Friday, July 4, 2008
City sets Yamhill makeover
City tells Bush Garden, Mother Goose it will subsidize their rent
Portland Business Journal - by Andy Giegerich Business Journal staff writer
At downtown Portland's Southwest Ninth Avenue and Morrison Street, worlds are colliding.
The neighborhood is home to high-end stores such as Brooks Brothers and Mother Goose. It also contains the decidedly lower-rent Peterson's on Morrison convenience store.
City officials, eager to redevelop the area for years, may finally get their wish.
The city -- which owns the block and operates the Smart Park Garage above its three retail spaces -- refused to renew Peterson's lease, so the store must close by Aug. 15. It has also told the Bush Garden Japanese Restaurant and Mother Goose that it will effectively subsidize their rent for at least the next year.
The flurry suggests the city is serious about correcting the site's many issues. It's a critical spot, with two light-rail lines that make it a transportation hub. Plus, business interests believe it can serve as a better gateway to developing commercial properties across Southwest 10th Avenue.
"It's been a big part of our downtown retail strategy," said Marion Haynes, a Portland Business Alliance spokeswoman. "It can help with the West End and develop a better connection to the Brewery Blocks" north and across West Burnside Street.
Colin McCormick, Mayor Tom Potter's policy manager for public involvement, said recent developments relate mainly to uncertainty over when construction on adjacent blocks will end and exactly when the 10th and Yamhill redevelopment can begin.
In particular, Potter believes that Bush Garden, at 900 S.W. Morrison St., and The Real Mother Goose, at 901 S.W. Yamhill St., have suffered because nearby construction has closed Southwest Ninth Avenue and hampered access to them. The city's moratorium on the retailers' rents will last one year.
The Real Mother Goose pays around $12,000 a month, while Bush Garden pays $3,000 a month. Peterson's pays $2,900 monthly.
"The construction over there makes it tough for customers to reach them," said John Doussard, a Potter spokesman. "And we've not been able to pull the trigger with what to do with the building."
Sho Dozono, who lost in May's mayoral primary to City Commissioner Sam Adams, owns Bush Garden. Potter endorsed Dozono in the election.
Dozono had come under fire during the campaign for owing the city more than $18,000 in back rent and taxes on the building.
Both Bush Garden and The Real Mother Goose could benefit when the full 10th & Yamhill project, led by developer John Carroll, becomes better defined.
Planners began mulling work on the site in 2002 and finally agreed in 2007 to co-develop it with Carroll.
David Logsdon, who's overseeing the project for the management and finance department, said economic conditions could make it difficult to find project funding. The public cost for redeveloping the retail spaces and the garage, from tax-increment financing and a parking fund, could reach $30 million. The entire project, expected to include a tower atop the existing garage, could cost $160 million.
"There's a bit of interest now in, let's make decisions and move forward," said Logsdon. "We want to make sure we get something done because there could be a lot of dark retail space, and that's not good."
The city council expects to review more proposals by summer's end, said Lisa Abuaf, a Portland Development Commission project manager.
"It's a pretty significant public investment, so we're taking the time to do it right," she said.
Carroll said the site will likely sandwich a revamped Smart Park garage between ground-floor retail spaces and upper-level housing and office units.
It likely will not, however, include Peterson's, which has operated on the site for 23 years. Doug Peterson said the site generates $1.4 million of his three stores' $2.9 million in revenue.
But Mike Reese, a Portland Police Bureau commander, said the site generates at least 30 incidents that require police responses yearly.
The city, citing the public drinking and public urination that allegedly occur around the store, informed Peterson in April that it would end his lease by Aug. 15. Nearby Brooks Brothers has also experienced high theft rates, according to the Portland Business Alliance.
"The record speaks for itself: That one particular store has had an impact on all surrounding businesses," said the PBA's Haynes.
Peterson counters that his store simply generates a lot of foot traffic, which may attract large assemblies of different clientele. He believes that shuttering the store contrasts with officials' desire to attract more downtown residents because many urban dwellers want access to 24-hour retail outlets.
"We're being told we're the bad guys who are drawing all the riff raff," said Peterson. "But you walk by Pioneer Place or Carl's Jr. or McDonald's or even Nordstrom's and you see them there, too."
agiegerich@bizjournals.com | 503-219-3419
http://portland.bizjournals.com/port...ml?t=printable
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