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New mood in Chinatown

PORTLAND TRIBUNE: JAIME VALDEZ - The Society Hotel is a sign of big changes underway in Chinatown.Patricia Augustiny checked in recently at the Society Hotel in Chinatown, and was gazing out the hotel’s plate-glass window from a couch in the front lobby.

“Just about everybody I see out there looks like a troubled person,” says the retired teacher.

Augustiny had just hiked to the top of Mount Tabor, and then walked along the downtown riverfront, noticing scenes she just doesn’t see where she lives in Chicago.

“I’m blown away by the amount of homeless and disturbed in the street. The volume here is staggering,” she says.

Near the hotel, Augustiny has seen one man in a psychotic rage shouting at the top of his voice, and a woman flailing her arms and legs as she walked back and forth on the sidewalk near the Greyhound bus station.

But Augustiny says she loves Portland and the neighborhood. “It’s an interesting mix. It’s grunge meets upscale.”

Catalyst for new development

The Society has been open for business in Chinatown since November, but already its location is seeming less like a risky proposition and more like the start of a trend. Almost all those abandoned and underused buildings on Northwest Third and Fourth Avenues have been gobbled up over the past year or so by developers who believe that Old Town/Chinatown’s redevelopment moment finally has arrived.

The Society Hotel helped blaze this trail, and its owners know it. “It was a leap of faith,” says Jonathan Cohen, one of four partners in the hotel. “It was a ‘build it and they will come’ strategy.”

The Society was the only hotel in the downtown area where Augustiny could find a room for under $200 a night — she paid just over $100.

Chinatown’s redevelopment moment appeared to be approaching in 2008, recalls Will Naito of Naito Development. The linchpin was going to be Block 33, a surface parking lot on Northwest Fourth Avenue a block north of Burnside. City money was spent to nurture a full-block project anchored by an Uwajimaya supermarket. Just as it appeared the project would get off the ground, the Great Recession reared its ugly head. Uwajimaya pulled out, and Chinatown development stalled.

In June, Guardian Real Estate Services bought Block 33 for $11 million, and is planning a mixed-use retail and apartment building.

Naito is redeveloping another property that in years past was going to herald Chinatown’s rebirth — the abandoned Grove Hotel on Northwest Fourth Avenue next to the Chinatown gate. Construction started on Naito’s nine-story, 113-room boutique hotel in April. Naito, who is getting financial backing from New York and San Francisco interests, says outside investment money is pushing much of the development in Old Town. When Naito bought the Grove property from the Portland Development Commission, he says there were 10 other developers competing for the site.

One by one, Old Town’s iconic properties have been sold. Developers have purchased the House of Louis and the old Magic Gardens building on Northwest Fourth. The Kalberer building, the Overland Warehouse building and the Wong’s Laundry building just north of the Society, are all in various stages of redevelopment.

Office demand from tech companies is driving a lot of the redevelopment, says PDC manager Sarah Harpole, who notes that young tech workers don’t mind the Old Town street scene and prefer the rustic appearance of redeveloped historic buildings.

“You have a younger generation not only on the sellers’ end, but also in folks interested in buying property in this area,” Harpole says. “You have a new generation that’s coming in and looking to purchase.”

In 2014 there were 16 Old Town properties listed for sale, Harpole says. Now there may be one, and the only sites that may yet become available are small historic buildings and parking lots.

Not sidestepping around homeless

The Society’s partners had faith that out-of-towners wouldn’t object to the Skid Row-style street scene in Old Town, which is home to the bulk of the city’s social services for the homeless. Rather than pretend guests won’t occasionally have to step around sidewalk sleepers, the Society’s staff have been instructed to talk guests through the issue when they check in.

The hotel has marketed itself to people who love history — the building is full of artifacts found during renovation. Budget business travelers and adventure-seeking backpackers have discovered the Society, which offers a quirky mix of rooms with bathrooms, rooms with shared bathrooms, and a hostel-style bunkhouse. Occupancy rates are consistently over 90 percent this summer.

Partner Gabe Genauer says the Society’s four owners got in on Old Town’s redevelopment just in time.

“We were able to pull this off at a time the boom hadn’t really kicked into gear,” Genauer says. “If we were trying to do something like this today, with the competition that’s out there with deeper pockets, I don’t know if it would have happened.”

Mix of room types, incomes

Late in the evening, most of the 24 beds in the Society’s bunkroom are occupied by men and women in their 20s and 30s, with a few middle-age men thrown in. There are backpackers from Europe and Australia, young professionals, and a woman about to start Columbia Law School. Three beds are occupied by members of a Los Angeles video crew in town to film a documentary.

Four bunkroom guests are hunched over laptops at the large table in the middle of the room, mostly oblivious to the sound of snoring from somebody in one of the nearby bunks. Earlier, one of the L.A. crew was fiddling with a video-filming drone at the table. All in all it’s a very communal scene.

Five floors up, a gentle wind is riffling the wheat grass in planters around the edge of the Society’s roof. It’s quieter than Toronto resident Heather Allen expected, no sirens or car horns. Allen, who tours a different West Coast city each summer, is playing with her tablet and talking to strangers after watching the sun set behind the West Hills.

Allen, a social worker, says there are homeless in Toronto, but the street scene in Old Town left her “a little shocked” when she first arrived.

“It doesn’t bother me. It’s a West Coast thing, and I work in the industry,” she says.

So far during her stay, Allen hasn’t been panhandled or hassled, aside from one man in front of Voodoo Doughnut asking for spare change, but not aggressively. She walked back to the hotel near midnight the previous night.

Allen is staying in one of the most expensive rooms. Three nights will run her about $550. Every other downtown-area hotel she considered when planning her trip would have cost over $1,000.

Part of the solution?

The upstairs guests and the bunkroom dwellers are indistinguishable in the lobby and the rooftop garden. It’s an unusual model the Society has pursued — mixed elements that normally don’t go together. That’s true inside with guests and outside with the neighborhood.

The hotel’s owners and staff don’t talk about gentrification. Instead, they refer to integrating the hotel into its surroundings.

Tom Bowes, a few tables away from Allen, is making his first Portland visit from Toronto, and the real estate agent also is staying in one of the high-end rooms. He calls the accommodations “minimalist, not extravagant but well-designed.” No television or bar fridge is fine with him.

Bowes wonders what happens to the homeless once the neighborhood changeover takes place. They aren’t going away, he’s told. In fact, a new methadone clinic recently opened just across the street from the Society.

Bowes likes that. He also likes the mix at the hotel. Last night he was talking to one of the young backpackers staying in the bunkroom, who told him the accommodations were a big step up from the hostels he normally frequents.

If the experience of the Society’s guests is any indication, that same coexistence on a neighborhood scale shouldn’t be as difficult as many once thought.

Bowes has noticed that the hotel and staff don’t encourage guests to ignore or overlook the street people.

“This is a part of society, and people that are here recognize that and don’t want to turn away from that,” he says. “People who don’t want to come here because it’s gritty are the type of people who don’t want to acknowledge homelessness exists. These guys are part of the solution.”

Traditional Chinese tongs giving way

Three years ago, city officials tried talking with owners of the Suey Wing building on Northwest Fourth Avenue, hoping to redevelop the abandoned Chinatown property.

The building would require an expensive seismic upgrade if renovated, and the owners weren’t interested. But the building’s condition, according to Chinatown insiders, wasn’t as much a problem as the owners.

The owners were members of a traditional Chinese tong — fraternal organizations dominated by elderly men who once ran Chinatown businesses. About 20 of the vacant and run-down properties in Old Town/Chinatown at the time were owned by tongs. Some tongs had dozens of retired members scattered around the country. Getting them to agree on selling a property or approving a bank loan was a near- impossible task.

But local firm Urban Development Partners was able to buy the Suey Wing building last year. It’s doing seismic upgrades and has secured office tenants for the renovated building. The Society Hotel property also was owned by a small tong, but it has only one participating member and he’s in his 90s, according to the hotel’s owners. Two other tong members had willed their interest in the building to family members living outside Oregon who were willing to sell.

For years, potential Chinatown developers were told getting consensus from tong members was impossible. But the tongs are no longer an insurmountable obstacle, says Will Naito, developer of the new Grove Hotel on Northwest Fourth Avenue.

“As the tongs continue to age, they’re getting to the point where, rather than pass it on to the next generation, they feel for whatever reason it is time to sell,” Naito says.

“It wasn’t impossible. You just had to wait.”