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Mayor wants to pull plug on PSU district

City, PDC may look for other ways to help university area


by: TRIBUNE FILE PHOTO: JONATHAN HOUSE - PSU President Wim Weiwel worked with former Mayor Sam Adams to create an education urban renewal district, which could be dismantled by current Mayor Charlie Hales.Mayor Charlie Hales wants to pull the plug on the fledgling urban renewal district around Portland State University championed by his predecessor Sam Adams.

Hales says the Education Urban Renewal Area isn’t the best way for the city to help PSU, and he’s making good on a campaign promise to put dollars back into the tax system by shrinking the land Portland ties up in urban renewal.

“Urban renewal is just one of the tools that we have in our kit to help PSU,” Hales says. “There’s also a general concern that urban renewal areas never seem to expire.”

The Education Urban Renewal Area, however, never got off the ground.

It was approved less than two years ago, pushed by Adams and PSU President Wim Wiewel. The plan called for spending $169 million during the next several years to refurbish PSU buildings, spur redevelopment of surrounding blocks — perhaps including Lincoln High School — and build affordable housing.

But it had some shortcomings, according to Hales and Ed McNamara, his policy director for urban renewal.

PSU doesn’t pay property taxes, and that’s how urban renewal areas raise money. “It’s not going to produce value added for a long time,” Hales says. As a result, it would take many years to finance any improvements near PSU.

As an alternative, Hales proposes to expand the nearby North Macadam Urban Renewal Area, site of the South Waterfront project. That would raise money sooner to support PSU, McNamara says.

A draft map shows that district expanding west from the waterfront to around Southwest Fifth Avenue, stopping short of the Park Blocks where PSU’s main campus lies. Some of that area has “great economic opportunity,” Hales says.

Threat of lawsuit

A second flaw surfaced after the education district was created. Critics complained that if the city spent property taxes on the PSU campus, it would shrink property taxes available for public schools, Portland Community College and the Multnomah Education Service District. Oregon’s Measure 5 property tax law limits the total amount for education, and attorney Greg Howe had said he would sue the city to enforce a strict interpretation of Measure 5.

PSU has publicly downplayed that concern. However, the city’s urban renewal agency says it would have to invest in infrastructure rather than PSU’s campus.

“We’d be more cautious ourselves about spending money on campus-related projects, just because of the increased scrutiny on it,” says Patrick Quinton, Portland Development Commission executive director.

The original campus projects identified for the Education Urban Renewal Area “look a lot more questionable today,” McNamara says. “From a legal perspective,” he says, Hales now sees urban renewal for PSU “as an imperfect tool.”

Hales also points out that Adams hoped to use the urban renewal area to subsidize the Oregon Sustainability Center, which has since been canceled.

A tool for PSU’s growth

Wiewel still favors the original plan, says PSU spokesman Scott Gallagher, noting that his boss and Hales are still talking about the proposed changes, and nothing is finalized.

“We’re confident that the city and PDC are still supportive of PSU’s growth,” Gallagher says. “Urban renewal was a tool to do that, but not the only tool.”

Scrapping the district also would nix plans for PDC to pay $19 million for a new Multnomah County office building. But that was conceived as a way of repaying the county for lost property taxes from the district.

“With the urban renewal area not going forward, the county recognizes that there’s no loss to make up for,” Quinton says.

Nor do Portland Public Schools leaders seem all that “enamored” of the earlier plans to redevelop Lincoln High, Hales says.

The main concern he’s heard from his colleagues is about losing $46 million that would have gone to subsidized housing. Still, Hales figures he’s got enough support to pass his plans to reshape the city’s urban renewal areas, after some fine-tuning.

“I believe there’s a majority of the City Council and a majority of the Portland Development Commission that wants to make these reforms reality,” he says.