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Projects funded by TSDC overlay

Project Name	Total Cost ($)	Total TSDC Cost ($)
Portland-Milwaukie Light Rail	$55,000,000	$5,000,000
Close the Loop	$22,518,465	$5,425,243
SE Water Avenue Relocation	$4,633,839	$1,565,478
SW 4th Avenue Streetscape	$2,402,138	$1,301,088
Broadway Cycle Track and Streetscape	$1,244,573	$674,107
Clinton to the River Multi-Use Path	$4,625,597	$600,000
Total	$90,424,612	$14,565,916

*Some projects on the city’s Innovative Quadrant list also show up on the citywide Transportation Service Development Charge list. Because developers and businesses can’t be charged twice for projects that show up on both lists, the amount of money that can be collected from the TSDC overlay was reduced by $362,848 to $14,203,068.

Transportation projects like light rail and street car only help the value and marketability of the properties within close proximity to them.

But to some property owners, the cost to bring those things to a neighborhood outweighs the benefits.

The Portland City Council on Wednesday heard the first reading on a new fee that will be assessed to any new construction or expansion project located near the new Portland to Milwaukie light-rail line. Despite concerns from property and business owners who say the fee will stop any new development dead in its tracks, the city has decided it will hold a final vote on the fee next week.

The transportation system development charge will be added on top of existing city-wide system development charge fees, which charge developers fees to help pay for transportation capacity, parks and other public utilities. The basic idea behind the fees is that new development should have to help pay for increases in user capacity that result from the development

The TSDC overlay is expected to raise $14.2 million over the next 20 years. Of that amount, $5 million will go toward the city’s $55-million contribution to the Portland to Milwaukie light-rail project 聽while $5.43 million will help pay for the $22.5-million 鈥淐lose the Loop鈥� street car project. The rest of the money would be split between four other transportation projects.

The fee will be calculated using a formula that takes into consideration the size and expected use of a project, along with the amount of capacity the project is expected to add to existing transportation systems.

While the fee will vary, it is expected to roughly double the existing system development charge related to transportation.

Upfront fees like SDCs are the most common concern of small business owners, Portland Business Alliance President Sandra McDonough wrote in a letter to the city opposing the fee.

鈥淭he compilation of charges and fees on this area has a chilling impact on new development as well as an increasing burden on existing property owners and tenants,鈥� McDonough wrote.

Portland Business Alliance spokeswoman Megan Doern added that the Portland Business Alliance fully supports helping pay a portion of the light-rail project, but the organization doesn’t think the nearly 聽$10 million in other projects should be included.

鈥淯nless they can reach an agreement with small business owners, or limit the projects this will go to, we oppose it,鈥� Doern said.

The property owners on the east side of the river near the light-rail line, especially those in the Central Industrial Eastside area, also are concerned about the new overlay fee.

Peter Stark, owner of Stark Design and member of the Central Eastside Urban Renewal Advisory Committee, said that the added fee will make the prospect of new development even bleaker than it already is in the central eastside.

鈥淭he argument is simple,鈥� Stark said. 鈥淭he fee is in an urban renewal area, which means it’s been determined this is a blighted area and it’s going to take risk to develop in it. This is going to put those individuals looking to make an investment in the district at a severe disadvantage.鈥�

Stark added that the group wouldn’t be opposed to using urban renewal funds to help offset some of these costs.

Not everyone on the eastside is opposed to an overlay fee that will help boost transportation, however.

Michael Tevis, a developer from Northern California who owns 125,000 square feet of space on Southeast Division Street between Eighth and 12^th avenues, is a strong supporter of having light-rail near his properties.

鈥淎s you know, developers don’t like fees,鈥� Tevis said. 鈥淏ut in this case, I can truly see the benefits.鈥�

Officials at both Portland State University and the Oregon Museum of Science and Industry area also are supportive of the fee as a way to improve transportation. Both institutions have major expansion plans in the coming years.

鈥淲e are a developer, and we will pay these fees,鈥� said Mark Gregory, associate vice president in finance and administration and PSU. 鈥淲e will grow by four million square feet in the next 20 years, doubling the physical size of the campus.鈥�

In the end it will be up to the city council to make the final determination on whether or not the new TSDC overlay is a good idea. They will take the issue up for a final vote during the regular council meeting on July 20.