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Public's bucks give builders a boost

Want a new WPA? Rose City offers a few good examples
by: CHRISTOPHER ONSTOTT The stalled Park West Tower in downtown Portland is the most visible symbol of the slowdown in private construction projects caused by the recession. No date has yet been set for restarting work on the project next to Directors Park.

Some Occupy Portland protesters are calling for a large-scale public jobs program to put Americans back to work.

'BUILD AMERICA CREATE USA JOBS,' reads one sign at the protest camp a block from City Hall.

'WPA NOW! REAL REFORM,' reads another, referring to the federal Work Projects Administration program that created jobs during the Great Depression.

Ironically, such a program would look a lot like Portland. Here, nearly every major construction project in the past few years has been funded with public dollars or by nonprofit organizations that rely on public support.

'Good-sized private sector projects have been few and far between for the past three years,' says John Mohlis, executive secretary of the Oregon Building Trades Council. 'At times like these, government needs to build infrastructure to put people back to work.'

One publicly funded project nearing completion is the rebuilding of Southwest Moody Avenue. The north-south transportation corridor in South Waterfront is being raised and realigned. The project, which began in January, includes, a new two-way street and new two-way tracks for the Portland Streetcar. The new street is scheduled to open Nov. 1. The cost of the project is about $51 million, with more than half coming from the federal government.

The street work is related to the much larger Portland-to-Milwaukie light-rail project. Moody was raised to allow the coming MAX line from downtown to cross the transit bridge being built over the Willamette River near the Oregon Museum of Science and Industry. That project is budgeted at $1.49 billion, with all of the money coming from federal, state, regional and local governments.

Even the largest privately funded construction project has a public connection. When it is completed, College Station will be Portland State University's newest student resident hall. The $66 million project is being financed and built by American Campus Communities, a Texas company that specializes in student housing projects. The 978-bed tower is also being built at the southern terminus of the new downtown MAX line. PSU will lease the housing once it is built.

By coincidence, the largest project funded with federal stimulus money in Oregon overlooks the Occupy Portland camp. It is the $139 million down-to-the-girders renovation of the Edith Green-Wendell Wyatt federal office building. Financing came from the $787 billion American Recovery and Reinvestment Act approved during President Obama's first year in office.

Local residential and commercial real estate markets may finally be showing signs of life, however, according to permits filed with the city's Bureau of Development Services. Preliminary work is under way on several private projects, according to spokesperson Ross Caron. They include two mixed-use buildings in Northwest Portland, an apartment building next to the Hollywood Theater, the proposed remodeling of the Safeway store on Southwest Barbur Boulevard and the planned renovation of the downtown Galleria by the Target retail chain.

'That's more activity than we were seeing a few years ago,' Caron says.

Stimulus funding

During much of the real estate boom that ended in 2007, Portland was bustling with private development projects encouraged by public funds and incentives. For example, construction of the westside Portland Streetcar line helped support billions of dollars in private investment in the Pearl District, which was also encouraged by city urban renewal spending and property tax breaks.

Urban renewal spending also helped lure private investors to South Waterfront, where condominium towers sprouted in the mid-2000s. Some privately funded housing and commercial housing projects were also built outside of urban renewal areas.

When the economy crashed, private funding for such projects nearly dried up. Just about the only big privately funded project in the region is the new fabrication plant Intel is building in Hillsboro for about $3 billion.

Those types of big projects are hard to find in Portland, where the slowdown is perhaps best characterized by the stalled Park Avenue West Tower. TMT Development stopped work on the $170 million office building at Southwest Park Avenue and Yamhill Street after completing the underground parking garage in early 2009. An attempt to restart the project by signing the Portland Development Commission as a tenant fell through when rent increases proved too high for the public agency.

One major private office building project that continued after the real estate bubble crashed was saved by federal stimulus spending. The First and Main Building at 100 S.W. Main St. had no tenants when it was completed in 2010. But now most of it has been leased by federal agencies forced to move out because of the Edith Green-Wendell Wyatt Federal Building renovation. Those making the move include two units of the Internal Revenue Service, the Drug Enforcement Administration, the Veterans Benefits Administration, and Armed Forces recruiting offices. Some are expected to stay after the renovation project is completed.

Keeping projects going

Planning started well before the economy tanked for the public and public-private projects completed during the recession. Great effort was required to keep some of them on track.

A good example is Bud Clark Commons, formerly called the Regional Access Center in Old Town. The $49 million project opened in June 2011. It includes housing and services for low-income people, including the homeless. The project was funded by a mix a federal, state, city and nonprofit partners. Housing Commissioner Nick Fish had to work hard behind the scenes to keep the project on track after a legal challenge to the urban renewal area that includes Old Town was resolved.

Fish also worked hard on the affordable housing project in South Waterfront that is under construction. He was forced to delay the project for more than a year after an earlier finance package fell apart. Now the $50 million Tamarack mixed-use project is scheduled to be completed next year.

Mayor Sam Adams worked for years to help the Vestas wind turbine company build a headquarters in town. His efforts paid off when Vestas agreed to a $66 million remodeling of the former Meier and Frank Depot Building in Northwest Portland, a project heavily supported by state and local funds.

Not all projects stayed on schedule, however. Those delayed include renovation of Centennial Mills and the redevelopment of the Rose Quarter, including the Veterans Memorial Coliseum. Oregon legislators also question the level of private support for the Oregon Sustainability Center, a joint Portland-Oregon University System project near Portland State.

Several major projects are continuing, including the eastside Portland Streetcar extension, a MAX line that will connect Portland to downtown Milwaukie and the first phase of the Oregon Health and Science University's satellite campus on 26 acres in South Waterfront area donated by the Schnitzer family. Ground was broken recently on the campus' first structure, the Collaborative Life Sciences Building being constructed by OHSU and the Oregon University System, including Oregon State University and PSU. The $295 million building will be at Southwest Moody Avenue and Porter Street, the future road that will lead to TriMet's new transit bridge.

The fate of the biggest public project is still up in the air, however. Planning is still under way on the Columbia River Crossing, estimated at about $3.6 billion. The Oregon and Washington legislatures must approve early funding next year for the Intestate 5 bridge, freeway and transit project to remain on schedule.