Former Burgerville site stuck in limbo
Developer: Planned apartments delayed by lending climate
Monday, February 20, 2012
It’s been nearly four months since Burgerville’s downtown hamburger stand met its demise under the brute force of dueling backhoes.
Now, an uncertain financial climate has left developer Elie Kassab in the dark about when work will start on his $16 million apartment project planned at the site long occupied by the Vancouver restaurant, 305 E. Mill Plain Blvd. The entire block -- bordered by Mill Plain, D, 13th and C streets -- is earmarked for a 92-unit complex called Prestige Plaza.
Plans for a new downtown Burgerville are also in flux, according to an official who said the hesitation stems from unanswered questions about construction, staging and right-of-way acquisition for the approximately $3 billion Columbia River Crossing Interstate 5 bridge replacement project .
Vancouver-based Burgerville is committed to having a presence in the heart of the city, said Jack Graves, the company’s chief cultural officer.
Meanwhile, Kassab said Prestige Plaza’s uncertain start date is rooted in today’s lending climate. He has asked for a 90-day extension on the project’s building permits, which had been set to expire this month.
Kassab now has until April 25 to break ground, said Chad Eiken, a planner with the city’s office of development review.
It’s been nearly one year since Vancouver-based Prestige Development started seeking project financing, said Kassab, the company’s president.
“Banking has gone from one extreme to the other,” said Kassab, who is no stranger to commercial construction. Among other projects, Prestige Development has also developed multiplex movie theaters in Vancouver, Battle Ground and Sandy, Ore., as well as downtown Vancouver’s 46-unit Lewis & Clark Plaza apartments at Sixth Street and Broadway.
But Kassab said financing just takes longer to secure these days. He said it’s even difficult to finance apartment units, which have been in high demand since the housing downturn and sluggish job market have shrunken the pool of potential homebuyers.
He said plans for Prestige Plaza’s dual four-story buildings also call for a small amount of ground-floor retail space facing Mill Plain Boulevard.
“We actually have a tenant interested in about 60 percent of it,” Kassab said
But lending is stringent, as banks pay closer attention to the global financial situation.
“I mean, Greece is on one day and off the other,” Kassab said, referring to European leaders’ months-long debate over whether to bail out the debt-strapped country. Some experts fear Europe’s problems could affect financial systems in the U.S., Kassab said.
He said the uncertainty is just a fact of life for commercial developers today.
“It’s a general condition of the global economy,” said Kassab, who also plans to use a city property tax abatement program that will add up to about $1 million in savings over the first 12 years of the project.
Burgerville’s next move
As for Burgerville, the company has considered a couple of downtown sites, according to Graves, the chief cultural officer.
But Burgerville is in no hurry to spend the capital without knowing how downtown traffic patterns will change during and after the construction of the Columbia River Crossing and its proposed light-rail component.
“That’s an issue that’s a little difficult to deal with if you’re going to put up a structure,” Graves said.
Burgerville officials seriously considered the now-vacant lot at the northwest corner of Main and 15th streets, formerly the home of a downtown car-washing business, he acknowledged.
“We went through the process and couldn’t come to any agreement,” Graves said “It just didn’t pencil out for us at this point in time.”
But the 38-restaurant chain continues to expand and is planning to open its 39th Burgerville outlet in Tigard, Ore., this spring.