Bakery rises again
Developers target 'Bakery Blocks' for redevelopment
Portland Business Journal - March 23, 2007
by Wendy Culverwell, Business Journal staff writer
Northeast Portland reminds architect Ben Kaiser of his hometown of Cleveland.
View Larger A blighted Northeast Portland intersection will become the Bakery Blocks as two different developers bring ambitious plans to install new commercial and residential buildings.
The district, just north of Legacy Emanuel Hospital, is taking its name from the former Continental Bakery. The two-block property is largely closed and has been sold to a Seattle developer who apparently intends to demolish the old building and replace it with a mixed-use development.
Another developer, Northeast Portland architect Ben Kaiser, has his own plans for the Bakery Blocks neighborhood, which is roughly centered along North Fremont Street between North Williams and North Vancouver avenues.
A Kelly's Tire shop one occupied the lot across Fremont from the bakery. A long-closed gas station stands on the lot across Vancouver and is enjoying a second life as a popular neighborhood car wash. The intersection is one of Portland's busiest bicycle corridors.
Kaiser, through his architectural firm and his development business, has remade dozens of old apartments into new condos within a 15-block radius of the Bakery Blocks neighborhood. Now, he's graduating from condominium converter into full-fledged developer, and the Bakery Blocks neighborhood is his launch point.
The Kaiser Group Inc.'s first project is BackBridge Station, a $14 million commercial and residential condominium project that starts construction around mid-May. BackBridge Station will bring 41 units to the former tire shop site, which Kaiser bought a few years ago before the latest run-up in property prices.
Kaiser's architecture studio is a few blocks away, above a nursery business on North Mississippi Avenue.
The project is somewhat unusual -- buyers can use their units as residences or commercial space. The five buyers so far say they plan to use the property for business.
Kaiser also owns property across the corner, bordered by Fremont and Williams. There, he plans to extend the BackBridge brand with a 39-loft project called BackBridge Lofts. Because of zoning, it will be residential.
Kaiser said he chose to call his dual projects "BackBridge" to reflect the neighborhood, which serves as a bridge between the freeway and the popular Irvington community.
A native of Cleveland, Kaiser said he's long been attracted to Northeast Portland because it reminds him of home.
In the past, he's specialized in rehabilitating blighted apartments into low-cost condos priced at $125,000 or below. He enjoys watching the way a redevelopment sparks neighborhood pride.
When work crews show up to improve a blighted property, neighbors perk up. They start to mow lawns and perform other maintenance.
"No one wants to live in a bad neighborhood," he said. "It's amazing to see."
But as prices for multifamily property rose, apartments for condominium conversion were no longer financially feasible. He began to turn his attention to larger opportunities and bought the former tire store site in 2004.
BackBridge has been two years in development. At one point, Kaiser even hoped to pair it with a bakery renovation.
He hoped to buy the former Continental Bakery, which had been owned by Interstate Bakeries Corp. The Kansas City, Mo., maker of Twinkies and Wonder Bread filed for protection from creditors under Chapter 11 of the U.S. Bankruptcy Code, and the Portland baker was one of the casualties.
The property, which includes a bakery thrift shop, was sold in a telephone auction for an as-yet unrecorded price. Sierra Construction, based in the Seattle area, outbid the local buyers.
Kaiser doesn't regret losing to Sierra -- in fact, he welcomes the investment, figuring a significant investment out of Seattle validates his long-held belief that Northeast Portland is the Rose City's sleeper hit.
"It's the most interesting of the four quadrants," he said.
Sierra officials weren't available to discuss their plans, but they did meet with Portland Development Commission officials earlier this week.
Byron Estes, a PDC urban renewal manager who oversees Northeast Portland, said the new owners are trying to figure out what to build, but indicated it will be some sort of mixed-use development.
"That's exciting. That's a large site," he said, calling the Vancouver/Fremont district a "fulcrum of development interest."
Under area codes, the developer could build as much as 360,000 square feet of new construction where the bakery building and thrift shop now stand.
Scores of developers are increasingly interested in Northeast Portland. Among them is Jim Winkler, the prominent Portland developer with broad tastes.
Winkler bought property at North Mississippi and Fremont a few years ago, deciding to buy it the second he saw it. He's been studying it lately to see if the time has come to build.
"This is clearly a very hip area," he said.
There are obvious challenges, including the premium builders can get for projects in the Pearl District and the ever-increasing price of construction materials.
He expects to make a decision about the 45,000-square-foot, L-shaped property in a few months.
Winkler, who attended grade school at Irvington, gives Northeast Portland a thumbs up.
"We've just been waiting for the marketplace to mature a little," he said.
wculverwell@bizjournals.com | 503-219-3415