In May, the Our 42nd Avenue Neighborhood Prosperity Initiative (NPI) closed a historic deal to acquire the former Portland Tissue Labs building and property from the Eddie Robertson family. The deal was completed through collaboration with Albina Community Bank and an innovative Portland Development Commission (PDC) funding mechanism, now called the NPI Opportunity Fund. The acquisition marks the first time an NPI has purchased property in Portland for community benefit and development.
“I believe that our role in the development of this property demonstrates the win-win nature of our work,” said Bob Granger, a founding board member of the Our 42nd Avenue NPI. “Through this deal, the Robertsons were able to continue their legacy of service to the community. The PDC and Albina Bank were able to advance their mission – and we are now in a position to influence how the future development of this site adds value to our neighborhood.”
The Robertson family has been actively involved in the community since 1970 and has operated their histology business, located at 5012 N.E. 42nd Ave., since 1989. Eddie Robertson was well known in the neighborhood for his contributions coaching soccer, Little League baseball and boys and girls basketball. A founder of the Oregon Black Caucus and an active supporter of Neil Goldschmidt’s mayoral campaign, Robertson passed away in 2011. Portland Tissue Labs was the first independent histology laboratory in Oregon and the family moved its business out of the building in January of this year.
“Right now we’re determining the route forward,” said Michael DeMarco, district manager for Our 42nd Avenue. “We don’t typically acquire property. We do like to participate in property dealings and give the community some voice toward economic benefit. In this case, our board of directors and the Robertsons felt like the best option for the future of the property would be that the organization purchase the property and figure out the best thing to do with it. Right now, a lot of people have a lot of ideas about what could be done with the property. It could be an adaptive re-use with the existing building. It could be a brand-new, mixed-use development. In all likelihood, it would be one of those two things. As an organization, we know a fair amount about what each of those options would look like – and what’s possible with each of those options.”
“This is a great example of how community-led economic development can impact activity in a district,” said Dana DeKlyen, PDC’s senior program manager for the NPI Network. “The relationships that Michael DeMarco has with businesses, property owners and residents in the community have been invaluable in understanding the goals in the district and enable him to be responsive to equitable and inclusive economic opportunities.”
The 5,695-square-foot building, built in 1946, sits on a 9,000-square-foot lot in the heart of 42nd Avenue’s business district.
“The property sits at kind of a sweet spot for us,” said DeMarco. “It’s relatively small. It’s at a relatively important intersection, strategically. We’re very familiar with the property because we worked on a deal there that didn’t go through. We were excited about that project, but for a variety of reasons it didn’t work. We retained all the due diligence that was part of our contribution to that proposal and there are now a few different ways our organization could choose to move forward. It’s ultimately going to be determined by what’s the most realistic and what yields the most benefit in terms of economic opportunity for the people in this community.”
Albina’s participation was key to bringing the $695,892 deal to fruition. As a first-position lender, Albina facilitated roughly $450,000 of the financing. As second-position lender, the PDC funding made up the difference.
“Albina has a long history of working with communities on these sorts of creative deals,” said DeMarco. “Not every lender fully understands how to work with the development commission as a second position lender. They’re not all comfortable with that – although there’s not a whole lot of risk involved. Albina’s done a number of deals like this and we didn’t have to explain the concept. They were in problem-solving mode right away and really went the extra mile to get the deal done.”
“Albina is committed to building and rebuilding communities to help create a Portland that thrives for everyone,” said Cheryl Cebula, president and CEO of Albina Community Bank. “We’re honored to be part of this initiative to help foster economic opportunity and serve the communities of Northeast Portland.”
Our 42nd Avenue board member Guillermo Navarro’s Iron Art of the Northwest is already tenanting the space temporarily and may end up as a permanent tenant, depending on how the board decides to proceed with the property.
“We have some interim tenants in the building,” said DeMarco. “Guillermo was looking for a home after his shop was displaced by the Makers Row project. His business has been in the community for more than a decade and, to be fair, Nick and Risa (Leritz) – who own the project – were pretty collaborative about making sure we found a landing place for him. There are benefits to this deal that come from the details of the parties involved. The Robertsons wanted to see something positive happen as they were winding down their business and we were able to find Guillermo a home – at least for now.”
“I am very happy in the new building and business is good,” said Navarro. “I am thankful to Michael DeMarco for everything he has done for my business and for all of the businesses in our community. Michael is a great man.”
DeMarco is working on additional leases and has at least two more tenants who could be in the building soon. Northeast Village PDX, a membership organization that provides volunteer services to help seniors remain in their own homes, has leased office space in the front-end of the building and Cully neighbor and floral designer Vanessa Guzman is looking for space for her business, Portland Bloem.
“Everybody has the understanding that this is only temporary space – and that everything could change in 18 months,” said DeMarco. “I anticipate a pretty diverse user base. We have a committee of folks who are hard at work and are going to make some recommendations soon. We’ve also had some independent consultants working on it.”
Money will be due on the PDC loan 21 months after closing, so the NPI has roughly 18 months to determine its best strategy.
“In the long run, what we’re looking at is how do we use this tool (the NPI Opportunity Fund) over and over again to give the community some voice in the projects we’re going to have here,” said DeMarco. “It might look different each time. It might not be property acquisition. It might be we’re doing commercial cooperation agreements, where we’re going to be doing the tenanting on commercial space that’s developed. In some cases, we’re going to be injecting dollars into deals that effect the pro forma. So maybe we could get some temporarily reduced lease rates for folks and get community entrepreneurs a foot in the door. There are a variety of ways that those dollars can be leveraged. Part of the project here is going to be exploring all of those options and figuring out how we get the most benefit out of this property, whether we own it or not, and still have the latitude to be able to interact on other property deals. We don’t want to become a one-project program. This is an exciting project, but we also have the Go 42 building, we’re working with Nick and Risa on Maker’s Row, we’ve helped with the Metalwood Salvage acquisition, we’ve got other projects. This deal will give us some flexibility, going forward, to pursue more of those. The most important thing is that we have some tangible economic-development deliverables at the end of the day.”
“The purchase of this property aligns perfectly with Our 42nd Avenue’s strategic investment priorities,” said DeKlyen. “Those priorities include creating equitable and inclusive economic opportunities, promoting economic stability for long-term community members – especially those facing economic disadvantage – and ushering development that is responsive to community needs and is deliberate in its inclusion of community members.”
For more information on Our 42nd Avenue, visit www.our42ndave.org. For more information on the Portland Development Commission, visit www.pdc.us. For more information on Albina Bank, call (503) 445-8700 or visit www.albinabank.com.