Main Street models combat gentrification

Portland’s small businesses squeezed as property rates rise 

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It took Katy Kippen more than a year to find a retail space in Portland for her jewelry business. Inventory for the kind of store she was looking for — under 1,000 square feet — is extremely limited and real estate prices are increasingly expensive for small business owners.

After an exhaustive search and many trips to the Multnomah County Records Office to scout out commercial property owners, Kippen found a space on 16th and NE Alberta Street. Her jewelry store, which opened in September, is in the heart of a commercial strip known for its small artisanal boutiques, and independent locally owned restaurants and coffee shops. 

“Because we design and make everything in house, we needed a certain amount of space at a certain price, in an amazing location. It took us more than 14 months to find the right space,” said Kippen, owner of Grayling Jewelry.

She was lucky to find a store in a well-trafficked area; but the challenges Kippen faced mirror the struggles of small business owners all over the city who are getting squeezed by increasingly costly commercial real estate and low vacancy rates.

Portland doesn’t just have a problem with a lack of affordable residential property; the commercial real estate market is on the same path. Developers are buying plots of land all over the city to redevelop into residential apartments and commercial office space, often leading to the displacement of small businesses.Unknown 1

The disappearance of food carts is a case in point. Several pods, emblematic of the city’s small business culture, have gone as property developers buy up land they occupy for redevelopment.

Low vacancy rates and increasing commercial real estate prices are a harbinger of the changing business landscape in the Portland metro area. The face of neighborhoods across the city is transforming as large-scale investments take shape.

In the Alberta Street business district, where Kippen’s jewelry store is located, a nonprofit — Alberta Main Street — is working to keep the area’s commercial strip of approximately 200 businesses diverse and locally owned.

The 34-year old Main Street model is a national program that works to revitalize historic downtowns and commercial districts by emphasizing the preservation of distinct architecture, personal service and local ownership.

Alberta Main Street started in 2010 and at the time was one of three main street initiatives in Portland. The other two were in Hillsdale and St Johns.  Hillsdale’s main street program has since disbanded and St Johns no longer carries the main street name.

Sara Wittenberg, executive director of Alberta Main Street, said she has seen commercial real estate rates go up in the district, making it tough for small businesses. But she has not seen an exorbitant rate increase yet.    

Wittenberg works to build partnerships with property developers to maintain the mission of the organization. “What scares me to death,” she said, is if a property developer leases a building to a large chain, such as Starbucks.

Wittenberg said she is seeing property owners less “risk averse” to hiking up rates because they can easily find a replacement if their tenant opposes the increases.

Her concern is that property developers are paying so much for real estate nowadays that they will be compelled to rent retail space to large corporate chains to recoup the costs of development.

Despite the market conditions she is happy with how the commercial district is progressing. The strip appears to be thriving and retains an artsy, local business feel.

“The business community is close-knit, and we all work together to promote one another. Alberta Main Street is the conduit and connector for all of us,” said Kippen.

Wittenberg would like to see more minority-owned businesses, public spaces, and a dedicated location for a business incubator to help entrepreneurs start their own companies.

A group called the Black Investment Corporation for Economic Progress (BICEP) wants to take that idea further.  The coalition of business and community leaders are working on a vision for a “Soul District,” a three-square-mile area of North and Northeast Portland they hope to turn into a mecca for African American–owned businesses.

As Portland’s development boom continues, more districts may find the main street approach useful in maintaining the unique cultural and economic character of their neighborhoods. New ideas like the Soul District also offer opportunities to innovate on the Main Street model to meet the needs of today’s diverse urban population.