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Rebound Avenue

Recession-slammed 50th and Division finds new economic life


by: TRIBUNE PHOTO: JONATHAN HOUSE - When Betre Peter Tesfu opened an Ethiopian restaurant on Southeast Division and 50th six years ago, the neighborhood was hurting financially. Now its bracing for gentrification. When Betre “Peter” Tesfu opened a new Ethiopian restaurant six years ago off Southeast Division Street and 50th Avenue, friends said he was crazy. But Tesfu figured Division Street was “up and coming” and primed to be another Hawthorne Boulevard.

Boy was he right.

Now the explosive growth along Division — including a nationally recognized “restaurant row” between 30th and 34th avenues — is spreading east to 50th Avenue and beyond.

Back in 2009, when the Portland Tribune sought to chronicle how the city was coping with the Great Recession, we selected the 50th and Division area as an average Portland neighborhood, and a team of reporters fanned out to interview nearby residents, workers and merchants. Our findings: the largely working-class neighborhood was “stressed but surviving,” which became the theme of our four-part series published five years ago this month.

Now, follow-up interviews reveal that the 50th and Division area is bracing for gentrification, like several other lower-profile neighborhoods on Portland’s east side.

“It’s a nice neighborhood; I think people are discovering that,” says Shawn Gordon, one of the residents profiled for our 50th and Division series.

There’s more vibrant sidewalk life in the area these days, thanks in part to á la carts Food Pavilion, a pod of 15 food carts that opened in 2011 one block south of the intersection. 

For the first time, Gordon now can walk to hear live music near his house: at á la carts and at the Landmark Saloon, a country bar on Division and 48th.

Since the recession eased, restaurateurs, retailers and apartment developers are increasingly busting out beyond Cesar Chavez Boulevard, which had long served as an invisible eastern boundary for Portland’s hip inner east side.

Restaurant row expanded eastward when Woodsman Tavern opened on Division and 45th, followed by the Japanese steakhouse Tokio Table on 48th and Division, and Mi Mero Mole, a Mexican eatery created by the “Zuke” of Kenny and Zuke’s Delicatessen, on Division just east of 50th.

When used clothing retailer Bearly Worn closed its doors on Division and 50th, Green Zebra Grocery announced it would open its second store there. The startup company, which bills itself as a healthy convenience store, was founded by former New Seasons CEO Lisa Sedlar. New Seasons has a reputation for luring more upscale residents where it opens, and raising property values.

“We saw that as one of the hottest corners in the city,” says Sedlar, who hopes to open the 50th and Division store by next spring. “I would say it was an average Portland neighborhood five years ago.”

Though construction hasn’t begun, promotional signs at a new condo project a few blocks to the south already tout the location near Green Zebra, along with the Woodsman and other attractions.

“Honestly, this neighborhood is so ready for that type of store,” says Linda Gramlich, co-owner of á la carts.

The frenzied development of four-story apartments along inner Division Street also is spreading east of Cesar Chavez Boulevard.

Aaron Jones, formerly with Gerding and Edlen, one of the city’s premier developers, is completing a 74-unit apartment building on 48th and Division. The four-story building will include a “name” coffee shop chain that’s new to Portland, Jones says.

He also is purchasing property on the northwest corner of 50th and Division, site of a transmission shop and the popular Taqueria Los Gorditos burrito stand. Word on the street is that Jones hopes to develop a similar four-story multifamily building there, though he says it’s too soon to talk details.

“I’ve always liked that neighborhood — upper Division,” Jones says. “It’s going to grow quickly and part of it is the projects we’re doing.”

From recovery to gentrification

by: TRIBUNE PHOTO: JONATHAN HOUSE - Ed MacGregor, who operates Year of the Fish at a la carts Food Pavilion, worries the site could get redeveloped, displacing the popular food cart pod. Back in 2009, Gordon was out of work for months after getting laid off from his longtime job as a department store shoe salesman. Now he’s back to work selling arch supports.

Bryan Daniel, another resident profiled in our Division and 50th series, had lost his job lifting and stabilizing homes. He too is back is back to work in his old field.

Some businesses near 50th and Division didn’t survive the Great Recession. In addition to Bearly Worn, the Blue Pig and Bay Leaf restaurants closed down, their spots filled by Tokio Table and Mi Mero Mole.

People in the neighborhood clearly have more disposable income now, Gramlich says. “I think that it’s a pretty sought-after neighborhood now,” she says. “I think it’s pretty healthy.”

Portland city planners say the down side of gentrification comes when residents or businesses are involuntarily forced out of a neighborhood. As property values rise, some businesses and renters can’t afford the higher rents. Others are tempted to sell their property for much more than they paid, even if it means their building gets demolished.

A single home was torn down to make way for the 12-condo Richmond Commons project a few blocks south of Division on 50th. Each unit there boasts three bedrooms and 3.5 bathrooms.

“It was a really cool old house up on a hill,” says Ed MacGregor, who runs the Year of the Fish food cart at á la carts. “They took the whole hill out; they leveled the block.”

Two other houses were torn down a few blocks north of Division and 50th, where an old paradox walnut tree was threatened by a proposed 14-unit multifamily project. When neighbors and environmentalists protested, the developer agreed to save the tree and put in 12 rowhouses

instead.

Home prices and apartment rents have risen sharply around Division and 50th since 2009, as they have in much of Portland.

Homes that sold five years ago for $300,000 now sell for $500,000, Tesfu says. A one-bedroom apartment in his building on 50th rented for $550 five years ago, but now fetches $850.

Even Franklin High School, a largely working-class school a few blocks southeast of 50th and Division, is getting a makeover. In the fall of 2015, students will be moved out for a couple years while Franklin gets remodeled. In recent years, affluent Mount Tabor parents — many of whom formerly sought transfers so their children could attend Cleveland or Grant — are now sticking with Franklin, school officials say.

Daniel, who is living in the same house where he grew up, says more architects and engineers are moving into the neighborhood, along with other professionals.

MacGregor says he sees a lot of families come to the food carts, but also “lots of ink — people with tattoos.” That suggests a younger, trendier crowd is discovering the neighborhood or moving in.

After a handful of Portland food-cart pods closed as property owners pursue more lucrative redevelopments, MacGregor worries á la carts could be next.

Gramlich says she and her husband originally discussed building condos on their property along 50th, but when the condo market tanked during the Great Recession they opted to put in food carts instead. Now some vendors and outsiders have asked if they might entertain other uses of the property.

“We’re kind of good with what we’re doing right now,” she says.

However, she can’t guarantee anything long term, especially if the city changes its regulations. “Five years from now, I don’t know,” Gramlich says.

by: TRIBUNE PHOTO: JONATHAN HOUSE - The rapid influx of four-story apartments, restaurants and other developments that have recast lower Division Street are now spreading east to 50th Avenue and beyond.

Poverty growing

Sometimes rising tides don’t lift all boats. About 8.7 percent of the residents living within a few blocks of 50th and Division were living in poverty in 2012, according to the American Community Survey by the U.S. Census. Surprisingly, the poverty rate was only 1.5 percent in 2009.

There also has been a noticeable drop in the share of residents who own their own homes, likely a result of the Great Recession and the subprime mortgage fiasco that triggered it.

In American Community Surveys of the blocks around 50th and Division from 2005 to 2009, 65 percent of residents owned their own homes and 35 percent rented. In surveys conducted from 2008 to 2012, 54 percent owned their own homes and 46 percent were renters.

The data was culled from Census figures with the help of Uma Krishnan, a demographer with the city Bureau of Planning and Sustainability.

The immediate neighborhood around 50th and Division also is getting more diverse.

Only 11 percent of residents in the 2005-09 surveys were Latino or nonwhite, compared to 23 percent in the 2008 to 2012 surveys. The area has attracted a smattering of African-Americans in the past few years, while the share of Hispanics jumped from 2 percent to 7.2 percent and the number of Asian descent jumped from 6.2 percent to 10.3 percent.

A mixed bag

With the addition of Green Zebra, the 50th and Division area will become more like the “20-minute neighborhood” that Portland city planners promote, where basic necessities are within a 20-minute walk or easy bike ride, Jones says.

His apartments will target renters wanting to be close to the amenities of inner Division, but live in a quieter setting. Units will be smaller and cheaper than those going up in inner Division, he says: 400 to 550 square feet, with rents at $875 to $1,095 a month, compared to $1,275 to $1,570 on inner Division.

While there’s talk in the neighborhood that his second project will force out Taqueria Los Gorditos, Jones says that’s premature. He even talked to the owners about locating where the coffee shop is going in, he says.

Sedlar says if she would have opened a Green Zebra in the neighborhood five years ago, it would have been too soon. But she doesn’t see the neighborhood character changing much.

“It still has its real cool funky vibe, and that’s never going to change,” she says.

Sedlar concedes Green Zebra could contribute to gentrification and rising property values, but notes it’s much smaller than a New Seasons.

“I think it’s possible we will have that effect, but maybe not quite as much,” she says.

Gentrification is a “two-sided coin,” she adds. “If you’re a landlord, you can get a little bit more for rent. When it comes time to sell your house, you’ll get more money for it.”

And the neighborhood can seem more vibrant and safer for residents, she says.

In past years, says inner Southeast resident Ralph Coulson, Cesar Chavez Boulevard was a clear dividing line. “Maybe in 2009, 50th was one of those dividing lines,” he says, but now that’s fading. “I think it basically bleeds into Mount Tabor now.”

Marty Stockton, a city planner who focuses on Southeast Portland neighborhoods, predicts that the eastward surge in redevelopments and new projects on Division is likely to end around 50th Avenue.

But Sedlar, Jones and Gramlich, who have all invested considerable sums in the 50th and Division area, expect the wave of redevelopment will eventually extend all the way to 60th Avenue, via infill projects, remodels, demolitions and rezoning.

Down the road, Stockton says, Holgate Boulevard and Gladstone Street may be the next sleepy main streets in Southeast Portland to get bustling redevelopments.


by: TRIBUNE PHOTO: JONATHAN HOUSE - Shawn Gordon went back to school to get retrained when he was laid off during the Great Recession, but wound up getting work in his old field.

'I have to be pretty frugal, but I'm doing pretty good'

Shawn Gordon makes less money than before the Great Recession, but he’s out of debt now and in better spirits.

“I have to be pretty frugal, but I’m doing pretty good now,” he says.

Back in 2009, when Gordon was profiled for the Tribune’s 50th and Division series, he had lost his job of nearly two decades as a department store shoe salesman and piled up $19,000 in credit card debt. His unemployment checks left him only “six bucks a day for soap and food.” Gordon vowed then to earn his GED and perhaps get some technical training in computers or electrical work.

Gordon wound up taking an online class at Brigham Young University to get the final credits needed to earn his high school diploma — at age 40. Then he enrolled in a yearlong program at Columbia Tech Center in Vancouver, Wash., to get trained for high-voltage electrical work.

That didn’t pan out for him when he failed to nab one of 12 apprenticeship positions from among 800 applicants.

So Gordon went back to work as a shoe salesman at Macy’s, and later moved to his current job selling arch supports at Good Feet. He says he’s “inching up” to his former pay level before the economy tanked.

Gordon also completed deck repairs to his house on Southeast 51st Avenue near Division Street so he could qualify for a home refinance loan. About a year ago, he finally paid off his credit card debt and the $10,000 cost of his yearlong training.

Gordon likes the changes he’s seeing in the neighborhood, especially the new food carts a block away. For the first time, there's now live music in walkable distance. At least twice a week, live bands play at the Landmark Saloon, a relatively new “country bar” on Division and 48th.


by: TRIBUNE PHOTO: JONATHAN HOUSE - Bryan Daniel says the trauma many experienced during the Great Recession helped make him, and his neighborhood, stronger.

'We survived and prospered from it'

Back in 2009, Bryan Daniel was jobless for the first time in his life at age 45.

A skilled concrete foreman specializing in lifting and stabilizing homes, Daniel was laid off when demand plummeted.

During one bleak week of job hunting, he applied for 50 jobs with no takers. When Daniel was profiled for the Tribune’s 50th and Division series, he had just started a blog about home construction projects, hoping to leverage that into side jobs.

He was unaccustomed to so much change in his life, and still lives in the house where he grew up, taking care of his ailing mother.

“You had to reinvent yourself a little bit; it was time to start doing that,” Daniel says. “It really opened my eyes as far as being resourceful.”

He strung together some small home-repair jobs, which carried him for several months. But he still wound up being out of work a year and a half.

“I did feel myself getting into a depression a little bit,” Daniel says.

So he talked to a local pastor, who helped him see he wasn’t alone. That helped a lot, he says. It also helped to stay connected with family, friends and neighbors.

About three years ago, a job opened in his old field, working for Concrete Lifting Solutions. But the first year and a half or so, there was only enough work to keep him on the job 10 to 20 hours a week.

Daniel decided to invest in a portable saw mill to start a side business. He turns firewood into tables and shelves.

Now Daniel is back working full time, on top of his side business.

Daniel likens what his neighborhood went through in the Great Recession to natural disasters that afflict the Midwest.

“It’s our own type of disaster that we learned to live through, and it was a disaster emotionally and financially,” he says.

“I do believe we’ve survived and prospered from it.”


by: TRIBUNE PHOTO: JONATHAN HOUSE - Despite its funky upstairs location, Bete-Lucas Ethiopian Restaurant is thriving off 50th and Division. Co-owner Betre 'Peter' Tesfu and his wife are looking for sites to open a breakfast cafe.

'Now my answering machine is full every day'

Friends told Betre “Peter” Tesfu he was crazy six years ago for opening a new Ethiopian restaurant in the depths of the Great Recession, and for choosing a funky upstairs locale on 50th Avenue south of Division.

But Tesfu, when profiled for our 2009 series, said Division was “up and coming” and primed to be another Hawthorne Boulevard, and that people still would pay for good food despite the hard times.

He was right on both counts.

Five years ago, if Bete-Lucas Ethiopian Restaurant sold 1,500 meals that was a good month, Tesfu says. Now he’s routinely selling 1,500 to 2,200 dinners a month, plus takeout orders. He and his wife are scouting for a second site to open a breakfast cafe.

Five years ago his building was in foreclosure, but Tesfu couldn’t swing a deal to buy it. Bankers wouldn’t talk to him then.

“Now my answering machine is full every day — do you want to borrow this? What can we do to help you expand?”

Division was “like a toddler learning to walk,” back in 2009, Tesfu says. Now it’s a “grown-up adult; it has a voice of its own.”

Though the neighborhood around 50th and Division clearly is gentrifying, Tesfu says, he doesn’t think current residents are leaving. Rather, there’s an influx of newcomers into new apartments and condos.

Tesfu is rather proud that he hasn’t raised his menu prices since he opened, though some of his peers say he should. “Peoples’ living wage hasn’t drastically increased,” he reasons. The one-bedroom apartment in his building rented for $550 five years ago, but now fetches $850. Houses in the neighborhood selling for $300,000 five years ago are now going for $500,000.

“Whose income has gone up that high?” he says.


by: TRIBUNE PHOTO: JONATHAN HOUSE - Ace's Quick Cash, a pawnshop on 50th and Division, isn't as profitable as it was during the Great Recession, says co-owner Dennis Jenkins.

'I'm not doing as well as I was five to six years ago'

The neighborhood around 50th and Division seems more yuppie than it was five years ago, but Dennis Jenkins isn’t seeing it among his customers at Ace’s Quick Cash.

“People are always having trouble paying their mortgage and paying their rent. I don’t think it’s any better,” says Jenkins, co-owner of the pawnshop at 4916 S.E. Division St. since 1992.

Now he’s seeing more customers who need money than he did five to eight years ago, and fewer coming in to buy things like chainsaws.

He’s still seeing the same number of customers, but the pawnshop business is tougher. People now pull out smartphones inside the store to compare his prices on laptops, bicycles and other goods to what they might pay online. That has forced prices down so he can remain competitive.

“I’m not doing as well as I was five to six years ago, 10 years ago,” Jenkins says. “I’ve had to change my lifestyle to keep my doors open.”

Customers selling their gold jewelry continues to be a hot trend, he says. But the market has plummeted for power tools, especially chainsaws.

“Five to six years ago, they were one of my best sellers,” he says. “Now they’re one of my worst sellers.”

It’s gotten so bad that he may get out of buying and selling tools.

He’s not sure why that’s the case, but says pawnshops tend to be lagging indicators. It may take a year or so to reflect changes from a sagging economy, or an uptick during an economic recovery, he says.

There’s a lot more foot traffic on Division than there was five years ago, Jenkins says, which he attributes to the new food cart pod on 50th Avenue. But he worries the city is allowing too many apartments on Division with little to no parking.

“My customers drive,” he says. “It’s almost like the city planners are trying to force cars out of the city.”