Former Portland strip club comes down, making room for 140 affordable housing units

PORTLAND, Ore. -- What used to be a well-known strip club - and neighborhood blight - is being torn down Monday and will be replaced with low and middle-income housing.

In 2015, a coalition of neighborhood groups purchased the "Sugar Shack" property. Last year, Hacienda CDC, a local developer, bought them out. Hacienda CDC will start demolition Monday and replace it with 140 housing units.

The Sugar Shack's demolition is a major step for the neighborhood that dealt with problems associated with the strip club.

Brenda Reyes grew up in the apartments across the street. She now owns a small grocery there too. When she was a teenager, Reyes remembers seeing crime and drugs at the Sugar Shack.

"You will see a lot of drunk people, driving really fast, drug dealers, a lot of people got robbed," Reyes said.

She says she also saw prostitution. On hot summer days, Reyes says women would sit in beach chairs in front of the Sugar Shack wearing bikinis, drinking alcohol.

"It was tough for us because we were trying to catch the bus, and strange guys would come over to us, thinking 'how much to go with us,'" said Reyes. "We were just students, we were high school students."

In 2015, the owners were arrested for tax fraud and running a prostitution ring. Since the Sugar Shack closed, Reyes says things got better.

Ernesto Fonseca, CEO of Hacienda CDC, took KATU News through what was left of the Sugar Shack.

Work crews were salvaging whatever the could, including metal pipes. In one room, a pair of high-heeled shoes still sat on the floor.

"This is a prominent and very important project," said Fonseca. "This is not just a project, it is erasing what happened then, to give hope to future generations."

Renderings for the new apartments show bold, bright designs. They will be called Las Adelitas, named after women who fought in the Mexican Revolution.

There will be a ceremony at 11 a.m. before demolition commences. Fonseca says they hope to have everything done by mid-2020.