Industrial businesses sweat gentrification
Portland Business Journal - August 24, 2007
by Andy Giegerich
Business Journal staff writer
While a new streetcar will better link Portland's inner eastside to the South Waterfront and Pearl District, many Central Eastside businesses worry that the line could encourage more housing.
They also fear that rising property values could squeeze out some of the warehouses and suppliers who've occupied the neighborhood for generations.
The Central Eastside Industrial District includes 681 acres south of Interstate 84 to Southeast Powell Boulevard and from the Willamette River to Southeast 12th Avenue. It contains 1,122 businesses that employ more than 17,000 workers.
Planners say they're committed to retaining the district's character and do not want longstanding businesses to leave. Like the businesses themselves, they also don't want a second Pearl District that, while harboring countless office and housing success stories, chased away downtown's lone industrial vestiges.
Either way, the eastside area's geographic fabric, which features some of the city's oldest businesses -- as well as many creative services firms -- will change if the streetcar receives approvals from the Portland City Council and the federal government.
"There are concerns, but the district is going to evolve anyway, so managing that growth is crucial," said Tim Holmes, president of the Central Eastside Industrial Council, which advocates for the area's political and business interests.
At issue is how new zoning will coexist with nearby industrial zones. For instance, Block 76, the Northeast Third Avenue site on which the Burnside Bridgehead project will sit, allows for office, retail and housing uses.
Developers could also score big if they're one day able to build riverfront condominiums with vast city views.
"We didn't really want any zoning that would allow residential in there," said Mike Bolliger, who chairs the council's land-use committee and whose company, Bolliger & Sons Insurance, has occupied a district space since the 1950s.
"That would be the first step toward a Pearl-like arrangement. It would bring congestion, a lack of parking. There would be all kinds of issues. Your little Johnnys and big trucks don't mix very well."
The Portland Development Commission, which oversees the Central Eastside urban renewal district, believes it can retain the area's attributes while sparking more economic development.
"Central Eastside won't become the Pearl," said Kia Selley, the PDC's development manager for the urban renewal district. "It has its own identity and people within it that support and nurture that identity. And the zoning is very different. It doesn't have nearly the amount of areas zoned for housing as the Pearl."
In the end, Selley predicted Central Eastside will "be affected by market trends, just like any other district, but it will keep its own set of variables that keeps it unique."
The eastside district has changed incrementally over the years from the conversion of such buildings as the one formerly housing the B&O Railroad warehouse to an incubator that largely hosts creative services firms.
"We're all for keeping the evolution going and transforming into a highly functional part of the city," Holmes said. "It's doable, but it's scary having the streetcar come in and having the change happen too fast."
As a result, some owners have questioned why they should shoulder $15 million worth of local improvement district fees that will help fund the streetcar. The city proposes creating the district within a three block radius of the streetcar's 3.4 mile loop.
Others believe the streetcar will actually protect industrial businesses. Peter Finley Fry, a planning consultant and longtime Central Eastside Industrial District champion, said many are resisting the urge to sell to developers who might seek to build high-rises.
"We'll see a few high-rises, but in this case, the streetcar will perform more of a transportation role than a development role," he said.
But Rick Gustafson, Portland Streetcar Inc.'s executive director, said studies show that as many as 4,300 new housing units could appear near the new line over the next 20 years.
Streetcars by nature support higher density.
"But we're keeping it here in the areas that are zoned for it," he said. "It's an exciting challenge to make the industrial sanctuary work in a fashion that supports our desire for urban living and working."
Taking it to the streetcars
The Portland City Council will decide on Sept. 6 whether to provide funds to the eastside's Portland Streetcar Loop. The council will further vote to establish a local improvement district through which local businesses will provide construction money.
The federal government will also decide soon whether to kick in $75 million for the $146 million project. Rep. Peter DeFazio, D-Ore., is helping to secure the funds.
The streetcar, in connecting with the westside line at Northwest 10th Avenue and Lovejoy Street, would travel across the Broadway Bridge, south along Martin Luther King Jr. Boulevard and Grand Avenue, then loop back to the South Waterfront district across a new Willamette River rail bridge.
giegerich@bizjournals.com | 503-219-3419
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