Acclaimed Union Way development struggles to attract tenants

A sign posted to one of the tenant spaces inside the Union Way development Linda Baker A sign posted to one of the tenant spaces inside the Union Way development

The downtown arcade has yet to become a bustling market space, five years after opening with much fanfare.


— Updated, May 11, 2018

On a sunny day during lunchtime, a couple of people are happily slurping Wailua's Hawaiian shaved ice inside the Union Way development off West Burnside. The Boxer Ramen restaurant at the alleyway entrance is reasonably full.

But the rest of the narrow arcade, designed by Portland-based Lever Architecture, is empty.  Most of the original nine businesses have closed or relocated. Windows are papered over.  "For Lease" signs figure prominently.

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Some of the vacancies are due to larger problems facing brick and mortar retail.  High-end clothier Steve Alan, for example, underwent a major restructuring last year.  

But other tenants say the complex, while well-designed, did not live up to its promise as a lively, Parisian-style shopping arcade.

"The original vision was there would be a lot of strong foot traffic there, but we never really saw the level of traffic that we were hoping,” says Craig Olson.

Olson relocated his Union Way shop, Spruce Apothecary, late last year.

vacancy

Pedestrian malls are are a hard nut to crack.  And micro retail spaces like the alleyway are modeled after much higher density cities like Paris or Tokyo, says Brian Libby, a local architecture critic.

"This kind of development needs greater density. Where you see this type of alley become successful, it has tall buildings around it. So you get that more granular retail development."  

West Burnside street remains an obstacle, Libby adds. "Even though there are businesses in the West End doing well, there was more expectation that energy from the Pearl District and Brewery blocks would spill over. But that’s not the case."  

In addition to uban planning challenges, the retail project lacked a unified marketing vision, Olson said. Plus, the rent was “quite expensive.”

Three of the Union Way spaces are listed on LoopNet for $39-$87 per square foot.  

The listing describes Union Way as a "hip. indoor alleyway full of unique retailers and some of Portland's most popular taste makers." The ad cites several retailers that no longer occupy space in the development, including Steve Alan, Quin Candy and Spruce.

The sign outside the alleyway also features tenants that have since shut down or moved out.

 

sign

Olson said one of the original ideas was to locate a restaurant or beer garden in the middle of the alley to pull in people off the street. 

That never happened.

Project^, the original developers, sold the complex to Los Angeles real estate firm, Blattheis & Schnur. The Project^ principals declined comment, and Lever Architecture and Dan Blattheis did not return phone calls. 

It's possible that Union Way is ahead of its time, and that ten years from now, the alleyway will thrive in a higher density environment, Libby says. "As long as the new owners don't tear down the space and put up a mixed used condo building, which is possible."


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Linda Baker

Linda Baker is the former editor of Oregon Business

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