Only one of the seven 'empowerment zones' is in the West

The federal Department of Housing and Urban Development has rejected requests by Portland and Vancouver, Wash., city officials for millions of dollars in tax incentives and bond financing to help jump-start the region's stalled economy.

The two cities teamed up in October to apply for HUD's 'empowerment zone' designation, which could have meant as much as $500 million in bond financing, tax deductions, capital gains for stock and partnership interest and other incentives.

Officials from both sides of the Columbia River were baffled by the Bush administration's decision and saw it as a slight of the Northwest's economic woes.

'We're very disappointed in the decision,' Mayor Vera Katz said. 'Portland has the highest unemployment rate in the nation and for our city to be passed over is surprising. It could have been a powerful tool in lending a hand to parts of our community suffering in these difficult economic times.'

Only one Western city was among the seven empowerment zones selected by HUD. The recipients are: Pulaski County, Ark.; Fresno, Calif.; Jacksonville, Fla.; Syracuse, N.Y.; Yonkers, N.Y.; Oklahoma City; and San Antonio.

They will share an estimated $17 billion in tax incentives for housing and economic development. They were picked from 35 metro-area applicants nationwide. Don Mazziotti, executive director of the Portland Development Commission, said Sen. Gordon Smith, R.-Ore., had gone to bat for Portland but hedged at discussing the political ramifications of the selection process. If Portland had been chosen, it 'would have made a significant difference in the economy,' he said, adding that city officials will continue to look to other avenues to attract business.

Smith's office did not return a call by deadline.

'These things take time'

'You wind up with a little bit of merit and a little bit of political process,' said Gerald Baugh, manager of business development for the city of Vancouver. 'You can scratch your head a little bit over ones like Jacksonville and San Antonio. The West, per se, really got left out.'

Colin Sears, PDC's business development officer, said the agency had hoped President Bush would announce the city's designation when he visited Portland on Jan. 5.

'We know these things take time,' Sears said. 'There were a lot of politics involved. We feel our region is especially needy. Oregon and Washington have experienced tremendous difficulties over the past three quarters. We're deeply disappointed, not only for Oregon but the Northwest.'

Secretary of State Bill Bradbury, and a Democratic candidate for Smith's Senate seat, was critical of Smith's efforts: 'It's surprising that we were passed over, especially when Bush was just here and Smith was onstage talking about economic stimulus.'

Oregon had the highest unemployment rate in the nation last month, at 7.5 percent; Washington registered second, at 7.1 percent. The high-tech, telecom, manufacturing and retail industries in southwest Washington and greater Portland have suffered hundreds of job losses over the past six months. California, by comparison, reported 5.7 percent; New York and Texas, 5.4 percent.

Strategic plan a big factor

HUD officials said the decision was not based solely on a city's economic situation, such as high unemployment and rents. Strategic plans submitted as part of the application process factored heavily in the decision, said Brian Sullivan, a HUD spokesman in Washington, D.C.

'It wasn't just need-based,' he said. The judges 'also looked at poverty, population and census data.'

Portland and Vancouver were proposing a 2,000-acre area as an empowerment zone, designated much like an urban renewal district, that stretched from downtown Portland and Martin Luther King Jr. Boulevard to North Portland by Columbia Villa, parts of Northeast Portland and parts of Vancouver Ñ including downtown and central Vancouver.

PDC's Sears said the 81-page strategic plan 'is not a lost effort. There were a lot of connections and partnerships we've made that we're going to follow up on.'

The next step, said Baugh, is for Portland and Vancouver officials to meet in early February and look at what can be done at a local level in terms of business recruitment, housing and other revitalization projects.

Contact Kristina Brenneman at This email address is being protected from spambots. You need JavaScript enabled to view it..

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