In 2016, the City of Bend expanded the Urban Growth Boundary, which included an area in northeast Bend aimed at creating a new, complete community. Petrosa, a Pahlisch community, was master planned to include a mix of residential and commercial uses. While the residential portion of this neighborhood is underway, community members are still waiting for the planned commercial development to follow suit, creating a more convenient neighborhood.
Located at the intersection of NE Butler Market and Deschutes Market roads sits an area of land designated for commercial development in the Petrosa Master Plan, per the City of Bend Development Code 2.7.3900. The Markets at Petrosa is planned to offer space for a variety of businesses, including retail, health and wellness, professional and medical.
According to a Markets at Petrosa information packet, “The location of the project will create a retail and rooftop synergy that will make the NE quadrant one of Bend’s most desirable and sought-after areas.”
After years of construction on homes and other neighborhood amenities, including a 4-acre central park, a private pool, fitness facilities and a community clubhouse, the area designated for commercial developments is still awaiting construction. The land is currently for sale.
“The commercial-zoned parcels have been for sale for years while we look for the right specialized commercial developer to build the area to its highest and best use,” said Jessica Seidel, the marketing senior director at Pahlisch.
Residents — including several people involved in a lively discussion about the neighborhood on Reddit — have raised concerns regarding the delayed commercial space. “I can’t believe that a developer plats out acres and acres of expanded UGB, gets it approved by the City, then reneges on a portion of that,” Liz Lotochinski, a Mountain View Neighborhood District board member, told the Source Weekly after seeing that the land was for sale.
Lotochinski lives within walking distance of the planned Markets at Petrosa location. She was looking forward to the finished development.
According to Seidel at Pahlisch, the plan is still in motion. “Unfortunately, commercial development has been delayed in response to changing market conditions and high-interest rates, but our commitment to the area has not changed.”
When it comes to commercial development, Colin Stephens, community economic and development director for the City of Bend, noted that it typically comes after residential development.
“In general, it takes a certain amount of development and people living in the area to make commercial areas viable,” said Stephens.
Seidel with Pahlisch echoed these reasons for the delay. “The sales of homes add to the desirability of the Petrosa commercial area for retail businesses.”
Stephens compared the pace of the Petrosa development to that of the now-established neighborhood, Northwest Crossing. “Some of the commercial land is still not built out, and it took years for the market to support what is there,” he said.
Development in Northwest Crossing started in 2004 and has taken over a decade, according to Stephens, for the commercial to turn into what we see today. While the City is responsible for expanding the UGB and approving the master planned community, Stephens said it has no control over the timing.
“We, the City of Bend, can only set the table. We can’t force people to eat. The UGB expansion set the table for areas all around town to have complete communities. The timing of construction of all of the elements it takes to make a complete community is driven by the private market and is not something under the city’s control,” said Stephens.
Although the promise of commercial development may have driven some people to the Petrosa area in the first place, the annexation agreement that brought the land into city limits had no set requirement for timing or exact types of commercial uses. “We can’t force people to build buildings at a certain schedule,” said Stephens.
Pahlisch, in accordance with the UGB expansion, was only required to create buildable lots. According to Stephens, this has been accomplished. “Pahlisch has fulfilled their requirements because they have developed commercial lots with new adjacent roundabouts, urban infrastructure an access points that allow people to get to these commercial lots.”
The City is also responsible for regulating the allowed land uses. Since the Petrosa lot was initially approved for commercial use, it will remain zoned for commercial uses. “While the development of new communities is a long process, the future is bright at Petrosa, and we look forward to realizing the vision we have for northeast Bend,” said Seidel.
Still, nearby resident Lotochinski hopes to soon see the area built out for the community. “I was looking forward to the markets. It was going to be an amazing convenience for me, having shops, stores, restaurants, a grocery store and things like that there.”
This article appears in Source Weekly November 16, 2023.
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As Bend grows, the commercial component of this area will eventually fill in. The ebb and flow of factors outside of control of the City or Pahlish will favor completion at some point. If there is an implication that the City and Pahlish somehow dropped the ball is not apparent based on the information provided in this article.
Pahlish is a home builder, not a Retail developer. So they need a partner or a buyer.
Given that these projects need rents well north of $35 SQFT to pencil back when rates were in the 3% range, they aren’t feasible at the current 8%+ range. Plus the massive run up in material costs since the pandemic.
Developers dont build projects this massive (hundreds of millions of dollars) with cash from under the mattress – if he lenders wont lend because (ironically their own rates make the project not work) its a waiting game.
Get comfortable making coffee at home for the foreseeable future. 🙂
As long as we are talking about Petrosa, can we ask why there are 6 feet meridians with lush green grass around the outside of the development? Sure seems like a waste of water here.
I’d take issue with the statement by Stephens: “We can’t force people to build buildings at a certain schedule,”
You can’t force a builder to build, but with regard to scheduling it’s called phased development, and folks like Stephens very well know that. Pahlish will understand how to best maximize profit, but that’s not the City’s concern.
The City could’ve mandated that commercial development would have to occur before later residential phases would be allowed, then put the ball back into Pahlish’s court as to whether to break ground in the first place.
With regard to Petrosa that’s now water under the bridge. But with regard to development within Bend’s current UGB that’s far from being the case.
Want to turn up the heat? Integrate this into the approval process for the Stevens Road Tract.
This basic practice of “build it and they will come” is well understood by COB planners. Why else would they encourage expanded services not explicitly (but for sure implicitly) under their purview, such as schools and parks, be located just outside current UGB boundaries? Build it and you will create a fait accompli argument for expanding the UGB, and thus an expanded tax base/larger municipal kitty.
Old playbook practice for COB. It’s now up to the electorate to continue to buy into the “develop first, ask questions later” process (which is probably why The Source is putting this article out for consideration – let’s see if the Bulletin follows suit).