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  • 23 Oct 2014

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Grove Hotel development deal falls through

by: TRIBUNE FILE PHOTO: L.E. BASKOW - A plan to turn Old Town's Grove Hotel into a hostel with a first-floor restaurant fell apart last week when developer David Gold let a memorandum of understanding with PDC expire. Ten years ago, Portland city officials hoped a full block, $70 million multi-use project that would have placed Asian supermarket Uwajimaya in the middle of Old Town/Chinatown would serve as a first domino to jumpstart development in the central city’s most underutilized neighborhood.

The Uwajimaya project failed to materialize, and on Monday another Chinatown project seen as a potential lynchpin development fell by the wayside when a development agreement for an international youth hostel complex in the old Grove Hotel expired.

Developer David Gold planned the hostel, along with a first-floor restaurant, in the vacant Grove Hotel on Northwest Burnside Street. The Portland Development Commission owns the Grove Hotel. For much of past year, both PDC and Gold insisted a deal was progressing as planned. PDC wanted to sell the Grove to Gold for a discounted $550,000 and offered to help with redevelopment of the property with $2.64 million in loans.

Gold is out of the country, but in an email this week he told the Tribune he was still “hopeful that something will work out.”

But the first hint of trouble came in December, when Gold told the Old Town/Chinatown Neighborhood Association that he would pull out of the project unless the city removed the Right 2 Dream Too homeless campground. Right 2 Dream Too sits directly across Fourth Avenue from the Grove and Gold insisted he could not find a restaurant tenant for his first floor space with the homeless facility so close.

As of this week, Right 2 Dream Too remains in place. In fact, next week the nonprofit will have its first day in state court on a lawsuit that challenges the city’s claim that the campground violates city code.

A number of behind-the-scenes discussions have taken place aimed at finding another site for Right 2 Dream Too, but so far, no deal has been reached. The city has fined owners of the Right 2 Dream Too property approximately $25,000 so far, according to Right 2 Dream Too officials.

An ‘eyesore’

On June 28, the city’s development agreement that gave Gold exclusive rights to negotiate for the Grove expired. According to Lew Bowers, PDC’s central city manager, the city will prepare a new request for proposals for the old building.

Bowers expressed regret that the deal with Gold has fallen through. “We like his plan. His vision is great. It’s very consistent with our emerging vision for Old Town/Chinatown. That’s why we stuck together,” Bowers says. “At this point we couldn’t see a way to make it happen.”

Bowers is concerned about the state of Old Town/Chinatown, which has seen a number of businesses depart in the last year as Entertainment District nightclubs have flourished.

“We’re worried about Old Town/Chinatown,” Bowers says. “We see some signs that are troubling and some slippage of momentum that was there.”

The Grove, according to Bowers, is one of those troubling signs. “It’s an eyesore on Burnside and a major property in Old Town. We want to get it activated,” he says.