Max Infill Stalls Again

This article originally appeared in the July 15, 2009 edition of the Portland Observer.

Block sits idle for years

Jake Thomas

The Portland Observer

Nearly a decade ago, when the housing market was booming and economy humming, the Portland Development Commission hatched plans to erect brand new mixed-use structure featuring a patch of condominiums, rentals, and retail space on the corner of North Killingsworth Street and Interstate Avenue.
But with the housing market in a sag and credit frozen, the commission is still barreling along with its plans, even though questions abound whether or not the project is feasible or necessary.

In 2000, the PDC began acquiring properties on the northeast corner of North Killingsworth Street and Interstate Avenue for a project dubbed, “Killingsworth Station.” The commission planned to use subsides to woo a developer into erecting an $18 million, mixed-use structure that would maximize use of the new Interstate Max Light Rail line.

PDC shelled out over $1 million in land acquisitions. It razed several homes and an upholstery shop for the project.

However, Killingworth Station hit a snag in 2005 when developer Max Kemper bailed on the project, citing rising construction costs and an unstable market.

“I guess in the first go-around, the ambitions for the site were more than the market could bear,” said Matthew Collier, project manager for the PDC.

After the project’s initial collapse, the PDC stepped back to retool the project by scaling back on the size, nixing all rental properties, and pulling in a new developer, Winkler Development Corp.

PDC’s latest vision for Killingsworth Station is similar to the last. The government agency envisions a four-story, mixed-used, transit-oriented, structure. But this one will feature 54 one-bedroom condominiums, three two-bedroom condominiums, and 9,000 square feet of commercial space.

However, the start date for construction has been delayed several times. Now shovels won’t hit the dirt until March, which the PDC blames on poor market conditions and lack of credit.

Sixty percent of the new condos will go for $160,000 to $180,000, which Collier explained are geared toward people making 80 percent of the median income for the Portland area, and will be well-suited to first-time homebuyers.
One thing is for certain about the project: Making it happen won’t be cheap.

According to a PDC board report on Killingsworth Station, the commission will offer up $4 million in loans and grants to the developer and financial assistance to people buying the new condos. Additionally, the developer will be granted the land valued at over $1 million.
PDC justifies the project on grounds that it will provide good housing for the up-and-coming neighborhood, and it’ll be a positive presence once the economy rebounds.

But since the recent housing collapse, the market for similar residential projects has been poor. According to, the total inventory of condos and single family homes in Portland has risen to nearly 18,000 units, up from 8,000 in 2006. The median price of a home in the city has dropped by over 9 percent, which puts home developers in a less-than-ideal position for a project of this nature.

Collier recognizes that there is a glut of similar properties, and said that Killingsworth Station “would be ready to break ground if it weren’t for the down market.”

There’s also questions as to whether or not this is the right project at the right time..

“I think that it’s just another tool to gentrify,” said Julie Metcalf-Kinney, an affordable housing advocate and member of the Interstate Urban Renewal Advisory Committee-which advises the PDC.

Metcalf-Kinney is also unhappy about the project’s long delays, and questions the benefits to the community.

“None of it’s affordable,” she said. “The project isn’t even worth supporting.”

The creation of housing aimed at people at 30 to 50 percent of median income would be a better use of the land and money, she argues.

Calls to other members of the IURAC weren’t returned.

Jim Winkler, the president of Winkler Development, is still enthusiastic about the project despite the dour market. He anticipates that Killingsworth Station will eventually help snag more investment into the neighborhood.

However, Winkler said he still needs $8.5 million in financing to cover a scaled-back $14 million price tag, and has received jittery responses from lenders who have been reluctant to make a loan on anything with the words “condominium” or “residential” attached to it.

A PDC report also finds that the commission is at risk of a prolonged holding if financing doesn’t trickle in fast.

But Winkler and the PDC remain undaunted.

“We see this as an opportunity to be a catalyst in the neighborhood,” said Winkler.


About jakethomasreports

Jake Thomas is the web editor and news reporter at the Portland Observer. His freelance work has been published in In These Times, Utne Magazine, Willamette Week, Portland Mercury, and others.
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