Memo calls for more control over renewal agency's spending

For most of a year, Mayor Tom Potter's Charter Review Commission has debated how to reshape the Portland Development Commission, the influential city agency that transformed areas such as the Pearl District and now is remaking the South Waterfront area and the Central Eastside.

Last week, however, the City Council took a stab at answering the question, moving to bring the semi-independent agency more under the control of City Hall. Thursday, the five members of the council released a joint memo calling for the City Charter to be changed in a way that requires the PDC to obtain council approval of its budget.

Although the memo was signed by all five council members, it clearly responds to a push by three of them - Erik Sten, Randy Leonard and Sam Adams. By securing the mayor's agreement to the memo, it appears the Sten-led majority will have the last word on PDC reform.

By agreeing to the memo, Potter staved off an effort by Sten, Leonard and Adams to put a PDC reform measure of their liking on the ballot in November. Instead, the three agreed to wait until next May, allowing the mayor's Charter Review Commission to finish its research and recommendations.

The PDC has been under mounting pressure from Potter's fellow council members. The agency, which invests property taxes in economic-development projects, has been involved in a series of controversial real estate deals, as well as the Portland Aerial Tram project.

The agency also has been a focus for individual council members who want the PDC to spend more on particular programs, such as affordable housing as well as higher wages sought by construction unions.

The council memo, dated July 19, attributes some of the past year's friction to 'ambiguity' in the degree of autonomy enjoyed by the PDC, adding that 'the fact that the Portland City Council does not approve the PDC's budget leads to mismatched priorities and constant questions as to whether Council's policies are being implemented.'

The memo asks the charter commission to explore the idea of giving the council final approval of the PDC budget. It was delivered to the citizens group Thursday afternoon by Bob Durston, Sten's chief of staff. Sten negotiated the memo with Potter earlier in the week.

Research on the way

David Wang, chairman of the charter commission, said that his members' reactions to the memo were 'favorable' but that further research would be required before the commission decided whether to endorse it.

'We cannot promise that at the end of the day we're going to recommend it, but we're going to consider it and do the analysis,' Wang said.

Sitting on the sidelines during the council's PDC clash has been City Auditor Gary Blackmer. He said that while bringing the PDC under more direct council control may have some benefits, it also could detract from the original purpose of the agency - to be a 'quick-response,' private-sector-style entity that was not bogged down by red tape. The PDC has become far more accountable in the past year, Blackmer added.

'The question is how much more (change) do they really want,' he said, 'and how much change is really necessary in the charter - if any at all.'

Not only that, but since PDC spending often enriches individual business owners, 'I think an arm's length from a City Council member might be desirable from an appearance standpoint,' Blackmer said.

State law is in play

City officials said that to give the council final budget authority over the PDC may require a change in state law.

The PDC is set up to take advantage of state urban-renewal law, which allows the agency to divert property taxes from schools and Multnomah County to spend it on economic development projects. This can be controversial, and upon taking office, Potter said he wanted the city to be more frugal and thoughtful about how it used urban-renewal funds, and to be more collaborative with the affected jurisdictions.

That push suffered a setback earlier this month in a Central Eastside urban-renewal vote. In it, a recommendation that had been approved by schools and the county, as well as endorsed by Potter, was overruled by Commissioners Sten, Leonard and Adams, who wanted the PDC to spend more money on the Central Eastside.

Critics of the vote said the commissioners in effect appeared to be diverting school and county funds to their own priorities and bureau budgets. The commissioners, however, said the move would pay off for schools and the county in the long run.

Leonard said the vote was a matter of equity, that business owners in the Central Eastside deserved the same level of PDC support that landowners in the South Waterfront and the Pearl District had enjoyed.

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