Allegro | Dead

[WonderlandPark]

Originally Posted by Drmyeyes

The big problem with the Allegro developers, is that they did not responsibly research the need for such a building at this point in time in co-operation with the neighborhood. That was a recipe for extra expense and a waste of time in regards to their project.

Isn't this the same story with the Cascadian like 7 years ago, poor research only led to the shorter building getting built? Would have been nice to see the 20-ish story Cascadian getting built.

[Urbanpdx]

The story is both similar and pretty different. The Cascadian developers took a chance on an untested market area. They were pioneering that area and the market didn't go for it. Other developers, appraisers and lenders watched and that area has been pretty lifeless since.

The Allegro developers were victims of a very risky political process. Now that developers have seen what can happen when you spend A LOT of money developing a project you think fits into the code and the process pulls the rug out. This decision codifys an increased risk of building a high-rise in Portland. With increased risk, required returns will be higher. Higher required returns will result in any combination of lower land values, fewer projects, higher sales prices, cheaper building techniques, cheaper materials & less inspired designs...

These forces could result in more row-house development and fewer high-rise proposals. A developer, in many instances, can put up some row houses in 6-12 months and make a profit or take a huge chance on a 2-4 year high rise project with a lower percentage return on invested capital and a much higher risk. Look at Marty Kehoe's projects in NW Portland the past few years for expamples. This decision just accentuates this problem.

[MarkDaMan]

^there should be a law against new row houses inside the 405 loop, Lloyd, Kings Hill-Goose Hollow, SoWa and NW Districts...than there isn't a choice but to take the risk developing a high-density high-rise development.

[Leo]

Originally Posted by Urbanpdx

The Allegro developers were victims of a very risky political process. Now that developers have seen what can happen when you spend A LOT of money developing a project you think fits into the code and the process pulls the rug out. This decision codifys an increased risk of building a high-rise in Portland. With increased risk, required returns will be higher. Higher required returns will result in any combination of lower land values, fewer projects, higher sales prices, cheaper building techniques, cheaper materials & less inspired designs...

The Allegro developers are not victims.

Plenty of high-rises are being built all over Portland by developers who choose to plan effectively. This one failed because the developer chose a high-risk approach to planning the project, and this high-risk approach proved to be ineffective.

[Urbanpdx]

just because an alternate form of development is outlawed does not mean that people will invest money at a lower than normal rate of return. If you could expect to make 4% investing in high rise development or 4% putting your money in the bank, you'll choose the bank every time.

[Leo]

Originally Posted by Urbanpdx

just because an alternate form of development is outlawed does not mean that people will invest money at a lower than normal rate of return. If you could expect to make 4% investing in high rise development or 4% putting your money in the bank, you'll choose the bank every time.

I’m assuming that the developers of successful high-rises still manage to exceed the 4% return, despite the fact that they chose a design process that conformed to regulations. I could be wrong.

Not every business proposal has to pan out in order for an industry to suceed.

[Urbanpdx]

I used that 4% example to simplify the concept. I thought that was obvious.

Maybe this is easier, if they can make 15% on a highrise and 30% on a suburban tract home development in half the time they would rationally choose the tract homes. If they can make 20% in a business that is less risky than development (any business...coffee shop, plastic manufacturing, sign painting, widgets...it doesn't matter) they would rationally choose the other business. All business propositions compete for limited capital, capital goes where it can earn the highest returns at the least risk, (econ 101).

The other problem with low returns should the developer want to do it anyway is that the required down payment, if a bank would fund a "skinny" project at all, would be higher further lowering the cash on cash return.

With all due respect, there is a good book called "Economics for Real People" that is a great overview of how things work in layperson's terms. We all think that we have a "common sense" understanding about economics but unfortunately the opposite is often true. Many think that economics is a matter of opinion but economics is indeed a science. In any science there are such things as correct answers, ones that will be recognized by all practitioners of that science. If you really think the earth is flat, wouldn't you think that even a little time spent learning that it is round would be a good thing?

[Drmyeyes]

Originally Posted by Urbanpdx

All business propositions compete for limited capital, capital goes where it can earn the highest returns at the least risk, (econ 101).

This statement highlights the inherent flaw of the competitive business matrix as a means of efficiently arriving at the kind of development that will best meet the needs of individual and community.

I knew urbanpdx would love that comment. Competition could be a good thing if it were manifested differently. Developers should be encouraged to compete with each other to best fulfill the needs of neighborhood and community as articluated by neighborhood and community. This is what they should be doing rather than attempting to hand down ultimatums regarding what they will or will not impose upon a neighborhood as they compete with each other to fatten their pocketbooks through creative interpretations of what the law allows.

The former USSR did not support community decision making. It attempted to maximise its international strength, militarily for the most part, by imposing centralized distribution of goods and services on an insufficient level to the people residing there. This is not what is happening in Portland, or what's being advocated.

N-E-E-E-I-I-G-H-H !!! Throw that horse a bale of hay!!

[Urbanpdx]

Actually just the opposite is true. Since the economy as a whole is willing to pay more for that capital elsewhere it means that society values that capital more in the competing use. Instead of you or a handful of others that want to decide what would be best for society, society gets to choose.

The businesses with free competition do the best job of prividing goods and services. Do people have a problem with the variety & price of groceries available? Imagine if we had to get our groceries from OLCC liquor stores or at the DMV.

The former USSR tried your method and, even though they had amazing programs that tried to predict where and when goods and services should be produced and distributed, there were lines for bread and overflowing warehouses of milk (or the other way around).

You really need a basic understanding, try the book. I know you are well meaning but your arguments are like trying to say that it would be better if gravity didn't work. Not to mention that your desires don't acknowledge that government isn't actually a disinterested all-wise and all-knowing arbiter with only our best interests at heart. Actually, it's a collection of people just as self-interested and corruptible as you and me.

[Leo]

Originally Posted by Urbanpdx

With all due respect, there is a good book called "Economics for Real People" that is a great overview of how things work in layperson's terms. We all think that we have a "common sense" understanding about economics but unfortunately the opposite is often true. Many think that economics is a matter of opinion but economics is indeed a science. In any science there are such things as correct answers, ones that will be recognized by all practitioners of that science. If you really think the earth is flat, wouldn't you think that even a little time spent learning that it is round would be a good thing?

I’ve taken plenty of economics classes, and they have thoroughly convinced me that economics is interesting and useful, but no more a science than psychology or engineering. But that is a topic for another discussion board; I shall say no more on this subject.

The 4% figure was obviously just an example. By your own argument, developers of successful high-rise buildings must have found that building their high-rises was more profitable than building suburban tract homes, and they did this without resorting to the practices the Allegro developers employed. Based on what I have read about this project, the Allegro developers do not appear to have made a good faith effort at conforming to regulations, but instead chose to push the boundaries through a variety of deceptive practices. I’m quite relieved that this strategy failed, and I do hope it will serve as a warning to other developers who try something similar.

[Urbanpdx]

If this horse isn't dead it certainly is tired of being beat...

[pdx2m2]

Is the horse (alegro) dead or just resting?..any news on what is next? I assume the developer and sienna will craft a smaller more acceptable version although it has been very quiet these past weeks. Someone at sienna must have some news.

[zilfondel]

Originally Posted by pdx2m2

Is the horse (alegro) dead or just resting?..any news on what is next? I assume the developer and sienna will craft a smaller more acceptable version although it has been very quiet these past weeks. Someone at sienna must have some news.

Yea, well, it does take time to design stuff...

[urbanlife]

especially if it results in a redesign. give it some time for anything new on this, just like we will have to give the Ladd tower some time before new news.

[PacificNW]

Any more news, or renderings, on the Moyer project across the street from the Ladd Tower.

[urbanlife]

Probably not till spring would be my guess, at the earliest. I believe he is still trying to buy that small credit union building before moving foreward on this tower.

[CouvScott]

but this is for pre application review on 11/16

[pdxman]

If the design/architecture is good, build it...the portland process drives me crazy sometimes.

[bvpcvm]

here's a link to the preapp document. i kind of like it!

[NJD]

It's hard to tell without site renderings, but I think this will be a welcome addition to the greater downtown area. Nice use of one of Portland's few odd shaped blocks; not a slab design, good height to width, built along a MAX trunk route, and is built on a surface parking lot.