Deli vs. dorm: deli wins

A prime corner of Southwest Sixth Avenue and College Street is up for sale, less than two years after the owner turned down an offer to sell to Portland State.

The university wanted the remaining quarter block so the new Broadway housing could be built to fill the entire block. In the opinion of the owners, PSU didn’t offer enough money.

“They wanted to steal it,” said Nathan Makboul, son of the owner and principal manager of the busy Sixth Avenue Deli and Market Place. He said the university offered $1.2 million and the owners already had an offer on the table for $1.75 million (which they eventually declined.)

Two weeks ago, with The Broadway preparing to open fall term, a big white sign went up on a corner of the deli. “For Sale By Owner, quarter block, 10,000 square feet, zoned RXD, call 503-222-1056,” the sign read.

PSU is about to fill up The Broadway, the new residence hall that occupies the remaining three-quarters of the block. The Broadway is bounded by Broadway, Sixth, College and Jackson streets. PSU wanted to create The Broadway as a square building, filling the entire block.

When the owners of the missing quarter block declined PSU’s offer, the university went ahead anyway and made The Broadway L-shaped, filling three-quarters of the block and leaving the deli isolated on the remaining quarter block,

Still ensconced and doing a brisk business on that that quarter block is the occupant for 15 years, the Sixth Avenue Deli and Market. It has been owned by Awni Makboul since 1989 and operated principally by members of his family. It doesn’t lack for business, as a steady stream of customers brings snacks and soft drinks to the constantly clanging cash register.

“When The Broadway opens, I’ll have to put in another cash register,” Nathan Makboul predicted, foreseeing an increased flood of business from his new next-door neighbors.

Did this sudden appearance of a for sale sign on the deli, just as The Broadway is about to open, represent a thumb to the nose at the university? No, it’s a combination of circumstances and money, Makboul said.

He said his father and the owner, Awni Makboul, is into his seventies and wants to retire from business. But he wants what he believes the property is worth, which in his opinion is about $1.8 million, $600,000 more than the university was willing to offer.

“In another year and a half we’ll have the whole mortgage paid off,” the younger Makboul said. “This is a very, very good location.” He said he and his family have put in years of 16-hour days running the store and he doesn’t think the asking price is too high. “We’ve worked our butts off,” he said. “We deserve to get that.”

The store was built in 1950, he said, and has gone through a number of identities, one of them as a Burger Chef. Nathan conceded that to make a $1.8 million price for a quarter block pay off, the location would need to be redeveloped. He observed that PSU is asking $25 a square foot for ground level retail space in The Broadway.

Until the property is sold, Makboul will happily welcome all the many new residents of The Broadway with their snacks and soft drink purchases.

Asked if the university could have condemned the quarter block, Makboul said it could not have because an offer at $1.75 million was on the table.

Whatever the legalities, PSU would not have gone into condemnation on the quarter block, explained Cathy Dyck, interim vice president for finance and administration.

“We don’t condemn,” she said. “That’s not the way we do business.” Aside from policy, condemnation would not have been practical, since the process requires a lot of time.

“We wanted to be on the fast track with The Broadway,” she said. “If you don’t get a residence hall open by fall, you have to wait a whole year because by then everybody has found a place to live.”

If a new owner pays the asking price of $1.8 million, it can’t make the property pay off by continuing it as a deli. Whatever a new owner of the quarter block may consider placing there, Dyck feels the City of Portland will be pressing for density in any new construction. That could mean a high-rise, a parking structure, apartments, condominiums or a hotel. Whatever it may be, it will be directly up against parts of The Broadway, which won’t improve the view either south or west.

“It’s a great location because of all the activities in the area,” Dyck said. “Whether you can make something pencil out, I don’t know.”

She agreed with Nathan Makboul that the university is asking $25 a square foot for ground level retail in The Broadway.

The PSU Foundation, as the actual owner of The Broadway, has signed leases in hand and signed letters of intent that are in the lease negotiation process.

The prospective tenants include several restaurants and specialty shops.