Zidell Block 8 | xx' | xx floors | Cancelled

[tworivers]

Originally Posted by winstonLT5

Everything's on hold.

Zidell family suspends development of South Waterfront land
Updated 3:47 PM; Posted 3:47 PM
By Elliot Njus enjus@oregonian.com
The Oregonian/OregonLive

Negotiations between Portland officials and the Zidell family over plans for the family's South Waterfront land appear to have collapsed, for now torpedoing a highly anticipated 33-acre development...

(Continues)

Would love to know the backstory on this. Could be a hardball negotiating tactic, obviously. I wonder how much skyrocketing building costs are affecting the negotiations. I'd imagine that this might be a situation where the IZ policy ends up being a shot in our own foot -- a local developer told me a few weeks ago that Trump's tariffs had pushed the price of steel that they needed to buy from $2500/ton to $5000/ton.

[johnliu]

Originally Posted by tworivers

Would love to know the backstory on this. Could be a hardball negotiating tactic, obviously. I wonder how much skyrocketing building costs are affecting the negotiations. I'd imagine that this might be a situation where the IZ policy ends up being a shot in our own foot -- a local developer told me a few weeks ago that Trump's tariffs had pushed the price of steel that they needed to buy from $2500/ton to $5000/ton.

Building materials costs are broadly rising. Lumber futures have doubled in the last three years. Steel futures ditto. Specific types of lumber or steel may have increased more.

The report makes it sound like the infrastructure to be provided by the city is the main sticking point. Or rather a gap in its financing.

"But ultimately, the cost of building a street grid, parks and other infrastructure might have proven too large. The city had in 2015 pledged $23.7 million in public dollars to cover those costs, but recent negotiations had revealed "a gap," said Shawn Uhlman, a Prosper Portland spokesman.

"At this point, it was something that we were not willing to cover," Uhlman said. "

Or, as mentioned in the other thread, it could be cold feet given we're near the end of a development cycle with so much new housing supply recently delivered and in the pipeline.

In the Oregon Square thread, I asked what do the South Waterfront developers know that AAT in the Lloyd does not. If AAT cannot find an economic way forward at this time for a worthy project on their parcel, how are the Ziddels (and whoever is supposedly going to do the fantasy Kumo towers) finding a way?

I like to think that the Post Office development is different, because there will be more office, the city is more committed to it, and it is earlier stage.

[urbanlife]

Originally Posted by johnliu

Building materials costs are broadly rising. Lumber futures have doubled in the last three years. Steel futures ditto. Specific types of lumber or steel may have increased more.

The report makes it sound like the infrastructure to be provided by the city is the main sticking point. Or rather a gap in its financing.

"But ultimately, the cost of building a street grid, parks and other infrastructure might have proven too large. The city had in 2015 pledged $23.7 million in public dollars to cover those costs, but recent negotiations had revealed "a gap," said Shawn Uhlman, a Prosper Portland spokesman.

"At this point, it was something that we were not willing to cover," Uhlman said. "

Or, as mentioned in the other thread, it could be cold feet given we're near the end of a development cycle with so much new housing supply recently delivered and in the pipeline.

In the Oregon Square thread, I asked what do the South Waterfront developers know that AAT in the Lloyd does not. If AAT cannot find an economic way forward at this time for a worthy project on their parcel, how are the Ziddels (and whoever is supposedly going to do the fantasy Kumo towers) finding a way?

I like to think that the Post Office development is different, because there will be more office, the city is more committed to it, and it is earlier stage.

From what I heard on the radio this morning, it sounded like the amount of affordable housing the city was requiring for them for all the infrastructure work they were asking from the city was too much for them and didn't make the project pencil out.

It sounded like Ziddells were looking for a deal from the city or not have to give up too much in return for the infrastructure improvements. It's a shame if this all falls through, but I hope both sides can still come back to the table to agree on something.

[maccoinnich]

Millions in infrastructure costs sank Zidell Yards development in South Waterfront



Just weeks ago, both city officials and the Zidell family thought they were close to a deal to kick-start a long-anticipated development on the family's South Waterfront land.

The Zidell family had raised their ambitions for the site five-fold, from a million square feet of development to as much as 5 million -- the equivalent of four and a half U.S. Bancorp Towers.

But infrastructure costs had ballooned, too. It would cost as much as $90 million to build the streets, utilities and parks to support the built-from-scratch neighborhood. The city had initially pledged $23.7 million.

The gap couldn't be closed. Talks were called off three weeks ago, and ZRZ Realty Co., the family's real-estate arm, announced it was suspending development.

"It all gets back to one simply articulated issue which hasn't been so simple," said Jay Zidell, whose grandfather founded a ship-scrapping operation in what would become the South Waterfront. "That's getting the infrastructure paid for."

...continues at the Oregonian.

[johnliu]

A $7MM gap couldn't be closed to allow this development to proceed? Crazy. Surely the city's various funds can come up with that. I mean, that's the cost of a mile or two of road reconstruction.

[urbanlife]

Well at least the renderings were pretty......

[MarkDaMan]

A round of applause for Prosper Portland (PDC) screwing up another no-brainer deal.

Emphasis mine...

https://www.oregonlive.com/expo/news..._targeted_news

Zidell said the family would rather wait than scale back its plans for the site.

"Could we scale it back, dumb it down? Sure," Zidell said. "But it's not an interest to us."

He also said the city would have made back its investment over the 20-year buildout period through development fees and construction taxes, even without considering new property tax revenues.

[urbanlife]

I am really getting tired of who is running Prosper Portland these days, it also makes me concerned for the Post Office site. Are they gonna dumb that down too, and scale it back to just a bunch of 5 story buildings?

[pdxlexus]

Originally Posted by urbanlife

I am really getting tired of who is running Prosper Portland these days, it also makes me concerned for the Post Office site. Are they gonna dumb that down too, and scale it back to just a bunch of 5 story buildings?

Yep; most likely.

[johnliu]

I wonder if PDC/PP has expanded its mission to broad equity/diversity projects, in a way that has diluted its focus on, or reduced its budget for, large scale development projects in the central city. Prosper Portland's total financial resources at about $372MM with annual revenue about $150MM, so a $7MM funding gap for the Ziddel project would seem doable, if the project were high on PP's list of priorities.

https://prosperportland.us/wp-conten...ved-Budget.pdf

[maccoinnich]

There were lots of interesting comments about baseball in this thread, but they weren’t specifically related to the (now dead) Block 8 proposal. I've moved the comments over to the Diamond Project thread. Please keep the great discussion going over there.

[maccoinnich]

Report to the Prosper Portland board on the North District [Zidell] Development Agreement.

[cronked]

"The Zidell family, having shelved plans for high-rise development on its South Waterfront land, wants to build a 10,000-seat performance venue there in a partnership with the promoter Live Nation.

The venue is envisioned as an interim use, said Jay Zidell, whose grandfather founded a ship-scrapping operation in what would become the South Waterfront. The plan was presented Monday to neighbors, but still requires city approval."



https://www.oregonlive.com/portland/...ront-land.html