The city of Portland is putting the concept of urban renewal at risk for all of Oregon as it recklessly considers using urban renewal funds for the wrong purposes.

The 2009 Oregon Legislature must intervene to curb Portland's potential abuses and preserve urban renewal as a legitimate tool for transforming economically depressed neighborhoods and business districts.

Portland officials seemingly won a victory last week when the state Land Use Board of Appeals mostly upheld the city's decision to create a satellite urban renewal district in the David Douglas area. The City Council decided last year to form the satellite district so that $19 million from the successful River District could be siphoned off to build a school and community center miles away in David Douglas.

The city has good reasons to help the David Douglas School District: That area has been flooded with new students in recent years and it has few financial resources to deal with the overcrowding.

But good intentions don't always make for good public policy. If the City Council and Portland Development Commission persist in establishing an unprecedented satellite district, they not only would violate the intent of an urban renewal district, they also would create inequities in school funding. If the council and PDC are willing to buy a school in David Douglas, why not also rescue the Portland, Parkrose, Centennial and Reynolds school districts? These districts have given up real tax dollars to Portland's ever-expanding urban renewal ambitions.

Urban renewal's effect on school funding is just one reason for the Legislature to act. Equally important is the question of whether Portland's manipulation of vague state statutes could prompt a backlash from the Legislature or a voter initiative to limit traditional urban-renewal districts.

Because these districts can do a great deal of good if properly administered - and because they also can lead to abuses if state law remains undefined - the Legislature should amend the state's urban-renewal laws to prevent irrational satellite districts and other schemes that stray from what should be the well-intentioned purposes of urban renewal in Oregon.

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