Enormous development opportunity lies north of Vaughn waiting for a streetcar
By Allan Classen
Americans of old sought riches in Alaska, where the ground gleamed with gold.
Today, smart-money people in Portland still look north, though not so far. Just beyond Northwest Vaughn Street will suffice. That’s where property owners and developers see great opportunity in the alchemy of land-use law—turning cheap industrial land into treasured residential and commercial property by employing a magic word: rezoning.
A syndicate of local investors who scooped up the 22-acre ESCO property two years ago has big—though unspecified—plans for the area between Vaughn and Nicolai streets. The former heavy industrial sanctuary has given way to a wide array of commercial uses under the 2035 Central City Plan adopted two years ago.
Soon after the plan was enacted, the Portland Bureau of Planning and Sustainability took it a step further, considering an option that could produce 4,270 housing units where none are allowed today.
Meanwhile, the ESCO buyers have joined with other property owners to the east and south in support of a streetcar line through what is now a figurative wasteland between Vaughn and Roosevelt streets. They are willing to tax themselves through a local improvement district to underwrite construction of the rail line. Those costs pale beside the anticipated boom in land value.
The differential in land value between that designated as exclusively industrial versus residential or mixed-use, though difficult to quantify, has been estimated in the range of 300 to 400 percent.
Unico, a Seattle-based developer that bought Montgomery Park and the surrounding 18 acres a year ago, has no need for a zone change. Although its property is north of Vaughn, the site has long enjoyed a carve-out for housing that so far has gone unrealized.
That is about to change. Unico intends to build major apartment buildings, offices and retail spaces on expanses now devoted to parking around the monolithic 100-year-old landmark. Attracting so many people while kicking cars out would seem to call for a transportation solution of futuristic capacity, flexibility and efficiency. So the company is banking on the 19th-century urban transit technology known as the streetcar.
Even Portland Streetcar Inc.’s biggest backer, Executive Director Dan Bower, admits that rail transit provides only a small boost in ridership potential compared to buses. But streetcars beat buses every time as a marketing tool. And Unico has put streetcar imagery front and center from the first announcement of plans for its new acquisition.
“Everyone loves to have a streetcar coming to their new apartment building,” said Steve Pinger, a development consultant and neighborhood activist who has observed the unfolding development and streetcar plans for the “northern territory” for more than a decade.
Similar adoration is not poured upon the humble bus. Montgomery Park is currently well -served by the 77 and 15 bus lines, but buses seldom enter discussions of transportation solutions for the envisioned urban center.
Phil Selinger, a retired TriMet planner who now serves on the Northwest District Association Transportation Committee, does not consider streetcar the end-all to Montgomery Park’s transportation conundrum.
“The streetcar would seem ‘sexier’ than a bus, but it is not necessarily faster,” Selinger told the NW Examiner.
Furthermore, the favored streetcar route north of Vaughn Street would avoid the heart of the densely populated Northwest District.
“The proposed streetcar extension will miss the primary Northwest business district on Northwest 23rd and 21st avenues, misses a direct MAX connection and skirts the downtown area,” Selinger said.
Left the station
Nevertheless, a cliché often heard at neighborhood association meetings regarding the streetcar alignment is that the train has already left the station.
After years of exhortations from neighborhood leaders, the Portland Bureau of Planning and Sustainability at last began a public engagement process this year to consider the best streetcar route. A Montgomery Park to Hollywood (MP2H) Project Working Group that includes six Northwest District Association representatives has met twice and last month held a virtual open house.
Jen Macias, a Northwest District resident and business owner serving on the MP2H Project Working Group, said city staff are “just cherry-picking our comments to support their preconceived ideas.”
No research has been done on how various sectors of the community might be affected, she said.
Another NWDA representative on the Working Group, Steve Ramos, generally agrees with Macias’ critique. A visioning step should have come first, yet the streetcar alignment north of Vaughn Street was the only option presented to the group.
Ramos said that ideas deviating from the favored plan are dismissed and other concerns brushed aside.
Pinger, who also represents NWDA on the Working Group, draws the same conclusion about the citizen engagement process.
“It’s not truly advisory,” he said. “That comes through clearly.”
While all members are free to speak up, he believes their input “is not likely to have any impact on the outcome.”
Pinger is also dismayed by the absence of any current industrial district workers on the body: “Who speaks for them?”
Without knowing where workers live and how they get to their jobs, it is premature to apply a specific transportation solution, he said.
At the July open house, Greg Madden, a Working Group member and head of a family-owned manufacturer in the industrial area, delivered a message he has been repeating (futilely) for years:
“Replacing industrial-zoned land along the boundary of industrial sanctuary reduces the amount of well-paid jobs available to underserved folks in Portland and access to living-wage jobs to people with little or no college training.”
Madden said two of the three options BPS is weighing will only “lead to commercial and professional jobs and minimum-wage retail jobs while driving up industrial land pricing.”
NWDA representative Chuck Duffy also bemoaned the failure to assess the impact on current industrial workers. No such workers were included in the 13-member Working Group.
Money at the wheel
Pinger and other NWDA representatives have never gotten past the notion that the streetcar is driving public policy in the area, and that it does so primarily in service to the financial interests of major landowners, not the transportation and livability needs of the wider community.
“This is not so much a streetcar expansion as it is a zoning upgrade, a huge benefit worth hundreds of millions of dollars,” he said. “We wouldn’t have this streetcar if it weren’t for anticipation of wholesale zoning upgrades.”
Warren Rosenfeld, president of Calbag Metals on Northwest Nicolai Street and spokesperson for the group of ESCO buyers known as 1535 LLC, told the Examiner he has not calculated the magnitude of land appreciation.
“We haven’t actually done that,” he said. “We know it’s more.”
To his calculus, “If we add jobs, the whole community benefits. … It’s a bit of the rising tide lifts all boats.
“If we’re getting into the fights about this or that enhancement, it’s going to kind of miss the point.”
Although its 1535 moniker denotes the melting point of iron, Rosenfeld said the type of business most ready to fill the vacuum north of Vaughn may be an expanded Amazon distribution center, a hybrid form of business having similarities with retailing.
“It’s going to expand like crazy,” he said of online distribution services.
The irony of the 1990s fight to keep a Costco out of the Northwest Industrial Area is not lost on Rosenfeld. The industrialists who fought discount retailing in the area a generation ago may now be welcoming discount distribution.
Wagging the dog
Bower pushes back against claims that the streetcar is the tail wagging the dog. If Unico wants to emphasize the streetcar, that’s up to them, he said, but the company does not need it to gain city approval for its development scheme.
But he cannot speak long without returning to the virtuous cycle he sees in streetcars.
“Build a transit line and development happens around it,” he said. “Streetcar is unique in doing that.”
In contrast, buses have been serving Montgomery Park and the industrial area to the east for generations “without conversations about making this area work. Streetcar incentivizes the kind of development you would want to see happen.
“The entire neighborhood is in play now. We’re not building a transit system. We’re building a community.”
Others see that as the crux of the problem.
“They just keep avoiding that the issue is the increase in value for the property owners and everything else is secondary,” said Mike Stonebreaker, another NWDA rep on the Working Group.
Bower and the landowners may be right about the golden miracle they’ve uncovered in the land north. As for the extra traffic likely to flow through the residential neighborhood, the uncoordinated and perhaps compromised transit service in the district and family-wage jobs that may be lost, only time will tell.
Like prospectors of yore, few of whom hit the jackpot, there was no expectation that the winners would share their newfound prosperity with all. But buying a round or two at the bar was always a good gesture
Pinger asks: “Is it OK to grant these landowners triple the value of their land without a significant public benefit?”