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Milwaukie's downtown plan has its problems

A consultant hired by Metro said the plan may not be feasible

Despite years of planning, with visioning drawings of renovated buildings and tree-lined streets, the plan to revitalize Milwaukie's downtown core might be less feasible than many in the city had hoped.

According to a consultant hired by Metro, downtown's physical constraints may prohibit some larger developments, such as a grocery stores, that the consultant said are crucial aspects in enticing people to live in a downtown area.

Jerry Johnson, of Johnson Gardner LLC, said there is a 'statistical linkage' between certain amenities and the attractiveness of a downtown area.

'When you get into an area like the Pearl District where the achievable rate is $600 to $700 per square foot, you start to think that it's because of mixed use' amenities in the area, Johnson said. 'The belief is that if there's amenities like grocers, theaters, night clubs close by, people will pay more for housing.'

But Johnson said it's not just the presence of mixed amenities that draw people, but the nature of them. For instance, he said, if people are going to live in a downtown, one of the key services they want is a grocery store they can walk to. He also said that proximity affects cost, noting that the highest prices in the Pearl District are near Whole Foods on Burnside Street.

But his report didn't offer an optimistic outlook for Milwaukie.

'The big issue of course in Milwaukie - people look at alternate investment opportunities - because of your particular location you're a little truncated,' from Portland physically and from the prospect of expansion, Johnson said.

He said Milwaukie may not have a site big enough for certain amenities, such as a downtown grocery store, and that will affect rent, leasing and sale prices.

Johnson's report said the potential for such services is also limited because the downtown isn't large enough to support an extensive amount of people, limiting the potential customer base for such businesses.

Community Development Director Kenny Asher said the assessment isn't really new information, it's an objective analysis and a relative one, but it doesn't mean the downtown plans won't work.

'Real estate in this discussion really needs to be considered as a commodity that's bought and sold, that competes with other places,' he said, 'kind of a hard-nosed view of the way the space will trade in the face of other places.'

But Johnson said the effects could already be seen in the cost levels for residential space at North Main Village. The condos there are selling for $260 per square foot, but he said that based on construction costs and market trends, it should be closer to $350.

'Rent levels in the area are seen to be well below what is necessary to support mid-rise construction,' the report said. 'As seen in North Main Village, affordable housing receiving tax credits represent the most viable development form in the current market.'

Johnson said certain amenities may never be viable downtown, but that a 'mix of uses providing a similar range of services is possible over time.'

He recommended increasing the downtown population and making development, especially retail, visible to 99E to attract people passing through.

Johnson also said an incremental approach to enticing investment is the most feasible solution.

'You want to make the area more attractive so you can charge more for the area … You can develop that by generating activity downtown so it's a place people actually want to be,' he said. 'The problem is it's the chicken and the egg - you've got to get people interested in investing downtown,' but to do that you've got to get people downtown.

He said this could happen over time if the city builds interest incrementally - attracting lower-quality development, getting more people downtown, through that new dynamic building new and greater interest and investment and so on.

Asher said the city could catalyze the process by investing in public areas and private developments.

'If you invest in amenities - which is to say make a great place, which has the stuff people want to do - then you attract the people and the project evolves,' he said.

But Councilor Susan Stone was concerned at the comparative nature of the report.

'My concern with our downtown is it's a small space, and we need to be very choosey about what we put here,' she said. 'My concern is that looking at some of the plans on the table to densify - we need to be making downtown for the people who already live here … We're not the Pearl District and I have a concern that we're trying to be a mini-Pearl.'