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Erin Graham deployed unusual candor while speaking at a real estate breakfast this January inside the Hyatt Regency by the Oregon Convention Center.
Graham, president and CEO of the Oregon Museum of Science and Industry, revealed her organization was $22 million short on its plans to jumpstart a 24-acre mixed-use district redevelopment. For Graham, who grew up going to OMSI, it's something of a dream to spearhead the OMSI District, a plan for 1,000-plus new homes and millions of square feet of fresh development.
Nearly two months later, project leaders are pulling together their contacts, from the federal government on down, to drum up the money. In a telling example, Graham spoke with the Business Journal from Washington, D.C. on Leap Day after pitching Oregon's federal delegation on OMSI District funding.
"The good news is that everybody's really excited about the OMSI District," Graham told the Business Journal. "They see the potential. They see the vision, and that is consistent through our federal delegation, our state representatives and local level, as well. ... I think we're going to have really good news to share this summer."
State lawmakers carved out $6 million for OMSI's new Water Avenue, as it's being called, in the Legislature's signature housing package this short session. Puttman Infrastructure is designing a wastewater system and could help close the gap, too, though by how much is not yet clear, according to Preston Greene, OMSI's vice president of real estate and facilities.
Greene expressed optimism about closing the funding shortfall by the end of the year. A lot is riding on finding the money, and it comes down to a common foe of Oregon real estate developers: infrastructure.
“We do not have the utility infrastructure to support the density of development approved in the plan,” Graham explained to the CREW Portland breakfast crowd back in January. Graham said a priority is the need for a new road and infrastructure that would “align the fast-moving traffic to the railroad,” making the interior of the OMSI District safer and more walkable. Without that, development options are highly limited.
"Now we need $22 million so we can move directly into construction," Graham said then, "and that is the biggest hurdle. Following that investment, OMSI is already doing campaign planning for the amount of money that we will raise through philanthropy from the community. We already know the private ... investment in infrastructure, and so we really have this immediate near-term gap that is the puzzle to figure out."
The shortfall reflects how slippery it is currently for neighborhood-altering projects to maintain traction in Portland. Seated with Graham on the CREW morning panel was Urban Renaissance Group’s Krista Bailey. Seattle-based URG is undertaking a $1 billion-plus transformation of the aging Lloyd Center mall, a redevelopment in its earliest stages. Portland State University, represented by its president, Ann Cudd, has its own corral of real estate ideas in progress.
Across town, the previous owners of Northwest's iconic Montgomery Park envisioned a project of similar ambition to OMSI before market tumult pushed the 18-acre property into foreclosure last year and a February courthouse auction. To be sure, OMSI isn't at immediate risk of any such dramatic action, but Montgomery Park exemplifies how best-laid plans can go awry as the broader commercial real estate sector turns hostile.
OMSI officials acknowledge the shaky market for hefty commercial real estate endeavors. Financing costs for large-scale projects are high, according to Greene. In other words, OMSI faces the same difficulties seen throughout the commercial real estate sector, namely that "money is expensive," he said.
But as for the more immediate problem, the $22 million gap, Graham's grim forecast from January has brightened within the past two months.
"We're making significant strides on the road infrastructure," Greene said.
'A 20-year plan'
Should OMSI surmount its most present money obstacle, the district will enter an interesting next phase, starting with work on new Water Avenue. Doing so will ease the way for the development of five of the OMSI District's 11 parcels, Greene said.
OMSI is working through road design, for New Water Avenue and some of the existing Water Avenue affected by the new roadway, with the Portland Bureau of Transportation and engineering firm KPFF this year and next. The full design is expected to be completed in 2025. After that, road construction starts.
Since there are seven developable parcels in total that would move OMSI and its development partners steadily along what Greene is couching "as a 20-year plan." The clock started "in 2015 with the launch of OMSI's 20-year vision," OMSI leaders said.
Bottom line: What can Portlanders can expect to see in those two decades?
As project documents state, "The planned OMSI District will transform 24 acres of parking lots into new, mixed-use transit-oriented development with 3 million square feet of office space, research space, retail, residential, hotel, recreational green space and more. Up to 1,200 units of housing are planned, with at least 20% of those being affordable. District attractions, including a new waterfront education park, will bring together visitors, communities, employers and Central Eastside neighbors."
OMSI didn't break out how much of the three million square feet each commercial property type would take, but OMSI leaders did say, "The plan currently includes 1,200 units of new housing, which is roughly 50% of the available square footage in the district."
Already, Greene notes, environmental consultants are working on OMSI District plans, so on the most basic level, construction has begun.
Put another way, over the next two years, OMSI will tackle "horizontal construction," he said. Locals can expect to see vertical construction starting in 2026 or 2027.
Housing will be a significant component of the vision. OMSI hopes to work with development partners Edlen & Co. and Hacienda CDC soon to build 100 to 120 units of affordable housing, Greene said.
Said Graham, "We're starting with 120 units because we have to start somewhere, and only two of the parcels can be developed without the infrastructure."
One crucial part of the OMSI District that requires infrastructure investments to advance is the Center for Tribal Nations, a duo of towers that will sit on the Willamette. It will likely be situated across from OMSI, Graham said. That would be just east of OMSI, on a parcel that Portland General Electric currently owns, according to OMSI leaders.
James Alan Parker, executive director of the Northwest Native Chamber, described the Center for Tribal Nations as an "over 30-year community vision by both tribal nations and Native leaders here in the Portland metro area to really, in principle, return Native and tribal people to the shores of the Willamette, (which) has been a traditional gathering place, a place of trade and commerce."
Parker said the center could include housing, restaurants, storefronts, gathering spaces, health and wellness spaces, and hotel rooms. It could provide "economic opportunity for Native and tribal investors," he said. Parker said the center's number of housing units will become clearer through a planned feasibility study. Either way, the space is envisioned as "two towers that rise above the skyline."
"This has been dreamt into existence for decades for us," Parker said.
A neighborhood catalyst
In its final form, OMSI District will mark a new era for the east side of the Willamette River near the Marquam Bridge.
OMSI officials look forward to drawing others to the area beyond museum patrons, Greene said. Indeed, the OMSI District's impact will likely be felt beyond its formal reach of 24 acres.
"It's exciting because it's catalytic" for the neighborhood, he said.
Crux Fermentation Project last year opened a pub at 2715 S.E. Eighth Ave. that, while technically outside the bounds of the OMSI District, could still attract more foot traffic in coming decades.
Crux spokesperson Ashley Picerno said her company "is thrilled for the upcoming OMSI development and revitalization that is much needed in the southeast waterfront area. We are hopeful it will help more beer fans discover our Southeast Portland pub and cement us as part of the Portland beer community."
Meanwhile, OMSI's Graham struck a more upbeat tone while speaking from D.C. in late February, particularly when asked where things stood today.
"I don't think things are standing," she said, "I think they're accelerating."
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| Rank | Prior Rank | Name / prior rank / URL |
|---|---|---|
1 | 1 | Portland Art Museum |
2 | 2 | Self Enhancement Inc. |
3 | 3 | Latino Network |