Vanport Square tries new approach: pride in ownership
Portland - Instead of an anchor tenant with leased shops, the mall on Martin Luther King Jr. Boulevard is owner-occupied
Friday, January 25, 2008
ERIN HOOVER BARNETT
The Oregonian
Just three years ago, Vanport Square seemed hopelessly stalled. The city-backed shopping center project, a linchpin on Northeast Martin Luther King Jr. Boulevard, had lost another anchor tenant and significant steam.
But Thursday, developers Jeana Woolley and Ray Leary stood grateful and victorious before more than 150 project participants and well-wishers, celebrating the grand opening of their gleaming 42,000-square-foot building at 5225 N.E. Martin Luther King Jr. Blvd.
The project is significant for its high-profile presence on a long-sagging boulevard but even more so for the creation of the wealth it represents. Vanport Square is owner-occupied, not leased. So far, 14 of its 16 spaces are sold or reserved. Eight of the 14 business owners are minorities, including five who are African immigrants or African American.
The project's turnaround came when the developers, both African American, abandoned the conventional approach of an anchor tenant with smaller, leased shops and reclaimed their original vision -- and their community's highest hope -- of owner-occupied spaces.
"It was by virtue of running out of conventional options that we tried something revolutionary and it worked," said Leary, a Jefferson High School graduate. "We came through tremendous odds, and public opinion was convinced we were dead on the line. . . . But we never looked down at the water."
The project's roots date to the Vanport shipbuilding community. African Americans settled there in the 1940s before the 1948 flood -- and discriminatory real estate practices -- pushed them into inner North and Northeast Portland. By the 1980s, frustrated by disinvestment, residents pushed for the Albina Community Plan. The plan called the Vanport Square site crucial to the boulevard's renewal.
The Portland Development Commission in 2001 chose Leary and Woolley, in partnership with heavy hitters Gerding Edlen Development Co., to transform the old Marco Manufacturing building and surrounding land into a commercial center.
The project required $6.8 million in taxpayer money and $2 million in federal tax credits purchased by Wells Fargo Bank. By comparison, the city spent about $8.5 million in property tax revenues to help build the tram.
Vanport Square business owners received loans at less than 1 percent interest for the first 10 years to buy their spaces. The lender was the Portland Family of Funds, which sells the federal tax credits. Sales prices for the units, however, were close to market rate at $266 a square foot, according to the commission's project manager. Each business must build out its space.
Leary credited Mark Edlen for lending the clout to get and hold the commission's attention.
Gerding Edlen recommended the conventional leased approach. But when one anchor tenant after another fell away, Leary and Woolley parted with Gerding Edlen and revisited their original condo-style approach with a new consultant, Jeff Sackett.
The building is opening on a significantly changed boulevard, thanks in part to the market but also the development commission. Four other PDC-supported projects have been or are being built, though some are struggling to fill spaces. Vanport Square's second phase, anchored by a major fitness club, is expected to break ground this summer.
Leary told Thursday's gathering that amid the many new residents in this changing neighborhood, Vanport Square will stand as a reminder of the Vanport community.
"Their historic roots are the shoulders we stand on," he said.
For business owner Mohamed Yousuf, who rented space for his Horn of Africa Restaurant for 11 years, Vanport Square is the realization of a dream.
"My wife and I were working hard, and we achieved our goal," Yousuf said. "I'm so excited."
Erin Hoover Barnett: 503-294-5011;
ehbarnett@news.oregonian.com
http://www.oregonlive.com/business/o...830.xml&coll=7
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