After a long night, Lake Oswego commission delays Mercantile Village decision
Lake Oswego's Development Review Commission began a public hearing Monday on a long-running plan to redevelop the Providence Mercantile Center. But after more than four hours of presentations and a significant amount of public testimony, commissioners voted to extend the hearing to Aug. 20 and made no final decision on the project.
If approved, the development at the corner of Kruse Way and Boones Ferry Road would include 208 luxury apartments and 50,000 square feet of dining, fitness and specialty shops. Mercantile Village would also boast a "festival street" with shops, restaurants and perhaps a small gourmet market, and a community gathering space with covered seating, a fountain, a fire pit and art installations.
Senior Planner Johanna Hastay offered a quick summary Monday of the project application, which has been in development since 2016.
When current owner Providence Health System began marketing the campus for sale, CenterCal Properties initially responded with a plan for a retail center anchored by a large grocery store. But City planners urged the developer to consider a housing component, which would be more in keeping with the City's vision for the site as defined in the Lake Grove Village Center Plan.
CenterCal then partnered with Trammel Crow to jointly develop a new version of the project, with a large residential building and a smaller retail building anchored by a pharmacy.
As proposed, the residential building would feature ground-floor public parking for the commercial parts of the site and three more levels of parking to serve residents. The upper garage would have a separate entrance and exit from Mercantile Drive.
The apartments are planned to be market-rate, according to Trammell Crow's Steve Wells, with a starting monthly cost of approximately $1,900 and an average cost of $2,700. They're expected to be cheaper to build than the downtown Windward project, but that's primarily due to most of the apartments being smaller; the construction cost per square foot is about the same, Wells said.
"That's the reality of trying to build apartments in today's market," he said.
The plans received a significant amount of public feedback in advance of the hearing, most of which was in opposition to the project. There were a number of supporting comments as well, however, and most neighbors praised the developers' community outreach and involvement efforts.
Many of the written comments requested that the City or the developers find a way to preserve some of the 43 trees on the site that are slated for removal. (An additional 51 invasive trees are also scheduled to be cut down.) Additional public comments related to traffic congestion, concerns about negative design impacts and a lack of affordable housing units.
City staff recommended approving the project, Hastay said, because the design meets most of the City code standards either directly or with conditions of approval. The tree loss would be mitigated by planting 283 new trees and more than 2,000 shrubs, she said.
"There was really no way to preserve these trees that was actually practical," she said.
Wells and CenterCal's John Paul Wardy gave their own presentation Monday, along with Kurt Schultz from SERA Architects. Schultz discussed the evolution of the proposed site's design style, which he said began as Italian Renaissance but was gradually fine-tuned to be more eclectic in response to feedback from neighbors.
"One of the major moves was changing the style of the retail building to a pitched roof in the Arts & Crafts style," he said.
Architects also increased variety in the design of the residential building, he said, adding arches, canopies, bay windows and large recessed pavilion areas along the side facing Kruse Way in order to break up the structure's massing and avoid a uniform wall.
DRC Commissioner Nick Shur said he was still concerned that the flat roof of the residential building was too uniform, and he asked if it could be broken up into different heights. Schultz responded that the 45-foot height limit at the site constrains the roof shape, which is part of why the architects emphasized breaking up the walls of the structure.
"We concentrated on the vertical breaks between the elements," he said, "and we've got six widths of vertical breaks, two of them being very significant courtyards."
Schultz also clarified details about how various vehicles would move through the development's parking areas in response to questions from Commissioners Jeff Shearer and Paden Prichard. The ground-floor garage would include a few spots for large moving trucks to park and unload via a secondary lobby and elevator bank, he said, and the second-floor garage entrance would be engineered to be large enough to allow small U-haul trucks to enter.
The anchor retail tenant would take care of its trash using a truck loading zone hidden at the back of the building facing Mercantile Drive, Schultz said, but the rest of the site's garbage would be collected at a central hub in a corner of the ground-floor parking garage.
The design plans include more than the required number of parking spaces in the residential garage, Schultz said, but not quite enough on the ground level for the commercial sites. Developers plan to make up the difference, he said, by using a small number of upper-story spaces for commercial parking — most likely for store emplyees, he said, to avoid confusion for customers.
DRC Chair David Poulson raised concerns about soil liquefaction on the site in the event of an earthquake, saying developers appeared to be underestimating the probability of there being groundwater at the depths to which they plan to excavate the site.
"This is a classic case," he said. "You couldn't find better conditions (for liquefaction risk) down in San Francisco."
Poulson and Vice Chair Brent Ahrend also pushed back heavily on a traffic study that had been commissioned by the developers. It found that traffic around the site would increase with the new development, but not beyond the maximum theoretical level that is currently allowed on the site.
In particular, Poulson noted that the addition of the residential component to the project would presumably lead to much greater levels of traffic during peak hours. A traffic engineer working with the developers disputed that idea, however, saying residential traffic would only be about one-third of the site's typical daily trips.
The commissioners also asked about an undeveloped 59,000-square-foot portion of the property located on the far side of Mercantile Drive. The current plan doesn't feature any development on that site, but includes an easement to preserve part of its open space.
Some of the commissioners joined neighbors in questioning whether it made sense to locate part of the project's required open space on a separated part of the property, but Deputy City Attorney Evan Boone replied that from a Development Code perspective, the two sites are considered one property even though Mercantile Drive runs between them.
Although the written comments tended to be focused on tree removal, most of the public testimony at the hearing delved into more technical aspects of the building design. For example, several neighbors joined the commissioners in objecting to the flat roof on the main building.
"The Italian style does not necessarily dictate a flat roofline," said Lake Forest Neighborhood Association Chair Kate Myers.
Other neighbors challenged the traffic study, criticizing it for what they said was a lack of attention paid to the traffic impacts on nearby roads that branch off Mercantile Drive.
"I think really you're minimizing the traffic impacts that will happen on Douglas Way, Boones Ferry Road and Quarry Road," said Waluga Neighborhood Association Chair Cheryl Uchida.
At the end of the public testimony period, the commissioners voted to extend the hearing to Aug. 20 and postponed their own deliberations until then. Poulson also noted that several people who had signed up to testify had left, so the commissioners voted to keep public testimony open at the next meeting for residents who didn't get a chance to weigh in on Monday.