GlobeSt.com UPDATE: DDA Approved for $12M Holman Building Renovation

PORTLAND-The Portland Development Commission has signed off on a $12-million disposition and development agreement with two local business owners that will rehabilitate the 90,000-sf Holman Building on the east bank of the Willamette River and fill it with 220 high-paying jobs. The agreement includes up to $3 million in public subsidies, but the project is expected to generate $1.66 million in city, county and state taxes and fees during its first year and some $16.4 million over the next 20 years.The two local business owners are Jeff Reaves of the Portland-based architecture and engineering firm Group MacKenzie and Jay Haladay of the Lake Oswego, OR-based software development company Coaxis. Reaves and Haladay, who are friends, plan to lease the building to their companies as their new headquarters. GlobeSt.com first reported the potential deal last July.Coaxis, which had gross revenues of approximately $19 million in 2004, plans to relocate 95 employees from Lake Oswego and 15 or 20 from Maryland. Group MacKenzie, which had $9 million in gross revenues in 2004, plans to relocate 100 employees from the North Macadam area of Portland. The two companies’ combined average employee salary is about $60,000.The DDA calls for $8.8 million in private equity and commercial loans taken out by the two business owners, a $1-million PDC seismic loan, up to $1.4 million from the PDC Quality Jobs Program and Economic Opportunity Fund Program, and a PDC site improvement grant not to exceed $600,000. In addition, the PDC will pay $87,000 to settle the building’s remaining Water Avenue LID assessment prior to its conveyance to Reaves and Haladay, who would pay $200,000 for the building under the name Rivers East LLC.The Holman Building is a two-story former warehouse with 38,000-sf floor plates, 24-foot ceilings and a 7,000 sf of mezzanine space on each level. The plan is for the two companies to occupy all but 15,000 sf on the ground floor in the building that is already leased to the nonprofit Portland Boathouse Inc. The organization represents several rowing clubs use the space to store canoes, kayaks, outriggers, dragon boats and other light watercraft that access the water via a new public dock that opened very near the building last year. The PDC purchased the building in 2002 in a $2.5-million package deal that included several properties on the east bank of the Willamette River. The PDC’s original plan was to renovate the high-ceilinged building, lease it up to businesses and organizations with river-related operations. However, cost estimates came in higher than expected and would-be tenants reduced their requirements, making the project unfeasible. Instead, it renovated only a portion of the ground floor for the Portland Boathouse and sent out a request for qualifications to see if anyone else would be interested in taking on the rest of the building. That is when Reaves called his longtime friend Haladay. Their liaison for the project is Monte Haynes of GVA Kidder Mathews. Last year Haynes told GlobeSt.com the project will entail a new exterior skin, a seismic upgrade, and new glazing and mechanical and electrical systems. In addition, Reaves and Haladay will construct a public plaza and pedestrian/bicycle path directly south of the building in the SE Clay right of way as well as a surface parking lot on the other side of Clay Street. Construction could start as early as November 2005 and be complete August 2006.