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HomeMy WebLinkAboutDeveloper Interview Summaries 2025-10Interview with Chris Nelson – Capstone Partners (Foothills District, Lake Oswego – Developer Perspective) Intro Talking Pts 1. [Project overview] (screen share: Exhibit 1 – Project Description) ●Thanks for taking the time today. We’re doing a focused round of developer interviews to test feasibility assumptions for the Foothills District Plan Update. ●The intent is to ground our framework plan in market and financing reality. ●Here’s the overall project area between downtown and the river. ●The City’s updating its 2012 framework plan—driven by the wastewater treatment plant replacement and new goals around housing, access, and livability. ●We’re looking ahead to how Foothills can evolve over the next couple of decades with realistic phasing and private-sector partnership. 2. [District structure (screen share: Exhibit 2 – Subdistricts map) ●The plan area includes three distinct development zones: ○North District – closest to downtown, most likely early-phase. ○Upper Shelf – transitional, more complex topography and access. ○Garden District – southern portion near the river, longer-term play. 3. [Areas of change and ownership] (screen share: Exhibits 3 & 4) ●This map highlights where change is most likely in the next 10–20 years. ●You can see a mix of City-owned parcels, private holdings, and infrastructure constraints. ●We’re testing which of these could realistically move in the near term, and what kinds of projects would be feasible over the next 5-10 years. 4. [Interview framing] ●We’re looking for your take on feasibility, timing, and what would make a site like this viable. ●We’ll spend about 45 minutes, starting with the market context, then barriers and incentives, and finish with what makes a district like this competitive. 5. [Closing note] We’ll use your input anonymously and thematically, to inform the financial feasibility analysis and the draft framework plan. ATTACHMENT 2/PAGE 1 OF 23 Questions 5 years No plans to do any testing, wait until the plan fleshed out, any actions. Nothing is contaminated, equipment is subgrade 30% design on the treatment plant FFF is asking a lt of questions, it’s in the flood zone How much to raise up? Where will grade land? How does that work? Jacobs will build, operate, and run this facility. They’re designing a building based on existing conditions, trying to influence how they are thinking about it. Trying to think about how to work with it, integrate so not an eyesore, maybe it’s pleasant No odor, limited noise Market and Feasibility 1. Given how interest rates, construction costs, and equity expectations are playing out right now, what types of mixed-use or residential programs do you think could realistically get financed in a district like Foothills over the next few years? a. Given the timeframe, current env is tough. The general location is a REAL positive; setting aside infrastructure access and details b. The ones we pursued with City involvement were Sherwood and Tigard - smaller but prior uses that were cleaned up / prepared to some level but not the level that we wished they had been i.Sherwood was a former cannery, env stuff, RFQ with City of Sherwood. Had a vision to activate an area near historic downtown. HAd already built the Hacker library/ city hall building. Had leland do some study work, community outreach. ●Chris hadn’t been to Sherwood ●Ankrom dug it up. Lobbed in an RfQ for an RFP. ●City wanted more of a mixed use activation ●Baby Jamison square with town square, small community center. ●Last industrial building from cannery, small performing arts/community center ●100 market rate apartments. ●Need to learn more about the community and fundamentals. The RFP responses were townhomes, but they liked their vision ●3-4 meetings with city manager; mayor was involved ●Hit the GFC, negotiating a DDA ATTACHMENT 2/PAGE 2 OF 23 ●“Sherwood stimulus plan” Build Back America bonds - let’s build town square, community center, streets ●Elevator in both, or stairs in one? We were trying to get to a 7 yield at that time ●Fee developer - Kurt Lango did ●Audience- a. not being too specific to one resident type. i. 6 3BRs, 2 story townhouses ii. George Fox students, 90 yo woman iii. Community of potential older residents as alternative to older people housing iv. Couples of different ages v. Single working people, divorced people vi. City managers ● ●Market a. Getting to $1/ft was top of market in Tualatin and Sherwood for classic garden style, b. But elevators, smaller units. But different format. US Bank was a lender - it was hard to get people interested in the format c. Had financed 2 50 units booked, getting $1.30 PSF in Springfield. ● ii.Tigard, 2011-12originally a treatment plan, public works yard and industrial area. They wanted housing. 165 apartments on the site. ●Project was successful but construction duration due to unforeseen circumstances made it take a long time to build ●We would have structured things differently ●Elevator served, all wood. Tuck under parking with surface parking ●Needed on site one per unit plus adjacent; 1 per bedroom ●Built project in an area that was industrial feeling, right next to Fanno creek trailhead iii.Gresham, Arts Plaza ●In all of the cases, they were no studios in the immediate comp set. Need studios. ●Singles attracted to a low entry point. Have had to explain that to investor capital. Why are you doing studios in the suburbs that small? iv. Wilsonville ATTACHMENT 2/PAGE 3 OF 23 ●Owned site since 2022, solving for 5.75% yield in prior world economics. But debt and equity was a lot more cost competitive. 6.5% yield now. ●4 story wood with a lot of extra steel, work/live on the ground floor that could be adaptable. Absolute minimum yield to get VHTC treatment. ● v. Evolution of a concept in the suburbs ● 2. Based on what you’re seeing in similar suburban infill markets, what rent levels or sale pricing would a project like Foothills need to hit to make sense—and how far are we from that today? a. Consider ownership units b. Units over 1000 feet c. Rent attainment: better than Wilsonville d. If you had a project of that quality - not sure what the mix needs to be. Leans toward much higher end e. Depends on what the site is. Could be really desirable if you create the right opportunity. f. In our comps, Willows - market study for the comp set as the highest rent attainment - nice looking building with a lot of employment right there 3. Foothills sits close to downtown but lacks the visibility and existing foot traffic of Lake View Village or A Avenue. What have you seen work in secondary or emerging locations to create early momentum without overbuilding? 4. Given its location off Highway 43, how should retail or food service be positioned? Do you see a path for destination-type uses, or should the district lean more toward serving local demand and residents? a. Like Atwell Off Main - down the road and not in a traditionally strong retail area. Wanted to build the least amount of retail. Doesn’t have morning-noon-night traffic. i. Tigard with main street core is pretty vibrant. ii. Built two spaces with hair salon and etsy with a brick and mortar space. Attributed $12/ft. b. Arts Plaza - On a park but not in the downtown core. Coffee shop is built into the lobby. Funded turnkey everything equipment in the coffee shop. c. Coffee shop is doing great. Didn’t have the burden of TI’s. the footprint is very small d. Live-work units on the ground floor. Gresham was underserved for coffee quality. e. Serviced retail, not going to be ATTACHMENT 2/PAGE 4 OF 23 Barriers, Incentives, and Public Role 5. From your experience structuring public-private partnerships, what’s the minimum level of public investment or participation that actually changes feasibility—whether that’s site prep, infrastructure, or risk-sharing tools? What have you seen cities do that genuinely adds value versus what tends to just slow things down? 6. If you were advising the City, where would you tell them to spend limited public dollars first? 7. What barriers do you think will be hardest to overcome in Foothills? Are they primarily market-driven, or are there policy and process factors the City could address now? There’s a lot of eyes/opinions on everything in Lake Oswego. Community outreach and getting all of that upfront in a way that doesn’t require whoever partner - maybe they do it with the city. Gresham was trying to bring developers in for a specific site. Lauren went out to Villebois before started on the project. Community outreach Villebois - we don’t want apartments, even though they were totally part of the plan all along. We didn’t want to be this portland developer coming to deal with Wilsonville politics. Eliminating potential public opposition/land use uncertainty - In Sherwood they went to LUBA, and City’s atty represented Capstone’s interests. Expectation side of the community so it’s not a wild goose chase later. Ideally you have it set up. 8. Lake Oswego already has a successful downtown. In your view, how can Foothills differentiate itself enough to attract tenants and buyers without competing directly? ATTACHMENT 2/PAGE 5 OF 23 8. The riverfront is both an asset and a constraint—limited access, flood risk, and high expectations for public use. How do you think private development can realistically activate that edge without compromising long-term value or resilience? 9. When you think about mixed-use districts that have succeeded in this kind of environment—moderate scale, strong public involvement, tight land economics—what lessons stand out that could guide early-phase development here? ATTACHMENT 2/PAGE 6 OF 23 Gus Baum Intro Talking Pts 1. [Project overview] (screen share: Exhibit 1 – Project Description) ●Thanks for taking the time today. We’re doing a focused round of developer interviews to test feasibility assumptions for the Foothills District Plan Update. ●The intent is to ground our framework plan in market and financing reality. ●Here’s the overall project area between downtown and the river. ●The City’s updating its 2012 framework plan—driven by the wastewater treatment plant replacement and new goals around housing, access, and livability. ●We’re looking ahead to how Foothills can evolve over the next couple of decades with realistic phasing and private-sector partnership. 2. [District structure (screen share: Exhibit 2 – Subdistricts map) ●The plan area includes three distinct development zones: ○North District – closest to downtown, most likely early-phase. ○Upper Shelf – transitional, more complex topography and access. ○Garden District – southern portion near the river, longer-term play. 3. [Areas of change and ownership] (screen share: Exhibits 3 & 4) ●This map highlights where change is most likely in the next 10–20 years. ●You can see a mix of City-owned parcels, private holdings, and infrastructure constraints. ●We’re testing which of these could realistically move in the near term, and what kinds of projects would be feasible over the next 5-10 years. 4. [Interview framing] ●We’re looking for your take on feasibility, timing, and what would make a site like this viable. ●We’ll spend about 45 minutes, starting with the market context, then barriers and incentives, and finish with what makes a district like this competitive. 5. [Closing note] We’ll use your input anonymously and thematically, to inform the financial feasibility analysis and the draft framework plan. ATTACHMENT 2/PAGE 7 OF 23 Questions Gus has been working at Security Properties 10 years - every 6 weeks, last 18 months. 2-3 days in Seattle Maija is the asset manager for the Windward ●How has the Windward performed over time in terms of leasing, rent levels, and tenant retention? ○Maija: Only been on the windward for about a year, joined SP a year ago. ■Really good last nine months. Have seen ATR shrink to 2-4% Very few homes. 3% ATR with six homes out of 200 available to rent. ○Has given opportunities to shoot for the moon. Lease tradeout s 13-15% over prior rents. Good story about rents today and poor rents from a year ago. ○None of the new developments have impacted the Windward (Willows LO, Mercato) have not taken any traffic away frmo us. It’s such a niche apartment community downtown by the farmers market with retail offerings. The others If you want to be in the heart of Lake O ○Gus ■Unlike Foothills - highly amenitized by location and walkability. This will be different. The other new institutional projects on Kruse Way like Mercato, have large institutional backing. Would traditionally get lower slung developments. ■Investors know about Lake O and its submarket. Have chosen to invest even if those institutions have had challenges because of downward pressures. ■Windward has had its location - walkability right out the ●What types of tenants or residents have been most drawn to the Windward, and what do you think drives that appeal? ○A large # of divorced folks witha family home in LAke O. Separating and divorcing from spouse and want to stay in the area. ○More short term rentals than any other properties. They choose to live there while looking for a home to buy. 3-8% to live ona short term rental, 2BR apartments. ■Or recently sold their house and come to the house to stay in the community with friends, jobs, and families while looking for the next home. ○Anecdotally, large renovations too ○Senior population / active adults. Not assisted living . There are some aesthetic components that skew assisted living. (happy to share) ■200 homes at the windward. 131 floorplans that are a logistical nightmare. Don't even have market floor plans. Architectural floorplans. ●Have to rely on taking videos ATTACHMENT 2/PAGE 8 OF 23 ■Nice to have a single loaded hallway with transom windows to let in light. Extra wide but not wide enough to program. ●Little carve outs with someone putting a bench ■ ○Small families ●What are you seeing now in the Lake Oswego market (either shifts in demand or tenant expectations) that are shaping how you think about development and operations? ●From your perspective, what aspects of the Windward’s design, mix of uses, or location have contributed most to its success? ○Pitch roofs with slate tiles and the appearance of mimicking a home. Blends in, doesn’t look like a box apartment community. Looks like tall homes sandwiched together. ●Are there design or amenity choices that, in hindsight, you would do differently? ○One of the challenges with Windward - Security Properties did not design and build the property ○Design standards in Lake O are a hot mess. A mish mash of everything going on all the time. ○To the extend that Lake O can calm itself down. What could be allowed / should be unlocked. And not at a whim/whimsical from a planning and permitting standpoint. Not clear defined standards. ○No one is doing it right, pre-pandemic Portland is getting closer. Trying to create design standards that you can pull it out of the book. On the West Coast, they’re in whiplash mode with restrictions and criteria around design that makes less affordable to build there. Currently nobody really knows ○Retail ■Challenges are around the use. ■Spincycle. We can’t rent the home above it - turned it into a corporate suite. ■Could have done a better job picking the gate. It’s super load. - challenges for homes near the garage. ■Retailers - burger shop. There’s no scrubber at the windward. Tuesday is the day they grill all their onions. ●An amazing exhaust system but if you don’t have anything scrubbing you’ll still smell onions. ●Grilling them offsite ●Challenging finding the right tenant to go in there. ●Differences between midrise and high rise. ●Retail space is condoized so they can’t control it. ATTACHMENT 2/PAGE 9 OF 23 ■It’s one thing if you’re remote enough from the main amenities - grocery store, gym, building in amenity to the development site vs. it’s not that far away. Need to provide the pathway there and that doesn’t need to be my focus. What would it need from a commercial retail should determine. ○Not sure they’d replicate the unit mix ■To the extent they know the target demographic. Found different efficiencies with unit types. Conflicting uses. ■1br with den but you can use it with a pull out couch. Den works for people to work from home. ●Based on your experience at the Windward and any other Lake Oswego properties you control, what do you think makes a site compelling to both tenants and investors here? ● ●Are there specific physical or programmatic elements like ground-floor activation, parking approach, or public realm features that you think Foothills development should prioritize? ○Parking - unsure of requirements and what windward has ■Car stackers to make the required parking ratio ■People don’t use them. They don’t function for the kinds of cars they want. Too wide/too tall cra. Car tackers are on the first level - waited forever. People don’t like/use. Any opportunity to consider the kinds of cars people are bringing in. Pull the dept of licensing vehicle. Suppressing the amount they could charge. People would pay a much larger parking rate. ■Solving for parking in a master plan - Portland has the opposite issue where you don’t have to have parking ratio requirements. The market is going to tell you what to do. But you can’t have all things all the time. Going too far underground or requiring structured parking. ■Sarah Zahn - very familiar with Lake Oswego - worked on a project with UDP and Hacker. The parking issue is something she highlighted as something to fix up front. To allow for design optionality - tuck under, above grade parking vs. below grade parking. ●Would park 1 per unit - but probably need to do 0.7. $200/month. They could easily get $275f ● ●How do you think Foothills could complement rather than compete with downtown Lake Oswego or the Windward? ○Foothills - it’s not going to be focused on the retail play - looking at connecting to the water. It’s a different environment for building. ○Wouldn’t try to stuff all possibilities into that plan ○Allow for or encourage daycare uses? ATTACHMENT 2/PAGE 10 OF 23 ■It’s a great program for certain types of projects but they have certain requirements for outdoor space. How that coexists with multifamily. ○South Waterfront - a food desert. There isn’t a clear way to get to whole foods. ○Night life / active spaces. People do like that you can go get ice cream/pizza. If foothills programmed down there and not connected to those things. ○Would want to make sure - look at doing for sale town homes or condos because of the price point of Different demographics ●What advice would you give to the City or developers as they try to establish momentum and attract early investment in Foothills? ○Look at public process/public ownership. ○Prevailing wage and BOLI rules. Not hamstring developers to excessive tax on getting those projects funded and started because you have 12-15% premiums on construction because you have public sector involved. ■Christy White and Dana and how terrible it is. ○Oregon is a union state. As we have seen, it’s very challenging to get movement on that topic. ○Hotel - UDP has worked with hotel projects ■Demand/market study is there for it. Esp if right sized with water amenities of some kind. ○Be really careful with affordability requirements if any. Becoming clearer in the current times that affordability as demanded by policy makers and tacked to new construction is not creating the housing they want. When it starts creeping into the master plan that it’s flexible esp in what’s incentivizing and how you’re dong that (sDC wavers, % of AMI - lake Oswego in his opionoin will have a hrd time mandating 60% affordability across the units. Maybe they could be inflated because the units can absorb that. ■Create flexibility. The likelihood of getting it wrong is high. It’s a period of time that the affordable units. Don’t play matchmaker. ■Willamette Towers - put affordable in as a second building in three parcels. They have struggled to get those out of the ground. ■Anecdotally, mix between deep affordability and the upper echelon residents. ■Looking at this broadly at ECO - there’s a real lack of units in workforce 80-120%. This is a huge area of opportunity for places like this. You need service workers and other income levels to populate a community like Lake O. Market rents are so high. Finding something where working wages are able to have a place. AI Summary ATTACHMENT 2/PAGE 11 OF 23 The meeting focused on gathering developer insights for the Foothills District master planning process, with discussions covering the area's history, current market conditions, and potential future developments. The group examined specific properties like Windward, including challenges with leasing, retail spaces, and parking, while also addressing design standards and regulations in Lake Oswego. The conversation concluded with discussions about affordable housing strategies, parking requirements, and the potential for hotel projects in the Foothills area, emphasizing the need for flexible approaches to development and market analysis. Next steps ●Cinder to send the PDF maps of the Foothills District to Gus and Maija for their review. ●Cinder to follow up with Maija via email to gather more detailed information about the Windward's performance over time in terms of leasing, rent levels, and tenant retention. ●Cinder to meet with Eric Kress about the North Anchor project and explore the potential for a hotel in the Foothills area. ●ECHO Northwest to consider parking requirements and design flexibility in the Foothills master plan based on feedback from Security Properties. ●ECHO Northwest to examine workforce housing options as part of the Foothills District planning. ●ECHO Northwest to consider prevailing wage and BOLI rules implications for public-private partnerships in the Foothills development. Summary Foothills District Planning Developer Insights The meeting focused on gathering developer insights for the Foothills District master planning process. Gus and Maija, representing Security Properties, shared their familiarity with the area, noting Gus's increased travel to Seattle due to stronger project pipelines and Maija's role as an asset manager. Cinder provided context about the Foothills District's history, including a previous urban renewal plan that was politically challenged and a wastewater treatment plant that needs relocation. The discussion highlighted the need to ground the framework plan in current market and financing realities, with plans for more detailed work on specific blocks and infrastructure in future phases. Area Districts and Future Developments Cinder presented an overview of the area's districts, including the North District with the wastewater treatment plant, Foothills Park, and industrial sites, the Middle District with condominiums, and the Upper Shelf District with challenging topography. Cinder mentioned potential changes in the area over the next 5-10 years, including the opening of a waterfront site and the sale of an industrial property. They also discussed the fragmented ownership of properties in the area and the possibility of future redevelopments, particularly for low-slung apartment developments. Cinder concluded by preparing to address questions about Windward's performance in leasing, rent levels, and tenant retention. Windward Property Rental Market Update Maija, who has been with the Windward property for about a year and a half, shared that the property has seen a significant decrease in available rental units, with an ATR of 3-4%, resulting ATTACHMENT 2/PAGE 12 OF 23 in strong rent increases of 13-15% over the past year. She explained that the Windward's location near downtown Lake Oswego and the farmer's market, along with its walkability, sets it apart from other new developments like Mercado and Willows, which are located 3 miles away. Maija noted that the property attracts a diverse tenant base, including divorced individuals, short-term renters looking to buy homes in the area, and active seniors, though it is not an assisted living community. Windward Assisted Living Design Challenges The discussion focused on challenges with the Windward assisted living development, particularly its 131 different floor plans and lack of marketing materials, which makes it difficult to showcase available units. Gus noted that Security Properties did not design and build the Windward project, and he expressed that its design standards and regulations in Lake Oswego were problematic, emphasizing that future projects would not follow this approach. Maija highlighted the exterior's aesthetic appeal, mentioning the pitched roofs and slate tiles that blend well with the community, while Gus suggested that Portland's pre-pandemic efforts to create clear design standards were a positive direction, though current regulations remain uncertain. Retail Space Challenges and Solutions Maija discussed challenges with retail spaces at a property, including noise issues from a community spin cycle retailer and a problematic swinging gate. She explained how a burger shop had to stop grilling onions on-site due to odor complaints from residents, and noted that finding new tenants has been difficult without a scrubber system. Gus commented that they wouldn't replicate the current unit mix at the Windward property, and suggested that Foothills should focus on water connectivity and outdoor experiences rather than retail, with considerations for daycare uses depending on outdoor space requirements. Foothills Retail and Amenity Planning The group discussed retail and amenity planning for the Foothills development, with a focus on balancing destination-oriented services with connectivity to existing amenities. They agreed that while daily services like grocery stores weren't necessary, a destination restaurant with waterfront views could be successful, though not on the scale of Windward's retail offerings. Maija noted that the South Waterfront has been considered a food desert, while Gus emphasized the importance of considering different demographics between rental and purchase markets, suggesting that the Foothills area would be better suited for for-sale townhomes or condos due to Lake Oswego's single-family home price points. Windward Unit Mix Strategy Review The group discussed unit mix strategies for Windward, with a focus on one-bedroom units and one-bedroom den configurations, noting their success in similar properties. They explored the concept of "bird nesting" during divorce transitions and work-from-home trends in Lake Oswego, which show higher rates compared to nearby communities. Maija raised concerns about parking issues at Windward, particularly regarding car stackers on the first level that residents find inconvenient and unappealing. Foothills Parking Space Optimization The group discussed parking challenges at the Foothills development, with Maija explaining that current parking arrangements limit revenue potential due to underutilized spaces. Gus ATTACHMENT 2/PAGE 13 OF 23 emphasized the importance of addressing parking requirements in the master plan, noting that while market forces can guide decisions, balancing costs and space utilization is crucial. Cinder raised concerns about soil conditions near the river and potential remediation needs, while Maija suggested parking ratios of at least 0.9 spaces per unit, with Gus advocating for a compromise of 0.85 spaces to accommodate financial constraints. Public-Private Partnership Development Challenges Cinder and the other participant discussed the challenges of prevailing wage and BOLI rules in public-private partnership projects, emphasizing the need to avoid excessive costs that could hinder development. They also touched on the potential for a hotel project in the Foothills area, with Cinder planning to meet with Eric Kress to explore this further. The conversation highlighted the importance of market studies and demand analysis for such projects. Flexible Affordable Housing Strategies The group discussed affordable housing strategies for Lake Oswego, with a focus on avoiding rigid affordability requirements that could hinder development. They agreed that flexibility in affordability approaches, such as designating specific parcels for affordable housing, would be preferable. The conversation highlighted the need for workforce housing options between 80- 120% AMI, as current market rates make home buying and renting unaffordable for many service workers and essential employees. ATTACHMENT 2/PAGE 14 OF 23 Interview with Damin Tarlow – Trammell Crow (Foothills District, Lake Oswego – Developer Perspective) Intro Talking Pts 1. [Project overview] (screen share: Exhibit 1 – Project Description) ●Thanks for taking the time today. We’re doing a focused round of developer interviews to test feasibility assumptions for the Foothills District Plan Update. ●The intent is to ground our framework plan in market and financing reality. ●Here’s the overall project area between downtown and the river. ●The City’s updating its 2012 framework plan—driven by the wastewater treatment plant replacement and new goals around housing, access, and livability. ●We’re looking ahead to how Foothills can evolve over the next couple of decades with realistic phasing and private-sector partnership. 2. [District structure (screen share: Exhibit 2 – Subdistricts map) ●The plan area includes three distinct development zones: ○North District – closest to downtown, most likely early-phase. ○Upper Shelf – transitional, more complex topography and access. ○Garden District – southern portion near the river, longer-term play. 3. [Areas of change and ownership] (screen share: Exhibits 3 & 4) ●This map highlights where change is most likely in the next 10–20 years. ●You can see a mix of City-owned parcels, private holdings, and infrastructure constraints. ●We’re testing which of these could realistically move in the near term, and what kinds of projects would be feasible over the next 5-10 years. 4. [Interview framing] ●We’re looking for your take on feasibility, timing, and what would make a site like this viable. ●We’ll spend about 45 minutes, starting with the market context, then barriers and incentives, and finish with what makes a district like this competitive. 5. [Closing note] We’ll use your input anonymously and thematically, to inform the financial feasibility analysis and the draft framework plan. ATTACHMENT 2/PAGE 15 OF 23 Tell a non dumpster fire story Big lender - don’t see long term demand Nothing you can say or do - Tina says it’s getting better Ramin - was an Ankrom for 20 years. Worked with Will and James for 8 years. Background is heavily focused Damin - all aspects of real estate. Keep getting pulled into housing. Live in unincorporated Clack Co. Trammel Co. Decade at Gerding Edlen. Up and down the West Coast. Consulting gig in Korea. Pro forma doesn’t make people pay rent A few people he actually likes, a few people. Sewage treatment plant. Brokerage, jurisdictional market data, tried to slide Tom Puttman into the situation. They went with a bigger firm. Deal with City of Portlnad. Gives for $1, in exchange City takes on responsibilities of cleaning it up and moving it. They get everything for free but they need to build the new one. Even with the train going in, they think it u Concrete batch plant - don’t talk to me, not selling. People won’t c Long-term Guy to the west runs a landscape company. Light industrial use, we’ll run business and then we’ll sell and it will be worth more, we’ll retire on it. Groundwater plume - once it’s in the groundwater, it’s moving around. Have to figure out base source, this can be contentious. 10 drillings, 9 were clean, another was worst case scenario. They don’t know how ATTACHMENT 2/PAGE 16 OF 23 Questions 1. Familiarity and Market Context 1. You’ve said you’re familiar with Foothills — what’s your read on the site and how it’s evolved since the last planning effort? 2. Have you or Trammell Crow explored opportunities in Lake Oswego or similar suburban- urban markets? What lessons from those experiences might apply here? 3. When you look at the current regional development climate — rates, costs, capital availability — how do you think those conditions shape what’s realistic for Foothills in the next few years? Mercato Grove + Foothills Comparison Questions ●Location: Kruse Way & Boones Ferry Road, Lake Oswego (near I-5 interchange) ●Developer: High Street Residential (residential subsidiary of Trammell Crow Company) ●Completion: Phase 1 delivered in 2021 ●Scale: ±206 apartment units and ~50,000 SF of retail ●Total size: ~7 acres ●Architect: Hennebery Eddy ●General contractor: R&H Construction ●Designed as a mixed-use, lifestyle district in a suburban setting — a “village” anchored by food, hospitality, and highly finished housing. Intended to capture Portland- level quality and design in a suburban environment. ○Retail: Ground-floor restaurants, boutique shops, and services organized around internal streets and plazas. Early tenants included Fivespice, Oven and Shaker, Cooper’s Hall, and Breakside Brewery. ○Residential: Market-rate apartments targeted at professionals and downsizers seeking urban amenities with suburban convenience. 1.Market Position - How do you think Mercato Grove succeeded in positioning itself within Lake Oswego’s market and what lessons might that hold for Foothills in terms of product mix, brand, or tenanting? 2. All retail at Windward has failed - hard a hard lease up Mercato has failed - had a hard time. Fix it, comes back down. Six lease breaks in seven days. 3-4 month. The state has mandated lease break fee. 1.5 month fee. ATTACHMENT 2/PAGE 17 OF 23 Corporate leases, you can’t control the lease expiration matrix. Security is vertically integrated. Greystar relying on : increase concessions, lower rent, offer deals. Nothing is really working here - Portland has a bigger attitude problem. No one believes in rent growth. Only places to sell the story - Vancouver waterfront. The Westside. Jobs and schools. Hillsboro, Beaverton. Nothing big enough to pencil - 5-6 acres so you can surface park it. $3 PSF to cover vertical housing. ●Hard entitlement, Intel will never come back, Nike will fire people and never come back. Forget about columbia, keen, adidas. Everyone is looking for AI, Amazon. We don’t have that thing. We don’t have the correlation. Livable, affordable, diversified. ●Low growth, low demand model. The best line I heard: The tax policy should be the inverse of your weather. Stop talking about your- don’t tax groceries. Put asterisks on things. What are you doing with the tax dollars. Not about right wing owners of companies. The dialogue, the perception, the PR. Waive the SDC they didn’t talk about it. The City just removed a massive tax. No one ever. Was a Everyone wants 6.5 untrended yield in Portland. On Cedar Hills project, triangulating Slabtown, Lake O. All the public policy people believe the tings you say - My brother food and bverage - catering, waiting on the rich and famous. They’re the worse tippers. You can’t do business there - can’t connect those dogs. Design and RFPS. Subsidize the shit of out of it, put a pretty filter on it. Cedar hills - Bamboo $65 PSF is paying It’s excruciating - it’s all PR and optics. Politicians. Planning staff. No one understands - stop comparing us to Sacramento. It’s an international competition. $1B between all the taxes. To afford a home - $300K / year. Highest taxes $125 grand per year. Whatever it’s all the same. Even bleeds into Clark County that has no income tax. All a bunch of old timer, old boy networks. Vancouver waterfront works. Standard city blocks - can’t park ‘em, can’t afford. ATTACHMENT 2/PAGE 18 OF 23 I have four projects under contract - 1500 units. $10s of millions o Sellwood Two in Beaverton - Cedar Hills is completely stalled. One in Hillsboro - we can’t find a financer. Largest, biggest, baddest developer. Break lease ll day long, not traditional renter demographic Getting down to this site is challenging because of looping around Echoed gus on demographics - Mercato Grove does seem to be older than Windward. Perception is that Windward is more walkable. ●Public investment in Millenium Park, They do improvements, designated hallmark on mercato as feastival street. We don’t want to truck ever. ●Windward - Super deep units - skylight - ●Parks on stafford. They don’t understand economic development strategy. Family oriented ●They don’t know how to make place/vibrancy. It’s not a right wing/lower taxes. Rich people spending money on things tht are unproven. ●Or City has to do it. ● 3.Project Economic - Given what you know about how Mercato Grove was financed and delivered, what aspects of that deal structure or phasing approach could translate to Foothills — and what wouldn’t, given current capital market conditions? Everyone wants to live, no one wants to live, and no one wants to do business. Want to talk to the Mayor. Erica Rooney (engineer) so afraid of n’hood associations, complete rulebook, none of the staff can negotiate. Does random nasty things. Most of the staff is so afraid of the neighbors/Erica. Trammell Crow has that deal besides the springs living. They got 19 offers on the property. 4.Public-Private Dynamics - What did the City or its partners do well in supporting Mercato Grove’s delivery, and are there things you’d advise the City to handle differently if they want to attract comparable private investment at Foothills? No one in town wants to work with Lake O ATTACHMENT 2/PAGE 19 OF 23 5.Retail and Activation - Mercato Grove’s retail mix has had ups and downs. What does that tell us about what scale or type of ground-floor program could realistically work at Foothills? All the retailers, people who tried to sell the whole foods deal because most national people were detracted because the river. Mercato not in downtown. $2m SF, access to bridgeport, kruse way. Hard to make work, comp out. ●Sent a violation notice to GC nationally, sign by sign $9k fine, refused to negotiate ●Kurt Huffman - we didn’t lose all the retailers, wouldn’t listen to his clientele. ●5-6 of those restaurants, wouldn’t. Put a salad on the menu, put pizza on the menu. Guys, it’s suburbia, family oriented environment. Decadent food, assume people. ●New pizza operator, rebuilding over and shaker ●dSouel (korean) is the lardo restaurant, pavilion is temporary leasing office. ●Tasty and st jacks - large financial institution. City of Lake O sucks - crushed north anchor three times Did they decrease the retail requirement on North Anchor? 6.Design and Experience - From a design standpoint, what made Mercato Grove successful — or limited its performance — in creating a sense of place and connecting to its surroundings? Follow-up: How should Foothills think differently about integrating residential, retail, and public realm to stay resilient over time? 2. Feasibility and Phasing 4. From a developer’s standpoint, what product types or combinations could actually pencil here under current conditions? Prompt if needed: For example, mid-rise rental, townhomes, office, hotel, or some hybrid concept. ATTACHMENT 2/PAGE 20 OF 23 ODOT controls 43, no access possible. Damon concerned about the access points. What could be the opportunities - Tryon Creek - salmon spawning habitat. Federal request in for 20 years. Goal is to get this done before retired. Can’t do anything int ahta rea unless you deal with habitat, the water, the whole node is really problematic. The rail comes through there/ None of the sellers will sell. They don’t have the $$ to do that. You’re talking about a public group with $10m of all of the players to sign off, water/env, 36” fiber optic line running near north anchor Go ask Barry Cain to do it. At the end of the day, it requires a massive public infrastructure. No access to the money 5. Given the site’s mix of public and private ownership, how would you think about phasing — what’s a viable “first move” that could establish market confidence? 6. What would have to change — in rents, land costs, or public participation — for a project here to be financeable in this cycle? 3. Public Role and Barriers 7. What barriers do you see as the most significant to private investment in Foothills right now? Prompt: Infrastructure, entitlement complexity, or return thresholds? 8. Contamination - wanted an ecosystems two blocks in. let water flow across the properties. Can be crazy about how big the setback needs to be, but need to think about relief and what relief looksl ike relative to the river It’s not the city of portland, urban foresterThe river folks, some analogous jurisdiction. That’s why centennial mill hasn’t gone because of what you have to do 9. From your experience, what kind of public participation or incentive actually changes feasibility — and what tends to just add friction? 4. Identity and Positioning ATTACHMENT 2/PAGE 21 OF 23 9. How do you think Foothills can differentiate itself from both downtown Lake Oswego and South Waterfront to attract tenants and capital? Prompt: What would make it feel distinct but still authentic to Lake Oswego? 10. If you were advising the City, what two or three steps would you tell them to take over the next 18 months to make Foothills credible to institutional capital? Getting people to spend the money, getting people to not be whack a doodles. Everyone wants to be there. Foothills ●Eminent domain the sucker ●Change all the zoning ●Force those people out of there ●It needs a forced solution ●That park is brilliant. Condo assn is brilliant ●Ramin - gotta redo all the access infrastructure. ●Whole gridded streets ●City/County/Street ●Raise the tides - create upswings in rents. ●If you need a loss leader, prove it will make money. ○Too many requirements ○Baseline rents for any new ●Ownerhip units - gonna do better with condos than with renter. People own Hotel ●Too small - Crown Plaza fix itself up and ●Lakeshore Inn wants to kill! ●City hates it. That’s why they’re trying to d ●City is playing social engineer. Play market rate infrastructure ui ●You build the intersection, waterfront stuff, they can’t afford, barely pencils without ●Take away all the best land for the river ●Minimum key cap ●Pool that hotel, condo, apartments could all use. ●Lifetime fitness - bay club - everyone raves about that place. ●Put the infrastructure in / build the roads. It’s not retail. Do affordable housing on a pad. ●Mix of housing ○ Different incomes ●Rent vs own, longterm vs short term ●1 giant parking structure ●1 giant ament ATTACHMENT 2/PAGE 22 OF 23 ●Clackamas county playing ball - not giving proportionate share. Getting it into Foothills through the city. Should call Andrew - condo deal above the car wash at the bottom of Terwilliger. A few deals off Killingsworth Barry Cain Pat Kessi - great to work with J Holladay RAmin - seems like connectivity and infrastructure. 1.2 parking ratio. Put At the end of the day, my skepticism and my old man -ness. It’s an obvious - yo ucould double the size of downtown. /connect the city to the river. Make a beach, the possibilities are eneless. BARRY CAIN MOVED A RAIL LINE! He made place. Gus and Sarah are doing as good a job as anyone. Running a development company in Seattle. Killian - number of high level staff people. Most impressive top to bottom staff, and they are not active around here. Fore - turnover. Intentionally coming. Sam, Mill Creek will be proli - 120 large units with no amenities. Not in a great location. Has to deal with NW neighborhood associate. The Frankie - Milwaukie d Bottling Box project - 12th and Davis. 5 city blocks. Just in Joe Weston’s office friday - he looks 3-5 Billion perpetually operating charity. Homer solving ho- everyday music site on Sandy! ATTACHMENT 2/PAGE 23 OF 23