Historic buildings in line to get seismic upgrade funds from PDC

Photo Credit: TRIBUNE PHOTO: JONATHAN HOUSE - The Whidden & Lewis Building on the northwest corner of Flanders Street and Fifth Avenue in Old Town is in line for improvements. The City Council hopes new funding will boost Old Town redevelopment.Mayor Charlie Hales says he’s “ashamed at the condition of Old Town/Chinatown.”

Now we’ll see if the mayor’s proposed fixes will do much to change that.

The Portland City Council narrowly approved an ambitious Old Town/Chinatown Action Plan last week, aimed at helping historic-building owners afford earthquake safety upgrades and luring the first middle-income tenants to the city’s oldest and poorest neighborhood.

The Portland Development Commission, which crafted the action plan in close consultation with neighborhood property owners and community leaders, set aside $500,000 to help owners assess their buildings for potential seismic upgrades. Then PDC will award $5 million for actual upgrades, in what is billed as a demonstration project with the city’s Bureau of Emergency Management and Bureau of Development Services. The idea is to model how to renovate old brick buildings that are largely vacant because earthquake safety requirements make remodels so costly.

Beyond that initial phase, PDC has another $50 million or so available in urban renewal funds, which could subsidize a series of seismic retrofits in Old Town/Chinatown during the next several years.

Commissioners Amanda Fritz and Nick Fish hotly opposed one provision designed to spur construction of 500 middle-income apartments by freeing builders from paying an estimated $7 million in development fees. That kept the action plan bottled up for several months while Hales made concessions and rounded up two more votes needed to pass it.

Lisa Abuaf, PDC’s central city manager, says there are a few projects already “in the pipeline” that likely will contend for early seismic upgrades.

“We hope to be one of those,” says Brian McCarl, who hopes to renovate and expand the historic Whidden & Lewis Building at Northwest Flanders Street and Fifth Avenue.

McCarl says PDC would be wise to target projects, such as his, that will be a magnet for others and create momentum for improving Old Town/Chinatown.

“You can go for the capillaries or you can go for the jugular,” he says.

Another potential candidate is the Suey Sing Building on Northwest Fourth Avenue and Davis Street, Abuaf says. An organic farmer from California reportedly has a contract to acquire the building and hopes to renovate it.

PDC also is keen on assessing potential seismic improvements to the old city fire station the agency controls at Glisan Street and Third Avenue.

The middle-income housing subsidies weren’t a sure thing until last Wednesday’s City Council vote, so there are fewer ripe proposals. But any vacant parking lot in the Old Town/Chinatown area is a potential candidate, says Howard Weiner, owner of Cal Skate Skateboards and chairman of the Old Town/Chinatown Community Association.

Weiner is one of many community leaders who have argued that getting a broader mix of incomes in the neighborhood will stimulate the local economy and help Old Town/Chinatown shed its stigma as a haven for drug dealers, the homeless and low-income social services.

Potential apartments

The neighborhood is very enthused about getting middle-income apartments in what’s considered the heart of Old Town/Chinatown on Third and Fourth avenues, which has seen little development. One prime site, Abuaf says, is the Goldsmith Block, between Couch and Davis streets and between Fourth and Fifth avenues. There also are empty parking lots near the Lan Su Chinese Garden, on Broadway and Glisan Street, she says.

Gerding Edlen Development Co., which recently signed up Ankrom Moisan Architects to anchor its proposed six-story building at 60 N.W. Davis St., also could be a candidate for fee waivers for residential units in that building.

The Goodman family, which sold its Portland parking lot empire about a year and a half ago to focus on real estate development, retained one surface parking lot in Old Town/Chinatown and six in the adjacent Skidmore Historic District to the southeast. Greg Goodman, co-president of the Downtown Development Group, is one of several property owners who urged the city to add the development fee waivers to spur middle-income housing, arguing that developers can’t fetch the necessary rents in the area to finance new apartments right now.

Goodman says he’s more focused now on developing the family’s Skidmore properties. The action plan includes the Skidmore district, making those eligible for the fee waivers.

Planners figure the 500 apartments might be spread among three to five projects.

Council divided

Mayor Hales argued last week that Old Town/Chinatown “managed to sleep through two real estate booms,” and still has many vacant storefronts and empty buildings deemed fire traps because the owners can’t afford needed seismic upgrades.

But most of the City Council debate was over his proposal to waive System Development Charges, known as SDCs, for those selected to build the middle-income housing. SDCs are levied on new developments to help pay for parks, transportation, sewer and water infrastructure needed to serve new housing and commercial projects.

Fritz oversees the parks bureau, and Fish oversees the sewer and water bureaus and formerly led the parks and housing bureaus.

The city already grants SDC waivers to housing for poor and low-income tenants, and for residents building “granny flats” on their lots, also known as accessory dwelling units.

Fritz portrayed the SDC waiver as a subsidy to developers, construction companies and landowners for projects that would be built anyway, depriving parks and other city bureaus of millions of dollars. The new residents of Old Town/Chinatown will rightly demand more parks in the area, she said, yet the action plan doesn’t direct money to needed parks. Fritz also opposed awarding city subsidies for housing at a time when there are so many unmet needs for the homeless and those needing more affordable housing.

Commissioner Dan Saltzman, who oversees the Housing Bureau, said the fee waiver was a worthy gamble to jumpstart construction of middle-income housing in an area dominated by low-income housing projects.

“We think this is a significant inducement for a part of our city that is in dire need of changing the status quo,” Saltzman said.

Commissioner Steve Novick said the fee waiver is a “reasonable thing to do,” given that city policies created a neighborhood with a high concentration of poverty. “It is a worthwhile goal to try to have a wider range of incomes in the neighborhood,” he said.

Fritz said as the Pearl District gets built out, developers will turn to Old Town/Chinatown. “I believe that this new construction will happen anyway.”

Supporters argue that the city bureaus aren’t losing any money from the fee waiver, because middle-income housing won’t pencil out in Old Town/Chinatown without subsidies, and thus no SDCs would flow to the four city bureaus. In the past decade, the city has collected a total of $97,113 in parks development fees in Old Town/Chinatown, and $166,372 for transportation fees.

PDC expects that middle-income apartments will bring the four bureaus some SDCs for ground-floor retail built under the new units.

“It is an investment of money that we would otherwise never receive,” Hales said of the potential $7 million in SDC waivers.

But the notion of subsidizing wealthy property owners rubs many Portlanders the wrong way, especially champions for homeless and low-income people. And, critics point out, the apartment developers will only be required to keep their rents affordable to middle-income tenants for the next 15 years in exchange for the development fee waivers.

But Weiner, who has long worked on improving Old Town/Chinatown, says he hopes the development fee waivers can help “jumpstart” the neighborhood to become more diverse, so there comes a time when city subsidies aren’t needed there.

“The Pearl District needs no help today,” he says, “but it did 20 years ago.”

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