Natural Grocers in Beaverton

Patrick Rau, 9, of Beaverton, reaches for a lime Aug. 6, 2013, at the newly opened Natural Grocers store in downtown Beaverton. Portland officials said the store is expanding to Northeast Portland.

(Anna Marum/The Oregonian)

UPDATED: This story has been updated with more reaction from the city, grocer and neighborhood.

Natural Grocers, a Colorado-based grocery chain that's expanding in Oregon, plans to open its newest store on the long vacant city-owned property in Northeast Portland once slated for a Trader Joe's.

The store, which co-president Kemper Isely said specializes in natural healthy food and organic produce at "everyday affordable prices," will fill the void of the 1.79-acre site on Northeast Alberta Street and Northeast Martin Luther King Jr. Boulevard.

"We think Portland is really under-served," Isely said, saying the store will complement other grocery stores nearby while adding services such as free nutritional coaching for customers and cooking classes. The chain's current metro area locations are Beaverton, Gresham, Clackamas and Vancouver.

Mohamed Yousuf, owner of the Horn of Africa restaurant in the nearby Vanport Square retail center, said the news is welcome for his business. "Any grocery store close to our plaza would be wonderful."

Thursday's announcement is the latest turn in a story that started last November after the Portland Development Commission's board approved a $502,160 sale agreement with California developer Majestic Realty to bring a Trader Joe's to Northeast Portland.

Many neighbors rejoiced at the popular food chain's planned arrival in the changing neighborhood.

But the highly subsidized deal, which included a $2.4 million discount on the property's value according to a recent appraisal, also prompted criticism from the Portland African American Leadership Forum. The organization argued that the city needed to bring more affordable housing to Northeast Portland to help displaced residents return to the neighborhood.

On Feb. 3, Trader Joe's abruptly announced it wouldn't open a store on the property, citing "negative reactions" from the community. PAALF and other community groups held listening sessions earlier this year to discuss the property, gentrification and affordable housing. In March, Portland Mayor Charlie Hales convened a summit of local leaders, and pledged to spend an additional $20 million on affordable housing projects in the neighborhood during the next five years.

In a news release, Hales acknowledged the "challenges" of the Trader Joe's proposal.

"But thanks to the determination of the public and private partners involved, we're now able to present a development that will benefit the residents of Northeast Portland, support neighboring businesses, introduce Portlanders to a high-quality, affordable grocer and revitalize a parcel of land that has sat dormant for 15 years."

City's plans

Patrick Quinton, PDC's executive director, said the urban renewal agency worked for months with Majestic to find an alternative after Trader Joe's pulled out. He said the bones of the original plan for a grocery store development remain the same. The project includes a 15,000-square-foot store, with an adjacent building to accommodate an additional 4-10 retailers.

Majestic will retain as its general contractor Colas Construction, a minority-owned building firm that Majestic had engaged for the Trader Joe's project.

The Natural Grocers deal isn't finalized. Quinton said he planned to return to the PDC board next month with an update on the project.

Quinton said PDC hasn't told the neighborhood or adjacent Vanport Square businesses about Natural Grocers.

Quinton said he informed the King Neighborhood Association earlier this summer that PDC was still at the table and hoped to report back.

PDC and Majestic will work through a community benefits agreement later this year.

"We're not going to change tenants as a result of the process but we certainly want people to be involved," Quinton said.

Officials with Majestic didn't immediately respond to a request for comment. Cyreena Boston Ashby, PAALF's director, declined to comment for this story.

The PAALF and North/Northeast Business Association moderated meetings earlier this summer reaffirmed the need for something to happen on the site, Quinton said.

Tenants at Vanport Square clamored for development on the vacant parcel for years. Quinton said while PDC had worked closely with tenants at Vanport and the neighborhood, the discussion on a Trader hadn't been revisited for a few years.

Quinton said PDC learned that it needed to talk more broadly about community issues when working on high-profile projects.

"That was probably missing the first time," he said.

Company's expansion

Andrew Colas, president of the construction company, said he's thrilled about the potential for Natural Grocers and the neighborhood.

"It's actually affordable," he said of Natural Grocers.

Colas, a native Portlander who is African-American, Colas said he expects to create 250 jobs during the construction process.

If design work and the community dialogue goes as planned, Colas said, the project could break ground early in 2015 with the goal of opening the store that same year. Colas said the developers had to overcome some "hurdles" but ultimately he said the result would be "an example of true social sustainability in the construction industry."

Isely, the co-president of Natural Grocers, says he was aware of the community debate surrounding the Trader Joe's proposal.

"Trader Joe's is a nice store," he said, "But I don't think you can do all of your grocery shopping there, where in our store you can."

He said the store would offer up healthy foods, with no additives or preservatives. The store will include produce, meat, everyday household products and local goods "priced substantially below everybody else's."

Natural Grocers has 85 locations in 13 states, and Isely said Portland is a key place in the company's growth plans. The company has four locations in the metro area, and hopes to add 8 more in the next few years.

The chain enters a competitive marketplace served by New Seasons, Whole Foods and other natural food stores.

"Most people are not familiar with them as of yet," said Tom Gillpatrick, executive director of the Center for Retail Leadership at Portland State University.

But Gillpatrick said Portland is in the midst of a proverbial food fight with grocer's investing and expanding rapidly. "If you can prove yourself here," he said, "it shows you've got some mojo going."

-- Andrew Theen