^it appears there might be more than one player pushing for higher limits...
SOUTH WATERFRONT SKIRMISHING
The barge-building firm plays a cagey game with the area's key players, including filing a Measure 37 claim to protect its interests on the riverfront
Sunday, December 17, 2006
By RANDY GRAGG
The Oregonian
It's hard to find a more striking contrast of old and new than where Southwest Gibbs Street meets the Willamette River.
On Thursday, the press got its first rides on a shiny new aerial tram departing from the end of Gibbs up and down Marquam Hill. Mere steps away, 75 proud workers of Zidell Marine Corp. are finishing the largest barge they've ever built -- 365 feet long, weighing 3,000 tons and with a capacity of 86,000 barrels of oil.
Rumors are flying that it's the last barge Zidell will build, boxed in as it is by condos rising to the south and Oregon Health & Science University's planned academic village to the north.
Au contraire, says company CEO Jay Zidell. He's got a 56,000-barrel barge under way, a contract signed for an 80,000-barrel barge after that and one, maybe two, on a waiting list -- as much as four years of barges in the pipeline.
That said, Zidell appears to be making the first tentative moves toward joining -- or maybe crashing -- the South Waterfront development game. Nov. 27, he dropped the seven lawsuits he filed against the city for what he considered unfair local-improvement-district assessments to build the tram. A few days later, his lawyer, Edward Trompke, filed a Measure 37 claim for $120 million.
The lawsuits, most insiders agree, were windmill jousts. The Measure 37 claim is a potential cluster bomb. If the claim is upheld, the city would either have to pay Zidell or waive regulations enacted since his family bought the land. That's a lot of regulations: According to the claim, the family has owned the land since 1955.
Zidell immediately suspended the claim, stopping the clock on the 180 days the city has to respond. Meanwhile, he hired the Sacramento firm EDAW to begin master-planning his 33 acres of South Waterfront. Even his development consultant, Bob Durgan -- who has long chafed South Waterfront wheeler-dealers with his pushing and shoving for bigger roads and a smaller greenway -- is showing off slides from recent brainstorming trips to Chicago, New York and San Francisco.
"Our family hopes to have a big say in the property's future," Zidell says. "The market will determine what we do."
In many ways, Zidell has little choice but to develop or sell. The company faces a $4.5 million cost to clean up its land, long used to build and scrap ships. The tram and streetcar assessments will cost him more than $2.7 million. Neither fits well into the expense column of a barge business spreadsheet. He's weeks from closing the sale of 35 North Portland riverfront acres to the University of Portland, land he bought only nine years ago as a potential new location for the barge business.
Zidell missed his best moment for the quick-money exit from South Waterfront when developer Homer Williams back in 2001 began connecting the deals for the new district. All the key players -- the city, OHSU and Williams -- wanted land to leverage. Zidell says no one made any offers. Williams says Zidell could have "easily walked away with $15 million."
That window slammed shut in 2004, when another important player, the Schnitzer family, donated 20 acres next door to Zidell to OHSU. That sandwiched him between the university and Williams, both ready for action.
"Jay was cooked," Williams says. "If the majority landowners want a local improvement district, then a local improvement district is what happens."
Insiders chortle at the twist. For most of the last century, the Zidell family blocked valuable river access for the Schnitzer land with a narrow finger of land running north. But the early 20th-century advantage turned into an early 21st-century liability. Zidell is responsible for the environmental cleanup of land that is almost certain to become a greenway and restored habitat, a wonderful amenity for OHSU.
Zidell says he doesn't know whether to feel "anger or envy" about all the deal-making. He filed the Measure 37 claim for leverage, "to protect our interests and our rights."
The city's master plan for the district earmarks 35 percent of Zidell's land for streets and parks. Zidell points out the city has bought the parks being built in Williams' development. On the other hand, Zidell can build huge towers by right that Williams and other landowners must earn with setbacks for the greenway and other amenities.
And so a very, very delicate game begins.
Zidell paid a 20-minute visit to Mayor Tom Potter last week, asking for one city point person to deal with. He says he hopes to plan his property together with OHSU.
"It's a terrific institution," he says. "We're very hopeful."
OHSU and the city are quick to curtsy back.
"We're having productive discussions," says Mark Williams, development director for OHSU, who has also hired a master-planning consultant, Perkins + Will, for the land north of Zidell's.
"We don't feel like there's gun to our head," according to Portland Planning Director Gil Kelley. "Zidell understands they are receiving benefits from the city and other developers working down there."
Up to now, Zidell and Durgan have been checkers players among chess masters like Homer Williams. Measure 37 isn't a checkmate, but it sure puts some powerful new pieces on the board.
The public interest, of course, is connecting OHSU and the rest of South Waterfront to the city with unbroken streets and a seamless greenway. And, so, as much as Zidell hopes to benefit from joining the South Waterfront game, that game might benefit from him, too. Keep in mind, this is a guy who keeps his father's antique glass and ceramics collection in his office, who feels "strong loyalty" to his workers, who earnestly talks about leaving "a family legacy."
And, lest we forget, in 2003, when Homer Williams was routinely saying a ski lift would be just fine for the tram, Zidell wrote the first $50,000 check to sponsor a design competition for it -- an ante Williams and OHSU had to follow to stay in the tram's political game.
It will be fun to watch not just the urban, but the personal drama unfold. Zidell has a choice: be remembered as the barge builder who kept everybody aiming high or the ruffian who dropped anchor on everybody's game.
Randy Gragg: 503-221-8575;
[email protected]
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