Jay Zidell plans to develop Portland’s largest riverfront property
Premium content from Portland Business Journal by Andy Giegerich , Business Journal staff writer
Date: Friday, February 3, 2012, 3:00am PST - Last Modified: Friday, February 3, 2012, 9:08am PST
Jay Zidell is best known as a third-generation Portland industrialist.
He’ll soon add the term “developer” to his resume. Zidell, the president of Zidell Marine Corp. , confirmed publicly for the first time this week that he’ll develop the 30 riverside acres his family holds on both sides of the Ross Island Bridge.
The land will soon be home to buildings that complement the new incoming $1.4 billion MAX light-rail line to Milwaukie, two adjacent Oregon Health & Science University buildings and nearby South Waterfront mixed-use projects. Zidell’s property currently holds the company’s barge-making and dismantling facility and small office buildings.
Zidell’s property immediately becomes central Portland’s largest developable site, easily topping the U.S. Postal Service land, near the Broadway Bridge (14 acres) and the Con-way trucking facility, also in Northwest Portland (15 developable acres). Commercial real estate experts said the site’s availability will easily generate hundreds of millions worth of building projects alone.
“This is huge. It’s a game-changer,” said Portland Mayor Sam Adams. “It’s a continuation of the family’s great work on their site that’s built on a foundation of civic improvement. They can do a lot of things with their land, and they can continue to set a high bar for cleanup, restoration and redevelopment.”
Zidell’s nephew Matt French will oversee the property’s development. Zidell and the city are working on development agreements that will dictate uses for the land, currently zoned for commercial and industrial uses.
Zidell is “substantially done” with a Willamette River clean-up process that began 25 years ago. The work cost Zidell far more than the $20 million he’d originally planned to spend to rid the site of hazardous metals and other contaminants.
“The clean-up project took a long time and it cost a lot of money,” said Zidell. “But we’re delighted it’s done. We have a completely blank palette to work with. It’s exciting to have such a large piece of real estate downtown, and on the river, that we can do anything we want with.”
Those possibilities include transit-oriented developments that offer a mix of office, housing and retail sites.
The strategies don’t immediately include building on the lot that holds Zidell Marine, which employs 50 workers. It’s the last remaining waterfront manufacturing facility between Sellwood and the Northwest Industrial District.
“We expect to keep building barges on the site as far as we can see into the future,” Zidell said. “But decades from now, if I could come back to earth, I’d expect to see everything redeveloped in 40 or 50 years.”
The Zidell team is still determining whether it will build projects on the property itself or work with other developers.
Lots of suggestions
No matter what the team decides, “Our intent is to have a long-term interest in this property and stay involved, and to some extent control what happens down here,” said French.
Local development analysts have a few suggestions. Chris Johnson, president of NAI Norris, Beggs & Simpson, foresees towers similar to the Matisse and the Mirabella housing structures in the South Waterfront district. Zidell could even build living spaces for students who attend classes at nearby OHSU and Portland State University.
“It’s not a matter of if, it’s a matter of when it’s going to work,” Johnson said. “It’ll take a lot of equity to get something built today, but it’s a great opportunity.”
Lew Bowers, a Portland Development Commission project manager, added the Zidell site could even host a business campus, such as the Nike Inc. and Intel Corp. facilities west of town.
Bowers’ city-backed economic development agency wants Zidell to consider projects that would either attract a large relocating company or encourage a local business to greatly expand.
The Zidell property itself has a market value of more than $23 million. It sits between OHSU’s Center for Health and Healing, which cost $140 million to build in 2007, and the university’s under-construction $295 million Life Sciences Center.
Other privately built structures in the neighborhood have fared well. The Matisse apartments project, which sits on 1.5 acres at 0677 S.W. Lowell St., has a market value of $43.5 million.
While attorneys for OHSU and Zidell squabbled several years ago over a tax increase related to OHSU’s aerial tram, OHSU officials and Jay Zidell both say issues are resolved.
“We’ve worked cooperatively with them and we’re very supportive of (Jay Zidell’s) efforts,” said Mark Williams. OHSU’s associate vice president for campus development. “These properties are extremely important, and one of these days, this area is really going to be part of downtown (Portland). There’s a lot of good that can come from this development.”
However, environmental groups fear that Zidell’s river restoration techniques could affect future property users. The company chose to cap river-bottom sediment around and near its facility, rather than remove the sediment and contaminants outright.
The Audubon Society of Portland had considered suing Zidell to force him to spend more money — between $5 million, according to the Audubon group, and $80 million, Zidell projected last summer — to eliminate the contaminants.
“The restoration that was planned won’t come to fruition now, and that will put pressure on every other industrial site up and down the river when other manufacturers eventually restore their sites,” said Bob Sallinger, the Audubon Society of Portland’s conservation director.
As he’s worked to restore the river and the surrounding banks, Zidell has slowly raised his low public profile. He made a rare appearance last month, speaking during a press event to federal transportation officials who toured South Waterfront.
“Am I going to be more visible? Well, that’s a relative term,” Zidell said. “The answer is ‘yes,’ but being in the barge and steel pipe fitting business is very different than developing real estate. There’s a lot of public process that goes on in real estate, and while that’s something we’d not been doing in the past, we expect to be involved in more public conversations.”
Fast Facts
The Zidell Co. has completed the bulk of its site clean-up, as agreed to with the state’s Department of Environmental Quality. The site contained contaminants from operations, by Zidell and other companies, on the site between 1926 and the mid-1960s.
Zidell Marine Corp.
Headquarters: Portland
Ownership: Privately held
President/CEO: Jay Zidell
Employees: 50 at the company’s barge facility, another 200 at Zidell’s Tube Forages of America plant in Northwest Portland.
Revenue: Not disclosed.
Website:
www.zidell.com
Andy Giegerich covers government, law, health care and sports business.
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