January 13, 2005

Burnside Bridgehead Developers Face Portland Development Commission

Presentations Made Before Another Standing Room Only Crowd

In something of a marathon work session, the Portland Development Commission yesterday heard from the three developers vying for the Burnside Bridgehead Development Project, and were presented with the first set of findings from the committee charged with evaluating the developers' proposals.

There's much to get to, but in transparent deference to the fact that we are backing a horse in this race, we do want to offer one little tease before we begin.

During its original public presentation to the evaluation committee, Beam Development indicated that it had letters of intent from enough prospective tenants to fill 65% of the available space. Tonight, they announced that the letters of intent now in their possession account for a whopping 94% of the leasable area.

Setting aside, for the moment, that rather dramatic jump in the interest in the Beam proposal from specifically identified prospective tenants, the work session (which included at the front table Commissioner Sam Adams and a staffer from the office of Commissioner Erik Sten) lasted for a full three hours -- so let's get to it.

Gerding/Edlen Development

As previously reported, the Gerding/Edlen Development team is now recommending to PDC that the Burnside Bridgehead project not include big box retail. Prior to this, GED had included a Home Depot in its development proposal.

Despite this shift, Mark Edlen said that in recent weeks the discussion had become "a referendum on big box retail," when the real conversation should be about what he termed "community building".

After recapping what the GED team has seen as the purported strengths of Home Depot as compared to other big box retailers (e.g. sustainability practices and adaptation to urban formats), Edlen returned to the context at hand.

"We applaud the public process that your committee has implemented," he said. "We've tried tot ake to heart the comments that we've heard."

He reiterated GED's new conclusion removing big box retail from their proposal, saying that the community believes it to be "inappropriate" and has demonstrated that it is "vehemently against" its inclusion.

Edlen argued that GED strongly believes their concept is the right one for the site, in large part because of the "ownership opportunities" it offers -- something he said the GED team had "not adequately expressed". He added that they do not view the project as being akin to the Pearl District, or to some form of "Pearl Lite".

Amongst the "refinements" added to the GED proposal with the removal of Home Depot: Extended sidewalks along the Burnside frontage, incuding an entry plaza to provide "visual spatial relief". Replacing what would have been Home Depot would be a row of "work lofts" and possible retail functions.

Also repeated from their original presentation to the evaluation committee was the inclusion of the Little Italy proposal (whose inclusion in this particular development we've disparaged as being tacked-on in order to give the GED proposal some sort of character), although this time they added the notion of cobblestone streets -- something they almost directly lifted from the original Beam proposal.

Edlen stated that removing big box retail from the financial equation reduced the "gap" by $6 million. The question of the "gap" would arise repeatedly over the course of the evening, since any such gap would need to be made up through funds other than those brought to the table by the developers and their respective plans.

"I also hardly see us as the goliath" as described in the press, he said, stressing (in clear response to the focus on Beam Development) that Gerding/Edlen was Portland-based, and staffed by Portland employees.

Beam Development

Peter Stark drew attention to the flexibility of the original Request for Proposals issued by PDC for the development -- meaning that it did not, in fact, demand or require big box retail. He argued that the Beam team's "understanding ... of the district" is why they did not include any such big box retailer in their proposal from the beginning. He described Beam as the "only team that really understands the Eastside".

"I feel that my vision," said Brad Malsin (owner and managing director of Beam Construction & Management), "enters into something that big box ... doesn't address." That something, he said, was connection to the community.

Referring to the initial findings of the evaluation committee, which were distributed at the start of the workshop but not discussed until later, Malsin added: "Our 'weaknesses' are actually our strengths."

We will come back to that point later, when we get to the evaluation committee's findings. During the work session, the Beam team was perched directly behind us, and the notion that what the committee had listed as the "cons" of the Beam proposal were actually seen by them as the "pros" of their proposal was overheard in conversation.

"We believe that the district is eclectic," said Stark, in response to the evaluation committee's findings that the Beam proposal lacked unity of design, and that the multiple architects and contractors might be more difficult to manage. The team, he said, "should represent different aspects of the design," and that the design should not take a single "monolithic" approach.

On the financial side, Malsin cited the team's "connections to the district" and referred to the letters of interest in Beam's posession as "reliable and verifiable". It was at this point that he announced that he now had enough such letters to account for 94% of the leasable space.

Stark offered the Commission a brief description of the "menu-driven" approach the Beam proposal includes, allowing each tenant to decide for themselves how much, or how little build-out they want as part of their initial lease.

Malsin, responding to the earlier GED presentation, said that the Beam proposal also includes "significant opportunity for ownership".

Turning to community benefits, Stark said that Beam Development's projections show the project would result in 1,849 family wage jobs.

"We're talking about a district that I have made my home," Malsin said. "I understand the Central Eastside." And what the district needs, he said, are family wage jobs.

Stark said that the Beam proposal would require $7 million in tax increment financing from the Central Eastside Urban Renewal Area, calling it a "small investment with dramatic results". Turning to the previously-mentioned 1,849 permanent family-wage jobs, Stark said that $7 million breaks down into investing $3,786 per job.

Beam's presentation also included a reminder to the Commission that theirs was the only proposal which took into account the Burnside Skatepark from the very beginning. We mention this partly because we always try to make sure we point out when the skatepark is mentioned, but also because it's a good example of our earlier argument regarding the importance of what each developer thought in the first instance was necessary to address.

Malsin ended the Beam presentation with a list of the top ten reasons PDC should select their proposal for the Burnside Bridgehead.

10) We clearly share the vision for the district
9) We provide the greatest range of uses and diversity
8) We understand the importance of local -- we are local
7) We know the district
6) We know the district
5) We have the capital
4) We have significant financial support
3) We can lease this project -- and have letters of intent for 94%
2) We can build this project
1) Beam Development has always thought OUTSIDE of the BIG BOX

Concluding, Malsin added of his team's proposal: "This is connection and this is collaboration."

Opus Northwest

Bruce Wood of Opus Northwest said he was going to offer a "little bit different presentation" than had been given by his competitors -- one that stepped back a bit, talked about experience, and discussed design specifics. And, he said, they would "talk about what it's going to take for this to be a successful project".

He began by saying that the resources available to Opus allow them "to do things others couldn't".

Wood stressed something that Opus had also stressed in written responses to the evaluation committee. Namely, that "this process that we're all involved in ... [is] just the beginning". He said that everyone is focused on these designs, but that after a developer is selected, "the design is going to change, because market conditions change."

While this is undoubtedly true, we feel it necessary to offer the opinion that Wood was stressing this particular point so much because Opus is trying to play catch-up with the alleged (at least as far as the public is concerned) front-runner, and attempting to counter the criticisms that his proposal appears to have left out a number of considerations.

Wood specifically made reference to the Burnside Skatepark, and the fact that the Opus proposal failed to take it into consideration. "That level of design will occur as you develop your design later," he suggested.

Here it's important to note what he did not say, and what to date no one has challenged him on publicly. Namely, that the RFP specifically required that the proposals be sensitive to adjacent uses, including the skatepark.

We don't happen to believe that failing to follow the Request for Proposals is something that the evaluation committee, PDC, or members of City Council should in turn fail to take into consideration.

In a hopefully-transparent attempt to explain why the Opus proposal, unlike the Beam proposal and to a lesser extent the GED proposal, offers no sense of just what tenants might occupy the development (especially since, theoretically anyway, Opus would be willing to ditch Lowe's), Wood said this: "If the demand is there, the demand is going to be there no matter who [you] pick."

Translation: Don't consider it a negative that one developer already actively went out to recruit tenants, to the tune of 94% of the leasable space, while all we could think of was naming which big box retailer to include.

Gary Larson, a partner and co-founder of BML Architects and part of the Opus team, gave a brief overview of some of their proposal's design elements. "Rarely," he said, "do you get a chance to aggregate five blocks together."

Larson described the Opus proposal, with its short stack of big box retail topped by a parkign structure, which produces a plaza/platform/podium level upon which the rest of the development rests. He cited what clearly is the strongest element of the Opus proposal, that being the "view corridor" along Couch through the development.

Wood said that you must "have great design" and a "development team that understands what's going on". He also argued, as he did in his original presentation, that Opus' use of its own capital would mean significantly less demand for other -- meaning public -- resources.

He then approached the big box debate. "We have not been wedded to a big box," he said, although Opus has yet to present any clear sense of the alternatives. He added that someone had suggested to him bringing to the work session a model of the development which included big box retail, which he could then smash with a hammer. "Maybe people would finally get the message."

We must interject here, in case the reader missed the petulance of that remark. Rather than respond to the opposition to big box by presenting specific alternatives, Wood instead has reduced himself to whining that people won't believe him when he says Opus isn't committed to including big box retail. Perhaps the reason why no one is taking that position seriously is the fact that Opus hasn't acted like their "we have not been wedded to big box" line is anything other than hot air.

Wood went on to reiterate something he has previously told the evaluation committee: That the project "needs an anchor".

"Without an anchor," he said, "it's not going to work." It doesn't have to be big box retail, he said, but without an anchor of some sort, the project cannot move forward.

You'll note, we hope, that this is merely more of the same that we've been hearing from Opus since their proposal first became public. They emptily proclaim that big box isn't necessary, but offer no alternatives. They claim that some other sort of anchor might be possible, but offer no suggestions.

This, in fact, is precisely why no one is taking their assertions that they don't have to include big box seriously, and why we, at least, suspect that their real intent -- by which we mean more of a lazy inertia than any outright maliciousness -- simply is to try to cajole their way into being selected, in part based upon these "big box not necessary" statements, only to then stick to this anchor argument, and then push for the idea that the best way to ensure an anchor is... big box retail.

Evaluation Committee Findings

As we type this, it is now nearly 2:00 AM. Meaning what? Meaning that we are going to leave the report on the initial findings of the evaluation committee until sometime this coming afternoon. Keep an eye on the Burnside Bridgehead page at PDC's website, however, because it's not inconceivable that before we get our next item written, they may have posted the committee's initial findings.

Of course, even if they do, we still have plenty of work session discussion of those findings, as well as our own inevitable commentary, to pass along.

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