Sten wants to spread urban renewal funds

BACK STORY • River District cash could help outlying areas

By Jim Redden

The Portland Tribune, Oct 16, 2007, Updated Oct 30, 2009 (19 Reader comments)

L.E. BASKOW / P0RTLAND TRIBUNE

The River District Urban Renewal Area, which includes the Pearl District, already can support an additional $121 million in urban renewal spending. Its status as a renewal area expires in 2020.

The 15 acres owned by the David Douglas School District looks like a country getaway. Situated between Powell Butte and Happy Valley in far Southeast Portland, it can be reached by crossing the only covered bridge in the county.

Walking over the gently rolling hills on a sunny fall morning last week, David Douglas Superintendent Barbara Rommel noted that a previous owner housed horses on a portion of it.

“It has a real country feel,” Rommel said.

But if city Commissioner Erik Sten has his way, the City Council soon could declare this property to be part of an urban renewal area – a government financing tool to help eliminate urban blight.

Although the site seems anything but blighted, Sten argues that Portland has an obligation to help the district. As he sees it, urban renewal-caused gentrification is forcing many families to move from inner-city neighborhoods to the David Douglas district, which cannot afford to build the new schools necessary to accommodate its children.

Because of this, Sten wants to add the property to the River District, the urban renewal area that includes the rapidly growing Pearl District and Brewery Blocks.

This would allow the city to transfer around $20 million to $30 million in redevelopment funds from inner Northwest to help the district build an elementary school and community center.

“This is a way to use the money generated by successful developments to help poorer neighborhoods,” he said.

Sten’s proposal comes as the city is rethinking the future of its 11 urban renewal areas, which are administered by the Portland Development Commission, to spur redevelopment in parts of town deemed blighted by the City Council.

Sten is co-chairing an urban renewal work group that is studying the three areas that have helped to reshape downtown and Northwest Portland for more than 30 years.

One of the areas is the River District, whose status expires in 2020. The other two are adjacent to it. The first, called South Park Blocks Urban Renewal Area, covers much of the retail core. The other, the Downtown Waterfront URA, runs along the Willamette River and includes Old Town and Chinatown. Both of them expire next year.

Sten knows his idea of a “satellite district” is likely to spark debate. Although the Willamette Industrial URA is divided by the river, no other district is separated geographically – let alone by more than 10 miles.

“I took what was a complex but routine review and made it controversial,” Sten admitted.

Indeed, questions about the proposal already have been raised from several quarters. Commissioner Dan Saltzman, who serves on the group with Sten, wonders whether the proposal is legal.

Former Mayor Vera Katz challenges the idea of spending city urban renewal funds on noncity projects, saying it could open the door to other governments and special interest groups asking for a piece of the pie.

“It’s going to be a big fight,” she said. “Everyone’s going to have their hands out.”

Projects compete for funds

Some of the biggest questions, however, come from residents, landlords and business owners in the three areas being studied by the work group.

Although they acknowledge David Douglas needs financial help, hundreds of millions of dollars of unfunded projects already have been identified in their neighborhoods.

“We have enough projects that we could use all the money,” said Howard Weiner, an Old Town business owner who co-chairs a community committee that has developed a vision for the Old Town-Chinatown area.

The group also is being lobbied to be more conservative and not spend all of its available urban renewal dollars. This is especially true for the South Park Blocks and Downtown Waterfront renewal areas, which are scheduled to expire next year.

Those arguing against committing any more property taxes to redevelopment in those areas include the League of Women Voters, the Portland Business Alliance and Portland State University urban studies and planning professor Ethan Seltzer, who helped write some of the earliest downtown redevelopment plans.

“Just because the money is there doesn’t mean it has to be spent,” Seltzer said.

The group’s next meeting is set for Oct. 23. It is scheduled to complete its work by January. The group’s recommendation will then go to the council and the PDC board for consideration.

Values rose in River District

Urban renewal was conceived in the 1950s and 1960s as a means of redeveloping blighted areas. It is based on the premise that such areas would not redevelop on their own without an infusion of public money.

The system works by formally declaring a geographic area to be an urban renewal area for a set period of time.

All property taxes generated by the increased value of the land within the boundaries are reinvested in the area, in large part by financing bonds. The bond payments continue after the area expires. Once the bonds are paid off, all of the increased property taxes are available for general government uses.

It is easy to understand why there is so much interest in the River District. The area can support more than $121 million in additional renewal spending. At the rate it is growing, the area ultimately should be able to support hundreds of millions of more dollars of spending by the time it expires in 2020.

This is potentially far more money than the approximately $139 million in bonds that still could be issued in the South Park Blocks and Downtown Waterfront areas before they expire next year.

And, under state law, the council also can expand the River District by 20 percent to include another 61 acres – an expansion that would allow it to finance projects in the other two areas, depending on how the boundary lines are redrawn, after they expire.

“It’s a big pot of money,” one PDC official, who asked not be identified, said of the River District.

Serious discussions over the future of the three urban renewal areas began several years ago when it became apparent the South Park Blocks and Downtown Waterfront ones would expire before all the projects under consideration within them could be funded.

In the South Park Blocks URA, unfunded projects include the redevelopment of the city-owned parking garage at Southwest 10th Avenue and Yamhill Street that is now considered a substandard design.

The Downtown Neighborhood Association also believes the city should encourage the construction of new, working-class housing in the city core.

The number and range of unfunded projects in the Downtown Waterfront area is even greater, in large part because of the work of the Old Town Vision Committee.

This volunteer group, which first began meeting in 1995, has brought residents, social service agencies, landlord and business owners together to develop a comprehensive redevelopment plan for the Old Town and Chinatown parts of the area.

The committee also has worked closely with the PDC to draft a North Old Town/Chinatown Redevelopment Strategy that calls for work on specific locations. They include the surface parking lots used by NW Natural and the block occupied by the Blanchet House and the Dirty Duck tavern.

The committee also worked with homeless service agencies in the area to find a way to create waiting rooms for the people seeking their services.

“One of the longtime issues is how to prevent long lines from forming on the sidewalks,” Weiner said. “One answer is to help the agencies accommodate them on their premises.”

More recently a number of other potential projects also have begun rising to the surface.

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