The Portland City Council must put the brakes on a proposal by Commissioner Erik Sten to divert approximately $19 million in urban renewal funds collected from the city’s River District to pay for a new elementary school and community center miles away in the David Douglas School District. The notion of spreading urban renewal funds from a legally defined geographic area to an outlying “satellite” area comes before the City Council next week. Sten, who will leave the council in April, cannot be faulted for trying to help the David Douglas schools. The district is fast growing and overcrowded and has been unable to win voter support to build new schools and classrooms. That doesn’t mean the council should be led astray by a lame-duck commissioner to adopt public policy that ignores the needs of other school districts within the city — including Portland Public Schools, Parkrose, Reynolds and Centennial — that also have building needs. Nor should the City Council break from the spirit — if not the state’s legal definition — of urban renewal to mystically move funds miles away from where they are generated. The city attorney’s office already has questioned the move; according to state law, urban renewal funds that are collected from taxes on increased property values within a district are required to be spent on public infrastructure improvements to revitalize blighted properties and stimulate economic development in that area. City needs another opinion Because Sten’s satellite funding concept is a radical departure from urban renewal practices traditionally employed in Oregon, we believe the city of Portland should call upon the state attorney general’s office for a legal review of the concept before putting the city in jeopardy. Otherwise, we can imagine a public backlash occurring. All too often, when government agencies appear to stray over the line, someone either will file a lawsuit or mount a ballot measure challenge. The City Council should not put itself, the city’s urban renewal programs or other Oregon cities that utilize urban renewal at odds with the courts or the public. Since Sten is leaving public office, he doesn’t have to worry about the legal or long-term consequences of his actions next week. But Mayor Tom Potter and the rest of the commissioners do. While the matter of the transfer of urban renewal funds to a satellite district is controversial, it is not the only vexing concern facing the city of Portland and its policies regarding urban renewal. Other urban renewal issues arise Already Multnomah County is challenging the city to share some of the property taxes that the county would otherwise have received if the city’s many urban renewal districts didn’t keep the value of new economic development off the general tax rolls. There are estimates that the county will lose $18.5 million this year in taxes as a result. Other entities, such as school districts and the city’s general fund, also lose to urban renewal. The city also faces pressure on how long it allows urban renewal districts to remain in operation. Even the League of Women Voters tells the city: “When you have a successful (urban renewal) district, it’s supposed to end.” These and other questions about urban renewal deserve full review by the city, the Portland Development Commission (which manages the city’s urban renewal districts), other government agencies operating in the city — and the state attorney general’s office. Helping David Douglas schools deal with overcrowding is an admirable goal, but too much is at stake here to rush into a flawed strategy for providing that assistance.

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