You can say this for Portland Mayor Charlie Hales: In his first 14 months in office, he hasn’t been afraid to tackle the boring stuff.

The mayor’s current proposal to curtail the city’s urban renewal districts, detailed in a Portland Tribune story on Tuesday, provides a case in point. Rather than launch a sexy new initiative that might win him immediate attention, Hales now is seeking to follow through on a campaign promise to alter urban renewal boundaries and free up property tax dollars for basic government services.

It’s not exactly the type of project that’s going to rally the troops, but it has far greater meaning than it might first appear. Hales’ plan, if approved by the City Council and Portland Development Commission, will produce long-term financial benefits for Multnomah County government, the state’s school districts and even the city’s own basic police and fire services.

Hales has proposed a 1,700-acre reduction in the city’s urban renewal areas, which would result in more than $1 billion in property value going back on the tax rolls. Right now, the property taxes on that $1 billion in valuation go toward urban renewal projects. Once the boundaries are redrawn, those taxes instead will be directed toward schools and general government.

The success of urban renewal in places such as the Pearl District is undeniable, but critics also have complained that Portland’s urban renewal districts are siphoning too many property tax dollars away from basic services. Multnomah County, for example, gives up millions in dollars in property taxes to urban renewal each year — funds that otherwise would go into the county general fund.

Hales’ proposal is only a start toward correcting that imbalance, but there are other reasons why it makes sense to adjust the urban renewal borders. The current boundaries have been in place for years, which means they don’t necessarily include the land most in need of


That’s why Hales is proposing to add land to some districts, even as he is eliminating it from others. He would peel off portions of the development-rich Pearl and Airport Way districts, while focusing new renewal efforts near OMSI and South Waterfront.

The most difficult issue, however, is what to do with the Education Urban Renewal Area, which was envisioned by former Mayor Sam Adams as a means to help Portland State University reach its full potential as Oregon’s landmark urban university.

The university district always posed a challenge, because urban renewal districts raise money through private property taxes, and much of the land around PSU is publicly owned. Yet, if Hales and other city officials decide to pull the plug on the Education Urban Renewal Area, they must provide concrete alternatives for assisting PSU in its ambitions. Hales has said an urban renewal district is just one of several ways to help the university, but he must spell out exactly what he has in mind.

PSU already is a major economic asset for Portland, but it has the potential to drive even greater economic growth. In the future, the most successful cities will be those that have the best in higher education and full collaboration between universities, local governments and the private sector.

Hales understands the importance of PSU, so we believe he’ll work with university officials to ensure PSU’s prospects are not harmed by this change in direction. Otherwise, the mayor is correct in insisting that successfully renewed land be put back on the tax rolls and that district boundaries be altered to incorporate areas in need of redevelopment — including South Waterfront and Old Town/Chinatown.

With the important caveat that PSU not be left out in the cold, the rest of the Portland City Council and PDC board should look favorably upon Hales’ plan to rein in and refocus urban renewal.

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