Central City Urban Renewal Area: Learning the Basics

The Central City URA public meeting held September 22 in Northwest District.

Last month the Portland Development Commission (PDC) held four public meetings to discuss and take questions about the potential Urban Renewal Area (URA) in the west side of Portland’s Central City. Although well organized, the information presented didn’t offer much on the details of the URA rather the focus of the public meetings was on the complex financial machine behind its potential. Attendees that were not familiar with terms like Tax Increment Financing or TIF, might have found the explanations clear and helpful in understanding the larger picture of how urban renewal projects are funded. Missing from the meeting however, was clarity on the project itself. A handout outlined the boundary of the potential URA, a draft of the proposal explained investment strategies and PDC goals, but so much of what could happen to the city if the plan goes forward was left to the imagination.

That’s not to say there isn’t information available. In fact, there is an abundance of documentation, meeting minutes, and studies on the potential plan accessible to anyone with an interest and a keen power of concentration. The plan review process started in early 2009, there has been prior public outreach and neighborhood associations have been discussing its potential impact and trying to decipher the issues for nearly two years. But the truth is this URA plan is extremely complex on economic, political and community levels. Boundaries of the Central City URA plan frequently shift and potential benefits are challenged on a neighborhood-by-neighborhood basis. Where does one even begin to understand the wonky details of the project and how it could impact the city if approved?

The Basics

Here is as good a place as any. For starters, the intention of the Central City URA plan is to create a new 25-year redevelopment district just as two URA projects—South Park Blocks and Waterfront Park—are expiring. Originally planned for 900 acres, the most recent version of the URA calls for a 345-acre project that incorporates Goose Hollow, Northwest District (which includes the Con-Way site near 405), Downtown (North of Market, which includes a section of Old Town-Chinatown) and Southwest (including Portland State University and North Macadam). Initiated by Mayor Sam Adams, the plan has been evaluated by a 24-person committee made up of representatives from both the public and private sector.

According to the PDC, the primary goals of the URA are:

• job creation/retention
• businesses receiving loans and/or storefront grants for improvements
• increase assessed value per acre
• leverage of private and other public investment
• wider range of housing options and affordability
• the development of green-certified buildings

The boundary of the URA has key areas of commerce with affordable rents that typically attract upstart businesses. To attract more of these types of businesses and encourage their growth the URA would offer loans; and for existing businesses that would benefit from a storefront facelift, grants will be made available. A portion of the URA investment would go toward PSU job creation at the Living/Learning Center and City Gateway Center. (This is part of the 2010 PSU University District Framework Plan.) And to compliment the Portland Downtown Retail Strategy already in place, public and private parcels in the downtown retail area would be marked for improvement. Aside from making the area more aesthetically enticing to visitors and residents, the financial payback is a long-term increase in business income fees and taxes.

An increase in housing density aligns with the City's effort to create 20-minute neighborhoods.

Mixed-use housing would be expanded to encourage a live-work downtown environment, with 30% of all project resources going toward affordable housing preservation. Building density would vary depending on the neighborhood but overall, an increase in this type of development aligns with the City’s effort to create more sustainable “20-minute neighborhoods” where residents are no more than 20 minutes from all basic amenities (Although it’s not clear whether this entails high-rise building development).

Other considerations of the Central City URA plan include parks, improved streets (for example, making 21st a two-way street), a pedestrian bridge over I-405 Freeway to connect Goose Hollow with the Central Business District and PSU to South Portland; and a new building on the Lincoln High School site—a topic that has become one of the more hotly debated issues of the URA.

Who Will Pay? And How?

Say Tax Increment Financing (TIF) and most people’s hair stands on end. Although it’s a common financial tool for urban renewal projects, it draws a range of opinions. With that said, TIF is the proposed method of financing the CC URA and on paper it looks as good as gold. The idea is to create a boundary for urban renewal and cap the property taxes flowing from that area into the City’s General Fund, etc. Then the City borrows money to pay for improvements, which in turn increases property values and hence, tax revenue to pay off the debt. The maximum debt limit is $345 million (essentially the project budget) and the potential for an increase in assessed value is around 5.7% over 33 years.

PDC says residents and business owners in the URA will not experience a tax hike because of the project unless they make improvements to their property. However, rather than go to the General Fund, increased taxes collected from the URA will go toward improvement projects within the district.

Many Things to Consider

At a glance, all the elements are there for a reasonable redevelopment plan, funds would be made accessible for major improvements, more housing will be created, and (it appears) that no one within the boundary will be burdened with unnecessary tax increases. But there are a lot of people who would disagree, and don’t like this plan for a wide range of reasons. For starters, there’s concern that no matter the increase in affordable housing (30% of all project resources must go to affordable housing) it will overburden low-income renters in the area by increasing property values and hence, rents.

It will also increase population density, which troubles Juliet Hyams, of the Northwest District Association, and a member of the evaluation committee. It’s not the increase in people that concerns her but the potential influx of school age children in a district that’s already overcrowded. “How many more kids will go to the Lincoln cluster?” she says.

Hyams is also concerned that money going into the URA will divert funds from public schools—a consistent point of contention among residents who question whether a project of this scale is appropriate during an economic down time. But according to PDC, tax revenues that remain frozen in the URA for the duration of the project’s life will continue to flow to other taxing jurisdictions such as Portland public school districts.

New Building for Lincoln High School

Should the Central City URA be approved, it’s possible that Lincoln High School will undergo significant improvements to the campus and a new building to accommodate public programs after school hours. Jerald Powell, a Community Planning member in the Goose Hollow neighborhood, says that his community would like to be involved in the process. “What form Lincoln takes isn’t clear but we’d like to see the mechanism in place,” he says.

Goose Hollow would benefit from the spillover of students and public if there were more shops and restaurants. In fact, that’s one of the reasons the neighborhood supports the URA. Residents are pulling for more shops and increased housing. “We’re looking to be able to create storefronts,” says Powell, “something so people don’t feel like they’re crossing a moat. A noisy one at that.” The pedestrian bridge across I-405 would be a plus.

Enhanced Livability in Northwest Neighborhoods

Hyams says her Northwest neighborhood stands to benefit from the URA in a number of ways. There could be new parks and a pool. She says they’d like to see 21st Avenue turned into a two-way street. But she’s not sure they will actually see the benefits; there are a lot of players vying for URA dollars and still a lot of murky information.

Perhaps the plan will become clearer if approved by the City Council this fall. Although there is always a chance it could be shot down, that possibility is pretty remote. The Central City URA is way too detailed to turn back now.