The owner of 27 individual developable parcels in the Hazelwood neighborhood is seeking a buyer or development partner for what could become a dense, affordable housing project. The land sits at the Gateway Regional Center’s core, just north of E Burnside Street in what officials planned to be a second downtown on the Eastside of Portland. City agencies have made significant zoning changes in the last two decades and have built infrastructure projects designed to increase density and create economic opportunity. In nearly 25 years since planning for this area began, much of the market-rate housing and commercial storefronts expected in this area have not broken ground. However, these city blocks still offer walkable access to transit and resources, making it an ideal location for urban density.
Joe Westerman began collecting properties in this area over a decade ago, having successfully created multi-family housing in Oregon and Washington, including housing in this area. The properties surround a new segment of NE Davis Street that PBOT will construct later this year. These properties are part of a Local Improvement District (LID) that will extend the city street grid to these parcels, creating smaller blocks with consistent pedestrian and vehicle access in what had once been long unconnected streets. Calling this area the Gateway Blocks, Westerman commissioned conceptual designs imagining what development could look like and waited for the infrastructure improvements.
All lots in this area are Central Residential (RX) zoned with a Design overlay. RX offers the highest density of dwelling units for any residential zone. Buildings are generally Six to ten stories tall and have limited ground-floor retail uses. Design overlays only apply to the Central City, town centers, and the Gateway Regional Center. The minimum housing density for new structures built here is 87 units per acre. Portland planners envisioned downtown-level redevelopment at this site, but developers have not yet been able to secure the funding to build at that scale in this space, at least not for market-rate housing. Surrounding affordable housing projects are underway or recently completed with financial support from various government and nonprofit sources. That observation lead Westerman to explore affordable housing options for his properties.
Despite having over 30 years of experience as a builder, Joe Westerman’s focus on market-rate development left him without the needed connections to create an affordable housing project on his own. Consequentially, he will consider offers to build these developments to suit a potential buyer or participate in a joint venture with a nonprofit looking to create affordable housing. Westerman will also consider land leasing or the sale of parcels individually or as packages. “It’s not exactly an easy market to get stuff done in right now,” explained the listing agent for these properties, Nick Ostroff of NAI Elliott. High interest rates and other market forces have kept these lots underutilized for too long. Still, Ostroff sees the support for affordable housing as a way to jump-start this area’s transformation.
Joe Westerman is not the only land owner in this area waiting for building opportunities. Andrew Baltz’s limited liability company, Baltz Family Holdings, possesses most of the land south of Westerman up to E Burnside Street. The concept drawings for the site show both owner’s properties along NE 97th Avenue, 99th Avenue, and 100th Avenue fully built out. This illustrated vision matches the city’s aspiration for the Gateway District but represents projects that are not currently feasible. Development at this scale is slow, and many people are waiting for others to make the first step. If one property redevelops in the LID area, it could be enough to start other developments, and Westerman is willing to see if his lots could contribute to that catalyst.
The Westerman properties will soon have several advantages for future builders. Through the LID, Phase II of the Gateway Street plan will continue work started on NE 97th Avenue in Phase I, with new streets, curbs, sidewalks, and green-strip landscaping. The city will vacate the vestigial sections of NE Davis and Couch Streets west of 97th Avenue, which no longer align with the new grid pattern. This returned right-of-way will free up that space for additional building amenities, as seen in the 2019 Portland Design Commission approved plans for a dormant project at this site. Buildings in this space are within walking distance from the Gateway Fred Meyer grocery store, medical services, and transit options. The lots are adjacent to the I-205 Multi-use Path with easy connectors to the Mall 205 retail area and Montavilla shops.
Future builders will have to overcome some ongoing project headwinds. Zoning for these blocks will hamper modest uses, dissuading some development options. Additionally, these lots are committed to the NE 97th Avenue and Couch/Davis Street LID, whose member property owners will provide a portion of the $15 million project cost. City staff calculates the amount of money contributed based on the street frontage of each lot, but Ostroff said that would be part of any sale negotiation. This underutilized area has also attracted many urban campers, leaving trash and damaged fencing. Street grid construction will clear roadside debris and reset the area with clean pavement. According to Nick Ostroff, to keep the area activated while waiting for construction to begin, it could host community garden space. Westerman is an avid organic farmer and often includes community gardens in his developments that can support it. He also made vacant land available for urban farming when crews were waiting to break ground. Those plans depend on who partners with Westerman or buys the property. “Everybody’s trying to get together and make something positive,” remarked Ostroff. At this point, the Real Estate team is looking to cast a wide net and see how to start the desired transformation in these blocks. Organizations interested in learning about options and pricing should contact the sales team at NAI Elliott.
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