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Front Page > Issues > 2004 > March

New Starbucks brews fear of gentrification

The merchants of Seven Corners want to cultivate a new kind of neighborhood. Starbucks may change all that.
By Abby Sewell

For developer Peter Perrin, real estate broker Urban Works, and the Starbucks corporation, the new Starbucks scheduled to open on SE 20th and Division on April 22 is just business as usual. But for a sizeable segment of the residents and area business owners, the new neighbor will be most unwelcome.

The neighborhood is divided on the issue, with some residents outright welcoming the new Starbucks, many others having concerns about increased traffic due to the new development, and still others seeing the Starbucks as a step towards gentrifying the Division/Clinton Street area and ruining the sustainable, local-business based economy that the neighborhood has worked for years to build.

the issues

The most mundane, and probably the most common concern, is that the new Starbucks, which is moving into the old Ladd’s Meat building, will increase the car traffic at what is already a congested intersection, generate more “stop and go” traffic in the area, make the intersections still more dangerous for cyclists and pedestrians, and reduce parking for neighborhood residents. Of course, any new business will generate a certain amount of additional car traffic, but the Red and Black Cafe across the street, for instance, caters much more to a bicyclist and pedestrian crowd, with an informal poll of its clientele revealing that about 80 percent arrive by means other than car.

When asked how Starbucks would When asked how Starbucks would respond to the concern that its new store will upset the local business based, pedestrian and bike friendly ethic of the area, Starbucks representative Michelle Caine said, “We try to create kind of a community gathering place where people can meet, whether they arrive on foot or by bike or by car.”

But with the locally owned Red and Black Cafe and Palio’s Coffee and Dessert House both within a two-block radius of the proposed Starbucks, the neighborhood does not lack for community gathering places. And apart from the traffic issue, some local business owners — notably at the Red and Black Cafe, the Mirador Community Store, and People’s Food Co-op — are raising concerns that the high rent being paid by Starbucks will encourage other local landlords to raise their rents, precluding new small businesses from opening in the area, and leading more corporations to move in.

The rent Starbucks is paying Peter Perrin — $22 per square foot — is higher even than the rents paid by many Pearl District gallery spaces, and is certainly well above the average rent for the Division/Clinton area. Even before it was known that Perrin would be renting to a Starbucks, the Seven Corners Localization Initiative, a neighborhood development group, criticized the developer for asking such a high rent for his new retail spaces, stating, “This rate is not affordable for local, community-oriented businesses.”

Steve Hanrahan, Mirador owner, said that he is not worried about his own store’s ability to pay if rents get hiked up. “But any new community-oriented business going in will have a hard time.”

On top of that, Hanrahan said, “Corporate business takes money out of the local economy. Local businesses keep money circulating in the local economy, corporate money goes out to the shareholders.”
This issue may be the most contentious, with some local business owners welcoming the new Starbucks, believing that it will bring more business to everyone. The Division/Clinton Business Association has so far taken a neutral stance on the issue.

“A lot of traditional businesses can’t understand —even though they’re local — that corporate business is bad for them...because the money doesn’t stay and get recirculated,” Hanrahan said.

Peter Perrin

The other pieces of the puzzle are Peter Perrin and Urban Works, who have been secretive if not outright deceptive in their dealings with the Hosford Abernathy Neighborhood Association (HAND).
According to HAND board member Chris Eykamp, when Perrin came to a meeting to describe his vision for the project last spring, residents asked him outright if he was going to rent to Starbucks and he said no. Later, Steve Hanrahan called Urban Works to ask the same question; they also said no.

At the initial HAND meeting, Eykamp said, “We told him a little about the community — he asked what would do well there and we told him the neighborhood would like something locally oriented and locally owned.”

From that conversation, HAND approved of Perrin’s plans; his vision seemed compatible with the neighborhood. He was willing to reduce the amount of parking spaces in favor of more landscaping, at residents’ request; he also took measures toward water conservation in the buildings’ runoff and stormwater treatment system.

Then it came out that Perrin had agreed to lease to Starbucks, and that negotiations between them had likely been in the works already when he first talked to HAND.

“I feel a little bit that I was, if not deliberately misled, at least put in a position where I was giving people bad information,” Eykman said. “And I do resent that a little.”

Since announcing that he was going to lease to Starbucks, Hanrahan said, “Perrin has been very secretive. He won’t come to meetings. We tried to have a meeting with him and Starbucks but he didn’t agree to come.”

Peter Perrin and Urban Works did not return calls from The Alliance.

the neighbors

At the Feb. 19 HAND meeting, at which two Starbucks representatives were present, Perrin’s absence was conspicuous. The meeting was packed and feelings ran high. Many people brought up traffic issues, with some also raising their frustration at not having been given a role in deciding who the property would be rented to.

Asked if it was Starbucks’ policy to instruct brokers not to inform the neighborhood when a Starbucks would be moving in, Michelle Caine responded, “It’s Starbucks’ policy not to talk about a site until the lease is signed...Aside from that, I don’t know what the real estate practice is.”

This led another resident to demand later, “At what point does the public get input in the process, if we don’t find out until after the lease is signed?”

There were also some pro-Starbucks voices at the meeting, pointing out that the corporation has given badly needed resources to Portland public schools and other community programs.

But when SpArk, a People’s worker and longtime community activist, told the Starbucks representatives, “Local businesses keep their money here in Portland, while most of the money from Starbucks will go to Seattle. And you may give money to community groups, but we already have businesses that do that, like People’s,” the room exploded in applause.

What does it mean?

For a time, the Clinton/Division area seemed to stand as proof that it is possible to build a local economy based on sustainable development and community power. The question now is, how much power does the community actually have to choose its own model of development, in a world where profit still has the last word, and where business interests are always assumed to be in the right?

Along the same lines, Steve Hanrahan said, “Our society has gotten to a point where we can’t make value judgments. Why is it wrong to protect the health of your own community?”

The March 3 City Council meeting will feature several speakers focusing on concerns about the new Starbucks. For more information about this, or to get involved in the campaign against the Starbucks, visit www.nostarbucksin7corners.org.

Abby Sewell is a Portland Alliance intern and a student at Reed College in Portland.

 

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Last Updated: March 7, 2004