While the new year is already here, there’s still time to make some much-needed resolutions. Here are my top 10 land use resolutions for a more thriving greater Portland region:

1. Improve the regional development dialogue

Our regional land use conversation is more a dysfunctional family feud than a process leading to a shared vision and consensus. Oregon land use politics could serve as exhibit “A” in proving politics is just war by other means. But history proves war’s ultimate futility and destructiveness. The more intense the war, the greater the impoverishment of the combatants. Oregon land use battles have indeed squandered our economic opportunities. We need land use peacemakers who can break this cycle and lead us to a more thriving economic future while protecting the livability and environment we cherish.

2. Increase incentives to better balance jobs and housing

History shows that everyone is diminished by land use inequities that lead to economic segregation. Consigning one side of town to poverty is really just another way of cutting off your nose to spite your face. Only through dispersion of jobs and housing types can we thrive as an entire region. While Portland has a long history of providing affordable housing, the suburban cities’ record is far more spotty and lacking.

3. Reduce urban services discrimination

This is a corollary of No. 2. We have a sad history of regional discrimination in the provision of urban services. The Oregonian has pointed out past land use discrimination between the west side and east side of Portland, but such land use discrimination continues throughout the entire region today, including suburban cities. Good leadership will resist the selfish tendencies of human nature.

4. Increase planning and infrastructure for raw land added to the urban growth boundary

We have a big regional gap between UGB expansion and land that is truly ready for economic development. That results from the lack of planning and public infrastructure to service the newly added land. Adding land to the region is far easier than planning and providing urban services needed for economic development. Damascus is only the most extreme example of this region-wide problem.

5. Increase the availability of shovel-ready industrial land parcels

Portland city commissioners rejected the Port of Portland’s efforts to make West Hayden Island available to industrial development. The port’s plan would have provided hundreds of new jobs. Regional studies show a lack of industrial land is resulting in a loss of economic development opportunities. To be a thriving region, every city and county needs to focus now on increasing shovel-ready industrial land.

6. Improve government culture of customer service and satisfaction

The old Communist joke was that the government pretends to pay us, so we pretend to work. Unfortunately we have some of that problem in our regional land use bureaucracy. A city can have the best code and the best plans in the whole world, but the culture of customer service is essential to successful achievement of the community development plans. A city’s bad reputation can and has scared away many a developer. We have much room for improvement.

7. Reduce the time of the entitlement process

The theory of the Oregon entitlement process is that it will only take 120 days to entitle a project by governmental land use action. That theory has unfortunately never been realized; instead we have a reputation for serious entitlement uncertainty that rivals any state in the nation, including California. We need a solution to avoid abuse of the land use appeal process that puts developers in LUBA hell by repetitive appeals and remands. The union appeal of the Park Avenue West design review purportedly based upon lack of affordable housing is exhibit “A” for such abusive delay tactics.

8. Reduce entitlement uncertainty

Too often planning and zoning has been divorced from the realities of the market, such that there is no demand for the permitted land uses. Developers hate the uncertainty and delay of trying to rezone land for its highest and best use. As a result, community development plans go unfulfilled. If and when discretionary development permits are required, developers must have confidence that the city staff and elected officials are unified in support of the community development plan, and that these officials have done their necessary homework to gain community-wide support for the plan. Consensus is a prerequisite to a thriving community.

9. Increase short-term development incentives

Too often communities fail to understand that short-term financial incentives to make projects financially feasible will be mutually beneficial in the long run. This is because the projects will perpetually increase local government revenue. Even when the additional revenue is reduced to present value, it often far exceeds the cost of necessary short-term incentives. Economic infeasibility is one of the biggest impediments to fulfillment of community development plans.

10. Support the Thriving Cities Alliance by attending its inaugural event

The purpose of the newly formed Thriving Cities Alliance is to convene a broad alliance of organizations with the credibility and technical skills necessary to help communities make real progress on the preceding issues. Speakers at an event Feb. 5, at 7:30 a.m., at the Governor Hotel will include: Rollin Stanley, widely regarded as one of the top planning directors in North America; Metro President Tom Hughes; and Portland State University President Wim Wiewel. Attendees will learn about the Development Ready Communities program, which will provide multi-disciplinary and affordable assistance to local governments willing to discover and remove the barriers to fulfilling their community development plans. To learn more about the event and register, visit http://northwest.uli.org.

Gene Grant is a partner in the Portland office of Davis Wright Tremaine LLP. He is the former co-chairman of the firm’s real estate and land-use group, and a co-chairman of the ULI NW task force that has created the Thriving Cities Alliance. Contact him at 503-778-5427 or genegrant@dwt.com.

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A Thriving Cities Alliance is being formed to promote quality economic and community development in the Portland metropolitan region. To thrive, our cities must become ready for greater community and economic development within their existing growth boundaries.

Greater development readiness requires all stakeholders to share a consensus regarding desired development that will: 1, generate job growth; 2, adequately protect and enhance quality of life; 3, preserve our environmental assets; and 4, reflect our social and cultural values. Such a consensus requires all interests – government, business, civic, community and environmental – to work collaboratively to develop plans, processes, policies and practices that ensure each city’s development approach enhances the local and regional quality of life.

This alliance started from two converging sources: The local leadership of both the Urban Land Institute and the Community Investment Initiative serendipitously saw this need and have been working in recent years to find the best means to regional improvement.

The ULI and CII are convening the alliance as a collaborative partnership of civic, environmental, business and development organizations committed to promoting smart growth and quality of life in the greater Portland metropolitan region.

While there are many alliance supporters, the key members who will direct the alliance are nearly complete. In addition to the ULI and the CII, directing members include Portland State University, Metro, the Port of Portland and 1000 Friends of Oregon. The following organizations have been invited and are nearing completion of their board approval process: the Home Builders Association of Metro Portland, the American Planning Association’s Oregon chapter, the American Institute of Architects’ Portland chapter, and NAIOP’s Oregon chapter. If any of these elect not to participate, then a substitute organization may be selected.

The initial focus of the alliance is continued implementation of the Development Readiness Communities pilot program on a regional basis. The alliance will provide low-cost technical advisory services of the highest caliber to willing local jurisdictions to diagnose their strengths and opportunities to enhance their community development plans, and develop a program to continually improve their development readiness. Over time, the alliance expects to undertake additional initiatives to fully achieve the vision of a thriving regional economy.

Development readiness is intended to mean that jurisdictions will accommodate development in an efficient and predictable manner, consistent with their needs for economic vitality, environmental protection and community livability. Development readiness is not defined as a pass/fail diagnosis, but rather an assessment of a continuum of factors that impact development actions. This program does not promote a single growth strategy, but is intended to assist each jurisdiction to find and promote its own vision within the context of the region’s future growth plans.

While alliance members are a diverse group who will sometimes disagree on issues, a thriving region depends on these members engaging in a positive dialogue that finds areas of common ground and aligned interests, and that fosters unity and nonpartisan solutions to our regional development impediments (and there are many). Too often these impediments result in missed opportunities for quality economic and community development in the Portland metropolitan region.

The alliance’s goals are to:

• Improve city readiness for quality new development, infill and industrial development;

• Encourage mixed-use, pedestrian-friendly and transit-oriented development projects;

• Ensure there is a sufficient supply of shovel-ready industrial land for new and expanding businesses;

• Promote housing and transportation choices for a range of incomes throughout the region within existing growth boundaries;

• Reduce greenhouse gas emissions by supporting land use patterns that require fewer car trips;

• Respect and conserve significant environmental, cultural and recreational resources;

• Support infrastructure investments that revitalize cities.

To achieve these goals, the alliance will administer the development readiness program as created by the CII in its pilot project with Oregon City. Washington County and Hillsboro city officials have recently expressed interest in being the next jurisdictions to use this program. The program will be nimble enough to respond to different conditions and needs in each jurisdiction and be able to change the design of the program as needed by each jurisdiction.

The program requires the right people in each jurisdiction to engage at the right level, developing a shared vision of the outcomes and developing a plan of action that works for each jurisdiction to ensure the ongoing positive impact of the program. ULI staff and alliance partners will proactively engage other jurisdictions to participate in the program, but in no circumstance will it proceed without their explicit support. The alliance will engage consultants to deliver technical assistance on an as-needed basis.

Over time, the alliance expects to expand its programmatic activities consistent with its mission and as resources allow. The type and nature of these activities will be determined in the future based on needs of the region.

We are planning a TCA kickoff program on Feb. 5, 2014, from 7:30 a.m. to 9:30 a.m., so stay tuned for the detailed program announcement to learn all the details about this new alliance organization and its work plans.

Gene Grant is a partner in the Portland office of Davis Wright Tremaine LLP. He formerly was co-chairman of the firm’s real estate and land-use group. Contact him at 503-778-5427 or genegrant@dwt.com.

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Landlords, whether residential or commercial, almost always include in their leases three requirements dealing with legal compliance. First, the lease limits the premises to specific legal use(s) or expressly allows any legal use of the premises. Second, the lease requires the tenant to comply with all legal requirements applicable to the premises and its operations. Third, the lease gives the landlord the right to inspect the premises to verify that these first two requirements are being satisfied.

Today, these provisions are more important than ever for landlords, because of the prevalence of illegal drug operations and particularly marijuana operations resulting from at least partial legalization in both Oregon and Washington. The government has the right to forfeit not only the tenant’s interest in the premises but also the landlord’s interest if the landlord cannot prove it is innocent of a convicted tenant’s criminal use of the premises.

In order to establish the innocent landlord defense, the landlord must prove that: 1, there was no reason to know of the tenant’s intent to engage in illegal use of the premises; and 2, it did not acquiesce in any such criminal use during the lease term.

The lease provisions mentioned above are necessary, but insufficient alone, to establish that a landlord had no reason to know of the tenant’s criminal intentions and did not acquiesce. This is why every landlord should screen all prospective tenants by obtaining a criminal background check as well as a credit check.

These screening reports are relatively inexpensive and easy to obtain. Disclosing, and obtaining consent for, the investigation of the tenant’s credit and criminal history in the lease application will also help avoid wasting time dealing with criminals, because they will not bother applying in most cases.

If a prospective tenant has no adverse criminal or credit history but resists the landlord right to inspect the premises or insists on unusual limitations on that right, then the landlord should be concerned about whether the tenant intends an illegal use. Inspection without prior notice is the best means by which the landlord can establish its innocence and lack of acquiescence in illegal use. Sticking one’s head in the sand and ignoring evidence of illegal use will not work because the courts will deem one to know what they should have known through a reasonably diligent investigation.

Granted, some tenants, such as financial institutions, have special security needs and must place restrictions on landlord inspection rights. But landlords must beware of tenants who demand inspection limitations without any reasonable need to do so, and particularly with respect to tenants who are more likely to engage in crime – such as residential tenants or sole proprietors of small businesses.

The problem is that the landlord’s interest can be forfeited if the landlord merely acquiesces in the illegal use of the premises. If the landlord has reason to know of the illegal conduct and fails to take reasonable steps to stop the illegal use, then the landlord cannot defend itself as an innocent party. Termination of the lease and eviction of the tenant is necessary to maintain innocence if an inspection reveals evidence of illegal use.

Despite partial legalization of marijuana in Oregon and Washington, landlords who allow growing and selling of marijuana on their premises – even for medical use – face a real and serious risk of forfeiture. First, it is virtually impossible for the landlord to verify and assure that the actual marijuana operation will comply with the state law limitations. And second, a conflict exists between state and federal marijuana laws.

Federal attorneys are prosecuting landlord forfeiture cases for use of the premises for marijuana growing and selling because the prosecutors believe the landlords are guilty of acquiescence in the violation of federal drug laws regardless of whether the activity is legal under state law. Letters have been sent out by federal attorneys warning property owners known to have tenants with marijuana operations on their premises to terminate the leases and evict the tenants if they want to avoid forfeiture under federal drug laws.

So, what does one do if a tenant is already in possession of the leased premises, and the landlord suspects there may be criminal activity on the premises? The landlord cannot evict the tenant based merely upon suspicions.

The way to avoid losing the innocent landlord defense in such circumstances is to report those suspicions, and their basis, to law enforcement officials. They likely will welcome the cooperation and assistance of the landlord in determining whether criminal activity is occurring on the premises. If reasonable cause is determined, then the law enforcement authorities can (and often will) obtain a search warrant and do their own surprise inspection of the premises – commonly known as a drug raid. If the tenant is thus exposed as a scofflaw, then the landlord has the needed evidence to evict the tenant and recover the premises.

Environmental crimes also can cause trouble for landlords. Even if the property is not forfeited, the value can be destroyed by the cleanup liability that comes with the land and will be an obligation of the landlord even though the tenant contaminated the premises.

Avoiding and stopping any illegal use of property is a landlord duty never to be ignored. The bottom line is to never: 1, trust one’s property to a criminal without considering the forfeiture risk, or 2, permit illegal use of one’s property.

Gene Grant is a partner in the Portland office of Davis Wright Tremaine LLP. He is a co-chairman of the firm’s real estate and land-use group. Contact him at 503-241-2300 or genegrant@dwt.com.

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Email communications are often as casual as oral conversation, and often do not reflect the level of thought and care that goes into the preparation of a legally binding real estate agreement. But they should.

Most business executives know that the law generally requires a written and signed agreement for a real estate transaction to be legally binding. What many of these people do not appreciate is that an informal email exchange can satisfy these legal requirements and collectively constitute a legally binding real estate contract. The printed name of the seller at the end of an email message will easily be held a sufficient electronic signature to bind the sender to the agreed-upon transaction.

Both the federal Electronic Signatures in Global and National Commerce Act, which applies to all interstate and foreign transactions, and the Uniform Electronic Transactions Act, a version of which has been adopted in Oregon, provide that a contract and signature will not be denied legal effect solely because they are in electronic form.

UETA applies “only to transactions between parties, each of which has agreed to conduct transactions by electronic means. Whether the parties agree to conduct a transaction by electronic means is determined from the context and surrounding circumstances, including the parties’ conduct.”

While no UETA appellate cases have been reported in Oregon yet, some around the country indicate the intent to contract electronically is easily inferred when a string of email messages contain the terms of a real estate contract.

For example, in New York last year a string of email messages was held to create a binding lease commission agreement for brokerage services. That case contrasts with a 2011 case in Louisiana, where the transaction was conducted by the traditional paper method, and the court rejected the buyer’s claim that their email message was a sufficient notice of contract termination.

One real-life Oregon example of this problem involved an enterprising individual who located a foreclosed home and who communicated an informal and unsolicited purchase offer to the bank via email. The bank’s attorney replied with a message accepting the offer, after which efforts to document and close the purchase failed because of onerous bank demands.

The bank succumbed to the temptation to believe it could back out of the original transaction when it discovered a second buyer ready, willing and able to pay over $100,000 more for the house.

Instead, the original buyer filed a lawsuit and placed a lien on the house, preventing the bank from selling to the second buyer. The first individual eventually prevailed; the bank had to close on the original price and terms.

Oregon courts are very likely to enforce the original buyer’s right to purchase if the key business terms like the property description, price, financing and closing date were agreed upon. Lack of agreement on all the ancillary sort of terms is not required to create a binding contract. The bank’s mistake could have been even more costly had the second buyer sued for damages due to loss of the bargain. Such circumstances are all too common.

So, what is the moral of this story? Protect yourself against unintended email contracts by using disclaimers – the same as those commonly used on nonbinding letters of intent to purchase or lease real property.

If you do not intend to be bound, then you had better say so, because the judicial assumption is going to be that the real estate agreement is binding in the absence of an explicit disclaimer in email messages. Consider every email message the equivalent of a wet-ink signature on a paper letter that potentially will be a legally binding contract unless that intent is expressly disclaimed.

So, how should an appropriate disclaimer read? A beefy disclaimer modeled on a letter of intent would read as:

“While this message consists of an expression of intent, it does not legally bind either party. However, this message will provide the basis for the preparation of a legally enforceable agreement between the parties. The parties acknowledge that this letter does not address all issues contemplated by the transaction described herein and such issues will be the subject of further negotiations. In the event the parties are unable to agree upon and execute, for any reason whatsoever, a mutually acceptable formal agreement, the parties understand that each party reserves the right to cancel all negotiations and consider other offers thereafter. In the event an agreement is executed and delivered by both parties, the terms of that document shall supersede all prior discussions and negotiations, and such document shall constitute the entire agreement of the parties as concerns the subject thereof.”

In many situations, such a long form of disclaimer will be undesirable. In those instances, conditioning a message with just a few words can provide a lot of protection. For example, it could say: “If we can agree upon other material terms, then the following terms would be acceptable as the basis for an agreement on this real property.”

Or you might want to say: “The following terms are subject to review and approval by our attorney.”

You could also simply say: “This message is nonbinding until the signing of a more formal and definitive contract between the parties.”

The key point is to remember that the email messages may well be a binding real estate contract absent some such condition or disclaimer.

Gene Grant is a partner in the Portland office of Davis Wright Tremaine LLP. He is a co-chairman of the firm’s real estate and land-use group. Contact him at 503-241-2300 or genegrant@dwt.com.

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Hang onto your hat, because the legislative winds are blowing! Here is a brief summary and my personal opinions on some of the real estate related bills in the hopper that relate to real estate:

Design and construction

HB 2090 would prohibit work on elevators in residences that would result in an elevator failing to meet minimum safety standards. Thumbs up for elevator safety.

HB 2481 would require housing materials be dried before coverings are installed. Thumbs up to avoid mold.

SB 384 and 890 would tighten up the prompt payment requirements for contracts. Owners and contractors will wrestle over these.

SB 421 would allow only a contracting party to sue the designer for defects. Thumbs up to overturning the judicial decision allowing successors and assigns to sue for negligence.

SB 612 would create claims against owners employing unlicensed contractors. Should owners have to be the police?

SB 657 would limit retainage to 1 percent. Thumbs down to an excessive restriction.

SB 704 would exempt ditch diggers and irrigation workers from licensing. That makes sense.

SB 893 would require a contractual obligation to construct to state code. This should be limited to transactions between consumers and home builders.

Sales

HB 2489 would require a two-year warranty for residential building envelopes. Thumbs up for protection of unsophisticated homebuyers.

HB 2485 and SB 707 would require septic system disclosure to home buyers. Thumbs up for the same reason as HB 2489.

HB 2518 would allow a transfer tax for higher-end home sales. Thumbs down because real estate markets have enough problems without a sales tax.

HB 2703 would restrict transfer fees to ordinary instances such as reasonable homeowner association fees. Thumbs up for full disclosure to unsophisticated buyers.

HB 2839 would require residential sellers to obtain and deliver an energy audit to buyers. Thumbs up for the same reason as HB 2703.

HB 3264 would require description of nonmonetary consideration in deeds. Thumbs down because of a waste of time.

HB 3269 is the Uniform Partition of Heirs Property Act. Thumbs up for a much better process to partition inherited property.

Loans

SB 484 would require lenders to attach documents evidencing beneficiary to notice of foreclosure sale. Thumbs up to solve the problem of unrecorded beneficiary assignments.

SB 492 would require a trustee to be a resident or registered to do business in Oregon, which makes sense.

SB 519 and 529 would give affordable housing covenant holders and local governments the first right to purchase affordable housing in foreclosure and would allow recording of short-form covenants. Thumbs up for affordable housing protection.

Environmental

HB 2082 would change the Prospective Purchaser program to foster economic redevelopment and environmental cleanup. Recent federal court decisions suggest Oregon’s law might allow so-called “direct” cost recovery claims against innocent purchasers. This was not the expectation when the original program was authorized. The bill would provide prospective purchasers who enter into a judicially-approved consent judgment explicit protection against direct cost recovery claims. Thumbs up to this legal fix.

HB 3400 and 3535 would require energy performance ratings for all buildings, but SB 630 would restrict who could see the ratings. Thumbs up for full disclosure and greener buildings, but should the information be a public record?

Brokers and managers

HB 2497 would allow broker commissions to be shared with parties to the sale or lease. Thumbs up because this is already common.

SB 156 would impose the same fiduciary and accounting duties on managers that brokers already have. Thumbs up for consistency.

Landlords and tenants

HB 2885 would require landlords to give voter registration forms to tenants. Thumbs down because landlords have enough obligations already.

SB 293 would require disclosure of all deposits and fees in applications. Thumbs up for full disclosure.

SB 294 would require large manufactured home projects to charge tenants based upon water usage. Thumbs up for a conservation incentive.

SB 481 and SB 491 would require lender disclosures to tenants of buildings whose owners were facing foreclosure. Thumbs up for full disclosure.

Land use

HB 2609 would require Metro and large cities to maintain a five-year, shovel-ready supply of a variety of housing and industrial land. Thumbs up because Oregon needs job growth, and land supply has been inadequate for certain types.

HB 3280 would specify winery uses allowed in EFU zones. Thumbs up for clarification and rural job growth.

HB 3290 would allow averaging annual income for justifying farm residences. Thumbs up for a longer term measure of farm income.

SB 476 would allow adoption of exceptions to statewide goals justified only by job creation. Thumbs down to job growth trumping all other land-use goals.

SB 766 and SB 839 would allow state permitting of regionally significant industrial projects. That sounds like more thorny issues about local control and fostering job growth.

SB 774 would void any land-use restrictions other than local government zoning laws. Thumbs down because this would completely overturn the long-standing law of private restrictive covenants and further monopolize local government control of land use.

Property associations

HB 3317 would improve several aspects of the Planned Community Act and the Condominium Act regarding the governance process, such as removing officers and directors and obtaining lender consents to amendments. Thumbs up for law improvement.

HB 3059 would void association rules against clotheslines. Thumbs down because associations should be free to protect the appearance of common areas.

SB 300 would make the condominium and planned community lien provisions consistent. Thumbs up for consistency subject to any lender concerns.

Surveyors

HB 2892 would provide detailed procedures for boundary agreements to resolve disputes. Thumbs up because these disputes are all too common, expensive and contentious.

HB 3386 would add a new category to lots and parcels on plats, which by amendment would likely be the traditional “tract” designation. Thumbs up if amended to define a tract consistent with customary usage.

Property taxes

HB 3017 and 3034 would extend enterprise zone tax abatements and relax job creation requirements during recessions. Thumbs up for this job growth incentive program.

HB 3167 would eliminate the discount for full payment and allow semiannual payment. Better get ready to pay a little more this November!

Gene Grant is a partner in the Portland office of Davis Wright Tremaine LLP. He is a co-chairman of the firm’s real estate and land-use group. Contact him at 503-241-2300 or genegrant@dwt.com.

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The city of Portland is known for great restaurants, a beautiful environment, progressive land-use planning, bike friendliness, mass transit, etc. Lately, however, Portland is becoming known for negative job growth.

In an ECONorthwest study commissioned jointly by the Portland Business Alliance, the Oregon Business Association, the Oregon Business Council, Associated Oregon Industries, the Port of Portland and the Pacific Northwest International Trade Association, Multnomah County was found to be almost dead last in the western United States for private-sector job creation, among many other indicia of relative economic decline.

I chaired programs presented by the nonpartisan Urban Land Institute the last couple of years in connection with the ongoing Portland comprehensive land-use plan, which corroborates results of the study. The panelists reported that 30 years ago, two-thirds of the metropolitan jobs were in Portland; today, two-thirds of those jobs are in suburban counties.

In absolute terms, the number of Portland jobs has remained relatively flat over that entire period. While city staffers participated in these programs and acknowledged the long-term failure of Portland’s plan to achieve job growth, Mayor Sam Adams and all but one commissioner were conspicuously absent.

Adams rejected the new study out of hand without any rebuttal of the evidence. The study sponsors are hardly anti-Portland, and ECONorthwest is highly regarded as being professionally objective. It is often consulted and relied upon by local governments in Oregon.

It seems fair to say that Portland’s elected leaders are somewhat out of touch with economic reality in their denial of these facts. As John Adams said, “Facts are stubborn things; and whatever may be our wishes, our inclinations or the dictates of our passions, they cannot alter the state of facts and evidence.”

The study was obviously intended to be something of a friendly “family intervention” to overcome this state of denial. Unfortunately, the city leaders’ response is only a reflection of more common misperceptions.

Portlanders’ pride in their city’s supposed superiority has blinded them not only to its lack of adequate long-term economic development but also the degree to which Portland has been losing ground to other cities.

Chicago recently was recognized as being greener than Portland. Hillsboro continues to attract more jobs than Portland. Los Angeles is installing a locally funded light-rail system that dwarfs Portland’s. Seattle has both jobs and a desirable environment. Denver has the competitive advantage of the lowest cost of living when incomes are considered. Portland has the highest. Portlanders’ view of the city’s economic condition tends to be fairly provincial. Perhaps Portland should be called “the city of rose-colored glasses.”

As a parent of two children finishing their college education who want to live and work in Portland, I am personally concerned about their inability to find jobs here. Portland seems to have planned and governed itself into being a poster child for economic stagnation.

In discussing Portland’s condition recently, I found a New York City commercial loan officer well informed on Portland being “challenged” in the economic development department. Perception is reality when it comes to economic and community development, and Portland’s image is not as great as the mayor and many of his constituents want to believe, especially among those deciding where jobs will be located.

Successful community development requires a coordination of land-use and transportation planning with execution of the right economic strategy. Unfortunately the Portland City Charter gives commissioners management control over bureaus, which virtually assures a lack of this needed coordination within the city. Until Portland voters reform the charter to follow the dominant model of a full-time, paid city manager supervised by a council of volunteers, this structural impediment to economic development will ensure Portland’s continued decline.

Portland’s economic success, however, also depends upon the cooperation, coordination and support of other local, regional, state and federal officials. Metro President Tom Hughes and Gov. John Kitzhaber are potential partners who have explicitly made job creation their top priority. Portland’s leaders should welcome and solicit their help in overcoming the problems disclosed by the ECONorthwest study and the ULI programs.

Portland needs job-promoting fiscal and educational systems, which require local, regional and state assistance from other jurisdictions. Portland and its partners must convince companies that they have truly put out the welcome mat for new business. They will never succeed until Portland’s tax burden becomes competitive. Right now, city and county income taxes are a major contributor to economic decline.

Jobs are the golden goose that funds other programs, such as schools, welfare benefits, low income housing, etc. Robust job growth will more than make up for the elimination of the local income tax. Every policy and program should be assessed for its jobs impact if Portland wants job growth. Many cities have seen their central business districts decline into irrelevance over the last 50 years. Oregon cannot afford to let that happen to Portland.

Many point to the success of the Pearl District as evidence of the vitality of Portland’s central business district. That is a mistake because the Pearl District is largely a reflection of the national housing bubble and is not evidence of healthy job growth in Portland.

The irony is that many Pearl District residents now commute to work outside of Portland. Reverse commute congestion is the consequence of Pearl District housing success.

What Portland really needs to focus on is expediting the remediation of its many brownfields and superfund sites so that industrial land will be available to major economic redevelopment.

Portland is facing long-term economic decline because of many structural and political problems, as well as a misperception of the city. Portlanders need to face these facts and solve these problems now.

Gene Grant is a partner in the Portland office of Davis Wright Tremaine LLP. He is a co-chairman of the firm’s real estate and land-use group. Contact him at 503-241-2300 or genegrant@dwt.com.

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Vacancy rates for commercial space, already high, continue to increase. Traditional long-term tenants are in short supply. Out of necessity, landlords are inventing new occupancy arrangements. These creative solutions, however, often require special kinds of occupancy agreements. Here are some common examples:

Pop-up stores

Many retailers are willing only to make a very short-term commitment to occupy store space. There are all kinds of these pop-up stores.

Holidays bring out the temporary sellers of decorations, flowers, gifts, costumes, fireworks, etc. New product rollouts by retailers often require short-term space. Sellers of seasonal products want space only during when their products are in demand.

Many landlords consider short-term rent and occupancy better than vacancy, and are willing to consider these pop-up arrangements.

A standard store lease form does not work well for these temporary tenants. For example, most lease forms are for net or hybrid rent structures. Short-term occupants want gross rents.

Standard lease forms contain repair and replacement obligations that do not work for pop-up stores; their obligation is typically limited to ordinary maintenance of the finish work. Insurance, damage, destruction and condemnation clauses in long-term lease forms make little or no sense for short-term tenants.

Depending on how short the term, legal possession of the premises may not be appropriate; a license to use the space may be better. Many landlords assume one size of lease fits all occupants, a penny-wise-but-pound-foolish mistake.

Shared offices

Like residential dwelling units, the sharing of commercial office space dramatically increases during recessions as occupants look for ways to reduce occupancy costs. Millions of feet of space are being marketed for sublease for this reason.

Many wrongly assume that subleases are easy and all that is required is to incorporate by reference all the provisions of the underlying master lease in the new sublease. That is another penny-wise-but-pound-foolish mistake.

Any time there are layered interests in real estate, the legal and business issues that must be thoughtfully resolved increase almost exponentially. For example, the sublessor can be caught between a rock (the master landlord) and a hard place (the sublessee) if the sublease fails to protect the sublessor with respect to defaults by either the sublessee or master lessor.

Sublessees, on the other hand, can be caught without any recourse if the sublessor defaults on the master lease without proper nondisturbance provisions. These are only two of many reasons why subleasing actually requires more careful and complex occupancy documents than the standard form lease.

Even more complicated is the office sharing license agreement in which the parties are actually using and sharing the same office space rather than using sublease space separated by a demising wall from retained offices. Many times a sublease is used incorrectly in these circumstances where a shared-use license is needed to maintain clear legal possession of the retained office space. Seasoned commercial leasing legal counsel will avoid these mistakes.

Government agencies

In times like these, landlords suddenly find untraditional tenants more attractive. Governmental and nonprofit-type tenants who would have been passed over may be the only options.

For example, the relocation of federal government employees while Portland’s Green-Wyatt federal office building is renovated will likely absorb newly constructed office space.

These governmental leases are particularly scary for landlords, because the government’s lease form is very one-sided. It is practically an understatement to say that the government condemnation power means the government can lease whatever space it wants on whatever terms it wants as long as it pays fair market rent as just compensation. That means landlords can forget their standard lease form, because the government will dictate the lease terms.

However, the landlord can count on the most important thing, which is guaranteed rent collection. That is no small comfort in times like these. Many empty speculative office developments in Portland have gotten lifts by leasing to government agencies.

Donated space

Even donated space, perhaps to serve a political campaign organization or a nonprofit agency, deserves the right form of occupancy agreement.

Typically a license is a better fit than legal possession under a lease. When space is being donated, the risk management provisions of the occupancy agreement are critical for the landlord.

Care must be taken to minimize the landlord liability associated with the recipient of the donated space. For example, adequate evidence of insurance is more important than ever, especially if liquor will be served at special events or other unusual use of the premises will occur. Indemnity provisions will be unusual depending on the circumstances. Property tax exemptions require special treatment in the lease, and the list goes on.

Standard lease forms often are a trap for unwary occupants and landlords. There is no substitute for an occupancy agreement that is prepared carefully and specifically to fit the factual circumstances. Resist the temptation to simply fill in the blanks using a standard lease form.

Gene Grant is a partner in the Portland office of Davis Wright Tremaine LLP. He is a co-chairman of the firm’s real estate and land use group. Contact him at 503-241-2300 or genegrant@dwt.com.

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