photos - Benjamin Brink, The Oregonian
Suburban growth - The question for the Beaverton project is whether the market will ever catch up
Monday, August 06, 2007
DAVID R. ANDERSON
The Oregonian Staff
BEAVERTON -- The Round at Beaverton Central is either ahead of its time or a century too late.
Now that the developer is apparently in default on its loan -- the third failing of the 10-year-old, half-finished project -- many wonder whether multistory buildings of retail/office/condominiums were doomed to flop in the suburbs.
Even national advocates for transit-oriented development admit the Round has been a mistake, the wrong product in the wrong location, a misplaced Pearl District. They don't want a failure in Beaverton to taint other efforts in the Portland area or across the country, where projects in the Bay Area, Los Angeles and northern Virginia, to name a few, have succeeded.
The Round proves that mass transit -- in this case, MAX light rail -- can't turn a losing development idea into a winner, said Dena Belzer, president of Strategic Economics, an urban economics consulting firm specializing in transit-oriented development, based in Berkeley, Calif.
"This project is just hanging out there in the wind," Belzer said. "I think no individual project can transform an entire district."
Proponents say that's a reason that Metro and Beaverton should persevere and do more to support the Round. The city is looking for a developer to buy the 4.6-acre site of the former Westgate Theatre next to the Round and build more of the same type of development. That will create a destination, they say.
Backers argue for patience. They say that if developers and public agencies don't try something new, a timid market will never change. They point to Belmont Dairy in Southeast Portland and Kruse Way in Lake Oswego as projects ahead of their time that defied skeptics and ended up succeeding.
"It's part of a longer-term effort to redevelop what was once, and may again be, central Beaverton," said Ethan Seltzer, a Portland State University professor of urban studies and planning. "The market has a lot of work to do in that area."
With officials from developer Dorn-Platz refusing to comment, observers are left to speculate about the reason for the most recent bad news at the Round. Was it a bad idea, bad location or bad execution? Or has the project acquired a stink from early failures?
Carl Hosticka, the Metro councilor who represents part of Beaverton, likens the Round's latest lurch to a plane crash -- it's either "pilot error or a problem with the plane."
"Pilot error"
Hosticka, an advocate of such development around the region, is inclined to blame the developer. He has heard that Dorn-Platz causes a crisis and asks for government concessions to get out of the jam, he said.
But the Round had a history of troubles before Dorn-Platz became involved.
The first developer went bankrupt in 1999. Dorn-Platz took over the project just months before Sept. 11, 2001, and the following economic downturn. City officials in 2004 declared it in default of their agreement, seized a $500,000 bond and negotiated a new construction schedule. Four of eight planned buildings have been completed, but construction has come to a halt.
City officials say they have been told that Dorn-Platz has a new construction loan and hopes to settle the default case soon. Construction should resume by the end of the month, said Linda Adlard, the city's chief of staff.
But skeptics say the problem is more fundamental. With a seven-story parking garage and development that suburbanites aren't used to seeing, some say it's just the wrong idea for that location.
Gloria Ohland, a spokeswoman with the Center for Transit-Oriented Development, has visited the Round twice and cites two significant stumbling blocks: It's a complex mixed-use project that includes office space, when the office market is weak. And it includes structured parking in a city with vast surface parking lots.
"Those projects are much harder and more expensive to build," said Ohland, vice president of Reconnecting America, a national nonprofit based in Oakland that runs the center.
If anyone has the right to question the idea of the Round, it's Heather Humelbaugh.
She opened Urban Rhythms Coffee Co. in December 2005 at the Round, enamored of the idea that people could live and work in the same neighborhood as her coffee shop. It also helped to have a captive customer base in the students at Cambridge College, the folks working out at 24 Hour Fitness and the MAX riders.
Then Dorn-Platz took away the parking next to her shop to start construction of a fifth building at the Round. And nothing happened for months. Less foot traffic passes her door, and she doesn't know when, if ever, office workers from the new five-story building will come in seeking a latte.
Business is so slow, Humelbaugh says, she'll probably close the doors before her lease is up in 31/2 years. But she says she still believes in the Round. And she thinks it will only get better when the Westgate site opens.
"It's the up-and-coming thing," she said. "I think it will work eventually. I think in the future, it will be an awesome spot."
Problem with design?
Frankly, critics say, the Round cannot stand on its own as designed and is an indictment of the notion that light rail, instead of the marketplace, can spur development. The only way such projects can get developer interest, they say, is with big public subsidies.
John Charles, president of the Cascade Policy Institute, a libertarian-leaning think tank, said he has followed the Round for the past decade and estimates that government agencies have poured about $20 million into the project.
The idea that development will follow mass transit comes from the streetcars of the late 1800s and early 1900s, but doesn't work today, he said. "It's about 100 years behind the times."
Hosticka counters that all residential construction is subsidized. Newly urbanized areas such as Pleasant Valley and North Bethany will require heavy investments in roads, schools and other public infrastructure, he said. If the region is to accommodate growth, he said, he would rather see infill in places like the Round than in the middle of established neighborhoods.
Brokers who lease retail and office space in the Round remain optimistic. But they acknowledge the project has had a cash-flow problem. Empty storefronts and office space aren't helping pay for construction of the four remaining buildings.
The challenge has been getting tenants to move into a construction zone, said Steve Neville of New & Neville, who has been leasing retail space.
Although Sedgwick Claims Management Services, the anchor tenant for one of the new office buildings, backed out of the deal, it was because of construction delays, not a loss of interest, said Frank Huffman, a company spokesman.
Buzz Ellis, a principal in Pacific Real Estate Partners, the leasing agent for the office space, rejects the notion that new pockets of class A office space in the suburbs don't reflect the market. He points to Kruse Way and Lincoln Center near Washington Square.
"It's kind of the evolution of suburban office parks," he said.
And Hosticka is unapologetic that the market wouldn't have built the Round without government incentives.
"We're not necessarily trying to respond to a market," he said. "We're trying to lead a market."
David R. Anderson: 503-294-5199; davidanderson@ news.oregonian.com
http://www.oregonlive.com/news/orego...520.xml&coll=7
Prev
Linear Mode
