Two buildings complete in Eugene Riverfront development; 11 still to go

Nearly two decades into planning, Eugene’s largest urban redevelopment in generations is taking shape. 

Last month, the first tenants moved into the 130-unit Portal apartment building at East Fourth Avenue and Mill Street. Portal joins the 95-unit Heartwood apartments, which opened last year, as the first finished buildings of the Eugene Downtown Riverfront development.

Eugene officials are banking on a transformation of the 16-acre property fronting the Willamette River, from a neglected former Eugene Water & Electric Board operations yard into more than 700 units of housing, with retail and restaurant spaces, a boutique hotel, parks, plazas and performance spaces.

But the original plan, which the city’s development partner once hoped to complete by 2023, is way behind schedule. Only two of 13 buildings are complete.

The Downtown Riverfront Park has been developed, but sections where trees and vegetation are planned are still lined with weeds and thorn bushes, though a plaza with a children’s playground opened last week. 

City officials now say that the entire buildout of buildings and park spaces could be complete by 2033 if construction continues at its current pace — 10 years later than the developer envisioned when it signed on to the project.

The city is investing tens of millions of urban renewal dollars on the redevelopment through its partnership with Atkins Dame, the Portland firm that spearheaded much of the early development in Portland’s Pearl District. Building up the Downtown Riverfront would achieve a longtime goal of connecting the city’s downtown core to the Willamette River. And the influx of residents and shoppers there could turn the land into a substantial property tax windfall.

“This project is a one-of-a-kind one,” said Amanda D’Souza, development programs manager for the city of Eugene. “As far as I know, something like this hasn’t been done in the city before.”

But even as construction kicks into higher gear following several years of planning and pandemic-related delays, the Downtown Riverfront project faces other headwinds largely beyond the city’s control.

Rising material costs and labor shortages that hit the construction industry since the pandemic are affecting several parts of the riverfront project. The Heartwood and Portal buildings were both constructed on schedule, according to the general contractor, Essex General Construction.

But the plaza at Downtown Riverfront Park, which the city had hoped to open with a ribbon-cutting ceremony in early July, wrapped up a month behind schedule.

“It’s just the standard construction issues, delivery of materials, those kinds of speed bumps,” D’Souza said.

Fewer workers, higher costs

Officials with the city of Eugene and EWEB had been discussing a deal for the city to acquire and redevelop the downtown EWEB property for nearly a decade.

But it wasn’t until 2018 that a deal was finalized for Eugene to pay $5.75 million for 16 acres of the riverfront site.

Later that year, Atkins Dame — then Williams & Dame — presented an ambitious development timeline to the Eugene City Council.

The firm wasn’t the city’s first choice for the project. The city in 2014 had selected the University of Oregon Foundation to lead the redevelopment, over Atkins Dame and another Portland developer, Trammel Crow. (Trammel Crow, which has helped Amazon build out its network of huge distribution centers in recent years, recently filed a permit application to build a nearly 300,000 distribution center near Eugene Airport.)

But the UO Foundation backed out amid its due diligence process a few months after being selected, citing risks to the foundation’s finances. The city then turned to its second choice, Atkins Dame.

“Have a beer on the river by 2021,” a page in the firm’s draft presentation of the riverfront project stated. An accompanying timeline projected that initial buildings and park space would open in 2021, with much of the vertical construction wrapping up in 2023.

The COVID-19 pandemic upended that timeline. And the inflation that followed has driven up the price of wood and other building materials, as well as interest rates developers pay for construction loans.

Costs of building materials like cabinets and doors “are probably double what they were when bid in 2018,” said Dan Revell, executive director of the Western Oregon Builders Association.

City officials say the timeline is also subject to the whims of an unpredictable economy, and a shortage of the kinds of subcontractors that firms like Essex need to do everything from electrical and plumbing work to window and cabinet installation.

About 300 fewer Lane County residents were employed in construction jobs in June than a year earlier, according to Oregon Employment Department data. Across the entire state, 4,500 fewer people are employed in construction jobs than a year ago.

“Whether it’s these apartment projects or the large-scale single-family builders, (general contractors) are having to draw in subcontractors from out of this area,” Revell said.

Atkins Dame officials didn’t return phone calls and emails seeking comment on their timeline for upcoming phases of the Downtown Riverfront.

Prevailing wage rate for unionized workers

Eugene officials say they have the financial flexibility to support the project through its build-out, even as questions swirl around the Riverfront’s total cost.

Willamette Week in May reported that an attorney representing Atkins Dame had asked the Oregon Bureau of Labor & Industries to reconsider a 2021 state ruling that declared the entire riverfront development a “public works” project that’s subject to Oregon’s prevailing wage rate for unionized workers.

BOLI determined that because the city is investing $35 million in infrastructure work like streets, utilities and parks that benefit the whole project site, private buildings developed there should be subject to the same wage considerations. If upheld, the ruling could add millions of dollars to Atkins Dame’s development costs.

“While the prevailing wage determination does impact project costs, it is one of a number of factors that need to be taken into consideration for these plans to move forward,” said D’Souza, the Eugene development programs director. “There are so many levers at play for these types of projects, including market demand, supply costs, interest rates, that all influence the financial feasibility.”

Urban renewal district funding

One factor working in the city’s favor is how it’s funding much of the work. The 16 acres of riverfront property is in one of two Eugene urban renewal districts, designations that allow the city’s Urban Renewal Agency to channel increased property tax revenues from elsewhere within the district to finance development of new construction and investment.

The Riverfront Urban Renewal District was established 40 years ago. And it covers 178 acres, an area roughly from Pearl Street near the downtown Park Blocks at the western boundary, north toward the Ferry Street Bridge, and all the way east to the Franklin Park natural area located more than a mile east of the Downtown Riverfront.

That means the Urban Renewal Agency can draw from years of rising property tax values generated by new construction within the boundary — projects like the downtown Eugene Whole Foods grocery store, hotels and student housing projects on East Broadway and Franklin Boulevard.

The agency has spent or allocated nearly $52 million in the riverfront project so far, covering expenses like the city’s purchase of the EWEB property, infrastructure improvements, park development and more. The agency has about $64 million available for other projects in the Riverfront District. And twice in the past 15 months, Eugene City Councilors, which oversee urban renewal spending, have dipped deeper into the fund than first planned to support projects with rising costs.

The City Council earlier this year agreed to raise its commitment of urban renewal funds to help Atkins Dame and Lane County’s housing agency, Homes for Good, stay on track to break ground on at least 75 units of affordable housing on the riverfront in fall of 2026.

The city had hoped to stay in the middle of the $1 million to $8 million estimated funding needed for the project. But city councilors in February voted to raise its urban renewal commitment to $7.5 million, up from an earlier estimate of $5 million.

That decision followed a council vote last year to commit an additional $6 million in funding toward construction of the Eugene Steam Plant. That project, being led by Eugene firm deChase Miksis Development, is looking to transform the derelict plant that once housed huge steam boilers and turbines into an arts and performance space, food and drink shops and a boutique hotel.

The city hopes to finalize a development agreement with deChase Miksis later this year, which would require construction to start within two years. The project should take an estimated 18 months to two years to complete, D’Souza said.

Mark Miksis, deChase Miksis Development’s managing partner, didn’t return a voicemail and email seeking comment.

What’s done, what’s still to come

Here’s a rundown of what has been built to date, and which projects are still in planning phases:

Completed or under construction

• Riverfront Park: Pedestrian and bike paths, seating areas, river overlooks. Completed 2022.
• Heartwood: 95 market-rate apartments. Completed 2024.
• Portal: 130 market-rate apartments. Completed in June.
• Riverfront Plaza: Play structures, public art, event space and natural areas. Completed in August.

Planned

• Affordable housing project: At least 75 apartments jointly developed by Atkins Dame and Homes for Good, for households earning $55,020 or less (60 percent of Lane County area median income). Construction could start in fall 2026.
• Market rate apartments: Three additional market-rate apartment developments led by Atkins Dame, though details are available about only one of them, called The Landing, a 237-unit complex located next to the Portal. The River District’s website lists a 2027 leasing date for The Landing, but the precise timing is unclear. Atkins Dame didn’t respond to questions about its timeline, and city officials said the firm is currently focused on the affordable housing project. The two other apartment complexes are planned between the Heartwood building and the EWEB Steam Plant building, one with an estimated 80 units and the other with 75 apartments. All three planned market rate projects have been granted 10-year property tax waivers by the Eugene City Council. 
• Commercial buildings: Atkins Dame is looking for other developers to lead the construction of three retail buildings on the riverfront site, each along East Fifth Avenue. Eugene commercial real estate firm Evans, Elder, Brown & Seubert is marketing the lots to local and regional restaurants and retailers. “We don’t have anybody committed to the project, but we’ve definitely had some interest,” partner Stephanie Seubert said.
• Townhomes: The riverfront plan includes three sites for townhomes: One just west of the affordable housing development, and two north of East Fifth Avenue, near Eugene City Hall. Townhome development would come near the end of the overall riverfront project, and the exact location and timeline of the projects hasn’t been set in stone. Current plans call for Atkins Dame to lead their development.
• Steam plant redevelopment: Conversion of the old EWEB steam plant into a hotel and commercial space. The city expects to sign a development agreement with Eugene development firm deChase Miksis later this year. The firm would be required to start construction within two years of signing the agreement, meaning work would have to start by late 2027. The work has a projected 18-month to two-year buildout.