Spreading the Streetcar Love

uilt incrementally at a current cost of $250 million and considered the model of “second generation” urban rail projects, the Portland Streetcar began producing dividends even before it entered service in 2001. A 2016 study by the Federal Transit Administration found that as of the 1997 decision to go forward with the project, $4.5 billion of market value had been developed along the Streetcar’s path, including 7.7 million sq. ft. of commercial space and 18,000 residential units. According to Dan Bower, executive director of Portland Streetcar, Inc., added market value within the Streetcar’s target area has since surged to $13.3 billion.

The Streetcar initially covered about seven miles. Since extended to 16 miles along parallel loops and dotted by 70 stations, it stitches together a series of downtown neighborhoods, several of which it is widely credited with helping to revitalize and re-imagine. Property owners along the path were incentivized to invest in the public-private project, says Bower, by the rezoning of target areas from industrial to mixed use, which boosted property values and set the stage for the development that has followed.

“The people who paid for the Streetcar,” Bower tells Site Selection, “are largely the property owners along it who formed a local improvement district. Everybody within four blocks of the Streetcar essentially voted to tax themselves to build it.”

Portland’s bustling Pearl District is the most visible manifestation of the economic vibrancy the Streetcar has helped to catalyze. Once little more than a railroad yard, it’s now a bustling neighborhood of office and residential space, bars, restaurants and pedestrian life.

“It was really like a completely new neighborhood that we shaped around the Streetcar line,” says Bower.

“The growth trajectory of the Pearl District,” agrees Lisa Abuaf, director of development and investment for Prosper Portland, the city’s economic and urban development agency, “has really chased alignment with the Streetcar. It has literally changed our skyline. It started with five- and seven-story buildings and now you’re talking about 20-plus stories.”

‘Radical’ Mixed Use
A team of dreamers is out to reinvent struggling Old Town, located near the Pearl Distinct and served by Portland’s MAX Light Rail Service. “Made in Old Town” is the brainchild of Elias Stahl, founder and CEO of Portland-based Hilos, whose production platform blends 3D printing with traditional footwear craft. With public backing, Made in Old Town looks to purchase and renovate about a dozen aging but elegant buildings for green manufacturing with a focus on athletic shoes and apparel, Portland’s calling cards.

“There’s an opportunity here where we can work with the community, work with our neighbors, and bring manufacturers back to these old buildings and do it all around outdoor and apparel,” Stahl tells Site Selection. “Really build the cluster around this incredible center of gravity that Portland already has and do it around manufacturing innovation.”

As Stahl’s chief partner in Made in Old Town, architect and urban planner Matthew Claudel says “transit in all its forms is hugely important to what we hope to accomplish.” Claudel, founder of the design and strategy firm Field States, says Old Town’s existing layout offers multiple transit-related opportunities.

“You can’t talk about manufacturing without having a way to move things in and out. The streets,” he says, “are wide and they’re built for multimodal uses. Our future is to have automated electric lorries that are moving goods throughout the district.” Pedestrian traffic, encouraged by Old Town’s wide, tree-lined sidewalks, is equally crucial to the project’s promised campus feel.

Both Stahl and Claudel see Made in Old Town as a model for urban office markets “in every city in the United States,” Claudel says, upended by COVID-19 and still adapting to remote and hybrid work. “It’s about telling a story of place that’s grounded in our past but also a roadmap for our future,” Claudel says. “We believe that the new approach to a vibrant neighborhood has to be radically mixed use and that it needs an anchor in something like manufacturing — in our case apparel manufacturing — which is the solid economic base on which you can build a well-balanced, vibrant neighborhood.”

“There’s a need,” Stahl says, “for states and cities to re-envision the uses of neighborhoods and to be multi-use and multi-purpose and, at the same time, to allow an industry that’s mostly gone overseas to think about manufacturing and innovation in their own backyard.”

The Streetcar’s New Horizon
With the example of the Pearl District in mind, Portland recently committed to a $120 million, 1.3-mile Streetcar extension into the Northwest region known as Montgomery Park, named for the hulking former Montgomery Ward warehouse that is the defining landmark of an area that’s otherwise mostly vacant.

The Montgomery Park Area Plan devised by the Portland Bureau of Transportation and the city’s Bureau of Planning and Sustainability envisions business development that will create some 3,000 new jobs amid abundant affordable housing. The Streetcar’s Bower says the project’s financing and development strategies align with how Portland has done it before, beginning with leading property owners.

“They’re going to be contributing toward the funding for the Streetcar. In exchange, their land is being rezoned from industrial to mixed use. What that does is create value for them, so all of a sudden their land is worth more money. In exchange, they help build the roads, build affordable housing and meet certain targets for jobs.”

What Portland is looking at, Bower says, “is like what we see in the Pearl District, where you have a lot of middle-wage jobs and a lot of housing and access to the largest urban park in North America [Forest Park]. And it’s all going to be served by the Streetcar system. It’s an area,” he says, “that’s going to offer a lot of opportunity for the people who choose to work and live there.”