Harsch looks skyward
Portland developer plans tall tower in city's fast-growing west end
Portland Business Journal - February 23, 2007
by Wendy Culverwell
Business Journal staff writer
Cathy Cheney | Portland Business Journal
Harsch Investment Properties intends to build a 25- to 30-story tower at the Federal Reserve building in Portland's emerging west end.
The company paid $12 million for the building and associated parking lot last summer.
The building, which has four stories and two basements, sits at Southwest Ninth and Oak streets.
The tower will have two levels of retail space, two stories of office space, and about 25 stories of for-rent apartments, said Jordan Schnitzer, president of Harsch, a $2.3 billion Portland-based real estate investment firm that owns and develops commercial real estate throughout the western U.S.
Tentatively called the Federal Reserve Tower, the building is one of at least two towers planned for the thriving west end. Gerding/Edlen Development Co. LLC and its partners have begun work on a 20-plus story tower at a former parking lot at Southwest 12th and Washington streets, west of Harsch's proposed site.
Schnitzer said he's encouraged by Gerding/Edlen's investment in the neighborhood. The tower at 12th and Washington is one of many new arrivals for the neighborhood, known until recently for its edgy character. Its prime location between downtown and the Pearl District and city building codes that encourage tall buildings make it a natural for new development.
Among the many developments: The Ace Hotel is opening at the former Clyde Hotel, and Living Room Theater opened in the same block on Southwest Stark.
Schnitzer said plans for a tower at the Federal Reserve building remain preliminary.
Harsch hasn't assembled a development team, architect or contractor. But Schnitzer envisions a construction start in 2008 and opening the building about 24 months later.
The tower would be built around the four-story Federal Reserve building, which was built in 1950 and held the Portland branch of the Federal Reserve Bank of San Francisco until the operation scaled back. The 87,000-square-foot structure contains four floors and two basements and has been gutted for renovations.
The proposal is welcome news to the Portland Development Commission. The site is within the commission's River District Urban Renewal Area, which covers much of the Pearl District and jumps Burnside to encompass a few blocks on the downtown side.
"We're very excited that Harsch Investments is looking at reactivating that space," said Steven Shain, who manages the River District area.
"It's a way of carrying the development from the Brewery Blocks across Burnside to the west end," he said.
Building apartments is an intriguing turnaround for Harsch, which has sold off most of its apartment portfolio in recent years. The company owns about 1,500 apartment units, down from about 6,500.
Schnitzer said that was a deliberate move to sell properties that were too small to meet Harsch's criteria or that were suited for conversion to condominiums.
Mark Edlen, principal with Gerding/Edlen, said Harsch's plans for the Federal Reserve property fit with what's happening in the west end.
"It's so ripe for development," he said. "I can see over the next 10 years, the entire west end will fill in."
The mix of historic buildings and the potential to build towers is compelling to developers. The project at 12th and Washington will be 275 feet and the company has plans to go as high as 325.
The 12th and Washington project is a collaboration between Gerding/Edlen, the architecture firm Zimmer Gunsul Frasca, and the Goodman family, which owns the property.
The team closed on financing about two weeks ago and has taped off the site while workers abate asbestos. Sewer work starts next week and excavation is expected to begin in about 45 days. ZGF will move its headquarters to the tower, which will also contain retail space and apartments.
wculverwell@bizjournals.com | 503-219-3415
http://portland.bizjournals.com/port...ml?t=printable
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