Project analysis · West Salem, Oregon

Now City West Salem.

Does the regenerative case strengthen at scale?

Four nested scales of the same project, evaluated against the fifteen-metric framework. Phase 1B is a low-capital activation prototype. Phase 1A is the 200-unit Scandi Block. Phase 1 is the 5.29-acre, 380-unit mixed-use core. The District is the full vision: 760 units, 105,000 SF activated retail and flex, 95,000 SF green and civic, anchored by a $100M Willamette Wellness Opportunity Zone Fund.

Location: 740 Basset St NW, West Salem, OR
Incentive architecture: OZ + URA + 10-year tax abatement
Salem market window: 1.92 months inventory
Demand anchor: OSU Huang Innovation Complex

The thesis test

What changes as the project scales from a $1.3M activation to a $400M+ district.

Cost of capital

~150 bps lower

Blended WACC compresses from approx 7.5 to 8.0% at Phase 1A to approx 6.0 to 6.5% at District scale, as more layers (LIHTC 4%, MFTE, green bond, sustainability-linked debt, OZ Fund anchor) become accessible.

Vehicle miles traveled

~50% lower

VMT per resident per day drops from approx 17 at Phase 1A to approx 12 at District, as on-site daily-use destinations reach the 9-of-10 15-Minute City threshold and innovation-district employment lands within walk.

Catalytic ratio

~3x improvement

Concessionary dollars to crowded-in market dollars improves from approx 1.4x at Phase 1A to approx 4x at District, as the Willamette Wellness QOF and district green-bond tranche unlock institutional real-assets capital.

Per-unit hard cost

10 to 20% lower

Industrialized construction, shared infrastructure, and standardized program produce platform-scale cost reductions that are not available to a single-asset Phase 1A delivery.

Four nested scales

Same project, evaluated at each level of commitment.

Parameter

Phase 1B · Market

Phase 1A · Scandi Block

Phase 1 · 5.29 acres

District · Full vision

Site

~3 acresActivation footprint

2.3 acresOf the 5.29-acre Phase 1

5.29 acres740 Basset St NW

18 to 40 acresVia Willamette Wellness QOF

Residential

0 unitsActivation only

200 unitsStudios to 3 BR

380 unitsPhased

760 unitsAt full build

Retail and flex

~25 vendorsDaily market hall

8,000 SFRetail plus incubator

40,000 SFRetail plus flex office

105,000 SFExperiential retail and flex

Green and civic

5 acres programmedCommons, sauna, market, craft yard

25,000 SFKid-safe green plus civic

40,000 SFScaled across phase

95,000 SFPlus landmark green infrastructure

Total capitalization

$1.3 to 1.4MActivation prototype

$95M$30M equity required

$194M$62M equity required

$400M+ over 10 yrs$100M QOF anchor

Returns

3.2x catalyst ROI$4.2M RE value lift

24% Levered IRR2.0x equity multiple

20.5% Levered IRR2.5x equity multiple

16 to 22% Levered2.5 to 3.5x at 10-yr OZ exit

Status

ConceptSite activation strategy drafted

$4M raise, 50% committedPre-construction

PhasedContingent on Phase 1A delivery

QOF in formationUp to 40 acres acquisition target

Capital approach

Recommended stack per scale.

Same categorical structure across all scales (senior debt, mission, subsidy, sustainability, philanthropic). What changes is which layers become accessible and what the blended cost lands at. The District unlocks layers (LIHTC 4% with bonds, green bond, sustainability-linked debt, the Willamette Wellness QOF anchor) that no individual phase can carry on its own.

Phase 1B · Market

$1.35M activation stack

Mostly concessionary. Designed to catalyze, not return.

Recoverable grants (Urban Reboot, foundation)$700K · 52%
Mission and sponsor capital$300K · 22%
City partnership and activation grants$200K · 15%
Vendor pre-pay and membership$150K · 11%

Blended cost3 to 5%

Considered, set aside: LIHTC (no residential), HUD financing (scale), green bond (scale), C-PACE (scale).

Phase 1A · Scandi Block

$95M Phase 1A stack

Conventional structure with OZ uplift on equity.

Senior construction debt$63.5M · 67%
LP equity (OZ-aligned)$25.6M · 27%
Co-GP equity (concessionary)$3.8M · 4%
URA grants$1M · 1%
Mission equity (Urban Reboot pathway)$1M · 1%

Blended cost7.5 to 8.0%

Considered, set aside: LIHTC 9% (timeline conflicts with shovel-ready target), HUD 221(d)(4) (Davis-Bacon adds cost basis at small scale), C-PACE (modest contribution at this footprint).

Phase 1 · 5.29 acres

$194M Phase 1 stack

Larger scale unlocks C-PACE for shared infrastructure.

Senior construction debt$126M · 65%
LP equity (OZ-aligned plus market)$48.5M · 25%
Co-GP equity$8.7M · 4.5%
C-PACE (shared infrastructure)$5M · 2.5%
Mission equity (Urban Reboot pathway)$3M · 1.5%
URA grants$2.8M · 1.5%

Blended cost7.0 to 7.5%

Considered, set aside: LIHTC 4% with bonds (workforce share too small at this scale to clear structuring overhead), green bond (unlocks at District tranche scale).

District · Full vision

$400M+ district stack

QOF anchor unlocks the full layered structure.

Willamette Wellness OZ Fund (QOF anchor)$100M · 25%
Senior debt (sustainability-linked)~30%
Institutional LP equity (real-assets thesis)~15%
LIHTC 4% with bonds (workforce portion)~8%
Green bond (district infrastructure)~7%
Mission co-GP plus C-PACE~8%
Recoverable grants (Urban Reboot, philanthropic)~3%
URA, MFTE, abatement layers~4%

Blended cost6.0 to 6.5%

Considered, set aside: LIHTC 9% (competitive QAP timeline does not match phased rollout), TIF (depends on Salem URA progression, revisit at year 3).

Outcomes

The fifteen-metric framework, applied at each scale.

Same metrics, same order, every scale. The signal lives in the values across the scale columns. Method, sensitivity, source, and v1.1 anchor target available per metric.

Capital and operators

Returns, risk, and the cost of money

5 metrics

Landowners · Operators · Capital

Financial ROI

Unlevered IRR over hold. Levered figures shown in method panel.

Medium

Traditional

8 to 11%

PNW and CA mixed-use comps

Phase 1B

3.2x

Catalytic ROI on $1.3M

Phase 1A

11 to 14%

24% levered, 5-yr hold

Phase 1

10 to 12%

20.5% levered, 5-yr hold

District

12 to 15%

10-yr hold, full OZ optimization

Scale storyCompresses slightly at Phase 1, then climbs at District as OZ tax exemption at year 10 plus shared infrastructure unlock additional return.

How this is calculated

Phase 1A and Phase 1 unlevered IRR derived by removing the 67 to 68% senior debt leverage from the Levered IRR shown in the OM. District unlevered estimate is directional; long-hold OZ optimization plus catalytic adjacent acquisitions are the dominant upside drivers. Phase 1B is expressed as catalyst ROI because $1.3M activation produces an estimated $4.2M lift in real estate value via demonstrated demand for the permanent retail tranche.

Sensitivity

Stabilization timing, exit cap rate, and OZ ruleset persistence to 2036. District-scale construction cost inflation at year 5 to 10 is the dominant downside.

Confidence

Medium at Phase 1A and Phase 1 (anchored to OM modeling). Med-Low at District (long-horizon, multiple unmodeled variables).

v1 source

OM Phase 1A and Phase 1 sensitivity tables. Brand Bible directional ranges.

v1.1 anchor target

NCREIF NPI mixed-use subset. Closed comparable transactions. Real returns at Phase 1A exit (Q4 2030).

Landowners · Operators · Municipalities

Timeline to shovel-ready

Months from site control or LOI to permits in hand.

Medium

Traditional

36 to 48 mo

Comparable mixed-use infill

Phase 1B

6 to 12 mo

Light infrastructure

Phase 1A

18 to 24 mo

Q1 2026 LOI to Q3 2027 demo

Phase 1

18 to 24 mo

Concurrent entitlement

District

24 to 36 mo

Master plan; phased over 10+ yrs

Scale storyPhase 1A and Phase 1 entitle concurrently. District master plan adds 6 to 12 months but rolls out over 10+ years per Willamette Wellness QOF deployment.

How this is calculated

OM business plan timeline shows Q1 2026 entitlement engagement through Q2 2027 entitlement complete. Salem alignment, Opportunity Zone designation, and Urban Renewal Area programs reduce discretionary risk and compress the entitlement curve. District master plan timeline assumes coordinated approval with City of Salem during years 1 to 2 of the QOF.

Sensitivity

City of Salem agency staffing. Wallace Road frontage entitlement context. Public process around the landmark gondola and tower elements.

Confidence

Medium. Strong city alignment narrative. Specific entitlement risk on the District landmark elements is unquantified at v1.

v1 source

OM business plan timeline. ULI PNW entitlement benchmarks.

v1.1 anchor target

Real entitlement timeline through Phase 1A permits in hand.

Operators · Mission-aligned capital

Cost of capital

Blended cost across the stack. Lower compresses every project metric.

Med-High

Traditional

8.0 to 9.5%

Conventional merchant build

Phase 1B

3 to 5%

Concessionary dominant

Phase 1A

7.5 to 8.0%

Conventional plus OZ uplift

Phase 1

7.0 to 7.5%

Adds C-PACE for shared infra

District

6.0 to 6.5%

QOF anchor plus full layer access

Scale story~150 bps compression from Phase 1A to District. The single clearest quantification of the regenerative thesis on the capital side.

How this is calculated

Blended WACC equals the sum-product of stack weights and required returns. Phase 1A blends senior debt at approx 7%, OZ-aligned LP equity at approx 11 to 13%, concessionary co-GP at approx 8%, and grants at approx 0%. District blend adds LIHTC 4% at approx 2% effective, MFTE and abatement at approx 0% effective NOI lift, green bond at approx 5%, sustainability-linked debt at approx 6.5%, and the QOF anchor priced for long-hold OZ optimization.

Sensitivity

Senior debt rate. Mission-layer availability through Urban Reboot and PNW foundation network. LIHTC and MFTE eligibility under Oregon QAP.

Confidence

Med-High at Phase 1A (anchored to OM Sources and Uses). Medium at District (multi-layer assumptions, market-dependent).

v1 source

OM Sources and Uses. Q2 2026 market rates. Internal stack design.

v1.1 anchor target

Executed term sheets. Closed mission-aligned LP commitments. Real LIHTC or MFTE awards as Phase 1 progresses.

Landowners · Capital · Municipalities

Property value appreciation

Adjacent parcel lift within a quarter-mile, three years post-stabilization.

Medium

Traditional

0 to 3%

Background only

Phase 1B

$4.2M

Direct lift on permanent retail

Phase 1A

8 to 12%

Establishes premium comp set

Phase 1

12 to 18%

Catalytic across corridor

District

15 to 25%

Plus 4 to 6% market CAGR

Scale storyCatalytic effect compounds. The Phase 1B activation alone produces a $4.2M direct lift; the full District lift extends into adjacent neighborhoods.

How this is calculated

Phase 1B uses the OM-stated $5 per SF rent premium across 50,000 SF of permanent retail at a 6% cap rate, producing $4.2M of additional real estate value. Phase 1A and Phase 1 figures are hedonic-regression estimates against catalytic mixed-use TOD comparables (Cervero, ULI). District includes adjacent acquisitions inside the QOF deployment radius plus the Salem-wide market CAGR of 4 to 6% for 2026.

Sensitivity

Salem housing inventory remains tight. Quality of curated retail tenants. Wallace Road traffic counts as proxy for visibility.

Confidence

Medium. Strong literature on catalytic mixed-use lift. Salem-specific variance is real.

v1 source

OM real estate value multiplier (Phase 1B). Cervero TOD studies. ULI catalytic-investment cases.

v1.1 anchor target

Marion County assessor data. Repeat-sales index post-stabilization. Site-specific hedonic model.

Operators · Capital

Economies of scale

Per-unit hard cost reduction and operating-cost reduction as scale grows.

Med-Low

Traditional

No scale

One-off cost basis

Phase 1B

N/A

Activation only

Phase 1A

3 to 5%

First of multiple phases

Phase 1

5 to 10%

Per-unit hard cost out

District

10 to 20%

Plus 20 to 30% op-ex via shared infra

Scale storyThis is the metric where scale most directly shows. District unit economics dominate the platform thesis.

How this is calculated

Compares per-unit hard cost across delivered phases. Curve-fit on platform learning. Shared-infrastructure costs (district energy, central plant, shared services, landmark green) allocated across units. District op-ex savings driven by shared services, district energy, and self-insurance.

Sensitivity

Number of delivered phases. Standardization of unit mix. Scope of shared infrastructure deployed at District scale.

Confidence

Med-Low at v1 because it requires multiple delivered phases to anchor. Strong directional from industrialized-construction cost-curve research.

v1 source

Industrialized construction cost-curve research. Platform-economics literature.

v1.1 anchor target

Real per-unit cost data across Phase 1A delivery, then Phase 2 delivery. Curve-fit analysis.

Civic and climate

Outcomes for Salem, climate, and shared infrastructure

5 metrics

Municipalities · Operators · Capital

Economic development

Local jobs and small-business formation at stabilization.

Med-Low

Traditional

Baseline

Chain-anchored ground floor

Phase 1B

100 to 200 jobs

25 vendors plus indirect

Phase 1A

50 to 100 jobs

Retail edge plus incubator

Phase 1

250 to 400 jobs

22K SF retail + 18K flex

District

1,000 to 1,500 jobs

Plus innovation district employment

Scale storyJob creation scales proportionally with retail and flex SF. Innovation-district employment at full District is the additional layer.

How this is calculated

Multiplier expressed versus a typical chain-anchored mixed-use baseline. Per-SF job density informed by Shuman local-multiplier research and OM tenant strategy. Phase 1B counts vendor full-time-equivalents plus indirect food-system jobs. District includes anchor employment from the OSU Huang Innovation Complex talent pipeline.

Sensitivity

Curated local-tenant share. Strength of Salem small-business ecosystem. Innovation-district anchor tenant signing.

Confidence

Med-Low. Hardest to anchor cleanly without a project-specific local-multiplier study.

v1 source

OM market analysis. Shuman local-multiplier research.

v1.1 anchor target

BLS local jobs data. Project-specific local-multiplier study. Verified leasing roster at Phase 1A stabilization.

Municipalities · Capital · Operators

Resilience and insurability

Operational resilience through grid, climate, and insurance dislocations.

Medium

Traditional

Tier 3

Single-point grid and water

Phase 1B

Tier 3

Light, flexible footprint

Phase 1A

Tier 2

Nordic envelope, building-level

Phase 1

Tier 2

District energy beginnings

District

Tier 1

Full district energy + storage + water

Scale storyResilience emerges at scale. District energy and on-site water are not feasible at Phase 1A footprint but unlock at District.

How this is calculated

Tier scoring aligned with FEMA CRS framework and emerging climate-aware carrier underwriting. Tier 2 reflects strong building envelope plus partial passive thermal. Tier 1 reflects district energy plus storage, on-site water, and integrated passive systems. The OM identifies indoor soccer arena and event space as a year-round community gathering and emergency response anchor at District scale.

Sensitivity

District-scale infrastructure investment level. Carrier underwriting engagement before Phase 1A close.

Confidence

Medium. Tier scoring is honest for v1. v1.1 should move to a numeric 1 to 10 score.

v1 source

FEMA CRS framework. OM resilience by design narrative.

v1.1 anchor target

Actual carrier quotes. Third-party resilience audit. CRS rating where Salem participates.

Mission-aligned capital · Municipalities

Lifecycle carbon

Embodied plus 50-year operational, expressed as percent reduction.

Medium

Traditional

Baseline

Wood-frame plus mixed gas

Phase 1B

~30 to 40% lower

Timber plus light infrastructure

Phase 1A

~35 to 40% lower

Nordic envelope, all electric

Phase 1

~35 to 40% lower

Scaled approach

District

~40 to 50% lower

District energy plus food systems

Scale storyPer-unit carbon reduction grows with scale as district energy, scale of materials sourcing, and circular food systems become viable.

How this is calculated

Life-cycle carbon equals embodied plus 50-year operational. Industrialized construction, electrification, and Nordic envelope drive Phase 1A reduction. District adds shared central plant, scale procurement on mass timber, and circular food systems (per OM food infrastructure section).

Sensitivity

Material spec. Operational systems. Oregon grid factor. District energy partner availability.

Confidence

Medium. Strong directional. Absolute numbers require LCA partner engagement.

v1 source

ULI Greenprint. RMI Zero-Carbon Building framework.

v1.1 anchor target

Full LCA from third-party partner per phase. Verified embodied carbon at substantial completion.

Municipalities · Civic partners · Residents

Vehicle miles traveled

VMT per resident per day.

Medium

Traditional

24 to 26

FHWA U.S. urban baseline

Phase 1B

~22 to 24

No residents; daily destinations only

Phase 1A

16 to 19

200 units in walkable mix

Phase 1

14 to 17

Sensitivity

Salem transit network expansion. Gondola feasibility study outcome. On-site employment density at Phase 2 and beyond.

Confidence

Medium. ITE has known limitations for mixed-use. Site-specific data is the anchor.

v1 source

ITE Trip Generation Manual. FHWA travel data.

v1.1 anchor target

Resident trip diary survey post-Phase 1A occupancy. App-based travel data. Comparison to Salem VMT averages.

Residents · Civic partners · Municipalities

Commute time

Median one-way commute, plus time-value recovered.

Med-Low

Traditional

~27 min

Census ACS U.S. median

Phase 1B

N/A

No residents

Phase 1A

20 to 24 min

Salem proximity advantage

Phase 1

18 to 22 min

Sensitivity

Salem employment geography. Resident industry mix. Speed of innovation-district anchor employment landing.

Confidence

Med-Low. Strong public data baseline. District-scale on-site employment is the dominant assumption.

v1 source

Census ACS S0801. Employment access mapping.

v1.1 anchor target

Resident commute survey pre and post move. Site-specific time-value calculation.

III

Resident and lived experience

How life changes for the people who live here

5 metrics

Residents · Mission-aligned capital · Civic partners

Health impact

Composite of WalkScore, on-site air quality, daylight, and active transport.

Medium

Traditional

55 to 65

Composite for typical mixed-use

Phase 1B

65 to 75

Sauna, daily routines, no residents

Phase 1A

75 to 85

Nordic envelope, kid-safe green

Phase 1

78 to 87

Scaled health amenities

District

85 to 92

Full biophilic plus landmark green

Scale storyHealth composite grows with destination density. Approaches WELL v2 thresholds at District scale.

How this is calculated

Composite of WalkScore, on-site PM2.5 vs neighborhood EPA baseline, daylight quality (percent of units meeting WELL v2 daylight criterion), and active-transportation share. Phase 1A includes the Nordic envelope (high-performance daylight and thermal). District adds the landmark green infrastructure (Danish Forest Tower, district biodiversity).

Sensitivity

Material spec. Setback and ventilation strategy. Active mobility infrastructure deployment.

Confidence

Medium. Components are independently measurable. Composite weighting is the v1 directional choice.

v1 source

WELL v2 framework. WalkScore methodology. EPA AirNow data.

v1.1 anchor target

WELL certification or third-party HEAL audit. On-site PM2.5 monitoring. Annual resident HRA.

Residents · Civic partners

Quality of life

WHO-5 Well-Being score plus 15-Minute City score (of 10 categories).

Medium

Traditional

55 / 4 of 10

Urban U.S. mean

Phase 1B

N/A / 5 of 10

Adds food, culture, wellness, civic

Phase 1A

70 / 6 to 7

Residential plus retail edge

Phase 1

72 / 8 to 9

More retail, flex, civic

District

75 / 9 to 10

Full daily-use program

Scale story15-Minute City score is directly tied to scale. The District reaches the 9-of-10 threshold that distinguishes complete neighborhoods.

How this is calculated

WHO-5 Well-Being Index is a five-question validated wellbeing instrument administered annually. 15-Minute City score per Carlos Moreno framework counts how many of ten daily-use destination categories (groceries, healthcare, schools, civic, retail, dining, parks, transit, employment, daycare) are reachable within a 15-minute walk. Phase 1B contributes to the score by activating four to five categories before residents arrive.

Sensitivity

Ground-floor program completeness. Walkable density. Resident sample representativeness on the survey.

Confidence

Medium. WHO-5 globally validated. 15-Minute City increasingly standard in urban planning.

v1 source

WHO-5 Well-Being Index. Carlos Moreno 15-Minute City methodology.

v1.1 anchor target

Annual on-site WHO-5 administration. Site-specific 15-Minute City audit.

Residents · Civic partners · Mission-aligned capital

Social impact

Tenant equity participation plus displacement risk reduction.

Med-Low

Traditional

0% / Med-High

No equity pathway

Phase 1B

Vendor coop

Local biz incubation

Phase 1A

30 to 50%

200-unit pool

Phase 1

40 to 60%

15% workforce housing committed

District

50 to 70%

Full pool plus stabilization mechanisms

Scale storyTenant equity model scales with unit count. District pool of 760 supports a deeper governance structure than any single phase.

How this is calculated

Tracks tenant equity model adoption per the four candidate models in the Tenant Equity Strategy memo. Applies UC Berkeley Urban Displacement Project framework to assess pre and post displacement risk. Phase 1B contributes via vendor cooperative governance for the daily market operators.

Sensitivity

Tenant equity model selection (still being explored). Salem displacement context. Pricing of equity pathway.

Confidence

Med-Low. Heavily dependent on equity model selection. Tightens fast once locked.

v1 source

Tenant Equity Strategy memo. Urban Displacement Project framework.

v1.1 anchor target

Adoption rates of the selected model. Pre and post displacement risk assessment. Annual tenancy survey.

Residents · Civic partners · Mission-aligned capital

Collective bargaining

Resident participation in equity governance and operating-decision share.

Med-Low

Traditional

0% / 0 seats

No governance

Phase 1B

Vendor coop

Small-biz governance pilot

Phase 1A

30 to 50%

Light-touch model

Phase 1

40 to 60%

Resident governance pilot

District

60 to 80% / 30 to 50%

District council plus governance share

Scale storyGovernance share scales with population. District-wide tenant council becomes viable at the 760-unit threshold.

How this is calculated

Tracks tenant equity model adoption rate. Documents governance structure (operating agreement, board seats, voting rights, common-area decision rights). Phase 1B vendor cooperative is the pilot governance model that informs residential structure at later phases.

Sensitivity

Tenant equity model selection. Operating-agreement provisions. Adoption among residents in lease-up.

Confidence

Med-Low. Depends on model selection. Industry comparables (limited equity co-ops, community land trusts) provide directional anchors.

v1 source

Tenant Equity Strategy memo. Industry comparables.

v1.1 anchor target

Operating agreement provisions. Real adoption. Annual governance documentation.

Operators · Mission-aligned capital · Residents

Resource efficiency

Energy use intensity, water use, waste diversion.

Med-High

Traditional

Baseline

ASHRAE 90.1

Phase 1B

Modest

Timber, minimal footprint

Phase 1A

30 to 40% energy

Nordic envelope

Phase 1

35 to 45% energy

Shared HVAC, water reuse beginnings

District

50 to 60% / 30 to 50%

District energy plus water reuse

Scale storyDistrict energy and water reuse are infeasible at Phase 1A footprint but unlock at District. Engineering benchmarks are well-established.

How this is calculated

Submetered energy use intensity per ASHRAE 90.1. Water use intensity per WaterSense. Waste diversion per LEED v4 protocols. District includes shared central plant, greywater recovery, and food-system waste recovery (per OM closed-loop nutrient narrative).

Sensitivity

Operational systems. Water reuse infrastructure. Resident behavior at scale.

Confidence

Med-High. Engineering benchmarks well-established. Submetered actuals close the loop.

v1 source

ASHRAE 90.1 baseline. WaterSense. LEED v4 waste targets.

v1.1 anchor target

Submetered actuals at Phase 1A stabilization. Third-party energy audit. Annual waste audit.

Recommended action plan

Sequence the next twelve months.

Specific to West Salem and the current $4M Phase 1A pre-construction raise (50% committed). Sequenced to compound across the four scales rather than treat each as standalone.

Next 90 days

Close Phase 1A pre-construction

Close the remaining $2M of the $4M Phase 1A pre-construction raise. OZ-aligned LP equity is the priority profile.
Stand up Phase 1B activation budget ($1.3 to 1.4M) using recoverable grants from Urban Reboot plus a city partnership grant. This activates Wallace Road frontage and produces demand data for the Phase 1A leasing comp set.
Engage a third-party LCA partner for Phase 1A. Required to anchor the Lifecycle carbon metric at v1.1 confidence.
Brianna review on the Willamette Wellness QOF formation documents. Resolve the structural question: fund-of-funds vs perpetual deployment, before LP outreach.

Next 6 months

Lock Phase 1A entitlement and Phase 1B activation

Complete Phase 1A entitlement (Q1 2026 to Q2 2027 per OM business plan). Salem alignment narrative is strong; protect the timeline by surfacing political risk indicators monthly.
Open Phase 1B daily market within 6 to 9 months of activation budget close. Real visitor counts and vendor revenue replace theoretical demand data for Phase 1A leasing.
Carrier underwriting letter for Phase 1A. Salem is not in a hard-to-insure market but the carrier letter pre-close moves the Resilience metric to documented Tier 2.
Identify tenant equity model from the four candidates in the Tenant Equity Strategy memo. Locking the model unblocks Social impact and Collective bargaining metrics for Phase 1A.

Next 12 months

Stand up the District capital architecture

Form the Willamette Wellness QOF with a $100M target. Anchor LPs from family offices and foundations with Pacific Northwest mission alignment.
Identify District green-bond issuance pathway. Coordinate with Oregon Treasury and a sustainability-linked debt advisor.
Engage Salem on a Disposition and Development Agreement covering the broader 18 to 40-acre acquisition radius. Locks entitlement parameters before close, reduces risk premium across the District stack.
Establish a measurement baseline: WHO-5 administration plan, 15-Minute City audit framework, on-site PM2.5 monitoring. These instruments need lead time before Phase 1A occupancy to produce comparable v1.1 data.

Risk register

What could break the recommendation.

Top five risks identified across the four scales. Each carries an explicit mitigation pathway. Severity reflects the combined likelihood and impact across the scales it touches.

Tenant equity model not locked

Touches Phase 1A · Phase 1 · District

Two metrics (Social impact and Collective bargaining) carry Med-Low confidence solely because the equity model has not been selected from the four candidates in the Tenant Equity Strategy memo. The longer the selection lags, the harder it becomes to integrate into Phase 1A operating documents.

Mitigation Lock the model in the next 6 months. Pilot through the Phase 1B vendor cooperative as a low-stakes governance test. Ensure Phase 1A operating agreement provisions accommodate the chosen model.

OZ ruleset persistence beyond 2028

Touches Phase 1A · Phase 1 · District

The District thesis depends on Opportunity Zone designations extending to 2036 (OZ 2.0 redesignations). If the federal ruleset shifts or the Salem tract loses designation, the Willamette Wellness QOF anchor weakens substantially and the District blended cost of capital reverts toward Phase 1 levels.

Mitigation Structure the QOF for early value realization through refinancings and JV recaps in years 3 to 7, not solely the year-10 OZ exemption. Alternative LP profile (institutional real-assets) backstops if OZ shifts.

Phase 1A construction cost inflation

Touches Phase 1A · Phase 1

OM sensitivity tables show a 5% hard-cost increase compresses Phase 1A Levered IRR from 24% to 22.1%. Sustained inflation through 2026 to 2027 erodes the buffer faster than the OZ uplift can offset. The 6.2% untrended yield on cost is the relevant guardrail.

Mitigation GMP contract with shared-savings provisions. Inflation hedging on mass timber procurement. Industrialized construction pathway commitment by Q3 2026 to lock cost basis assumptions.

Phase 1B activation delivers demand data the Phase 1A pro forma cannot match

Touches Phase 1A · Phase 1B

The Phase 1B base case projects 900 visits per day and approximately $725K NOI. If the activation overdelivers (toward the 1,500-visit upside case at $1.6M NOI), the Phase 1A retail rents underwritten in the OM may understate true market and force a re-pricing during lease-up. This is a good problem with documentation cost.

Mitigation Build a quarterly Phase 1B-to-Phase 1A data handoff process. Re-underwrite Phase 1A retail at month 12 of Phase 1B activation. Use the empirical demand numbers to support a Phase 2 capital raise.

District infrastructure approvals lag Phase 1 delivery

Touches District · Phase 1

The Resilience and Resource efficiency metrics at District scale assume district energy, on-site water, and the Skyway Cities gondola are entitled and operating. If Salem approvals lag, those metrics revert to Phase 1 levels and the District cost of capital compression weakens by 50 to 100 bps.

Mitigation Treat Phase 1A and Phase 1B as the entitlement-permission demonstration. Engage Salem early on a District-level Disposition and Development Agreement. Identify district energy partner during Phase 1 entitlement, not after.

On the numbers

Where the recommendation is anchored, and where it is not.

Phase 1A and Phase 1 financials are anchored to the Now City West Salem Offering Memorandum (April 2026) and the Investor Preview decks. Total capitalization, Levered IRR, equity multiple, and yield on cost are taken directly from the OM sensitivity tables. The unlevered IRR figures shown at Phase 1A and Phase 1 are derived by removing the OM-stated leverage and are directional.

Phase 1B activation numbers are anchored to the Site Activation Strategy deck. The $1.3 to 1.4M capital prototype, base-case 900 visitors per day, and $4.2M real estate value multiplier are OM-stated. Resident-experience metrics at Phase 1B are limited because there are no residents.

District-scale numbers are directional. They draw on the OM District Vision section (760 units, 105K SF retail, 95K SF green and civic) and the Willamette Wellness OZ Fund framing ($100M anchor, up to 40 acres, 10-year hold). They are framework v1 directional ranges. They become anchored to primary-source data as Phase 1A delivers and the QOF lands its first acquisitions.

All metric methodologies (WHO-5, 15-Minute City, ASHRAE 90.1, FEMA CRS, ITE, Census ACS, ULI Greenprint, RMI Zero-Carbon Building, Shuman local-multiplier) are documented in the framework's general methodology surface and applied here without modification.