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Urban renewal threats foreseen

Push for ‘satellite’ district may prompt

By Steve Law

The Portland Tribune, Aug 28, 2008, Updated Oct 30, 2009 (4 Reader comments)

David Douglas School District Superintendent Barbara Rommel considers the fate of the 15 acres near Mount Scott that could be developed into a new school. Commissioner Randy Leonard vows to change state law, if needed, to permit Portland to create a “satellite” urban renewal district there.

L.E. BASKOW / TRIBUNE PHOTO

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City Commissioner Randy Leonard wants to play Robin Hood to help out his struggling ’hood in outer Southeast Portland. But some fear the plan could backfire and provoke a state backlash against Portland’s aggressive expansion of urban renewal.

Leonard is championing a redistribution of the city’s tax booty from the Pearl District, which is part of the River District URA, by creating a “satellite” urban renewal parcel across the river. Taxes generated by Pearl condos would fund a new school for the David Douglas School District in outer Southeast Portland.

When several attorneys concluded the satellite violates Oregon’s urban renewal law, Leonard vowed last month to camp out in Salem next year, if necessary, to lobby for a change in the law.

“In my view, the Legislature will be intrigued, not offended, that a local city wants to help its school district,” Leonard said. “That’s truly what government is about, leveling the playing field for all communities.”

Leonard said he can envision a second satellite parcel in the downtrodden Cully neighborhood in outer Northeast Portland, and may urge lawmakers to create new tools so cities can improve neighborhoods ill-served by the current urban renewal system.

Those who follow the arcane world of urban renewal say Leonard should be careful what he wishes for.

“If they’re too greedy, it could tank the whole urban renewal system,” said Shelley Lorenzen, who monitors urban renewal for the League of Women Voters of Portland. “If the gauntlet gets thrown down (in Salem), there could be some bloody wars.”

“There are folks who have wanted to rein in urban renewal for a long time, and this gives them an excuse,” said Tom Linhares, director of the Multnomah County Tax Supervising Commission. “Somebody might say, ‘See, I’ve been telling you guys, Portland is out of control.’ ”

City on urban renewal roll

Portland has boldly expanded urban renewal since voters adopted a 2007 charter amendment granting the City Council direct control of the Portland Development Commission’s purse strings.

The PDC, the city’s urban renewal agency, has since agreed to erect homeless facilities, refurbish county offices and tackle other nontraditional projects, instead of focusing on projects that will spur new development and job creation.

In a brief spending spree earlier this year, the City Council authorized $600 million in new borrowing for the PDC. Once those bonds are sold, that could more than double the city’s current $454 million debt from all 11 urban renewal areas.

To pay off the bonds, the PDC must keep the River District urban renewal area off the regular tax rolls until 2027. The Downtown Waterfront urban renewal area will be kept alive until 2024, 50 years after its formation.

Leonard, a former state lawmaker, isn’t worried about a Salem backlash. Democrats are expected to dominate the 2009 Legislature, giving Portland more political clout.

Sen. Ginny Burdick, D-Portland, chairwoman of the pivotal Senate Revenue Committee, “is very dependable on these issues,” said Ty Kovatch, Leonard’s chief of staff.

But Burdick, who lost a 2006 race to the original satellite district promoter — former city Commissioner Erik Sten — called it an “unusual use” of urban renewal money.

“I think there is a potential for a new look at urban renewal given this expansion,” Burdick said. “Urban renewal has been very successful and if it in any way turns into a piggy bank for worthy projects, and the school district is a worthy project, then that would raise real concerns.”