Housing project replaces motel on Interstate Avenue
Portland Business Journal - by Wendy Culverwell Business Journal staff writer
The proverbial dirt is flying on North Interstate Avenue, where the old Crown Motel is giving way to a new apartment project designed to accommodate lower-income families.
Demolition crews finished tearing down the 19-unit Crown Motel at 5226 N. Interstate earlier this month. Walsh Construction soon will begin construction of Patton Place Apartments, a $12 million, five-story mixed-use project with three-bedroom units and space for street-level retailers.
It's been a long time coming for Tri-Met, which bought the Crown Motel in order to spur redevelopment along the Yellow MAX line, and for Reach Community Development, the private nonprofit developer selected for the project.
When complete, Patton Park will offer 54 apartments priced to serve families earning 60 percent or less of the median family income for Portland, or $40,750 for a family of four.
TriMet bought the Crown Motel in 2005, paying about $908,000 for the property, which was built in 1959.
The regional transit agency found itself playing the role of urban renewal agency in 2004, after the MAX Yellow Line opened ahead of schedule and under budget. The Federal Transportation Agency agreed to let it spend surplus money in neighborhoods around the stations. The decision swelled its "station area" budget to nearly $4 million, from about $500,000.
That gave TriMet a mission and the resources to invest in the neighborhoods around the new light rail line.
Jillian Detweiler, development manager of TriMet, said the Crown Motel emerged quickly as a contender for redevelopment since it is across the street from Patton Park and is near Killingsworth Station.
Both are critical amenities for low-income renters, families in particular.
Importantly, the Crown had a willing seller, unlike many of the other motels along North Interstate. TriMet and neighbors agreed the property should be used to bolster affordable housing while bringing more retailers to the district.
Ten developers, both for- and not-for profit, bid on the Crown redevelopment project. Reach offered the winning mix of larger units, retail space and a solid operational history that appealed to TriMet.
"Reach was selected not just because of their demonstrated ability to build good buildings, but because they continue to own their buildings and they support their residents with good services," Detweiler said.
In March, Reach bought the property from TriMet for $300,000, a discount price that reflects the public purpose mission to provide rental units at below-market rates.
Reach immediately set out to demolish the Crown Motel, and anticipates a completion date of Feb. 9, 2009, for the full project, designed by Sera Architects.
It took a complex mix of loans, tax credits and subsidies to make Patton Park Apartments a reality and it was all the more complicated by diminished demand for tax credits since many traditional tax credit investors don't have profits to tax.
Enterprise Portland, the local arm of Enterprise Community Investment, provided $3.2 million in equity, backed by federal low-income housing tax credits. Kate Allen, director of Enterprise Portland, said getting the project took intricate negotiations, but the value of the effort paid off.
The project also includes a construction loan by Bank of America that will become a $3.3 million permanent loan, a permanent loan from the Network for Oregon Affordable Housing, and $4.4 million from the Portland Development Commission. Regional agency Metro loaned $365,000 and TriMet contributed $190,000 in addition to the discounted real estate.
"We've all had to do some real stretching to make the finances work for this," said Enterprise's Allen.
Enterprise finds for-profit investors to buy tax credits awarded to groups such as Reach. Finding those kinds of investors is tough in a market where financial institutions tend not to have an excess tax problem.
The Patton Park Apartments will consist of 4,500 square feet of commercial space at street level, with four floors of apartments.
Twelve three-bedroom units are being supported by the Housing Authority of Portland via federal Section 8 housing vouchers.
As for the impressive Crown Motel sign that once stood sentry over North Interstate?
It was removed on March 17, but definitely is not forgotten.
The nonprofit Mid-Century Modern League arranged for Ramsay Signs Inc. to store it for a year while supporters locate a permanent home and raise the $35,000 to $40,000 cost of restoring the soaring neon fixture.
Why bother?
Alyssa Starelli, the league's leader, called it an unusual installation that reflects Interstate's history, as part of the highway leading to the Columbia River crossing. The avenue is still dominated by 1950s-era motels marked by flamboyant signs. The surge of public interest in the Crown sign's future convinced her and others who love mid-century design to attempt to preserve it.
"Interstate is undergoing so much zone changes, if we don't save the signs, there will not be anything left," she said.
wculverwell@bizjournals.com | 503-219-3415
http://portland.bizjournals.com/port...ml?t=printable
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