Search Google Maps for “Cully,” and the Sugar Shack is one of only a handful of businesses that appear in the northeast Portland neighborhood.
The irony is not lost on anyone familiar with the profound evolution that Cully, just south of the airport, has experienced in the past few years. The changes — from advocating for a $5.4 million investment that rebuilt Cully Boulevard to building the neighborhood’s first park in a former landfill site — are largely spearheaded by residents and neighborhood nonprofits who argue that Cully has been historically neglected by the city, the product of an out-of-sight, out-of-mind attitude held toward neighborhoods outside the central city and predominantly populated by non-white and low-income people.
The purchase of the Sugar Shack by a neighborhood nonprofit coalition is, by far, Cully’s biggest victory and biggest opportunity to continue transforming Cully.
The Sugar Shack was a conglomeration of three strip clubs, a restaurant, an adult video store and a lingerie shop that has been called an “adult super center,” an “adult sex shopping plaza” and a “mega adult entertainment complex.” It operated from 1997 until May 2015, when a five-year federal investigation closed the strip club after prosecutors indicted owners Lawrence Owen and Gary Bryant on charges related to prostitution and evading $1.5 million in federal taxes.
The neighborhood leaped to wrest control of the blight. Living Cully, a coalition of neighborhood nonprofits Verde, Hacienda CDC and the Native American Youth and Family Center, bought the property for $2.3 million after raising $60,000 from 300 people on Indiegogo and securing a loan from nonprofit lender Craft3.
“It was a big victory for our community,” said Tony DeFalco, Verde’s Living Cully coordinator.
“Everybody is so happy. So happy,” said Brenda Reyes, a lifelong Cully resident and owner of Tienda Dona Maria, a Hispanic market across the street.
The space’s future remains to be seen. Living Cully is exploring three options: selling the building with deed restrictions, leasing it “as is” to a developer who would pay for the build-out, or fully redeveloping the site and tailoring the building’s services to the needs of the Cully community.
The L-shaped, two-story building takes up 26,000 square feet on a 96,000 square-foot lot that has a parking lot with 120 spaces. The property, bounded by Northeast Cully Boulevard, Northeast Killingsworth Street and Columbia Boulevard/Highway 30, sees some of the busiest traffic in Cully.
Residents know the space abounds with potential. They talk enthusiastically about opening a community center, a day care, a preschool, a grocery store, a coffee shop, an indoor soccer facility, a gym, a job-training program, a pediatric clinic, branch offices of the Department of Human Services or the Oregon Health Authority, a taqueria or other restaurants, a food production facility, or small businesses owned by residents.
“You name it. We need it all,” DeFalco said. “Our challenge is how to meet those needs but in a practical way that we can afford.”
The dream scenario is to completely redevelop the building. The price tag would come to $6 million, a figure daunting to any nonprofit. It might not be possible given Living Cully’s tight timeline. The coalition must submit a proposal to its Craft3 lenders by March 2016, and the Craft3 loan must be paid back in 2 1/2 years.
“Two and a half years for a project like this is like lightning,” said Nathan Teske, Hacienda CDC’s director of community economic development. “If we commit now to getting $6 million, it’s a speculative venture. We don’t have hundreds of thousands of dollars to lose.”
The stakes are high financially, and socially. Cully is in an early stage of gentrification. Living Cully is working to reduce poverty without destroying the neighborhood’s racial and ethnic diversity and without creating displacement. The Sugar Shack is Living Cully’s biggest opportunity to do so.
“We’ve got to figure it out,” DeFalco said. “Otherwise, Portland will just be a place for rich white people.”
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Cully is the most ethnically and racially diverse neighborhood in Oregon. In the space of a generation, the neighborhood’s demographics have radically shifted. According to 1990 Census data, Cully’s population was 81 percent white. Today, more than half of Cully’s residents are African-American, Hispanic, Latino, Native American, Somali, Kenyan and Asian. A quarter of residents live below the poverty line, compared with a regional average of 9.9 percent. Almost nine in 10 students living in Cully qualify for free or reduced-price lunch. The neighborhood’s median income is $10,000 less than the city average.
Cully’s infrastructure is also impoverished. More than 10 percent of Cully’s streets are unpaved, almost two-thirds of Cully’s streets do not have sidewalks, the neighborhood has the least amount of park land per capita in the city, and there is only one grocery store, an Albertsons.
Living Cully was formed in 2010 as a vehicle to reduce poverty. The coalition collaborates to sponsor environmental and sustainability projects that Cully residents want to improve the neighborhood’s livability, as well as create jobs and job training opportunities for Cully residents.
FROM OUR ARCHIVES: How Cully came together with a poverty-fighting strategy
The coalition believes that environmental assets can create equity and wealth. A neighborhood’s wealth is not simply defined by its residents’ incomes but also by the neighborhood’s amenities — its parks, green spaces, number of bike lanes, the availability of affordable housing, and the neighborhood’s commercial retail and well-paying jobs. In other words, a neighborhood wealthy in resources.
“We are reinterpreting sustainability as an anti-poverty strategy,” DeFalco said. “We are simply manifesting the will of the community in a way that other sectors haven’t had any interest in doing. If they had, it’d look different out here.”
Living Cully is guided by the thinking that Cully’s residents can improve the neighborhood’s livability themselves. Individual residents’ lives improve because of the jobs they create. And if residents’ incomes rise, they won’t face the pressures of gentrification and displacement.
Making a neighborhood more desirable without making it more expensive and displacing its residents seems contradictory, maybe even impossible. A June 2013 report, “Not in Cully,” written by students in Portland State University’s Master of Urban and Regional Planning program, argues that strategic, neighborhood-level investments with the involvement of local organizations can stabilize a neighborhood and its residents’ lives in such a way that people can continue living in their neighborhood.
Living Cully has sponsored more than a half-dozen projects. Its Neighborhood Revitalization Initiative, in partnership with Habitat For Humanity Portland/Metro East, performs basic home repairs and weatherization upgrades for low-income residents to avoid code violations, evictions, and high utility and maintenance costs.
This month, in an effort to encourage residents to explore the neighborhood, the Living Cully Walks program will install maps at various intersections, showing safe routes, by bike or foot, to open green spaces.
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The “Not in Cully” report emphasizes retaining affordable housing to prevent displacement. Last week, Habitat For Humanity Portland/Metro East broke ground on a 21-unit development at Northeast 64th and Killingsworth that will open in nine months. Hacienda CDC rehabilitated the 133-unit Clara Vista apartments and will replace the 108-unit Galaxy Hotel with a new 144-unit apartment complex.
Cully Park, a 25-acre space on the site of the former Killingsworth Fast Disposal landfill, is expected to open in 2017 and become the neighborhood’s first park. Approximately 18 percent of wages related to building the park go to people living in Cully, and approximately 50 percent of the business contracts are with minority- and women-owned businesses.
The projects not only improve the neighborhood, DeFalco and others said, but create an identity that reflects Cully’s character and diversity.
“Cully has struggled … to build that identity and create that personified neighborhood,” DeFalco said, because the neighborhood has lacked gathering spaces like a community center or a park.
The Sugar Shack could epitomize that emerging identity more than anyplace else. Now that it is in Living Cully’s control, it is a blank slate.
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Whatever the Sugar Shack becomes, it will be in stark contrast to what it once was.
For years, Cully was seedy and dangerous. Portland Police Bureau Sgt. Leo Besner, a member of the North Precinct’s neighborhood response team, said the Sugar Shack was not the area’s only problem. “The level and depth of criminal activity … was much more deeply rooted,” he said.
A trailer park directly down the street was a center for drug dealing, fights and prostitution until new owners evicted problem tenants. And a couple who owned a Cully auto dealership are under investigation on allegations of laundering money from drug sales.
Police responded to the Sugar Shack more than anywhere else. Police were called out daily on reports of shootings, fights, drug dealing and prostitution when the Sugar Shack, open 24/7, was at its peak of activity in the late 1990s and early 2000s.
The building’s exterior corrugated metal walls make the building look like a tin can on its side. Inside, it is eerie, utterly silent and completely dark when the flashlights are off.
The entire interior is decorated with dark red carpet and alternating black and white wall tiles. DeFalco said the Sugar Shack’s owners kept adding onto the building, making it a mishmash of hallways, rooms and doors that lead directly to the street. Natural light comes in through only a few of the building’s doors, and it is easy to lose sense of direction and space.
Thick layers of dust cover the bars in each strip club. All the furniture has been removed. But it is easy to imagine tables and chairs, music, drinking and women on the stages.
There are 30 small rooms throughout the building, barely big enough for the twin and futon beds DeFalco and others found when they first toured the building. The only other feature in the rooms is a coat hook on the door, which locks and opens from the outside.
The space where the adult video store was also has small rooms that were used as private movie theaters. Handwritten signs on computer paper still hang, taped to some of the walls. “No sex acts or touching of any kind,” “ONE towel per show,” and, in red, “ENJOY YOUR SHOW.”
DeFalco shined his flashlight into a wall cavity where a TV would have been installed, and he pulled out a swimsuit.
One room contained taxidermic animals. The heads of musk ox, antelope, bison, deer and other creatures hung all along a terrace and lay on the floor.
“I don’t know what went on in here,” DeFalco said.
It isn’t necessary. “It’s been a bad place for a long time. It’s not a bad place anymore,” DeFalco said. “That’s the central victory.”
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Ana Mendoza, 25, grew up in the Clara Vista apartments, directly across Northeast Killingsworth Street from the Sugar Shack. Her mother forbade her and her older brother from going across the street. Mendoza witnessed fights, saw men coming and going, watched women wearing “super tiny clothes” sit outside during the day and walk up to cars that stopped, and saw signs advertising porn videos.
“The doors were all blacked out (so) you couldn’t see what was going on inside. But I knew what was happening,” she said.
“It was never safe to just be outside by myself,” Mendoza said. “My mom was scared.”
Mendoza was also scared. She could never guess what could happen to her walking down the street, but she always had to fear for the worst.
Reyes also grew up in the Clara Vista apartments. She said men routinely propositioned her and her friends while they waited at the 72 bus stop on Northeast Killingsworth and Cully. She laughs about it now.
Mendoza and Reyes both felt unsafe growing up in Cully, which Mendoza said made her feel secluded — from people who might have been her neighbors and from places she could not go.
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Mendoza no longer fears the Sugar Shack. She helped serve arepas during a community meeting Sept. 17 where the strip club’s restaurant once was. She said it is a space that now belongs to the Cully community.
The meeting’s purpose was to gauge support for the three options Living Cully is exploring: selling the building to a responsible developer, leasing the building in its current condition, or raising $6 million to redevelop the building.
DeFalco gave a tour of the building — something he has done dozens of times for interested developers, residents and other parties.
“I never knew it was this big,” one person said. Another asked how likely it was that a developer would work with Living Cully for a reasonable cost. DeFalco said he has already fielded numerous requests.
“We have an opportunity to be a little bit choosy in finding someone we want to work with,” he said.
De Falco said a food production facility approached Living Cully about leasing 20,000 square feet of the space. The questions DeFalco asked were the same for any business interested in the Sugar Shack space: Are they willing to hire people who live in the neighborhood? What kinds of jobs would they offer? How much would they pay?
Teske says the coalition has already turned down a tire recycling company.
“It doesn’t serve the community,” Teske said.
At the meeting, people listened to informal presentations on the three options and left feedback, on sticky notes, weighing the pros and cons.
Full redevelopment has the best “potential to attract positive assets to the neighborhood,” one note said. The only downside people noted was the high cost.
Based on the number of notes left behind, residents seem to lean toward renting the space in its current condition, leaving redeveloping and improving the space to individual tenants. It would take Living Cully one year to find tenants and ready the space. The cost is much smaller than full redevelopment: $635,000, compared with $6 million.
Renting the Sugar Shack would keep the space in the community’s control, but it could be difficult to find tenants who could afford to fix up the space, and some spaces could sit empty longer than others.
Living Cully’s leaders hedged when asked about their preferences for the space. DeFalco said he was neutral. After a long pause, Teske said he probably favors selling the building.
“We could do it fairly quickly. We would pay off our loan,” he said. And “we wouldn’t lose any money.”
If Living Cully were to sell the building, deed restrictions would be put in place to prevent the space from becoming a marijuana dispensary, a liquor store, a gun shop or another strip club.
From a practical standpoint, it is the best option. But it would be a departure from Living Cully’s history of taking control of, and changing the Cully community through grass-roots activism and collaboration that forces change.
“It’s a tricky issue,” DeFalco said.
Reyes, Mendoza and other Cully residents strongly wish to redevelop the building.
“No!” Reyes said, when asked about selling the building. “Why would you do that? We want something that will bring people here and help the community.”
Mendoza said there are many stay-at-home mothers who could take classes at a community center to learn basket weaving or other crafts from their cultures and start their own businesses. She uses the word artesania, Spanish for “craftsmanship.”
Teske summarized the thoughts of those who support redeveloping:
“We went to all this trouble to get it. Why would we just get rid of it?”