Bridgehead project finally moves forward
Vision includes a new tech hub in old Burnside building
If all goes well, May should be a big month for Brad Malsin, the Portland developer who has made a name for himself by embracing the city's "reduce, reuse and recycle" ethos.
Malsin's company, Beam Development, is best known for turning aging, neglected buildings into energy-efficient small-business incubators. His best-known projects are the Eastbank Commerce Center, the Water Avenue Building and Olympic Mills, all in the central eastside industrial sanctuary.
Now the company is wrapping up work on the Globe Hotel in Old Town/Chinatown. It is being restored and remodeled into the new home of the Oregon College of Oriental Medicine.
"The college is a perfect fit for this neighborhood," Malsin says. "It is near Chinatown, near the Chinese Garden and along a MAX line, so teachers, students and clients can reach it easily."
As that work is being completed, Malsin is preparing to begin work on his next project: renovating the Convention Plaza building at the east end of the Burnside Bridge into a center for high-tech startup companies. Mayor Sam Adams dubbed it the "tech hub" in his recent State of the City speech.
Malsin's interest in the Convention Plaza building goes beyond his current plans. The building sits on several blocks of land the Portland Development Commission bought a decade ago to redevelop as the Burnside Bridgehead. At the time, the PDC envisioned the project as a large mixed-use development that would be a gateway from the east side to downtown Portland.
Malsin competed in 2008 to do the project, but PDC selected Opus Northwest, the local arm of a national redevelopment company, to be the developer. At the time, the PDC thought Opus was a better bet because of its longer track record and deeper pockets.
Then the economy tanked, Opus pulled out of the project and the property languished.
A few years ago, the PDC decided to demolish the Convention Plaza building to prepare the land for whatever would eventually follow. But Malsin argued against destroying it, saying it was structurally sound and could be redeveloped into a viable enterprise for much less than the cost of a new building.
The PDC relented and retained Beam Development as part of a team to help draft a new framework plan for the property that included keeping the building. After a year-long process, the PDC approved a plan that called for a phased development that includes the existing building, new live-work spaces and perhaps an office building.
In exchange for his work, Malsin was given the right to submit a proposal on any of the parcels. He chose the one with the building.
Was it sweet revenge? Malsin is more philosophical about the reasons behind his decision.
"Divine intervention" is how he explains it.
Despite losing the initial Burnside Bridgehead contract to Opus, Malsin has tapped the PDC to help finance some of his projects. An audit released earlier this month points to Beam Development as one of the top five recipients of economic development loans between 2006 and 2011, receiving about 6 percent of all loans made.
That's well below the Portland Family of Funds, an investment group that received around 18 percent, but ahead of about 200 other recipients.
"I don't apologize for the money I've received," Malsin says. "They're all loans that will be paid back. Each one is just a small percent of the total project cost. And all of the projects are serving a public purpose."
A home in the Globe
Michael Gaeta, president and chief executive officer of the Oregon College of Oriental Medicine, has no doubt Beam Development was the right company for his project.
"Their work has been excellent," Gaeta says during a recent tour of the building along the MAX line in Old Town at Northwest Couch Street.
Since it was founded in 1983, the college has operated from buildings in Southeast Portland that were not originally designed to house a school.
Interest in traditional Chinese medicine is increasing tremendously, says Gaeta, attracting more students to the school than it can handle. With enrollment reaching about 300 students and a clinic attracting thousands of patients a year, the time has come to expand.
Gaeta says the college wanted to move to a centralized location along a transit line. The empty Globe Hotel was perfect.
Built in 1911, the hotel most recently housed an import store and a short-lived nightclub. The PDC acquired the building for a new Portland Fire and Rescue headquarters a few years ago. But it has sat vacant since the city decided to remodel the existing downtown fire bureau headquarters instead.
"We looked at a lot of locations, but when Brad showed us the Globe Hotel, we knew it was right for us," says Gaeta.
Work started last June on the $16.4 million project. Since then Beam has gutted the building, brought it up to current earthquake building code standards, installed new concrete floors and built a fifth-floor penthouse.
Major work is scheduled to be completed by May, and the Oregon College of Oriental Medicine will open in its new home this fall.
When Malsin first argued that the PDC should save the Convention Plaza Building, he said it was a historic building.
The Convention Plaza building opened as the Ira F. Powers and Factory in 1925 and later became an appliance store and Sears Roebuck and Co. warehouse.
During World War II, it was converted into housing for local shipyard workers called the Power's Dormitory. After that, the building slowly evolved into low-end office space.
Malsin says the building will cost about $15 million. It will include a landscaped courtyard, stairs and wheelchair ramps along the sloped southern end to be called Couch Street Plaza.
The PDC is loaning Beam Development $2.3 million for the project, the value of the building and land. The development agreement calls for the loan to be forgiven in five years if he meets certain occupancy and other goals.
PDC officials say they are already negotiating with other parties for projects on most of the other parcels. Someone wants to build a marketplace with semi-permanent food and retail spaces east of the building.
Malsin hopes to build something else in the area -- the live-work spaces called for in the Framework Plan. Not coincidentally, that kind of project was included in his first proposal for the Burnside Bridgehead that the PDC rejected.
After the shakeout caused by the recession, Malsin thinks he might realize much of his original vision for the area.