ODOT Blocks and OMSI …Get Their Developers

We forget here in the Central Eastside that we have two of the most transformative and underutilized core development sites in the city. I will go a step further and say we have three if you include the 12 acre Clinton Triangle site, but that one is still very green and maybe years away as the other two are much further along in their readiness to create something great.


I have covered this key three block sites numerous times in my other newsletters going back almost eight years when ODOT started thinking that these long held sites could be considered surplus. Owned by ODOT for decades when a south bound ramp to I-5 was seriously contemplated and the fact the west part of the blocks is impacted by the freeway and ramp to I-84, these blocks have sat starkly underutilized as the Central Eastside has percolated with strong growth and development. Intermittent laments by stakeholders in the Central Eastside were heard over what many perceived as a “waste” of great land in a land starved district that was really starting to rejuvenate. The Central Eastside’s (CEIC) release of a strategic plan in 2009 I think kick-started the wishing about these properties being pried loose towards actual “how do we make this happen” momentum. With PDC (now Prosper Portland) taking the lead discussions turned more towards proposals for acquisition around 2012. But with two government agencies, and a convoluted chess board cube of three distinct properties ,it was a hurry up and wait situation for several years as environmental conditions were not perfect, soils needed to be tested and ODOT had to retain ownership of a portion of the west part of all three blocks for maintenance and upgrades to the freeway. Well a few birthdays went by as all these issues got worked out but give it to those involved they finally made it happen. Prosper Portland closed June of 2017 and got a great deal with close to $30 psf for 100,000 sf of developable land but of course there are always extenuating circumstances to these deals that affect prices but given two government agencies as the goal to bring development and jobs to the site, it did not have many aspects of a market deal. But with the now in place industrial office overlay (EOS)which allows for substantial vertical creative office development on industrial sites in the Central Eastside, industrial land prices have zoomed past $100 psf and the latest high water mark is a pending $160 psf sale which translate into a very low basis which really gives Prosper room to help facilitate development. The RFP for a developer came out last December and most of us in the know kind of thought it was a foregone conclusion that Beam Development which has successfully imbedded itself like a sustainable tick in the Central Eastside with multiple successful ground up as well as redevelopment of older buildings would be in the running and if not chose would be a shock to many. “We have had our eye on these blocks for well over a decade ever since we redeveloped the Eastbank Commerce Center just to the north. It just has so much potential and really with three distinct blocks you can really have impact and scale to create something that is larger but it can have its own distinct look and feel on each block while also interacting and relating to each other. We have passed on other projects in the last few years in order to keep our powder dry for this opportunity and we have really put together a thoughtful and diverse team” says the captain of the development ship, Brad Malsin. They have lined up Hacker Architects, Colas Construction and Central Eastside mainstay Mackenzie who has offices just down the street. The first outlines of their plans which could take a year or more to pin down looks to have upwards of 250,000 sf of industrial offices; 50,000 sf of scalable “maker” or higher end industrial space and then street retail along water. When I look at the three blocks it is easy to want to vacate the streets that separate them as they basically dead end at the esplanade which could give you some great plaza possibilities and interactive common spaces between buildings while providing a directed corridor to the river. Anyhow the fact we are at this point in this ten year odyssey is special but still realizing it will take another year to get all the agreements fixated with Prosper Portland with another year for design and permitting. And probably more importantly, my development crystal ball tells me heavy machinery will start digging in the ground without a firm tenant commitment for a large chunk of space but given location, the team and what I am sure will be some compelling designs and overall desirability of the Central Eastside this will not be a heavy lift. Hopefully I will not be using a cane going to the ribbon cutting but knowing Beam, their experience, track record and commitment to the Central Eastside, it will happen sooner rather than later.

Gerding-Edlen Selected to Head OMSI Campus Redevelopment

OMSI is an iconic Portland institution providing one of the best educational and museum experiences in the state especially as it relates to its mission with educating and providing science experiences for children. It also has been a wonderful catalyst and addition to the growing and changing Central Eastside from the time 20 years ago that they renovated a dilapatated old energy plant along the river in the south part of the district. Given the property by Portland General Electric, OMSI’s campus encompasses 18 precious acres of land that has become much more valuable with significant infrastructure investments such as light rail and trolley and most importantly by the beautiful Tillikum Bridge that sits just south of OMSI’s main building. These big transportation improvements along with the some major investments by Portland State University and more importantly by OHSU just across the river really got OMSI thinking big about what else could be developed on what they realized was significant underutilized property on their campus. It also helped that this growing and potential synergy with those institutions and OMSI has been formalized into a multi-prong effort to create further science and technology investments and development spanning the Willamette River and is called the Innovation Quadrant. The visioning started over 7 years ago with a bold and huge plan by vaunted architect firm ZGF, that included not only their 18 acre campus but they took a bit of liberty and roped in many surrounding property owners for their ambitious first take on what this area could be. Whoa!!! was the first reaction by many when it was unveiled. That plan is hindsight while very preliminary was “over the top” with its audacious and to some a bit of a misplaced scale and uses such as hotels, apartments and huge parking structures and really did not pay homage to the industrial past and present of the district. It screamed Too Much! But for all its grandiosity it got people talking and motivated to dig in and really understand what is practical and reasonable for this area. While this elaborate vision faded over the ensuing few years as OMSI had pesonnel changes and stepped back to better understand its property and the market and more importantly what would be attractive and feasible to a development partner they would need to pull this off. This deeper re-analysis was also needed to correspond with the city efforts to forge the all-important Central City Plan for the Central Eastside because hard to figure out what and how much you can build until you know what will be allowed. A big part of OMSI’s desire and vision from the start was to achieve the ability for their property to accommodate multi-family residential uses as part of their campus which stayed in their thinking even as their initial big plans ratcheted back. It makes sense because the ability to accommodate multi-family really adds value to their land and while their science and educational missions for redevelopment are front and center, being able to monetize their land holdings to its utmost to finance OMSI’s mission is close to the top of the list. Ability to build apartments helps do this. OMSI made their case vociferously at the two year- long Central City Southeast Quadrant process planning process but generally was met with resistance by the stakeholders in the Central Eastside feeling that OMSI was too isolated for apartments and id not have the accompanying infrastructure to handle this type of development and that the district already had sufficiently zoned land for apartments elsewhere. After the sausage making of this process had concluded, OMSI got most of what they wanted with a zone change to the very flexible EX zoning (Central Employment) which allows for office; retail, and hospitality uses along with some rather healthy ability to build high on much of their campus. They got the ability to accommodate apartments but with some rather strict caveats to making that a reality as part of their ability to navigate through a rather strict Master Plan they had to get in place for the campus. With this behind them OMSI cranked up their planning aspirations by hiring internationally known architect and planer Snohetta to dig deep into a realistic and practical masterplan for their sites with the intention of reaching out to the development community for a partner to initiate development. Snohetta came back with some compelling ideas for a very open, robust and varied campus plan that gave big nods to activating the river, transit connections, sustainability, technology and education uses and community engagement to really create an activated hub and kind of vibrant village that they hope to blend in with the industrial nature of the surrounding neighborhood and complements OHSU’s campus across the river. They identified 7 developable parcels with the potential of 1.7 million square feet of space which of course would be phases over a decade or more. Most lauded the work and the practicality and scale of this plan as sensible and achievable. This lead to OMSI going out for a Request for Proposal earlier this year to the development community in which they got over dozen “hard” proposals which they winnowed down to a smaller group for presentations and then finally in July selecting local development group; Gerding-Edlen (GE) Development. This selection makes a ton of sense given GE’s local Portland roots and experience on multi-phase complex development projects in Portland (Brewery Blocks) as well as in several other cities. Plus their uber-sustainable bent and ability to cobble together public private partnerships really cemented their victory. “We were impressed with they demonstrated ability in developing transformative urban neighborhoods and their ability to work with the city and other public agencies to obtain support and public funds” said OMSI President, Nancy Stuber. The public involvement is a bit of quizzical aspect to the recipe at OMSI as there has been hundreds of millions of dollars of public investment nearby OMSI and the developable sites are ready to go unlike Zidell Yards across the river which recently blew up over the scope and scale of the city’s help with such investments. Gerding Edlen was cagey like anyone would be at this early stage about specific uses but they are dialed into the local economy, users and institutions that may want to locate at OMSI which everyone hopes will have alignment and synergy with OMSI’s science and educational mission. I can think of software/hardware; biotechnology or energy uses; R& D; University or Community College component; Beard Farmer’s Market or other innovative public food attractions; Art/Design and more. OMSI has always maintained they would keep ownership of all the property and give long term leases which can be a bit more challenging for financing and equity participation and if push comes to shove would not be surprised to see OMSI make a selected land sale here or there to give them an injection of funds an smooth development. It is a great fit with Gerding Edlen and all of us are excited to see this Portland urban land treasure to one day have some compelling and eye exciting uses, companies and attractions. Look for more specific plans, concepts and drawings in the early stages of 2019 an maybe a big announcement????