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City pays dearly for historic properties


Maintenance costs pile up on landmark public buildings

TRIBUNE PHOTO: JONATHAN HOUSE - New cost estimates for renovating the historic Veterans Memorial Coliseum (right) range from $35.1 million to $145.9 million, depending on the scope of the project.The cost of living with historic properties is catching up to the Portland City Council.

For the third time in two months, the council has been presented with a multimillion dollar estimate to maintain a city property that has been designated a historic landmark. And the cost of doing more than the bare minimum is even greater — in two cases, much greater.

But Mayor Charlie Hales says the historic landmark designation makes it difficult for the council to continue deferring the work, tear down the properties or sell them to developers.

“We tell private parties who own historic properties that they have a commitment to the community to maintain them,” Hales said last Tuesday when the council held a work session on one of the properties, the Portland Building.

During the session, the council was told it would cost an estimated $95 million to stop water from damaging the downtown city office building and bring it up to current earthquake standards. A complete renovation would cost $175 million or more, depending on additional needs found after more study or additional improvements the council decides to make.

More recently, the city released documents on Monday saying it will cost $35.1 million to bring the Veterans Memorial Coliseum up to current code. Additional enhancements range from $26.2 million more for basic tenant improvements to an additional $107.8 million to transform it into an indoor track facility that could host national and international events, concerts and cycling competitions.

A link to the documents can be found at portlandoregon.gov/cao/policy.

In July, the council agreed to spend $4 million to rehabilitate the three open reservoirs in Mount Tabor after they are disconnected from the water distribution system. It will cost an additional $1.5 million if the council agrees to install age-appropriate lighting at one of them.

Those costs are in addition to other big bills that are coming due for specific future projects. They include the city’s share of cleaning up the Portland Harbor Superfund site, the long-anticipated purchase of the U.S. Post Office property at the west end of the Broadway Bridge, and the city’s share of rebuilding the substandard levees along the Columbia River. That does not even count such ongoing needs as more affordable housing, additional parks, and the street maintenance shortfall, which is now over $1 billion and growing.

Most of the council agreed it needs to have a discussion about how to prioritize the unmet needs before deciding which projects to fund first.

“We have to ask some tough questions about what comes first,” said Commissioner Nick Fish. “Funding projects impacts the ability to fund future projects. At some point, you’re tapped out.”

Commissioner Amanda Fritz agreed.

“We need to have a holistic discussion about our priorities,” Fritz said.

Different projects, different funds

The reservoirs, Portland Building and Veterans Memorial Coliseum all have supporters who argue they are important to the city’s history and fabric and should be preserved. At the same time, during last week’s work session, some of the council members seemed to be looking for alternatives. Commissioner Steve Novick made it clear the council has not yet agreed to even the minimum work recommended for the Portland Building, and Commissioner Dan Saltzman asked if the city could be fined for demolishing a historic property. The answer was probably not.

Although all three properties are historic landmarks, the money available to maintain and improve them would likely come from different sources.

The reservoirs are owned by the Water Bureau, which negotiated the preservation plan with the Mt. Tabor Neighborhood Association. It was triggered by the council’s agreement with the U.S. Environmental Protection Agency to decommission the reservoirs to comply with EPA rules intended to limit the spread of water-borne illnesses. Although the council did not approve a funding source in July, water ratepayer funds are the logical choice. Lawyers in an ongoing civil suit about inappropriate city utility spending have argued water ratepayer funds should not be spent for decorative purposes. Bureau officials say the reservoirs will still be functional, however, and used to help drain and clean the replacement underground storage tanks.

Funds for the Portland Building are proposed to come primarily from city bonds supported by rents charged to city agencies. Agencies that occupy the building are already charged rents based on the square footage they occupy, but project advisers have suggested that all agencies help support the bonds, even if they are located in other buildings in town. Last week the council seemed to think that proposal needs further discussion.

Funds for the Veterans Memorial Coliseum will be harder to raise. Some tax increment finance money is available from the urban renewal area where it sits, but not nearly enough. The documents released Monday said the improvements will not justify raising rental fees there enough to cover the costs of the work.

The documents also said it would cost only $14 million to demolish the Coliseum, far less than the minimum recommended improvements.

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