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Hales hopes to shift urban renewal cash to blighted area

by: TRIBUNE PHOTO: JAIME VALDEZ - Renovations have begun on the Society Hotel project, where developers plan a ground-floor cafe and Old Town/Chinatowns first tourist hotel. Believe it or not, Portland’s Old Town/Chinatown neighborhood — long known for its homeless population and open drug dealing — is facing a real estate boom.

The adjoining Pearl District is getting built out, Portland’s real estate market is humming, and Mayor Charlie Hales is pushing to shift urban renewal spending from the Pearl into Old Town/Chinatown.

The result? The stars are getting aligned to turn around the central city’s most downtrodden neighborhood after decades of halting and often futile efforts.

Skeptical? Consider this:

• Several hundred added employees will go to work in the neighborhood in the next couple years, many of them earning good money. Pacific Northwest College of Art expects to open its new campus in the area by January, bringing 1,300 students and 240 faculty and other staff. Airbnb is opening a regional office next to the University of Oregon satellite campus, and plans to hire 160 or more people. Multnomah County is building a new Health Department headquarters next to the Bud Clark Commons, bringing 200 or more employees.

• Three hotel projects are in the works: at the boarded-up Grove Hotel on Burnside; the hostel-inspired Society Hotel on Northwest Third Avenue; and one next to the relocated college of art.

• Old Town/Chinatown’s eclectic vibe is attractive to software companies and other young creatives flocking to Portland. Open Sesame is moving into the neighborhood and Squarespace, a New York company about to open a big outpost here, is moving temporarily into the neighborhood until it lands a permanent site.

• If Hales gets his way, the city will shift some $50 million in urban renewal funds once slated for the Pearl District into Old Town/Chinatown, much of it for seismic upgrades so owners of boarded-up historic office buildings can afford rehabs.

• It’s a harder lift, but the mayor and Old Town/Chinatown leaders also hope to win new tax breaks to subsidize “market-rate” housing. That might mean bringing in students, young hipsters and others who have more disposable incomes than those living in single-room-occupancy hotels.

“You’ve got all these eyes now on Old Town/Chinatown,” says Howard Weiner, owner of Cal Skate Skateboards and chairman of the Old Town/Chinatown Community Association.

“It’s become one of the most attractive markets for younger firms,” says Patrick Quinton, executive director of the Portland Development Commission, the city’s urban renewal agency.

Some of the new projects were known before Hales announced his pivot to Old Town/Chinatown, but others emerged since then, says Sarah Harpole, PDC’s senior project manager.

When Hales started pushing the PDC to devote more energy and money in Old Town/Chinatown instead of the Pearl, that motivated community members to come together with the city to create a new action plan for the neighborhood, Weiner says. “That got the community talking,” he says. “People started thinking, ‘maybe we can do something here.’ ”

The prospect of PDC subsidies lured more property owners to the table, including the Goodman family that owns several surface parking lots they want to develop. Even Chinese community members who’ve sat on the sidelines while their buildings decayed joined the discussion, Weiner says. He’s also seeing some new, younger entrepreneurs get involved.

In one sign of the area’s higher profile, Gerding Edlen, one of Portland’s top developers, was selected by the PDC to develop an office building north of the University of Oregon/Airbnb block. Gerding Edlen has plans for a 120,000-square-foot, six-story mixed-use building, and one source says a prominent architecture firm might move there.

Seeking urban character

Mark Edlen, managing principal, says it’s too early to discuss potential tenants, but says Old Town/Chinatown has the “authenticity” and other features that many tenants in the market are looking for these days. They like the exposed ceilings, old brick and other characters found in Old Town/Chinatown, he says. “They don’t want to be part of the Pearl District.”

Tenants shopping for space or moving to Portland like Old Town/Chinatown’s historic structures, its street lights, the vibrant nightlife and the ethnic and economic diversity, says Brian McCarl, a developer trying to rehab the historic Whidden & Lewis Building at Northwest Flanders and Fifth Avenue.

“They want to be in places that have urban character,” McCarl says.

Jared Wiener, who is working to recruit software companies for the PDC, says he’s in touch with at least 10 prospects, and many are interested in Old Town/Chinatown.

Both McCarl and Edlen noted that owners of some of Portland’s expensive “class A” office spaces, such as the Big Pink office tower, are reconfiguring spaces to look less glitzy and more funky.

The hotels planned for Old Town/Chinatown could add vibrancy to the area, Harpole says, providing 24-7 activity. Having people spending the night also brings a built-in customer base to restaurants, coffee shops and nightclubs.

One of the goals in the PDC’s draft “action plan” for the area includes a desire to get more people crossing over from downtown. Burnside has been a “great divide,” Howard Weiner says, in part because it’s not so easy for cars to turn off Burnside into Old Town/Chinatown, or for pedestrians to navigate the traffic.

But Harpole is delighted by the success of the new Mi Mero Mole restaurant just north of Burnside on Fifth Avenue.

“They’ve been very successful at breaking down that barrier,” she says. Office workers from Big Pink now can be seen regularly crossing Burnside to eat at the Mexican restaurant or take food back to the cubicles.

Despite the sense that better days lie ahead for Old Town/Chinatown, no one minimizes the challenges of building in an area dotted with social services and homeless programs, or trying to build projects that won’t pencil out without subsidies.

“Yes, there’s a tremendous amount of energy going on in Old Town/Chinatown, but it’s going to take money,” Weiner says.

Many in the community fear new plans to add more nightclubs could jeopardize prospects for more housing and office uses. (See related story on Entertainment District.).

Some city commissioners are resisting the idea of subsidizing housing projects there by waiving Systems Development Charges, fearing that means less revenue for the parks and other bureaus, and will take away the focus on housing for low-income people. And giving subsidies to wealthy landlords and developers doesn’t sit well with some people.

McCarl says some subsidies will be needed for him and his partners to redevelop the historic Whidden & Lewis building and meet modern seismic safety requirements.

“You can put $30 to $40 a square foot into these buildings, which nobody sees,” he says, referring to the structural reinforcements needed.

The PDC has delayed bringing its new Old Town/Chinatown action plan to the City Council until Hales rounds up the necessary votes. But the PDC says it expects to bring it to the council sometime in June.

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