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Lawsuit could waylay urban renewal funds for PSU

Mayor Charlie Hales’ plan to cancel the Education Urban Renewal Area surrounding Portland State University is running into a potential buzz saw.

Hales proposes an alternate package of projects to support PSU using urban renewal money, but critics argue the city must designate those funds as supporting education, not general government.

Schools activist Teresa McGuire and 10 fellow citizens filed suit in Oregon Tax Court on Wednesday, asking the judge to rule that the projects supporting PSU should be construed as going to education. The distinction is pivotal, because if the money is deemed to be supporting education, that would require a corresponding reduction in property taxes going to Portland Public Schools and other school districts, under Oregon’s Measure 5 property tax limitation.

The critics are represented by attorney Greg Howe, a longtime supporter of Measure 5. He argues that providing urban renewal funds to PSU would mean the city is levying more property taxes for education than allowed by the Measure 5 caps.

Howe argues in the lawsuit that PDC is seeking to defeat the intent and purpose of that tax limitation by transferring property to PSU instead of direct cash.

Howe argues that many of the projects in the original Education Urban Renewal Area, enacted under the leadership of former Mayor Sam Adams, also would trigger the Measure 5 caps. Hales and the PDC share that concern, and sought to provide an alternate package that wouldn't run afoul of the tax limitation measure. The alternate package was worked out in delicate negotiations between the PDC, the mayor's office and PSU President Wim Wiewel.

Steve Law can reached at 503-546-5139 or This email address is being protected from spambots. You need JavaScript enabled to view it..

Twitter: @SteveLawTrib

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