Two companies bid to revamp 103-year-old U.S. Custom House

By Jeanie Senior

The government’s search for a developer to restore and reuse the U.S. Custom House seems likely to yield a bonus for the public — greatly increased access to the grand four-story brick and stone building on the North Park Blocks.

The General Services Administration, which owns the 103-year-old Italian Renaissance Revival building at 220 N.W. Eighth Ave., will recommend a developer for the “adaptive reuse” project in about a month.

Two finalists — Portland developer Venerable Group Inc., which specializes in restoring historic buildings, and the Pochter Group Ltd. of Northbrook, Ill. — will submit detailed rehabilitation proposals to the GSA by today’s deadline.

Both proposals carry multimillion-dollar price tags. Developers will be charged with making the unreinforced stone and brick structure safe during earthquakes, as well as removing hazardous materials, like lead paint or asbestos.

Venerable has letters of intent from four prospective tenants. The majority of the space would be occupied by the University of Oregon’s satellite architecture school, now located in Old Town, plus other UO advanced degree programs.

The other three tenants would be the Zimmerman Community Center, which serves both the Pearl and Old Town-Chinatown neighborhoods; the Contemporary Crafts Museum & Gallery; and a restaurant that would take advantage of the Custom House’s courtyard, which faces the park blocks.

Pochter, which has done a project in Salem, wants to remodel the building into an 82-room boutique hotel. Its partner in the effort is Wyndham Hotels & Resorts, which would be the operator and manager.

Built originally to house the U.S. Customs Service, the building now is occupied by the offices of the Northwestern Division of the U.S. Army Corps of Engineers. The present time schedule calls for some of the 150 corps employees working there to relocate to new headquarters in the Brewery Blocks development in December, but “I suspect it will be early January,” Homer Perkins, chief public affairs spokesman for the corps, said of the move.

Perkins said the northwestern division, which oversees districts in Portland, Seattle, Walla Walla, Wash., Omaha, Neb., and Kansas City, Mo., has had offices in the Custom House since the 1950s.
“There used to be other agencies here,” he said. “Over time there have been several, but they moved out long ago.”

Corps employees have mixed emotions about leaving the Custom House, he said. “It’s a historic building, complete with high ceilings and all those things that go with old buildings. There’s a lot of people that love this building — and lots of people looking forward to moving to new modern facilities.”

The move initially was scheduled for October, but “the process has been slowed for construction and other issues,” Perkins said.

General Services managers are offering a 60-year lease to the winning developer. It is one of four GSA-owned historic buildings nationwide to be involved in the same redevelopment effort.

“We understand this is going to be a long process,” said Keith Pochter, principal of the Pochter Group. “GSA hopefully will make a determination which one of the concepts they want to go with by Nov. 1 — then there’s the lease negotiation and a whole range of other things.”

He added, “This is not an easy thing to finance, because it’s a leasehold.” Leasehold means they will never hold ownership of the building.

Venerable’s offices are at Northwest Fifth Avenue and Flanders Street, just a few blocks from the Custom House. When GSA called for development bids, “Immediately we knew it was a perfect match for us, taking on stewardship of this landmark,” said Jessica Engeman, a historic preservationist with the firm.

By Aimee L. Curl

Local developer Art DeMuro of Venerable Properties and Keith Pochter of the Northbrook, Ill.-based The Pochter Group Limited have very different ideas about the best use for the historic Custom House, located in downtown Portland.

DeMuro is contemplating a mix of uses, including space for the University of Oregon School of Architecture and Allied Arts, a community center, an art gallery and a ground-floor restaurant.

Pochter, on the other hand, envisions an 82-room boutique hotel.

Located at 220 NW Eighth Avenue, the four-story, H-shaped, granite building was constructed more than a century ago. The U.S. Army Corps of engineers has occupied the building since the late 1960s.

The U.S. General Services Administration, which will retain ownership of the Custom House after the Army Corps leaves the building, has selected Venerable Properties and The Pochter Group Limited as finalists to redevelop the space. Complete proposals are due to the GSA by October 1. The federal agency plans to select a developer for the project by November.

“For anyone who loves historic preservation, the Custom House represents an elite challenge. The building is an architectural classic,” DeMuro said. “I’ve heard many people describe it as one of the most beautiful buildings in the city. The opportunity to get to be in charge of revitalizing it is mouthwatering.”

DeMuro said in addition to the architecture school, multiple disciplines from the University of Oregon—including the journalism, business, law and education departments as well as the university’s development and alumni offices—have voiced interest in opening satellite locations in the Custom House.

“There’s no question the university is interested, but they’re just now starting the process of some more detailed space planning and budgeting,” DeMuro said.

Also as part of Venerable Properties’ proposal, Zimmerman Community Center would move from its temporary location in the Pearl District and the Contemporary Crafts Museum & Gallery would move from its home on Southwest Corbett Avenue to the Custom House.

He said the restaurant that would occupy the Custom House’s ground floor would likely include an entertainment component geared for adults like a jazz club.

DeMuro said his company is also in discussion with the nonprofit organization BetterBricks about a possible move to the building.

Although Pochter’s firm has not developed any projects in Portland, he said he has been interested in doing something in the area for some time. Pochter called the Custom House a “very unique structure.”

“It represents a very unique presence in the area and an opportunity to revitalize the neighborhood,” he said. “The neighborhood is just on the fringe of the Pearl District. The Broadway corridor is an exciting corridor and we want to be part of it.”

Under Pochter’s proposal, Wyndham International Historic Hotels would operate the property.

Bill DuBray, a spokesman for the GSA, said the agency is evaluating the proposals based on how they meet public interest goals, historic preservation goals and the economic benefit for the government.

“Our pitch would be in historical sensitivity,” DeMuro said. “All of the users are large space users that would require minimal partitioning and changes to the interior, whereas the hotel would have to divide up the building.”

He said the proposed uses such as the community center and the museum would also benefit the community and surrounding neighborhood, while the restaurant would activate the street level.

Pochter said a hotel would allow the best public access to the property.

“The whole idea of historic preservation is to allow the opportunity for a use to be created that allows the public as much continuous and regular access to the property as possible,” he said. “Another function would not office the same access to the community as a hospitality use would.”

The Army Corps isn’t moving far from the Custom House. The agency will relocate a few blocks west to Block 4 of Gerding/Edlen Development Co.’s five-block Brewery Blocks development in November. According to Scott Eaton, director of marketing for Gerding/Edlen, the Army Corps will take 40,000 square feet on the fourth and fifth floors of Block 4.

Eaton said Gerding/Edlen was also interested in redeveloping the Custom House and submitted a proposal that featured Portland State University’s School of Architecture as a major tenant. He said PSU was unable to proceed for budgetary reasons and that Gerding/Edlen decided to withdraw once it was clear that DeMuro’s proposal featured a similar partnership with University of Oregon.

“We felt of all the uses we could think of, a school of architecture was the most appropriate use there,” Eaton said. “We felt it was better to do the right thing and drop out.”