A large withdrawal
The cratering of downtown Portland continues this week with news that U.S. Bank is leaving the U.S. Bank Tower at Sixth and Burnside, the city's second tallest building (by 10 feet). The bankers are moving most of their employees to an office complex of theirs in Gresham; the rest of their Big Pink crew are going to other locations downtown.
If you ask the bank why they're cutting out, you'll get nothing but corporate double-talk in response. But let's face it, it's gotta be the crime and the drugs surrounding the building. And could you blame them?
To see the point, all you have to do is read what the landlord, a Seattle real estate outfit called Unico, said in lamenting the bank's departure:
All of us at Unico are incredibly disheartened to hear this news today.
We have spent the past several years investing alongside our neighbors to brand and improve a new downtown district around the Tower, Ankeny Triangle, which has become a beautiful, walkable destination for locals and visitors.
Ankeny Triangle – are they kidding? Do they follow the news? A guy was shot and killed there just yesterday morning.
That big old tower – hard to think it's 40 years old – must be getting pretty bleak inside. The bigger they are, the harder they fall, I guess. The law firm Miller Nash bolted a while ago; now the bank is walking. Another tenant who split is suing Unico, saying the building was unsafe.
There's so much history surrounding U.S. Bank and Portland. But it appears to be coming to a sad close, and yet more central city office space will soon go empty. Downtown will come back someday, but you start to wonder whether anyone alive today will still be around to see it.
Street crime and drugs are an issue. But, don’t forget the undercurrent of the city’s attitude toward treating businesses as simply a source of taxes.
ReplyDeleteThanks to Democrat control of Multnomah county and Portland politics!
ReplyDeleteYeah, well, that’s like complaining about the weather
DeleteWeather is not a choice
DeleteBingo.
DeleteWish the other side had something more to offer than gun toting' wingnuts, Proud Boys, and Trump suckers.
Deleteyour reveal of the other side consisting of "gun toting' wingnuts, Proud Boys, and Trump suckers" leaves us in the middle wondering why we have to choose between them and those that have no problem accepting a $500k contribution without asking too many questions, having an unelected first lady involved in mental health policy decisions, or focusing the great majority of their attention on Portland at the peril of the rest of the state.
DeleteBy all means, though, continue to vote the party. Continue the mediocrity.
Between that and the party of J6, you're damn right.
DeleteThe crash of commercial real estate is going to be the death of many cities and banks. And the sad part is that most of the buildings are not convertible to other uses without huge expense. But don't worry Black Rock will come to the rescue for pennies on the dollar.
ReplyDeleteDowntown was built on timber money. We killed timber in the 90s.
ReplyDeleteIt was rebuilt as a tech hub. Covid accelerated what was going to happen anyway. Tech, particularly at scale, can be done anywhere now.
What's going to bring us back to the office in 2025?
Nothing is going to bring workers back to the downtown offices. The local coffee shop, restaurant, parking garage, etc are not owed a profit out of the pockets of workers who are perfectly capable of doing their work remotely. I feel for those business owners, but I am sure most of them were perfectly happy with capitalism, until they weren't.
DeleteLook at the bright side. Fewer high rises downtown with lights on means better safety for migrating birds.
ReplyDeleteI worked downtown 20 years. It was a great company to work for until a new finance director was hired who basically fired most of the staff in our office but had the brilliant idea of connecting the three floors we occupied by a central stairway making one really big office space. I thought it was insane we could always use the elevator or the locked stairwell and the cost had to be huge. She was eventually fired a month after I left and the company moved across town to the old Montgomery Wards building in NW. I always wondered how the building managed to deal with such a huge space for a single client especially now.
ReplyDeleteI worked there as a temp some 20-years ago when the initial namesake was in the process of vacating to MLPS I think it was. Nice glitzy building, but yeah is too close to the scuzz. I was hired as general office worker, but ended up being a glorified secretary. Which was strange enough by itself.
ReplyDeleteSeeing such a deserted building was just the icing on the “strange” cake.
Sorry to say, we are witnessing the disintegration of a society. Proof again, weird doesn't work.
ReplyDeleteUnfortunately for ordinary citizens, the Keep Portland Weird contingent has proven able to keep winning elections regardless of the consequences.
Delete“Keep Portland Weird”was amusing until it became a political force.
DeleteI think Harry Merlo had a penthouse office up there at one point. It's second-tallest, 10 feet short of WF. Always thought 4th and Burnside was a sketchy location for a building like that but hoped it would improve the neighborhood. Wrong...
ReplyDeleteHeight point corrected, thanks.
DeleteI miss everything about “old Portland” which I considered pretty provincial 50 years ago. The department stores, Imagine’s marble ladies room!, Charles F Berg, the original US Bank, now closed up, Rose City transit, and the vibe of business and normal people on the streets.
ReplyDeleteNow downtown is just a sad smelly dirty place where many of us feel unsafe.
Big Stink
ReplyDeleteBut should we care what a Minneapolis based bank does?
ReplyDeleteThe biggest issue here is US Bank is requiring most of it employees to come back to the office either full time or hybrid in mid-January, depending on the position. Workers shared their serious concerns about working in that area of downtown. US Bank decided to move out, and use some very underutilized space in Gresham that they own instead. (Along with a few employees moving to branch type locations in Portland and Vancouver.)
ReplyDeleteThe Emperor has no clothes - Part 1 of 2:
ReplyDeleteThings are the way they are, here in the City of Roses, because the unelected status quo (invisible to the public) benefits from the current conditions, as miserable as we all may be from the results.
PERS investments benefit from current conditions by loading up on Private Equity investments, which are reputed to have the highest returns compared to other portfolio item investments.
Private Equity has already been buying up manufacturers across the country, stripping them and outsourcing to cheaper labor in either other states and/or other countries. This has destroyed larger labor unions, while government employees have taken advantage of this situation to grow their Unions.
As many of us know, among other market contrivances, Private Equity has been buying up Single Family homes across the country, artificially driving up home prices to varying degrees, depending upon the locale. When one attempts to buy a house and a cash buyer suddenly shows up to offer 10% more.... that cash buyer, though appearing to be an individual person, is usually an agent/broker working on behalf of a bank or private equity entity. The house is then purchased by them to be rented.
This market play of buying and then renting, originated during the crash of 2008, as a result of millions of foreclosures, resulting in people with long term ruined credit and therefore difficulties qualifying to buy another home. Meanwhile, many of the foreclosed homes had "clouded" titles. As their ownership had been bundled and securitized into various financial instruments using the Mortgage Electronic Registration Systems, Inc. (MERS) based in Reston, Virginia. This is a relatively new contrivance, as Deed and Title records have traditionally been available only in the locality of the said property and took time for transfers. So banks needed a way to move Ownership quickly and electronically using MERS. This resulting in Securities issued by Wall Street Banks, but split up into thousands of pieces, so that proof of ownership of any one property in the portfolio became impossible. The banks did not sell these foreclosed properties, because the titles were clouded. Title insurance could not be acquired. So the banks decided to rent the properties instead of selling. They realized then that this was a good play, especially with continued low interest rates from QE. So, even more properties were sought and purchased for rentals and an investment trend was started.
The Emperor has no clothes - End of Part 1
The Emperor has no clothes - Part 2
ReplyDeleteMeanwhile, for over a decade, Private Equity has also been buying up trailer parks across the country. In the Midwest, trailer parks are the cheapest form of housing for people with the lowest incomes, many with fixed incomes, government assistance, disabilities, mental illness, criminal records, substance abuse, etc. When Private Equity purchases these, they raise the rents, driving the most marginal people onto the street, to become homeless. The Midwest local Social Services typically do not have a budget to support homeless, so they usually give the person a bus ticket. In places like Minnesota, homelessness in the winter can be a death sentence. So they then end up on the West Coast, including the City of Roses. Despite what the Mayor has said, most of the homeless in Portland and other West coast locations are not from the local area, they are mostly from out of the region. I have spoken to locally native first responders who have worked for years with Homeless in the City of Roses and they affirm that most of the homeless that they have encountered during their rounds, are not from our region or even state. As a local native and a bicyclist on local trails, I can attest to the non-native accents that I hear when encountering and conversing with the homeless. We should take care of our own and through the federal government, force the originating states to pay for their homeless. This while non-profits in my neighborhood, such as Urban Alchemy with their focus on "harm reduction," low-barrier shelters use naive, childish approaches that will prove in time (if not already!) to be inefficient and wasteful of tax payer dollars, even needlessly prolonging and exasperating the problems.
PERS also invests in REITs which build most of those ugly six story rectangular Silo Bunker Condos and Apartments that cast dark shadows across our Northern latitude streets (this isn't San Diego!), with high end rental rates for many ridiculously small college dormitory Room sized apartments across the city. These are touted by Planners for increasing density. Many, though seemingly fancy by 21st century standards, remain low occupancy, as they are often well above affordable markets.
What these Silo Bunkers actually do, is raise property taxes and assessments. Look on the 'Portland Maps' website to compare the property taxes of a multistory apartments to adjacent single family residences nearby. You will see that property taxes multiply by each story and drive up property taxes in surrounding housing and buildings. This is a synthetic non-market driven way for government entities to drive up property tax revenues for local governments. Driving up property values also inflates the value of associated government balance sheets, so that they can secure lower interest loans through issuing bonds. However, the rising interest rates have threatened this access to once cheap credit.
The synthetic high prices were also benefitting companies such as RealPage:
https://www.c-span.org/video/?537956-1/attorney-general-garland-announces-antitrust-suit-real-estate-company-realpage
We cannot be ignorant of the implications. We also cannot be naive enough to believe that the only viable jobs for our society are Fintech and government jobs, as implied by local policy decisions over the past few decades.