and Guardian Real Estate Services‘ Yard are fully built. Additional projects are at various stages of development.

“It’s a really interesting site in Portland, an interesting opportunity,” said Jeff Pickhardt, a Key Development principal. “It’s basically the epicenter of Portland, and it had been a blighted site for a long time.”

Initially, the PDC inked a memorandum of understanding with Opus Northwest, a subsidiary of Minnesota-based Opus Group, for podium-and-tower construction on the entire property. But Opus was hit hard by the Great Recession in 2008 and ’09, and the deal dissolved.

The PDC – led at the time by Executive Director Bruce Warner under then-mayor Sam Adams – restarted. The agency brought in Beam Development, a local firm that had performed several well-regarded rehabilitations of historic buildings, as a strategic adviser to craft a new framework plan.

Crucially, instead of seeking one large developer to take the entire site, the PDC moved to bring in multiple developers.

“It was smart on PDC’s part to have some diversity of development groups,” said Jonathan Malsin, a Beam Development principal. “We understood that that could lead to a better result of having a mix of architectural styles and product types.”

Beam Development was invited to redevelop a parcel in the area. The firm, led by Brad Malsin and his son, Jonathan, chose the Convention Plaza building, which since opening in 1926 had served at various times as a military barracks, a soup kitchen and offices before being targeted for demolition. But instead of knocking it down, Beam renovated the property at 123 N.E. Third Avenue into the Eastside Exchange.

Cascade Energy Inc. was the first tenant to take space in the 80,000-square-foot building, and then the Technology Association of Oregon and the Oregon Film Office followed.

Beam Development opened the door for others to step into the area, Pickhardt said.

“You could credit Beam and really PDC for activating that part of town,” he said. “Beam was heavily involved in the framework plan, and they really took the first step at the bridgehead. Their work early on, and particularly Eastside Exchange, was a catalyst for others to follow suit.”

In the wake of the Great Recession, most developers were not in a position to redevelop 4 acres of urban property. Parceling out the four-plus blocks over time enabled the PDC to spread the financial risk among several developers.

Key Development had investigated developing a large project in the Burnside bridgehead area in 2010. The Hood River company was interested in making its mark in Portland. After Beam developed Eastside Exchange, Key jumped in with bids for Block 67 and a portion of Block 76. Block 67 became Yard, a 21-story tower with 284 residential units and ground-floor retail space.

Yard attracted criticism for its dark appearance and unbroken mass, but Key Development and Guardian Real Estate Services sold the building in December to a Thailand-based company for $126.68 million after an unsolicited offer.

After completion of the Eastside Exchange, Beam and UD+P followed with Slate, a 10-story mixed-use project on Block 75. The Works Progress Architecture-designed building has 75 market-rate apartments and 45,000 square feet of commercial space. The building opened in November.

Guerrilla Development’s Fair-Haired Dumbbell – two six-story buildings totaling 56,000 square feet – is rising on Block 76. A June completion date is targeted for the office and retail project, developer Kevin Cavenaugh has said.

Cavenaugh used a unique crowdfunding mechanism to raise $1.5 million for the $18 million project. The façade will have a colorful design by Los Angeles artist James Jean, setting the project apart from Slate’s light-colored boxes and Yard’s dark appearance.

Meanwhile, Key Development is preparing to break ground on the western portion of Block 76 for a six-story, 22,000-square-foot commercial building, Pickhardt said. That project has received design approval from the city of Portland.

Development continues to radiate outward from the 4 acres comprising the Burnside Bridgehead Framework Plan formed in 2010. To the east, Dallas-based Trinsic Residential Group is building Aura Burnside. The six-story multifamily building at 55 N.E. Grand Ave. will include 167 residential units; it’s scheduled to open in late summer.

To the south, Gerding Edlen plans to build a 17-story mixed-use building at 5 S.E. Martin Luther King Jr. Boulevard. 5 MLK, as the project is known, is set to include approximately 220 apartments, 10,000 square feet of commercial space and 170 underground parking spaces. 5 MLK is being designed by GREC Architects of Chicago.

At 17 S.E. Third Ave., Sentinel Development and Westport Capital are rehabilitating the 108,600-square-foot Towne Storage building into creative office space. LRS Architects is designing the project, and Bremik Construction is serving as general contractor.

At 230 E. Burnside St., Arthur Mutal and NFN Investments completed adaptive reuse of the 16,400-square-foot R.J. Templeton Building into creative office and retail space in 2014.

ESI Group designed and constructed a 28,720-square-foot warehouse rehabilitation for New Seasons Market’s central kitchen at Southeast Second Avenue and Ash Street.

More properties could be developed in coming years. Cairn Pacific owns property at 811 E. Burnside St. that hosts an eclectic collection of local shops. There are no current plans to develop the property, located across Burnside Street from the Doug Fir Lounge and the Jupiter Hotel, but that could change as the neighborhood develops, Cairn Pacific founding principal Tom DiChiara said.

“It was sleepy down there for a long time,” he said.

Not so now. Looking back, backers of Burnside bridgehead redevelopment are proud of their work.

“It’s amazing that it’s all come together like it has in a relatively short period of time,” Pickhardt said. “To get that scale of development done collaboratively with the neighbors and PDC is remarkable.”

Geraldene Moyle, now a senior project manager at the PDC, said the city was able to be nimble in acquiring the parcels and selling them for fair market value. Developers had to work around a Portland Bureau of Transportation couplet project, elevation changes and other issues.

“I think it’s been successful,” she said. “Based on what we owned, based on the constraints of the site, the couplet, the height, we were able to deliver a site that fulfilled the goals of the framework plan.”

The post Burnside bridgehead grows up appeared first on Daily Journal of Commerce.

Yard, the darkly clad mixed-use tower completed earlier this year in Portland’s Central Eastside, has sold to a Thailand company for $126.68 million.

Approximately 50 percent of the building’s 284 residential units are occupied, according to the buyer, Land and Houses U.S.A. The company is a wholly owned American subsidiary of Land and Houses Public Company Limited of Bangkok, Thailand.

The sale equates to $446,056 per unit. The seller was Block 67, a limited liability company whose majority owner is Hood River-based Key Development, which developed the property. Marcus & Millichap’s Elizabeth Davis represented the seller.

“It’s a significant transaction for the Eastside,” she said.

The transaction occurred off-market.

“We are seeing that there’s an opportunity now for international and private capital to win some deals where before they were edged out by institutional buyers,” Davis said.

Skylab Architecture designed the 21-story building. Yard has drawn criticism for its dark appearance, which was changed after gaining approval from the Portland Design Commission.

Yard’s retail spaces were 64 percent leased at the time of sale. Tenants include Knot Springs, a social club and spa; and Tilt, a burger-centric restaurant and bar.

Key Development’s Jeff Pickhardt was not available for an interview, but in an email he stated that the project was leasing as expected – and even slightly ahead of schedule.

“We hadn’t planned to sell this soon after completion when we had started the project, but having received a compelling, unsolicited offer from Land and Houses, we reconsidered,” Pickhardt stated.

Yard, at 22 N.E. Second Ave., is part of a development renaissance at the east end of the Burnside Bridge. Other projects include Slate from Beam Development and Urban Development Partners, the Fair-Haired Dumbbell from Guerrilla Development and 5 MLK from Gerding Edlen.

Yard has studio, one-bedroom and two-bedroom apartments. Advertised monthly rents range from $1,524 for a studio to more than $4,000 for some of the luxury units. The apartments average 682 square feet.

Yard also has 57 affordable units available to renters at 60 percent of median family income through the city’s Multiple-Unit Limited Tax Exemption (MULTE) program.

Portland’s apartment market has shown signs of cooling, particularly at luxury price points. The overall multifamily vacancy rate was 3.71 percent, up from 2.9 percent a year earlier, according to Multifamily NW’s fall apartment report. Managers of some properties have begun to offer leasing incentives.

Portland-area rents grew at an average annual rate of 4.1 percent during the third quarter, according to Axiometrics. That was higher than the national average of 3 percent.

Portland had a 95.6 percent occupancy rate – above the 95.1 percent national average.

Key Development is also at work on a commercial project at Northwest Third Avenue and Couch Street, two industrial buildings at the Port of Hood River and a multifamily project in downtown Hood River. The firm is looking at another possible opportunity in Portland as well, Pickhardt stated.

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In six weeks, market-rate apartment tenants will move into the Yard tower – the jutting, angular embodiment of a new Central Eastside.

The 21-story mixed-use tower at the Burnside bridgehead has lived its share of controversy getting out of the ground. A large design change missed by plan examiners has led to questions about the city’s permitting process and the use of photo-realism in design renderings. It’s been assailed as cold and foreboding by critics.

The views from inside, though, are unassailably striking. Located near the geographic center of the city, Yard is currently the only high-rise across from downtown along the Willamette River.

“It’s a pretty important site in Portland,” Skylab Architecture principal Jeff Kovel said on a tour this month. “You can see, it’s really the best position in the city.”

Perhaps the biggest issue with the tower has been its glazing. The change missed by the city was involved a reduced number of vision glass panels – resulting in a darker facade. The city and developer Key Development of Hood River have agreed the city will provide the project an additional 67 panels of glass, though it’s not yet known whether they’ll be vision glass or spandrel glass.

Developing the site long known as Block 67 has been a long time coming. For more than a century, the Central Eastside served as the manufacturing and industrial counterpoint to downtown. The recession put an end to a plan to build a shorter project on Block 67, with a Lowe’s store as an anchor tenant.

The building replaces a parking lot that for years served the Burnside Skatepark, a handmade landmark and a worldwide tourist draw.

Kovel said in ways large and small the project is meant to honor the Eastside’s “maker” spirit, which he said today has more creative offerings than the area across the Willamette.

It chafes Kovel that people have overlooked the good things about his project – the inclusion of affordable workforce units, the fact that it isn’t a cookie cutter with a cramped fitness center and a terrace tossed on top. But he acknowledges it is striking to see a structure so big on that site.

“It’s the kind of thing you get used to over time,” he said. “It gets to be part of the fabric.”

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In response to a highly noticeable design change to a prominent high-rise project, the design approval process in Portland should change, according to some city officials.

Commissioner Dan Saltzman and Bureau of Development Services Director Paul Scarlett are two of them. Both called the difference between renderings of a new Burnside bridgehead tower and the way it looks now, under construction, a “concern.”

“I think this raises a larger policy issue,” Saltzman said. “We need to look more closely at who’s making sure that what’s going up was designed and approved by the (Portland Design Commission).”

Central Eastside gateway

Designed to hold a conspicuous place across the Willamette River from downtown, the Yard tower is intended to function as an urban gateway to the historically industrial Central Eastside. The 21-story mixed-use building features landscaped terraces level with the adjacent bridge. The main tower, nearly a parallelogram, is situated diagonally against the surrounding streets.

The project is Skylab Architecture‘s largest to date, and Hood River-based Key Development‘s first in Portland. When completed, it will hold 276 residential apartments, 400 parking spaces and nearly 20,000 square feet of office and retail space.

But the issue here is the building’s exterior.

show a glittering facade of intermixed glass and metal, with more glass panels near the top. But some observers are dismayed that unlike those drawings, the building has more metal and less glass.

The project team – which also includes Portland-based Guardian Real Estate Services and Andersen Construction – this week held a topping-out ceremony, signaling that construction is coming to an end. Completion is set for this summer.

Rendering vs. reality

Kevin Cavenaugh’s firm, Guerrilla Development, is behind one of the other two buildings going up at the Burnside bridgehead – the Fair-Haired Dumbbell. That project received its share of criticism when its designs were unveiled, so it’s surprising, he said, that Yard, with a more conventional design, has drawn so much ire from the public.

Cavenaugh commutes to the Central Eastside. He said he watched with growing concern last fall as Yard gained its skin.

“Every day I waited for more glass, and every day I’d drive across the bridge, it wouldn’t come,” he said. “I said to everyone, ‘Just wait. Jeff (Kovel, Skylab’s founder) is one of the most talented guys on the West Coast, let alone in Portland. It’s going to look great.’ Now I feel like calling up my friends and saying, ‘Sorry, I was wrong.’ ”

And Cavenaugh wasn’t alone. Beginning in October 2015, commenters began to turn on the much-anticipated Yard project as soon as the glazing and metals started going up. One person compared its look to a prison.

“I thought this was going to be sexy as hell, but it’s looking more like it’s going to be imposing and foreboding,” wrote a commenter named 2oh1.

Another commenter, Derek, wrote, “I’m thinking this is going to be another project where the renderings were almost too good to be true.”

Meanwhile, architect Shawn Sullivan of Sullivan Architectural, was suspicious of the project plans from the start.

“I wondered … when I looked at their sketches – how are they going to meet the energy code?” he said.

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What happened?

The problem that city officials and observers in the building community have with the tower isn’t necessarily that it looks bad; rather, it’s that builders are constructing what they’re permitted for, and what they’re permitted for isn’t what the Portland Design Commission approved.

“We need to honor the permit they’ve been issued,” said Kara Fioravanti, a supervising planner with BDS and a staff liaison with the seven-member design commission. “That’s just the situation we’re in.”

Following an initial meeting with the design commission, the Yard project team responded by making approximately a dozen requested changes, and returned for a Type II review with city staff. Windows were not discussed. A permit was issued.

The process rolled along and plan examiners in the building life-safety division identified that Skylab’s designs allowed too much heat loss to meet current energy code. The project team had its choice among different ways to meet the code, and elected to add metal and remove some glass.

Rebecca Esau, head of BDS’ land use division, said Skylab could have learned about the need for fewer windows had it checked in with personnel in the building life-safety division.

“We encourage applicants to work with the building life-safety portion of reviewers, which typically happens at the building permit stage,” she said. “They opted not to do that at the building permit stage.

“We suggest it to applicants. At this time, we don’t have a tool to force them to spend that time and money to do that analysis.”

Scarlett said citizens have complained, and the bureau has already responded with changes. Examiners now look for energy code compliance earlier in the process. But around half of the BDS staff was hired after the recession ended.

“This is the last thing we want happening; I can tell you that for sure,” said Terry Whitehill, BDS’ section manager overseeing plan review.

Skylab principal Jeff Kovel said he followed the city’s process to the letter, and did so working within a limited budget.

“Design review is not something you just go and do voluntarily,” he said. “We rely on the planners to define the process. We submitted our plan to the city and they reviewed and approved it and issued a permit.”

Plus, energy code has tightened in recent years and most buildings around town wouldn’t conform to it, he said.

Kovel also claimed that the renderings aren’t as different from reality as some people have said.

“They’re actually very, very similar,” he said. “They’re extremely similar.”

Disconnected

Michael McCullough served 12 years on the Portland Design Commission, leaving in 2007. He said that in many cases, including this one, an architect should be aware of all the design requirements that could be applied to a project.

“I think there’s some culpability on both the part of the architect and the regulatory agencies,” he said.

McCullough called the Yard issue a “prototypical” example of a lack of communication between the BDS and the design commission. Another from his tenure on the board was the Mosaic Apartments at 1410 S.W. 11th Ave., he said. That project was rendered with crystal-clear glazing, but mechanical engineers added highly-tinted, reflective glass that gave the finished product an “entirely different” look.

“The design commission was outraged by that,” McCullough said, “and the architect kind of shrugged his shoulders and said, ‘eh, it happens.’ If design commission approves something and some other building gets built, it negates the whole process. If it isn’t adhered to, those people are wasting their time.”

Part of the problem is that the design commission is looking only at rough sketches, Esau said. “And BDS is looking at … building elevations and construction drawings,” she said.

Renderings can sometimes give the public unrealistic expectations, according to Barbara Sestak, an architecture professor at Portland State University.

“They can’t possibly capture all the intricacies,” she said. “The purpose of a rendering is to persuade people, and give a flavor. They’re not exact.”

Now what?

PSU urban studies professor Ethan Seltzer sees two issues here. The first is staffing at the city. The BDS was cut in half when the recession hit, from about 330 staff members in 2008 to around 160 three years later. In most cities, staffing waxes and wanes along with building activity. Permit fees more or less pay the wages of plan reviewers.

“What that means is that you have kind of a feast-or-famine approach to staffing,” he said. “And it’s hard to build up a consistent, dedicated core of expertise to do design review. It’s not that the people doing it don’t have expertise; it’s just that institutionally, there’s not enough memory. And there’s not enough commitment over the long haul to do it well.”

The other issue Seltzer sees is a lack of attention to design review as a policymaking issue.

“I think it’s been a while since the City Council weighed in … on what it’s trying to do with design review,” he said. “It feels like there is a tremendous amount of process involved – lots of reviews, lots of re-reviews – I’m not sure the process we have now is the process we intended to have.”

Saltzman, the city commissioner who oversees BDS, said Scarlett has already approached him about realigning staff to bolster enforcement. But there are myriad issues that examiners must watch for, and that number grows with each new law.

“I think a more focused enforcement division would lead to less confusion on something like the Yard,” Saltzman said.

Many professionals in the Portland building community are critical of the design review process. Sullivan said designers often don’t know a definitive project cost until working through the city’s entire preconstruction process, at which point a project might no longer be economically feasible for a developer.

“Design review pushes for this big, beautiful building to anchor a rapidly developing extension of downtown, without ever discussing the cost,” he said.

Cavenaugh was more blunt.

“I hate the design review process,” he said. “I hate the concept of other people designing my building for me. And some of their requests are really onerous. But to prop up the commission and staff, I’d really like to see some more teeth in what their final edict is. Obviously, I think most people in town would agree with that.

“This is a pretty big freaking deal, and my guess is there’s going to be some changes.”

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The brains behind the designs of three very different developments planned at the east end of the Burnside Bridge revealed their motivations – and even exchanged a few barbs – during a panel discussion in Northwest Portland on Monday night.

Randy Gragg, executive director of the John Yeon Center for Architectural Studies at the University of Oregon, served as moderator. Panelists included Works Partnership Architecture principals Carrie Strickland and Bill Neburka, Skylab Architecture principal Jeff Kovel and Guerrilla Development principal Kevin Cavenaugh.

Each, in turn, talked about the motivations and thought processes behind their designs.

Kovel’s firm is behind the design of a $58 million, 21-story tower under construction on Block 67. The building will hold 20,000 square feet of commercial space and 284 apartments. A lower adjoining structure on lot 76 will have a parking garage for 200 vehicles and be topped with a green, cascading park.

“The two things at the core for me are abstraction and improvisation,” Kovel said. “There is a big musical influence in my life and my work, as well as a real fondness for abstraction, to try to look for different ways, even in the same project, to express an idea.”

Kovel said that inspired the decision to put a park atop the underground parking lot.

“We had a parking lot and thought why not make it a park and lift it up to the bridge level,” he said. “It’s a conceptual link to the wild river bank that existed before the city was formed. We used that as an amphitheater for viewing the city, for stormwater treatment and put our parking below it.”

The Works Partnership project at the Burnside bridgehead, a 10-story mixed-use building on Block 75, also is under construction. Retail space is planned for the ground floor, but Strickland said the upper floors could be used for either apartments or offices.

“It’s a 10-story building with 1,500-square-foot spaces,” Strickland said. “They are cellular spaces and anything can happen at any level.”

Neburka said his team traveled to Chicago to get ideas for the project.

“At the corner of Dearborn (Street) and Jackson (Boulevard) is the city’s tallest masonry building where the bottom walls are eight feet thick, and right across the street is Federal Plaza, the essence of free space, with ephemeral buildings above,” he said. “Our building is about these ideas, and the idea of permanence and history and modernity began to take shape.”

The project talked about most during the night was Cavenaugh’s Fair-Haired Dumbbell. All panelists agreed that it will be the centerpiece of the bridgehead projects because of its conspicuous location. The project is due to receive its final design review this week.

“You got stuck in the throne site, the island in the middle of a traffic pattern in the middle of a development,” Neburka said. “You’re on the main stage and I wonder how that affected your design.”

Cavenaugh’s original design for two six-story, cantilevered buildings joined by elevated walkways raised concerns because it called for an exterior resembling brightly-colored Florentine wallpaper. That plan changed, and now the Regional Arts and Culture Council is working with Cavenaugh to find an artist to create an original design.

But Cavenaugh said he wants the building, the smallest of the three developments at the bridgehead, to pop out to passersby. The exterior design will be “a crazy color,” he said.

“I don’t want people to die, but I do want people to get in little, small fender benders driving by,” he said.

Cavenaugh said his best creativity comes when his thought processes are balanced.

“I had my ass handed to me after the recession and now I want to make sure I balance between right brain work and left brain work and, ideally, the result is something quirky,” he said.

Quirkiness is what Cavenaugh hopes will help him promote the building to design firms, which he’d like to have as tenants.

“Each floor plate is only 4,000 square feet, so it’s ideal for a 10- to 15-person office,” he said. “If my client ends up being design firms, those are design firms who shouldn’t be on the 20th floor of Big Pink, eighth door to the left. They should be in a building like this.”

All of the Burnside bridgehead designs are very different, Neburka said, because there was no master planning process as there was for the South Waterfront District.

But Strickland said that not planning ahead was the point.

“The danger is in developing a multi-block at the same time and there being too much consistency,” she said. “Breaking it down with different developers and different programs – that’s how real cities develop over time.”

After about two hours of discussion, Gragg asked the panelists how they would work together moving forward and what the neighborhood will look like.

“I think you’ll see a lot of people taking pictures of these buildings for a long time to come,” Cavenaugh said.

Gragg also asked panelists to critique each other’s designs, and Strickland obliged.

“We all really do like each other, but before we even started the building we had done so much work on the east side, and I don’t think your building is authentic east side,” Strickland said of Kovel’s design.

Kovel smiled.

“I actually like the view of your building from my building,” he replied.

Strickland also criticized Cavenaugh’s design.

“Maybe you’re putting up a building that is not as important as everyone is expecting it to be,” she said.

The Fair-Haired Dumbbell’s standing as the centerpiece is “the elephant in the room,” Kovel said. Neburka added that the location is “a very, very loaded site.”

But Neburka said organic growth is continually occurring in the Central Eastside and that the Fair-Haired Dumbbell may become something entirely different in 50 or 75 years.

Cavenaugh said that’s OK with him.

“We tend to take ourselves too seriously,” he said. “I think amazing ideas will follow me, and I don’t think I am the pinnacle of ideas.”

The post Burnside bridgehead designers converge appeared first on Daily Journal of Commerce.

B67 will be a landmark for the city of Portland.

“The responsibility to do it right is tremendous,” said Adrian Boly, vice president of development for Guardian Real Estate Services. “You don’t get a lot of opportunities to add something to the cityscape that will define it.”

In the coming weeks, Andersen Construction will begin erecting the first floors of B67: a 21-story glassy tower in Portland’s exact geographical center. When finished, the 284-unit building will be one of the most visible landmarks in the city; however, as multifamily competition increases, one question remains: Will the development be able to generate the income necessary to justify the elevated costs of high-rise construction?

Humble beginnings

When developer Jeff Pickhardt first set his sights on the Burnside bridgehead, he wasn’t quite sure what to make of it. Not many people were.

“I think at that point in time people were still scratching their heads and wondering if it was an opportunity or not,” said Pickhardt, principal of Hood River-based Key Development, which is co-managing development of B67 with Guardian.

That was 2011, and after two years of searching for development sites in Portland, Pickhardt was considering whether to respond to an open request from the city to redevelop one of its long-vacant parcels. In addition to possessing a severe slope and irregular position next to the Burnside Bridge, the site was where a massive mixed-use development failed in 2008.��The city rallied by refocusing on smaller, bite-size projects.

As such, Pickhardt’s original proposal for B67 considered a small, mid-rise apartment building on just a portion of Block 67. The concept was soon dwarfed, however, by the site’s location and high-density zoning. By the time Pickhardt’s design team, Skylab Architecture, presented plans to the Portland Design Commission, the project had morphed into a full-blown tower.

“We want the tower to take on the qualities of the sky as much as possible,” Skylab principal architect Jeff Kovel said during that April 2013 meeting.

Commissioners were intrigued, but challenged by the ambitious concept. Then it was refined repeatedly over the following year. Renderings now feature an angular tower that bleeds into the sky as it climbs over a landscaped, mountain-shaped podium.

Around the same time as that first design commission hearing, Pickhardt was also consulting Guardian about a mid-rise apartment project in Hood River. That development never got off the ground, but as the two companies collaborated, their attention turned increasingly to Block 67 and a potential partnership.

Key Development would bring its experience working in public-private partnerships; Guardian, its expertise managing roughly 13,000 units across five states. Guardian brought another critical component to the union: the ability to leverage large sums of institutional capital.

“The determination was made that this could be an iconic project, and a very large project – something that could redefine the skyline,” Boly said.

Market window of opportunity

Last spring, Guardian launched a capital campaign to finance what by then was an $85 million project.

Portland’s multifamily market had all of the right ingredients for investors: a budding population, job growth, rent growth, and historically low vacancy levels. Accordingly, more than 7,000 new apartment units are expected to come online in 2015 and again in 2016 – more than double the metro area’s average annual absorption rate, according to Johnson Economics.

Jerry Johnson, a principal at Johnson Economics, doesn’t think the market will have any trouble absorbing those units. But if the pace continues into 2017 and beyond, he said, occupancies could start to decline. That will raise the stakes for landlords.

“Cycles get mature, and then they get a little … ripe, and then a little over-ripe,” said Johnson, who was contracted by the development team to analyze whether B67 would work financially. “I just think this is a market where people really have to be on their game. If you’re entering now, you have to have a good product niche, and you have to know where you stack up against your competition because you will have competition.”

The challenge for B67 will be its Pearl-District-level prices in an unproven location in the Central Eastside. Most units will be studios or one-bedroom apartments in 10 different floor plans; each will rent for between $1,200 and $2,000 a month. Additionally, 20 percent of the building will be reserved for individuals making 60 percent of the area’s median family income or less.

Fortunately for B67, Johnson said some mid-rise apartments in the Central Eastside are already obtaining rents between $2.20 and $2.40 per square foot. Not much more is needed to justify high-rise construction, and Johnson is bullish on B67.

“The Central Eastside is getting great rents right now,” he said. “For a lot of the younger wealthy, the east side is the new hip place to be; the Pearl is where your dentist lives – I was told that by a developer once.”

Banking on a solid location

B67 is backed by a 60 percent senior loan from the Bank of the Ozarks, a 25 percent mezzanine loan from Cornerstone Real Estate Advisers, and roughly 15 percent in equity investments from high-net-worth individuals. Scott Magoffin, an associate at Cornerstone, said part of the appeal of the Central Eastside is its gritty, industrial vibe compared to the “glitz and glam” of the Pearl.

“We all could be wrong that this is a desirable location at those rent levels, but access to the downtown area is as good as it gets without being down there,” Magoffin said. “… I feel I’d rather be the first and really only tower – Class A tower – on the east side than the 10th or 11th in the Pearl.”

The 21-story Hassalo on Eighth development will technically have that distinction when it’s completed later this year, but Magoffin thinks the location and amenities offered at B67 will give it an edge. In addition to on-site retailers and restaurateurs (such as a new distillery), B67 will have luxuries like a pet exercise area and a full-service day spa.

Pickhardt also sees those amenities playing a big role in the building’s performance, despite market demand.

“There is clearly a demand for (the project),” he said. “Nevertheless, our approach to this project has been one where we assume that that may not be the case. And if that’s not the case and there is an oversupply of apartments, then we would insist that the product we put out there is as good as it can possibly be so we’re positioned well to compete.”

B67’s best amenity, arguably, is its unobstructed views of the city. Before construction started, Boly said that one of the contractors flew a small drone 250 feet above the site to give the team an idea of what to expect from the roofline. The results were unparalleled.

“There won’t be anything like it,” Boly said.

The post The Central Eastside’s skyscraper appeared first on Daily Journal of Commerce.

Site clearing and excavation for the $58 million Burnside bridgehead mixed-use tower began Monday.

The Portland Development Commission on Friday issued the foundation permit for a 21-story building to be constructed on block 67 in Southeast Portland. When completed, the development will feature 20,000 square feet of commercial space, 284 apartments and 200 parking spaces. The permit paperwork indicates that the project will be a 16-story tower atop a five-story podium.

Project executive Brad Nile of Andersen Construction said Skylab Architecture will submit the building permit later this week.

“The deep shoring and foundation construction will take the next two months,” he said. “In January we will start going up with the vertical structure.”

The project team – Guardian Real Estate Services and Hood River-based Key Development Corp., Skylab Architecture and Andersen Construction – has been working on the effort for the past three years.

Nile said construction of the entire development would take about 22 months.

Also, Key Development purchased Block 76W, a small piece of land on the west side of the Couch Street couplet, with plans to erect a two- to three-story commercial building that will mirror the larger tower.

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