McDonald's Gives in to Mixed Use on Hawthorne

PORTLAND-It appears Portland’s popular Hawthorne Boulevard will see a new and improved use at the corner of Southeast 34th Avenue, a 23,000-sf parcel currently home to a large parking lot and a boarded up fast food restaurant. McDonald’s recently assigned a purchase option for the property to a local architect and developer in exchange for the right to lease a 2,500-sf corner space in the 80,000-sf mixed-use building now being planned for the site.

The news follows a city report that finds that an illegal alternation of the drive-thru in the mid-1990s means it is no longer a grandfathered use, which is what attracted McDonald’s to the property in the first place. The would-be buyer is Alan Kravitz, part owner in and former project manager of Paul Brenneke’s Avalon Hotel project on Southwest Macadam.

Kravitz, who also owns an interest in several area senior housing projects with another partner, recently formed his own company, Aiyana Group, the tagline for which is “progressive real estate solutions.” Kravitz tells GlobeSt.com he also is buying up the 40,000-sf block bounded by Broadway and Weidler and 17th and 18th in the Lloyd District en route to another mixed-use project.

Kravitz says the Hawthorne project will likely have 20,000-sf floor plates, with the first floor dedicated to retail, and the upper floors built out as moderately-priced condominiums, the design of which has not been finalized. Retail rents are expected to be in the $18 per sf to $20 per sf range, which is consistent with new development in the district.

The question for McDonald’s is whether it can find a franchisee to bet on a location without a big-revenue generating drive-thru in the middle of a neighborhood where 10,000 signatures were gathered by people who say they don’t want the chain in the neighborhood. Many of the petitioners have promised not only to not patronize the establishment, but also to actively protest its presence until it goes away.

As a final deterrent, the previous two fast food restaurants to occupy the site have failed. Atlanta-based RTM, which closed up its Arby’s on the site in October 2000, did so because of a lack of business, and they had a drive thru to work with. Arctic Circle is said to have closed under the same circumstances.

In McDonald’s favor–beside ubiquity, of course–is this: currently, the only national food retailers still along Hawthorne are Noah’s Bagels, Subway and Ben & Jerry’s, all of which are located in smallish spaces that front the sidewalk, just as Kravitz’ envisions the retail portion of his project.

Kravitz has not yet filed for the necessary permits to develop the project. He says brokerage firms will eventually be hired to market the retail space and sell the condos. He did not want to estimate the project’s cost or reveal conceptual drawings at a community meeting Thursday night, but said he would in a few weeks.