UPDATED 9/26/2011
With the deadline for a development agreement approaching, the much-publicized Centennial Mills redevelopment faces bureaucratic difficulties. An April directive from the Portland Development Commission (PDC), which owns the property, would require the project’s developer, LAB Holding, LLC, to lease at least 50 percent of the property to tenants in “traded sectors” and newly identified industry clusters.
Behind the PDC’s instruction is a desire for the project to create more jobs and to showcase Portland to the rest of the country and the world. PDC’s logic is that restaurants can certainly be successful, but large-scale manufacturers and distributors will be more profitable, create more jobs, and spread the Portland brand.
Patty Gardner, co-chair of the River District Urban Renewal Advisory Committee, says that PDC’s goal is “exponential growth.”
“It’s like a farmer making a pear,” she says. “The guy who makes the brandy makes a lot more money off the pear. It’s exponential growth that gets the name of Oregon and Portland out wider.”
While the PDC directive does not require radical changes to the Centennial Mills plan, LAB Holding must make some significant adjustments to its proposal, which was initially slated to primarily feature restaurants and Portland-based retailers. Perhaps most importantly, LAB must make the changes before the June 30th development agreement deadline.
“It doesn’t have to be a drastic change,” says Gardner. “But they have to make sure that they can make the two sides happy, and that just takes time. Development takes time in general.”
Steven Shain, River District Urban Renewal Manager for the PDC, feels that the situation is not controversial like some have suggested. “I don’t think it’s taken a turn. I think that’s been mischaracterized,” he says. Shain insists that the PDC did not suddenly change the requirements of LAB Holding’s design and that long-term goals were spelled out in Portland’s Economic Development Strategy released in 2009. “It’s really part of the dynamic of negotiation,” he says. “Things aren’t just static for a long period of time, and then we say, ‘by the way, you’ve got a month.’”
Complicating matters is the fact that the PDC directive was made without the sort of public process that guided the initial planning. Some blame has been placed on PDC Executive Director Patrick Quinton, who began his tenure February of this year.
Gardner has been critical of the late timing of the leasing requirement but does not feel that the project is a lost cause. Because “traded sector” can be interpreted so many ways, Gardner says, LAB Holding may be able to adjust its plan in time. “There’s a lot of room there,” she says of the new requirements. “I think that it just takes some creative thought.”
Traded sector businesses are those that produce goods that are sold outside of the greater Portland area. Industry clusters are markets in which Portland has been found to have a competitive advantage, including clean technology, sustainable industries and athletic and active wear.
In a recent NW Examiner article, Quinton insisted that PDC “[hasn’t] in any way changed the development plan for the project.” Instead, he says, PDC is “asking [LAB Holding] to ‘tenant’ the building in a certain way.”
Shain echoes Quinton’s sentiment. “PDC is putting a substantial amount of money into this project,” he says, “and part of that is the ability for us to ask them to meet our economic development strategy.”
LAB Holding, members of which could not be reached for comment, has been mum on its plans going forward. The firm could potentially refine its plan to meet the PDC requirements or back out of the project altogether. There is also a possibility that the development agreement deadline will be extended to allow for a more thorough planning process.
Regardless of its next move, LAB Holding is playing its collective cards close to the vest, a move that is not surprising to Mr. Shain. “We’re involved in negotiations,” he says. “Negotiations don’t like to play out in the press. That’s not the best place to be strategic.”
Neither Mr. Shain nor Ms. Gardner offered a prediction for what LAB Holding’s next move is, but both seemed optimistic that the project would stay on course. “I don’t know what’s going to happen, honestly,” says Gardner. “I am hopeful that they can find a way to work it out.
“I would hope they meet it,” says Shain, referring to LAB Holding’s June 30 deadline. “Both parties have a lot of time and investment in this project... We have a month and a half, and I would hope that they’re taking a very positive approach.”
UPDATE 9/26/2011: "PDC Mishandles Centennial Mills, Conflict of Interest Emerges"
By Ben Waldron, NeighborhoodNotes.com
UPDATE 6/30/2011: "Centennial Mills Deadline Looms, PDC Offers No Extension"
By Ben Waldron, NeighborhoodNotes.com
