Killingsworth Station Project Downsized

PORTLAND-A proposed full-block development at North Interstate Avenue and Killingsworth Street is shrinking in order to get eye-to-eye with the financing package. The project, called Killingsworth Station, was the result of a request for proposals by the city’s urban renewal agency, the Portland Development Commission, which owns the property.In May 2004, in cooperation with Innovative Housing Inc. and Peninsula Community Development, developer Tom Kemper’s KemperCo LLC signed a memorandum of understanding with the PDC for the development. At that time, the understanding was that the project would include 52 for-sale units, including 45 loft units above retail and 7 townhomes, 56 affordable rental units over retail, 13,000 sf of retail and 80 structured parking stalls.PDC project manager Christine Hermann tells GlobeSt.com that the total costs for this project were estimated to be $15 million. PDC had allocated $1.5 million of Interstate Corridor Urban Renewal Funds to help finance the project. However, refined construction cost numbers indicated that a total of $3.2 million in additional financing would be needed to build the project as originally proposed, resulting in a funding gap of approximately 1.7 million.Hermann says that because the gap was too big the project had to be downsized. The revised project includes 14 for sale units, including 10 townhouse-style units over retail and four townhomes not over retail, 56 rental units over retail, 13,000 sf of retail, and 37 surface parking spaces.Total development costs for the revised project are estimated at approximately $12 million, and the financing gap is now about 900,000. Hermann says the remaining gap is due to “increased construction costs related to a general increase in supplyprices in tandem with more detailed cost estimates.” As with the original plan, in addition to the urban renewal dollars, project financing will include bank debt, developer equity, Low Income Housing Tax Credit equity, and grants from TriMet and Metro. Additional sources for bridging the gap are undetermined at this time.The PDC’s executive director last week briefed its board of commissioners on the changes. In the next 60 days, the commission will seek additional input from community stakeholders and identify next steps.