Skyscraper could add $10 million yearly to city's coffers
Walter Bowen led the groundbreaking of BPM Real Estate Group's 35-story tower last Friday, July 12.
The building will feature ground floor retail, a food court, offices, a Ritz-Carlton five-star hotel and condominiums with access to the hotel's facilities such as the spa and the restaurant chefs when it opens in late 2022.
Block 216, as it is still known, is on the site of the Goodman-family-owned block that was recently cleared of the Alder Street food carts. Executives from out of town heard a series of congratulatory speeches, including words from Portland Mayor Ted Wheeler.
Ritz-Carlton is new to the Pacific Northwest, as is the affiliate of Mosaic Real Estate Investors of Los Angeles which provided the loan. Local boy, Bowen of BPM Real Estate Group, announced a $460 million construction loan for the project at 900 S.W. Washington St. last week.
The owner of BPM, Bowen is a developer of senior housing who has had recent good fortune branching out into spec office buildings such as Pearl West and the Broadway Tower near St. Mary's Academy, which are known for anchor tenants Wacom and the Radisson Red hotel, respectively.
"This will be a luxury living experience unlike anything that has ever been developed in the Portland market," said Bowen. He estimated the annual income from property and hotel taxes to be $10 million a year. "If you take that times the next 100 years you've got a billion dollars in taxes coming to the city," he said. He noted that the city will benefit from charging $25 million in system development charges (for infrastructure) "inclusive of $8.1 million that we're paying the city for the of inclusionary housing exemption because of the condominiums." That is the amount the owners will pay to get around putting affordable housing in the luxury building.
"It will be a very, very big addition to the city's coffers."
Bowen promised that construction will begin on July 29th, digging down four and a half floors for parking.
The tower will have 251 guest rooms, 238 co-branded condominiums and 140,000 square-feet of office and retail space. At 460 feet tall, it will be the fourth-tallest tower in Portland, and will cost $600 million to build.
The food carts may be moved to the North Park blocks, although there is another plan for a culinary corridor nearby along Southwest Ninth Avenue.
For now, they are being stored on land at the now quiet U.S. Post Office in the Pearl District.
He praised Mosaic as "not just another lender, it's a lender that really cares about the project. It's going to be a partner throughout this and we will work with as we go through the project and make it not only a great Ritz-Carlton project, but a great project on a standalone basis." He also singled out Howard S. Wright the builder. This is his third building with them downtown.
"I know these guys, I go to the weekly construction meetings, I try not to mess with themthem . . . First of all, I had to give Brian the bad news that he won't be hunting for 42 months, he's going to have to be on this project. So, no breaks. "
Walt and Ted
Bowen notably praised the City of Portland as a big supporter.
"We thank all of the dedicated employees at the Portland Development Commission the Portland Bureau of Transportation and Parks and Recreation. We look forward to them bringing Bryant Park back. They sometimes get a bad rap, but we had a great experience on this project. "
Mayor Wheeler flattered Bowen saying, "I just want to acknowledge that this is not your first rodeo here in the city, you have developed several mixed-use towers in the city. You have made significant investments in this community, you've created thousands of good jobs in this community, I want you to be proud of that."
Wheeler said the city would continue
to change for the better. "The pace of change in this community can sometimes seem overwhelming. And I want to reassure people that our city can continue to evolve, that we can continue to improve our community, while at the same time protecting the things that we love about this community."
He added that this is the first project to be started under the new Comprehensive Plan, which was approved by the City Council a few months ago.
He said it would help create a festival street in the food hall as well as contributing to the six-mile Green Loop and Culinary
Ethan Penner, the managing partner of Mosaic Real Estate, said he didn't normally bother with groundbreaking ceremonies, but this was a once-in-a-while project.
"First of all, this is the largest single asset financing that I've ever done. The only other deal I've ever done that's bigger than this is when I financed the acquisition of the entire Westin Hotel company. It's maybe the single largest construction deal done in the United States this year, by dollars."
Penner added, "Everyone here should be very proud of the city. This is maybe my favorite city. When I think of this project, I think of a balance between traditional and contemporary, between nature and architecture and between soulful and ambitious."
Tracey Nguyen, principal at Baker Tilly Capital explained why private money is flooding into one of Oregon's 86 qualified opportunities zones, 11 of which are located in Portland.
This includes Block 216, which benefits from the opportunity zones program by using private investments to help finance the construction. She estimates it will create 2,000 direct and indirect construction jobs and 550 long-term jobs.
"We are thrilled to provide our economic development expertise to BPM to leverage the opportunity zones program and to achieve the positive economic outcomes while also providing opportunity zone investors with a chance to invest in this unique institutional quality property."
Phil Beyl with Portland-based GBD Architects said it would add to the Portland skyline, and that Walt Bowen is "a great, visionary leader who has an uncanny sense for when it's time to build something, with great courage."
Beyl said it would be "a great destination for visitors for homeowners and businesses like the city has never seen before."
He added, "Oftentimes you do get into a situation where the city happens to be on the other side of the table rather than on the same side. But from day one, they've been on the same side as us."
There's a trend for condo residents to be able to step out of the door of their second or third home into hotel facilities. There is a St. Regis being built now in Boston, a total condo tower, where the developers have licensed the brand to add value to the people he's selling to, rather like the Trump organization rents out the brand but doesn't own the real estate.
Dana Jacobson, the senior vice president of global mixed-use development with Marriott, said, "The hotel will generate 300 new jobs from housekeepers to engineers, bartenders, and managers. Why is it that we have waited so long to have a Ritz-Carlton project in Portland? First, we need the right partner and we knew very, very quickly that Walt and his team were the right partners for Ritz-Carlton. We're super selective about the people that we do business with, and it was clear that Walt embodies the values of Ritz-Carlton."
Jacobson said people now demand a kind of look for a different kind of lifestyle. "They want to be able to walk to boutiques or coffee places. People who live there will be immersing themselves quickly in the community and walk around, go to art, go to movies."
She disagreed that Portland is not a five-star town.
"Portland's ready for this. We have so many customers who travel up to Portland, the lifestyle, the food scene, businesses. We found a great partner, and we found a great site. Just because Portland is low key, and people are interested in the outdoors, doesn't mean people aren't also interested in high-touch service, awesome food and beverages. We want to create an experience, we want to help you live your life better."
After the symbolic shoveling of the first dirt, Bowen explained why he is optimistic about this particular block: It's about access.
"You've got Nordstrom down the street, you've the whole Broadway corridor, you've got the retail section of downtown Portland, you've got a museum, the park blocks, and you've got the river — you can walk to the river. It's a very accessible site. That it's going to be able to build up 35 stories gives you a lot better view corridor, which is really important."
He denied that Wheeler and the normally slow city has expedited anything for this project.
"Just working with the Portland Planning Commission and Phil and his firm GBD on the last three projects, they have a good understanding of their locale, they know who they're talking to. And they listen, they take suggestions, and they've smoothed the path to a successful project."
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