- Written by Linda Baker
- Published in Real Estate
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Siblings Jay and Charlene Zidell barge into real estate.
In an interview, Jay Zidell and his sister Charlene Zidell come across as very different personalities.
Jay, the 69-year-old president of the Zidell family of companies, doesn’t mince words and is not exactly emotive. Charlene, 67, a former public-sector labor lawyer who directs programming for Zidell’s real estate division, is lively and enthusiastic. But the siblings have at least one trait in common.
“I like to work,” says Jay, who is sitting in a conference room in the company’s low- slung headquarters in the South Waterfront neighborhood. “It’s a genetic flaw,” laughs his sister.
“If I’m not physically here,” Charlene says, “I’m probably thinking what kind of deal can be put together.”
Over the past few years, the Zidells have been applying their work ethic to a radically new project. The project kicks off symbolically in June, when the company’s iconic 55-year-old barge-building division, Zidell Marine Corporation, finishes its 277th and last vessel — to be named, aptly, Zidell Marine 277.
The family will then shutter the business and clean up and reposition the shipbuilding area as part of a massive and much-anticipated development in the bustling South Waterfront neighborhood. But as Zidell transitions from gritty industrial manufacturer to glitzy real estate company, the siblings say they will retain the company’s longstanding commitment to community service, along with a noted ability to pivot with the market.
“The economy is changing all the time across the country and around the world,” Jay says. “I wish I was 40 again, because I think the next 20 years on the property are going to be so exciting.”
In December 2016, the Zidells unveiled a master plan for the 30-acre South Waterfront site that would accommodate 2,600 residential units, 1.5 million square feet of office space, a grocery store, a retail anchor, restaurants, parking, a 200-room hotel, three parks, a public plaza and a waterfront greenway that includes recreational access to the Willamette River.
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The project joins a spate of new development in the neighboorhood, a district that includes the Tilikum Crossing bridge and three OHSU buildings now under construction.
The family’s vision for the mixed use community, Charlene says, “is something that gives back to society in that the tenants are solving major problems and diseases, and doing good things for the world.”
After retiring from the law business to stay home with her children, Charlene decided four years ago to work for Zidell, managing corporate philanthropy and social responsibility. Two years later, she moved to ZRZ Realty, the real estate arm.
Her programming goals for the property focus on arts, culture and wellness. Potential projects include a rotating sculpture garden, wellness activities linked to affordable housing and the creation of an arts district connecting the Portland Opera on the east side of Tilikum Crossing to smaller performance spaces in the development’s mixed-use properties.
“It’s not the normal job of a real estate developer,” Charlene says of her efforts, which include reaching out to artists and nonprofits. “I’m a little outside the lines.”
Photo by | Jason Kaplan
Navigating unchartered waters is a family tradition. The oft-told story begins in 1912, when Charlene and Jay’s grandfather, Sam Zidell, immigrated to the United States from Russia and began selling secondhand machinery in Roseburg.
In 1946 Sam’s son Emery expanded the business in Portland with a ship-breaking yard that eventually became the largest in the country, dismantling a total of 336 ships, including World War II-era naval auxiliaries and warships. Nine years later he founded a welding fittings company, Tube Forgings of America, and in 1960 launched Zidell Marine Corporation as a barge builder.
At its peak in the 1970s, the Zidell family employed 1,000 on the waterfront. The marine and barge-building divisions employed 70, a number that declined to 55 last year. It clocks in today at 39 and will drop to zero by the end of 2017, Jay says. One hundred and twenty-five people will continue to work in the tube-forging unit located in an industrial zone 6 miles south of South Waterfront.
The rapid pace of change in South Waterfront was the primary reason the family decided to shutter the barge division, Jay says. Another was shifts in the global shipbuilding industry.
“Barges are getting bigger, and we have physical limitations we are up against,” he says.
In 1993 the company launched one of the first 60,000 barrel double-hull petroleum tanker barges on the West Coast.
“More and more, what we get asked for is on the bigger end, 85,000, 95,000 barrels, and we just can’t build anything bigger than 85,000,” Jay says. “It was the right time to transition into real estate development activity.”
Portland’s diminishing stock of industrial land is a concern, he says.
“I am an industrialist,” he observes.
But he is pragmatic about the constancy of change, and not only in the urban development arena.
“We’re sitting here today, and you’re recording this entire conversation on an iPhone that didn’t exist just a few years ago,” he says, gesturing to a reporter’s smartphone. “My first executive assistant took good, old-fashioned original shorthand, and would then go from my office to her office and figure out what to type up. We’ve leapfrogged over that multiple times now. Things change so fast.”
Zidell’s own plans for the property have changed over a short period of time. In 2015 the company signed a development agreement with Prosper Portland (formerly the Portland Development Commission) establishing December 31, 2016, as the deadline for starting construction. The company missed the deadline, and in February Prosper Portland moved the start date to December 31, 2017.
The first phase initially included an office building closer to Tilikum Crossing. That phase is now expected to take shape around the barge area. Following an outcry from housing advocates, ZRZ conceded as part of the development agreement to give the city the option to acquire a parcel for affordable housing.
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Since then the debate around affordable housing has only intensified. Jay expresses “concerns about” the city’s new inclusionary zoning law but says ZRZ “wants to be part of the solution. The challenge is doing it the right way.”
Prosper Portland has committed $24 million in infrastructure investment for the Zidell project, says agency spokeperson Anne Mangan. The money is contingent on availability of urban-renewal funds, the planned scale of the South Waterfront property and adherence to the new construction deadline.
ZRZ is fielding inquiries from potential retail and office tenants — including grocers, an amenity South Waterfront residents have been clamoring for. But Jay declines to reveal company names or discuss timelines.
“If you tell me when the first tenant is going to sign the lease,” he says, “I’ll tell you when we’re going to open the building.”
Other Zidell projects are underway. The company recently reorganized its three foundations under an umbrella group, Zidell Philanthropy. The foundations donate $1 million annually to arts and social-service groups, as well as “Jewish things,” as Jay puts it. (Like the Schnitzers, the Zidells are part of a larger story about the role Jewish immigrants and their descendants play in shaping the city’s economy.) This summer or fall, the family will release a documentary about the Zidells’ long and colorful history on the waterfront.
“I remember sitting here with the filmmaker, listening to the talk about real estate and thinking: ‘That’s so new,’” says Charlene. “But then I thought of my dad. Everything was new for him.”
It’s an iteration of entrepreneurship that has been in the family for years. As the South Waterfront development evolves, so has the sibling relationship. Jay and Charlene say they are closer now than when they were growing up, and Jay himself describes their interaction as “no boundaries.”
“She started out helping me with philanthropy and, on her own, went off in a different direction that led to interesting conversations with very smart people. She brings enthusiasm and a level of excitement that is a real treat to have down here.”
Real estate is new territory for the Zidell family, Jay agrees.
“But it’s horribly exciting. We are anxious to learn, anxious to do great things for the city.”