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Plan shifts focus from Pearl District to historic area

by: TRIBUNE FILE PHOTO: JONATHAN HOUSE - Portlands Old Town/Chinatown has become an entertainment district, attracting people at night  club that some say are unsafe. For decades, Portland’s Old Town/Chinatown neighborhood has been treated as a dumping ground for the poor, a place to site soup kitchens, low-income apartments, homeless shelters and social service programs.

Despite the advent of a thriving night-club scene and welcome newcomers like the University of Oregon and Mercy Corps, Old Town/Chinatown is still riddled by boarded-up historical buildings, vacant storefronts and open drug-dealing on the streets. “Over 90 percent of the folks that live in Old Town/Chinatown live in abject poverty,” says Howard Weiner, chairman of the Old Town/Chinatown Community Association.

Yet blocks away sits the Pearl District, which — juiced by urban renewal funds and a heavily subsidized streetcar line — has blossomed into a vibrant neighborhood dotted with upscale condos, boutiques and white tablecloth restaurants.

Now Mayor Charlie Hales says it’s time to shift the city’s urban renewal spending from the Pearl District to neighboring Old Town/Chinatown — $57 million worth over the next five years. Hales and others have concluded that Old Town/Chinatown has great potential, but that won’t be realized without serious city subsidies.

Hales started last year by asking the Portland Development Commission to prepare a five-year action plan for Old Town/Chinatown. The PDC action plan calls for improved policing on the streets, easier pedestrian and motorist connections to downtown, and subsidies so commercial property owners can afford earthquake safety improvements when they rehabilitate their buildings. Another key recommendation is meeting with resistance, which is why the action plan is still labeled a draft proposal. That's the idea of waiving city development fees to entice developers to build middle-income apartments.

Homeless advocates say the city should devote its housing subsidies to low-income units, at least until the homeless problem is solved. And some city commissioners are balking at losing the revenue supplied to their bureaus if the development fees, known as systems development charges or SDCs, are waived.

That part of Hales’ plan is “going to be a hard sell,” Weiner says.

Finding the money

So far, there seems to be little opposition to Hales’ plan to shift money from the Pearl District to Old Town/Chinatown, both of which are located within the River District Urban Renewal Area. A proposed five-year PDC budget shifts $32 million earmarked for the city to buy the U.S. Post Office complex on Northwest Hoyt Street. Using those and other savings, the budget pumps $56 million more during the next five years into PDC loan programs. That’s a flexible fund that could be used to subsidize earthquake retrofits and new housing developments in Old Town/Chinatown.

“We’re saying the first priority for projects in the River District is now in Old Town,” says Patrick Quinton, PDC executive director.

While many view the post office site as a prime spot to lure a major new employer to Portland in an urban campus-style setting, it’s unclear if the federal agency will ever part with the property. And PDC still proposes to leave $29.5 million in its five-year budget for the post office, perhaps enough to do some sort of public/private partnership at the site, says Lisa Abuaf, PDC’s central city manager.

As Quinton views it, the added $57 million could allow PDC to spur redevelopment of seven to 10 existing Old Town/Chinatown commercial buildings. Hales wants much of that money to subsidize earthquake retrofits, enabling rehabilitation of those buildings to pencil out. Seismic upgrades for a relatively small, two-story building in the neighborhood can easily cost $1 million.

But Quinton doesn't think the same level of subsidies are needed to spur so-called workforce housing — middle-income apartments — in the area.

“We see that housing projects are closer to penciling (out) than commercial projects,” he says.

For those projects, Quinton says, freeing some property owners from paying SDCs may be enough to spur them to build workforce housing. Giving breaks on SDCs would not impact the PDC budget, stretching the impact of the action plan, Quinton says.

Killer buildings

Old Town/Chinatown is Portland’s oldest neighborhood, where the city was initially settled. It’s home to the city's highest number of historic, unreinforced masonry or brick buildings.

“These are, as they say, the killer buildings; they most likely collapse and kill people during an earthquake,” says Carmen Merlo, director of the Portland Bureau of Emergency Management.

Other West Coast cities haven’t retained as many of these historic brick buildings, in part because Portland has treasured its historic structures and has largely been spared from major earthquakes. “We still have most of our older, most vulnerable buildings still standing,” Merlo says.

But the city’s historic districts limit the height of buildings, and renovating those historic structures often requires costly seismic retrofits that can’t be justified by the rents landlords can charge. Seismic improvements are expensive, but still won’t enable landlords to collect the highest “Class A” office rents, says Bernie Bottomly, the Portland Business Alliance’s vice president for government affairs and economic development.

That partly explains why many historic commercial buildings in Old Town/Chinatown remain largely empty.

Pushback on SDC waivers

Building new structures is a different kettle of fish. PDC, business leaders and Old Town/Chinatown leaders also want to see new development on surface parking lots and other underutilized properties.

In some cases, though, PDC has tried to give away its land holdings in the neighborhood and hasn’t found any takers, Bottomly says.

He figures that enticing developers to build new workforce housing in Old Town/Chinatown could well require SDC waivers as well as property tax abatements and other aid from PDC.

But just the SDC waiver has caused pushback for Hales and PDC.

SDCs are used to offset the impact new development has on urban services. There are separate SDCs charged for each project’s impact on sewer, water, road and park systems, and the money goes to those city bureaus.

The biggest pushback is coming from commissioners Amanda Fritz, who oversees the parks bureau, and Nick Fish, who oversees the sewer and water bureaus. Both also may be the City Council’s biggest champions for the poor and low-income housing.

They’re not the only ones raising concerns.

“It seems to me we need to see the impact SDC forgiveness would have on these bureaus,” says Debbie Aiona, action committee chairwoman for the League of Women Voters of Portland. The league hasn’t formulated a position on Hales’ proposal, but is a longtime advocate for steering urban renewal money away from the Pearl and toward Old Town/Chinatown.

City Commissioner Steve Novick, who oversees transportation and might be the swing vote on this issue, says he wants to talk to housing advocates, but is generally supportive of bringing middle-income housing to Old Town/Chinatown.

Defenders of the Hales/PDC proposal argue that without new development, there won’t be any SDCs. During the past decade, only about $90,000 in parks SDCs has been raised from development in Old Town/Chinatown, Abuaf notes. That’s enough to pay one or two parks employees for a year.

“The actual amount of SDCs the city is collecting from this area is very low, because there’s been little development,” Bottomly says. “Do you want 100 percent of nothing, or some percentage of something that is actually happening?”

Weiner says even a new apartment developer granted SDC waivers would pay some SDCs for the ground-floor retail. Those buildings also would pay property taxes, he says, unless they were also granted tax abatements.

As for those who complain the city should put its housing subsidies only into low-income housing, Weiner says that’s what’s occurred in Old Town/Chinatown for decades. The community needs a broader mix of residents, including more with disposable incomes, he says, to support retail development and get more activity on the streets that discourages drug dealing.

If that’s not the city’s goal, Weiner says, “you might just call it a day” and give up on urban renewal there.

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