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BRIDGE Housing will deliver on its affordable-housing commitment. The RiverPlace project will include 203 subsidized units in a 14-story tower, plus 176 market-rate apartments in a separate six-story building.

(BRIDGE Housing)

Developers who claimed they could deliver a full-size grocery store to Portland's South Waterfront area now say they've come up empty-handed after months of trying.

Portland officials selected BRIDGE Housing last year to develop a mixed-use project on city-owned property south of downtown.

As envisioned, the project was to include much-needed affordable housing, market-rate apartments and a large grocery store.

Now, plans for the grocery store have been nixed - and the setback wasn't much of a surprise.

"We tried really hard," Lyn Hikida, BRIDGE's vice president for communications, said Monday.

Hikida said developers couldn't find a grocer willing to move into the project, at 2095 SW River Parkway, in the RiverPlace area. BRIDGE had pitched Portland on a grocery store with about 30,000 square feet.

"We reached out to 17 national and local grocery brands, and they were not interested," she said.

Neither city nor company officials publicly disclosed that a grocery store wouldn't be part of the project in January, when they formalized an agreement for a "mixed-use residential project" featuring "ground-floor retail."

But documents submitted to the city's permitting bureau last month make clear that the grocery store is dead. The project will include less than 5,000 square feet of office space and less than 3,000 square feet for retail.

BRIDGE will deliver on its affordable-housing commitment, however. The project will include 203 subsidized units in a 14-story tower, plus 176 market-rate apartments in a separate six-story building.

City officials say they've known for a year that BRIDGE didn't land a grocer but plan to move forward to ensure affordable housing is built.

Portland officials hastily made the property available last year to show their commitment to build affordable housing. Portland has fallen far short of housing goals for the area, developing just 209 rent-restricted units since creating an urban renewal district in 1999.

BRIDGE and two other developers each pledged they could deliver subsidized housing and a grocery store. A development team led by Portland-based Capstone Partners even submitted a letter of interest with Fred Meyer, writing: "Fred Meyer wants to be here and is thrilled to be part of a much larger project."

City officials weren't impressed. In a project evaluation, officials last year said Capstone "relied too heavily on Fred Meyer" and they "worried about there being no Plan B if Fred Meyer fell through."

BRIDGE hadn't proposed a specific grocer. But the California-based company was "confident on delivering a grocery store," and, if it couldn't, BRIDGE could convert the space for other retail, documents show.

Hikida said BRIDGE also pursued Fred Meyer, including several meetings and phone calls, but couldn't seal the deal. Local developers Homer Williams and Dike Dame are consultants for BRIDGE but have no financial stake in the project, she said.

Hikida remained upbeat, saying BRIDGE now hopes to land a small "neighborhood market" for its retail space.

"If the retailers aren't responding, and we can't get a tenant," Hikida said, "it's not going to be in anybody's best interest to have 30,000 square feet of empty space."

City officials had warnings the grocery store might not materialize.

In 2011, a consultant evaluated several central city locations, including Portland's RiverPlace land, known as Parcel 3.

The site lacked enough foot traffic, and grocers doubted whether residents from downtown or the South Waterfront would visit.

"Grocers are not interested in being the first anchor retailer," the report warned, "in a newly developing area."

-- Brad Schmidt

503-294-7628

@cityhallwatch