The former Nordstrom building boarded up on June 29, 2021. (Saphara Harrell/Salem Reporter)

A once-bustling retail hub in downtown Salem will soon be torn down.

A developer working with the city of Salem is moving forward with plans to replace the vacant Nordstrom building downtown with a five-story structure that’ll include a mix of apartments and retail.

Ryan Schera, development manager for Deacon Development, provided details and a timeline of his company’s plans to replace the Nordstrom building at the Monday night board meeting of the city’s Urban Renewal Agency.

The Nordstrom building, located at 420 Center Street, closed in 2018. Schera said that his company purchased it in 2019 intending to turn it into another retail project.

“But that quickly died, especially with the pandemic,” Schera told the board. “So we had to pivot and rethink what would be successful here in downtown.”

Since the pandemic hit, retail and office spaces have been less commercially viable with more people working from home and shopping online. Following the closure of other large retailers nationally, JCPenney pulled up stakes from its Salem location last year. That building could also be developed into housing.

With the shifting commercial real estate market, Schera said the company decided to demolish the old Nordstrom building and erect a new structure that’ll include apartments and retail.

The agency’s board (which is also the Salem City Council) approved a $749,999 grant for the project at its Monday night meeting to help offset additional costs from demolishing and constructing a new building, as well as new energy code requirements.

Board members expressed enthusiasm for the project, which once seemed unlikely after the pandemic upended the economy.

“It’s a tremendous project,” said Mayor Chuck Bennett, who serves as the board’s chair. “We’re really happy that it's coming to fruition. It seemed like it was going to get real tough there for a while.”

According to city documents, the project is estimated to cost $25 million and will include 162 units of rental housing and 32 parking spaces. It’ll include a lobby, rooftop deck, community room, dog wash and an area to repair and store bikes. The building will include parking, but it will be tucked around back so it won’t be an eyesore, Schera said.

Studio apartments will cost $1,000 a month and one-bedrooms $1,300, he said. Two-bedroom apartments may be included, he added. 

Describing the housing as “urban apartments,” Schera said the company is anticipating younger and more active tenants more open to getting around by bike. With the building’s proximity to public transit, he said it’ll include a TV monitor with real-time bus schedules as well as the availability of rideshare services.

“When you're thinking about where you're going to go for the day, and how you're gonna get there, you can look at the screen and identify what's your most convenient option,” he said.

Councilor Tom Andersen said the building will reduce reliance on single-occupancy vehicles by creating denser and more walkable neighborhoods.

“I think this is terrific for downtown housing,” he said.

Schera said Deacon Development intends to submit the project for land-use review in a week or two and a permit in October. In response to a question from Bennett, Schera said the project is scheduled for completion by April 2023.

Instead of a large commercial tenant, Schera said the building will include a restaurant or coffee shop in its retail space. In response to a question from city Councilor Chris Hoy, Schera said Deacon Development looked into adding a grocery store but he said there isn’t a resident base to support a grocery store downtown. But that could change.

Kristin Retherford, Salem urban development director, said the city commissioned a study before the pandemic that found downtown was “right on the edge” of having enough people to support a grocery store.

“I think once we see one or two more residential projects coming into the downtown that's going to shift the dynamic and make it attractive for grocery operators,” she said.

  Contact reporter Jake Thomas at 503-575-1251 or [email protected] or @jakethomas2009.

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