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It's a surprise development that will rapidly accelerate development of the 33-acre property just south of the new Tilikum Crossing bridge.

(Doug Beghtel/The Oregonian (2013))

Portland barge builder Zidell notified employees Wednesday it is building its last barge on the city's South Waterfront.

It's a surprise development that will rapidly accelerate development of the 33-acre property just south of the new Tilikum Crossing bridge. Zidell had indicated previously that it planned to continue making barges for years to come, even as the surrounding area filled up with condos and offices.

"The accelerating pace of transformation in the South Waterfront took them a little by surprise," Zidell spokeswoman Kathleen Mazzocco said. She said the activity has been driven by the new bridge and by nearby commercial development, which includes considerable expansion at Oregon Health & Science University.

Simultaneously, she said, Zidell's core business has been enduring a steep downturn.

"The barge business has been slacking for a while, and it's slacking further," she said.

Sixty people work in Zidell's barge building operation, according to the company. It said it has no current plans to resume barge construction at another site. A separate Zidell operation that leases barges will continue operating.

The last barge will launch next spring, she said, and the site will then face months of removing equipment and inventory before it's ready for development. In remarks to employees, Jay Zidell said some employees from the barge building operation will have jobs in that cleanup.

Zidell has been building barges on the Portland waterfront for half a century but it's been clear for several years the property would be redeveloped eventually. Broadly speaking, plans call for denser, taller development at the north end of the property, a park at the south end, and a greenway running the length of the property along the Willamette River.

Last year, Portland committed to spend $23.8 million subsidizing the work to include affordable housing, parks and roads. But the city missed a July deadline to lock in a price for land intended for affordable housing.

Correction: This article has been corrected to note that the city missed a deadline for locking in the price on the affordable housing property.

-- Mike Rogoway

mrogoway@oregonian.com

503-294-7699

@rogoway