Hacienda CDC, a nonprofit affordable housing developer, has announced it will build 150 units of affordable housing in the housing-starved Cully neighborhood – all on a site better known for a notorious strip club.
On Oct. 27, more than 100 residents of the Cully neighborhood gathered inside the former Sugar Shack building, now called Living Cully Plaza, during an open house that shared early architecture designs of the project and asked residents their opinions about what they’d like to see in the design.
“I’m excited to see the transformation,” said Rose Ojeda, Hacienda’s director of housing development.
Two years ago, the neighborhood formed Living Cully Plaza LLC, a coalition of Habitat for Humanity, Verde and Hacienda CDC. When it purchased the property in 2015, it was considered a victory for the neighborhood.
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Most significantly for the Cully community, the building – which once housed the notorious Sugar Shack, described as an “adult super center” with three strip clubs, a restaurant, an adult video store and a lingerie shop – will be demolished for the new development. The club operated in the neighborhood from 1997 until May 2015, when a federal investigation closed it down after its owners were indicted on prostitution and federal tax evasion charges.
Even though the building was renamed Living Cully Plaza and Living Cully’s members and Cully residents have gone to great lengths to transform the space, the building’s lecherous past lingers in the dark red carpet, the body-length mirrors now covered in dust, and the narrow hallways that lead to small rooms and darkness.
“This place was horrible,” said David Sweet, a member of the Cully Association of Neighbors. “You look at the way women were demeaned here. Just being in here and seeing these rooms, it makes my heart hurt.”
Living Cully wrestled with what to do with it and considered selling or leasing the property to a developer. But the property’s future now rests solely in the hands of a neighborhood developer, and there are high hopes that it will become a thriving center of Cully’s community.
The property is large – a 96,000 square-foot lot, bounded by Northeast Cully Boulevard, Northeast Killingsworth Street and Columbia Boulevard/Highway 30, with a parking lot of 120 spaces and the L-shaped, two-story building that takes up 26,000 square feet. Hacienda CDC bought the property from Living Cully earlier this year.
Living Cully was facing a refinancing deadline with the nonprofit lender Craft3, which lent Living Cully $2.3 million to buy the property in 2015 with the agreement that the loan be paid back this year.
When Living Cully purchased the property, the coalition settled on three options, including selling the building with certain deed restrictions, thus ensuring that the property would not become another strip club. A second option was maintaining ownership and fully redeveloping the site to meet the needs of the Cully community. At the time, Living Cully’s partners considered that the most daunting, given the cost involved and the risk that the nonprofits would be taking on.
So, for the last two years, Living Cully pursued a third option, leasing the building to a retail or commercial business that would pay for the renovations and occupy the building, providing jobs and services to Cully residents.
The most promising lead Living Cully developed was with Laughing Planet, the Portland food chain. Those talks fell through when it became obvious that the cost of renovations was too high.
As Living Cully got closer to the refinancing deadline with Craft3, “we decided to go ahead and switch course,” Ojeda said.
Hacienda secured loans through Prosper Portland, formerly known as the Portland Development Commission, and Raza Development Fund, the country’s largest Latino community development lender.
Designs for the site, developed with Salazar Architect Inc., show two multi-story buildings that will include 150 units of affordable housing and commercial space on the first floor.
The apartments will be one-, two- or three-bedroom units, reflecting the fact that many Cully residents are part of young and intergenerational families.
The most important aspect of the design is a plaza in the center of the block between the two buildings. Alex Salazar, the architect who designed the building, said that the plaza will serve a practical purpose, enabling residents and passersby to cross the block without needing to walk around the street.
“It’s such a long block,” he said. “It’s a triangle site, which also presents some challenges.”
Living Cully members also hope the plaza will be a gathering and event space, “which the community is just begging for,” Ojeda said.
Since Living Cully took control of the building, the coalition has paid for some renovations: tearing out the deep red carpet and removing the red and white tile from the walls. It has also been opened to community groups for meetings and events, including dance and lucha libre classes.
Ojeda said she was surprised by the sheer demand for community space.
The commercial space on the first floor will include a professional kitchen and catering services through Hacienda’s economic development program. There will also be a community hall and a day care center, a huge demand among residents, Ojeda said. Hacienda and Living Cully are trying to find an organization that will help keep the costs deeply subsidized for the residents.
What else could go into the space remains to be seen. During the Oct. 27 open house, residents expressed support for a café, an indoor farmers market, a grocery store, an outdoor playground, a gym and public art.
Demolition will occur in early 2019 and will include a “thoughtful deconstruction,” Ojeda said. “We would like to reuse some of the important materials that are still here. There’s a lot of old growth lumber (in the building).”
Construction will begin in the spring of 2019 and last 18 to 20 months.
The development of Living Cully Plaza is happening during a time that other initiatives of Living Cully are reaching fruition, including finishing Cully Park, which will be the newest park in a neighborhood with the least amount of parkland per capita in Portland.
Living Cully formed in 2010 to reduce poverty and prevent gentrification in Cully, an inner northeast neighborhood that is the most ethnically and racially diverse neighborhood in Oregon.
More than half of Cully’s residents, according to census data, are African-American, Hispanic, Latino, Native American, African and Asian.
Cully is also known for its poverty. Compared to the regional average of 9.9 percent, a quarter of Cully residents live below the poverty line. Nearly 9 in 10 students living in Cully qualify for free or reduced-price lunch. And the neighborhood’s median income is $10,000 less than the city’s average median income.
The neighborhood lacks basic infrastructure. More than 10 percent of Cully’s streets are unpaved, almost two-thirds of Cully’s streets do not have sidewalks, and there is only one grocery store, an Albertsons. Laura Young, the chair of the Cully Association of Neighbors, said the neighborhood’s lack of basic infrastructure is the result of decades of “disinvestment” by the city.
All of Living Cully’s work centers on creating the infrastructure to support a tight-knit community without causing gentrification and the displacement of Cully’s residents.
“We don’t need things that bring rich people in the neighborhood,” Sweet said. “We need things that serve the people in the neighborhood and maintain our diversity.”
How to improve a neighborhood without causing displacement is a million-dollar question in Portland these days.
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In 2013, Living Cully collaborated with students in Portland State University’s Master of Urban and Regional Planning program, who wrote the “Not in Cully” report. The report argues that neighborhood-level investments that involve local organizations such as Living Cully can stabilize a neighborhood and residents’ lives while also preventing displacement. The report emphasizes retaining and building affordable housing.
Sweet said Cully has an unmet need of at least 2,000 units of affordable housing. Hacienda CDC has developed or rehabilitated hundreds of units in the neighborhood, including rehabilitating the 133-unit Clara Vista apartments directly across the street from Living Cully Plaza.