Portland warms to outside developers
Daily Journal of Commerce
by Kennedy Smith
06/13/2007
When the Portland Development Commission began seeking redevelopers for Centennial Mills in March, the agency issued a request to “thousands” of potential candidates, Steve Shain, project manager at the PDC, said. The agency, he said, hoped to draw developers from outside Portland to reshape the dilapidated former flour mill on a 4.75-acre site along the Willamette River.
Companies worldwide applied, and nine were chosen. If the goal was to draw outsiders, the PDC can boast it did a pretty good job: Only two of the nine firms are from Portland. Two are based in Canada, three have offices in Seattle, one is headquartered in Baltimore, and another is in Costa Mesa, Calif.
The century-old waterfront edifice between the Fremont and Broadway bridges houses the Portland Police’s Mounted Patrol Unit. But the PDC wants a redeveloped Centennial Mills – which could be anything from an open-air market to a hotel – to serve as a tourist attraction connecting the waterfront and the Pearl District.
The finalists’ geographical diversity, Shain said, shows “Portland is maturing to the point where national and regional developers are looking to invest here.”
For example, in 2003 Fraser McColl, a Vancouver, B.C.-based developer, and partner Don Charity built the Mosaic, an eight-story mix of lofts and retail space at Southwest 11th Avenue and Columbia Street.
Portland wasn’t always on the radar of Vancouver, B.C.-based Pemcor Development, one of the nine finalists. But that changed after the company, which is developing the Waterfront Pearl, a two-building luxury condo project at the edge of the Pearl District, saw the city undertake large-scale central-city developments like the Pearl District and South Waterfront.
“Certainly when we first embarked down there, we had not viewed it as a market for large-scale urban development,” Paul Mayer, president of Pemcor, said. “But the way the Pearl has evolved has demonstrated a kind of larger-scale growth.”
Size matters
Centennial Mills is a fairly large site, one of the reasons Pemcor, Mayer said, responded to the request for qualifications.
“Part of the challenge for people coming from out of town is that Portland’s projects are relatively small in scale,” Ethan Seltzer, head of Portland State University’s Nohad A. Toulan School of Urban Studies and Planning, said. “That means that essentially to get engaged in this market you have to do a lot of small projects. For national-scale developers, we’ve been less attractive because they can’t pick up thousands of acres at a time.”
Out-of-towners, although sought by the PDC to develop here, are at a disadvantage not knowing Portland’s personality, developers say.
From the outside in
“Portland’s always been considered a provincial city, not easy for outsiders to come and do business in,” Art DeMuro, president of Venerable Properties, one of the two Portland finalists, said. “Portland is not accustomed to outside developers shaping its look because it’s such a deeply rooted development community here. It’s difficult for outsiders to fit in.”
Brad Malsin, head of Beam Development, the only other Portland finalist, agreed.
Portland, Malsin said, is a hard city to develop in unless “you’re in tune with what is trying to be accomplished here. It makes it more difficult to imagine being part of the larger development community already here.”
Portland developers can benefit from outside competition in that it keeps them on their toes, said Mark Edlen, co-owner of Gerding Edlen Development, which did not pursue the Centennial Mills redevelopment.
Gerding Edlen is busy developing in Southern California, Edlen said, where he’s been the outsider entering a new market.
“The challenge is getting to know the streets and sidewalks, the neighborhoods, the city’s nuances,” he said. “I think that’s only natural. On the other hand, business is so global now, and things happen at such a quick pace compared to 10 years ago, those barriers, that xenophobia, are pretty minor.”
In recent years, Edlen said, Portland has streamlined its permitting processes, making it easier for developers to rezone, play with height limits and gain entitlements faster. Portland’s civic processes, he said, speed development, not stymie it.
“It takes us forever to get entitlements in L.A. compared with here,” he said.
Finalists for Centennial Mills redevelopment
Of the nine firms picked by the Portland Development Commission as finalists to redevelop Centennial Mills, just two are from Portland.
Beam Development, Portland
Venerable Properties, Portland
OliverMcMillan, San Diego
with an office in Seattle
Nitze-Stagen, Seattle
Focus Equities, Calgary, Alberta,
Canada
Pemcor Development Corp.,
Vancouver, B.C.
Lorig, Seattle
The Lab, Costa Mesa, Calif.
The Cordish Co., Baltimore
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