Changes to PSU district face uphill battle as watchdog tries to pierce veil of City Hall talks

by: TRIBUNE PHOTO: JAIME VALDEZ - The citys planned Education Urban Renewal Area includes money to expand PSUs business school, but that might reduce property taxes available for local schools and community colleges.Horsetrading has begun on Mayor Charlie Hales’ proposal to eliminate the city’s urban renewal district surrounding Portland State University.

Hales divulged plans last week to redraw the city’s urban renewal district map, including dumping the fledgling Education Urban Renewal Area championed by his predecessor and PSU. While Hales expressed confidence he has majority support on the City Council for his urban renewal overhaul, it appears he lacks the votes to dump the education district.

City Commissioners Nick Fish and Amanda Fritz say they’re reluctant to eliminate it, while Commissioner Dan Saltzman is expected to abstain from voting because his family owns property in the district. That leaves Hales short of a City Council majority.

“We are aware that the two commissioners have their concerns about the plan,” says Dana Haynes, Hales’ spokesman. “The negotiations have begun to try and convince them.”

Former Mayor Sam Adams and PSU President Wim Wiewel spearheaded creation of the district, which would raise $169 million in property taxes over 30 years. Plans called for spending $2 million to help expand PSU’s School of Business, $500,000 to redevelop Neuberger Hall and Cramer Halls and $2.5 million for its engineering and science classrooms, among other projects in and around PSU. The plan also calls for $46.5 million for affordable housing in the area, $19.2 million for a new Multnomah County office building and $10 million to help redevelop the Lincoln High School property.

Fish, who voted to launch the district in 2012, says he still supports it.

“I am interested in maintaining adequate funding for affordable housing,” Fish says, “and keeping a promise we made to PSU to help build out the university district.”

Fish says Fritz is the key swing vote. She cast the lone vote against creation of the district, but now seems reluctant to reverse that decision.

“I believe that government should keep their promises, as should everybody else,” Fritz says. However, she says if the city can find alternate ways to subsidize projects for PSU and support affordable housing in the area, she’d consider that meeting the city’s promise.

Saltzman didn’t respond to an interview request.

City Commissioner Steve Novick says he objected to the education district while running for office, because it’s not the best way to help PSU.

Inefficient vehicle

For Adams to cobble together the district, Novick says, he had to “buy off” Multnomah County and Portland Public Schools by shelling out money for the county office building and Lincoln High redevelopment. Another large chunk goes to overhead, Novick says — $24.5 million for Portland Development Commission management costs.

Hales cites multiple reasons for eliminating the district. He promised on the campaign trail to reduce some of the city lands kept off the tax rolls by urban renewal — close to the maximum 15 percent of the city allowed under state law. Hales also sees urban renewal as an imperfect tool to help PSU, because it requires increases in property tax to generate money, and much of the university district doesn’t pay property taxes. The city also worries that spending property taxes on PSU’s campus might force a reduction in other property taxes going to Portland Public Schools, Portland Community College and Multnomah Education Service District, under the 1990 Measure 5 tax limitation that capped property taxes for education.

PSU spokesman Scott Gallagher says PSU realizes urban renewal isn’t the only city tool available to help the university, which expects enrollment to climb by several thousand students in coming years.

“We’re open to discussions that provide PSU (and by extension, our community at the south end of downtown) similar benefits,” Gallagher says.

Hales is floating an alternate plan to expand the urban renewal area in the South Waterfront neighborhood, to encompass some of the university district. That could make up some of the lost funds for affordable housing as well as projects to support PSU, Hales says, and the money would be available sooner.

Hales also proposes to shut down the Willamette industrial urban renewal area, and to put some of the River District and Airport Way urban renewal areas back on the tax rolls, generating more property taxes for local governments. And Hales wants to expand the South Waterfront and inner eastside urban renewal districts, to fund more redevelopment of the Zidell site and Knight Cancer Research Center on the waterfront, and near two future MAX stations near OMSI.

So far, dumping the PSU district seems the most controversial, though Fish argues the council should first debate the Portland Development Commission’s role before redrawing six urban renewal areas managed by PDC.

Novick wants the city to explore putting the entire River District, which includes the upscale Pearl District as well as Old Town/Chinatown, back on the tax rolls. Within about five years, that would pay off by giving the city and county each $10 million a year in added property taxes, Novick says.

However, Novick has been pushing city aid to help Old Town historic office building owners retrofit for earthquake safety, which Hales now supports.

Hales says that’s one reason to keep most of the River District Urban Renewal Area intact, to pay for Old Town/Chinatown redevelopments.

The League of Women Voters of Portland, one of the few watchdog groups monitoring urban renewal in Portland, likes some of what it’s hearing about Hales’ plans, says Debbie Aiona, the group’s action committee chairwoman. Hales is recommending some of the same things the league has advocated, she says. The league opposed the Education and Willamette industrial districts and advocated for more spending on Old Town and less on the Pearl District.

But Aiona complains there’s been no public hearings on Hales’ proposal or documents that spell out his plans.

“The PDC and the mayor’s office need to be more forthcoming with information about this for the rest of us to see,” she says. “Right now, it’s all behind a curtain.”

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