A committee led by Portland Housing Bureau Commissioner Nick Fish and Multnomah County Chairman Jeff Cogen is proposing to add new restrictions to the city’s Limited Tax Exemption program.

The LTE provides property developers with up to 10 years of property tax savings if they build affordable housing in certain areas of the city.

In 2010, the Portland Housing Bureau started the “Big Look” policy review project to discover recommendations for program improvements. Last week, the review committee selected recommendations.

“We wanted to look at the breadth of the program to find where it’s efficient and where it needs to be lined up better with what the city and the housing bureau are trying to accomplish,” said Kate Allen, senior housing policy advisor for the bureau. “We want to make sure each aspect of the program is delivering on its goals.”

The LTE program, initiated in 2008, is divided into five different categories: nonprofit-low-income housing, multiple-unit housing, resident rehabilitation, single-family construction and transit-oriented development.

Recommended changes include: awarding exemptions on a “competitive” basis, meaning the merits of all LTE applications would be reviewed against other proposals to assure project quality and geographic distribution; establishing a $1 million cap of “foregone revenue” – property tax money the city and county forego in exchange for a public good – for multi-unit developments; and establishing more requirements for single-family construction, including compliance with the Portland Housing Bureau’s minority homeownership goals, green building and workforce equity programs.

Throughout the committee’s two-year existence, feedback has often been sought from the housing development community. Allen said some of the recommended changes were received with enthusiasm, while others were met with skepticism.

“Any time we add process to a tool that is put out there to incent development, it raises concerns,” Allen said. “Like most smart contractors, they don’t want more hoops to jump through.

Jim Kosta, owner of BW Construction, said he applies for 15 to 20 limited tax exemptions a year for his single-family developments. When asked whether the proposed changes would hinder his ability to receive exemptions, he said he “really doesn’t see much of an issue,” except for the “adherence to quality design standard,” which is one of the proposed requirements for single-family construction. Among other conditions, the standard would recommend that single-family houses be built only on lots surrounded by sidewalks.

“(Having to build on) lots with sidewalks narrows the availability of lots to build affordable housing on,” Kosta said. “To initiate a sizable number of new requirements and slowly bring them into effect would create issues that everyone would have to deal with.”

Some multi-unit developers, like Brendan Lawrence, project manager of the long-delayed Prescott Apartments in North Portland, are worried that the “competitive” basis would create uncertainty for some projects.

“Projects are relying on these programs to provide new housing options to areas of town that would otherwise not see new development, and they may not run on the same path as to what the city deems as ‘quality projects,’ ” Lawrence said.

Meanwhile, Allen made it clear that the recommended changes are not set. The review committee, the city and Multnomah County plan to hold multiple meetings, and some public forums also are in the works. Allen added that the changes, if deemed suitable, would first be given a three-year trial period.

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Multnomah County Chairman Jeff Cogen believes Portland Mayor Sam Adams is on the right track with his proposal for an urban renewal area surrounding Portland State University. But while he’s optimistic and willing to listen, Cogen isn’t quite ready to fully support the plan.

After being met with profuse opposition while pushing for a 325-acre URA last year, Adams took time during his State of the City address last week to pitch creation of a 135-acre URA that would encompass PSU.

Cogen likes the size reduction, but he is concerned that it would be focused around a public institution that doesn’t pay property taxes.

“It’s scaled back and much more focused around a specific area and entity that they want to improve,” he said. “I think supporting PSU is a great thing, but the premise of urban renewal and tax increment financing is to increase the tax base and when you are looking to improve a public institution that’s going to be hard.”

One selling point of a URA is that although taxing districts – such as counties and school districts – lose money while property taxes are frozen, they wind up with more tax revenues after development increases the tax base.

But as Mark Landauer, a lobbyist for the Special Districts Association of Oregon, pointed out, using urban renewal money for school construction projects would not increase the tax base.

“The point of using urban renewal dollars is to increase values, which increases the amount of property tax dollars collected,” he said. “Considering a school is not a taxable entity, it doesn’t do anything to increase the tax base.”

Roy Kaufmann, the mayor’s spokesman, said centering a URA around a public structure is actually fairly common, as happened previously with the Oregon Convention Center. Kaufmann said he understands the concerns about taxing districts losing money, but added that PSU has a long history of using limited public dollars to leverage large private developments. If this URA proposal were to go forward, the city would expect that to continue, he said.

Cogen has been one of the most vocal opponents of Adams’ previous URA endeavors. Last year he criticized the Portland Development Commission for moving forward with the 325-acre proposal before all the parties involved had discussed whether a new URA was needed. But Cogen said that for this proposal, the city seems to have addressed some of his previous concerns.

Adams spoke to Cogen about the URA proposal the day before the State of the City address, and the county chairman said they had a good conversation. But Cogen said he would need some time to decide whether to back the plan completely.

During the coming two weeks Cogen and his staff will review the proposal. Then he and Adams will reconvene an exploratory group that last year had evaluated the feasibility of a new downtown URA. That group includes Cogen, several other stakeholders and representatives of taxing districts that would be affected.

“I believe the group helped point out a lot of problems with the last URA that was proposed downtown and I have faith that this conversation will be constructive too,” he said.

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Portland Development Commission planners wanted to implement their proposed new and improved central city urban renewal area by the end of the year.

But as the city agency pushes ahead to meet that deadline, other public officials first want an answer to a key question: Is it even necessary?

Last week, e-mail correspondence between PDC planner Peter Englander and Multnomah County Chairman Jeff Cogen was made public. Englander informed Cogen that in an attempt to move the project forward, an evaluation committee meeting had been canceled. The committee includes parties leading the charge for the new URA. Cogen responded with concern that the entire group did not even agree that there should be a new URA.

“At the last meeting you confirmed that the work to date in creating this 70 percent (completed) ‘straw dog’ proposal was the precursor to the discussion of whether and when and according to what criteria the creation of a new urban renewal area should occur,” Cogen wrote in the e-mail. “That discussion has not yet even begun.”

As local governments’ budgets have dried up, urban renewal has come under fire over the last several years. Citizens and public officials are questioning whether property tax dollars should be diverted from schools, counties and service districts to pay for fund revitalization projects.

So PDC staffers exercised caution in planning out this URA.

When first explaining the proposed area, Englander said, “This URA isn’t about where we want it, but rather where we need it. It’s more strategically placed and has public involvement from more sources than any URA I have ever worked on.”

Multnomah County Commissioner Deborah Kafoury, also a member of the evaluation committee, agrees that the PDC is being considerate – but “not out of the goodness of its heart.”

“It’s more out of survival as people are more skeptical of urban renewal these days,” she said. “But with good intentions or not, they are going to eventually have to make the case for why here and why now.”

Cogen added that now, more than ever, it’s important to discuss in detail anything that could affect budgets.

“This is important now because we have to remember that we’re facing a $3 billion shortfall here in Oregon,” Cogen said. “We need to see where things are with the state budget before we start freezing property taxes in specified areas.”

Shawn Uhlman, spokesperson for the PDC, said he was assured by staffers that such dialogue will take place. The meeting cancellation was to allow Englander, the project manager, more time to visit neighborhood associations, as well as bring the straw proposal to 90 percent completion, Uhlman said.

“Peter just wanted to have the investment strategy nailed down a little more before he brings it back to the group for another meeting,” he said. “With anything like this, you want the most up-to-date numbers in front of you.”

Both sides say no rift exists. And to make sure it doesn’t turn into a fight, Mayor Sam Adams on Wednesday that the process will be slowed.

“I have asked PDC to slow down the project’s timeline because we are headed into a tough budget season that will consume much of our time,” he wrote. “PDC did not ask me about (the) number of future (meetings) on this issue: We can have as many (meetings) as useful and needed.”

But not everyone is convinced that a slower process will lead to discussion about the necessity of a new URA.

Debbie Aiona of the League of Women Voters of Portland recently sent a letter to Englander stating that the Portland Business Alliance, Portland Public Schools and Multnomah County all have bid to initiate the discussion, but without success.

“It is difficult to understand how the participants can have a thorough discussion about whether or not a new URA should be formed and what criteria should be used to make that decision in the space of one or two meetings,” Aiona said in the letter.

Some may never be convinced of the need for the URA.

“You don’t see a lot of construction out there and you do see a lot of vacancy signs up in windows,” said Kafoury, the only committee member that voted against the straw proposal. “This just seems like a tough time to ask for those trade-offs.”

Below is the text of the e-mails between Englander and Cogen:

Peter,

At the last meeting you confirmed that the work to date in creating this 70 percent “straw dog” proposal was the precursor to the discussion of whether and when and according to what criteria the creation of a new urban renewal area should occur. That discussion has not yet even begun.

I am completely mystified about how the work of this committee could conclude in 1 or 2 more meetings when we haven’t even analyzed or discussed these foundational questions.

It appears that this conversation is being short circuited. Am I missing something here?

Jeff

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Central City Urban Renewal Area Evaluation Committee Members and Interested Parties:We held four successful outreach events last month in an effort to inform the public about the Central City Study and the Committee’s work. We have posted a summary of feedback from these meetings online. In addition, we have received input on the 70% boundary proposal and are developing a 90% proposal , which incorporates the feedback we’ve received, for your review.

We are working with the Mayor to conclude the committee’s work, with the objective of having only one or two more meetings in total. At our next meeting, we want to be able review the 90% draft investment strategy and boundary. We are continuing to work with stakeholders to finalize these recommendations. We will notify you once we have finalized a strategy and meeting times for concluding the committee’s work.

THEREFORE, WE ARE CANCELLING NEXT WEEK’S MEETING that was scheduled for Tuesday, October 12 at 1 PM, and are working to set up new meeting dates and times.

Thank you for your continued commitment and the time that you have invested into this process. As always, feel free to contact me with questions and concerns.

Peter Englander

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Multnomah County commissioners today voted unanimously to pay for design work for a new courthouse in Gresham‘s Rockwood neighborhood. Construction on the building, estimated to cost between $15.9 million and $19.5 million, could start as early as December.

The project will replace the aging Gresham courthouse, which commissioners and members of the pubic testifying before the board called too small and leaky. The state requires Multnomah County to offer a court facility for offenses taking place east of 122nd Avenue.

Building the courthouse now will take advantage of a weak construction economy and attractive financing rates, Commissioner Judy Shiprack said. “It’s timely because construction companies are hungry and interest rates are low,” she said.

Chairman Jeff Cogen described himself as a project skeptic, given tight county budgets. He said he received assurances that the county would have the money to operate the courthouse.

Invoking the Wapato jail, which the county built but couldn’t afford to operate, Cogen said repeating that mistake “would be devastating to our reputation in the community.”

“That was my biggest fear about the whole thing,” Cogen said after the vote. The district attorney, sheriff and court staff told Cogen that they could shift resources from the Portland courthouse without any extra operating cost.

“They told me they could do it, I expect them to do it and I’m going to hold them to it,” he said.

The new courthouse, planned to be built at Southeast 185th Avenue and Stark Street, will have three courts. Commissioners had discussed whether to build only two courts.

“It doesn’t make sense for us to build a facility that will be cramped and crowded almost immediately upon construction,” Commissioner Deborah Kafoury said.

Despite county budgets that require cuts year after year, Kafoury said the current Gresham courthouse doesn’t do the community justice. “It’s truly a disaster,” she said.

“One has to spend five minutes in there to see that.”

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The ripples in Oregon politics from Ben Westlund’s death continue. The Multnomah County Board of Commissioners is scheduled to vote to name a new commissioner and elevate another at its April 1 meeting.

Commissioner Jeff Cogen plans to ask the board to approve the appointment of Barbara Willer to fill his District 2 seat. Cogen would be appointed board chairman. Both would be sworn in immediately.

Cogen would serve out the remainder of Ted Wheeler’s term. Former chairman Wheeler was appointed to serve as state treasurer following the Westlund’s death March 7.

Cogen is seeking election to a full term as commission chairman. Willer, however, is not running for a full term as District 2 commissioner.

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The Metro Council has approved agreements with the three Portland-area counties mapping out where development can occur for the next 50 years. The council’s vote Thursday finalized agreements on urban and rural reserves each county’s board had approved.

The Multnomah and Clackamas county commissioners voted unanimously on Thursday to approve their individual agreements with Metro, following Washington County’s unanimous vote on Tuesday.

Multnomah County‘s vote came after Commissioner Judy Shiprack added an amendment shifting undesignated land along the Washington County border near Bethany into the rural reserve. The amendment passed 3-2, with Commissioners Diane McKeel and Deborah Kafoury joining Shiprack in support. Kafoury testified that she received close to 1,000 e-mails and phone calls in favor of putting the land into rural reserve, county spokeswoman Karol Collymore said.

Commissioner Jeff Cogen, Multnomah County’s representative on the Core 4 group that met to establish the reserves region-wide, voted against the amendment. The county shouldn’t unilaterally amend what was a negotiated agreement with Metro, Cogen said.

Still, the Metro Council approved the agreements 5-2, with commissioners Robert Liberty and Rod Park voting against.

The reserves process identified approximately 272,000 acres that will remain rural and approximately 28,000 acres that can be developed. Metro will look at land within the urban reserve for future urban growth boundary expansions.

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In January, Multnomah County prepared to issue a request for proposals to develop a parcel of county-owned land at the western end of the Morrison Bridge. More than eight months later, that still hasn’t happened.

The county later planned to issue requests to developers first in March and then in August. In each instance, the plans were postponed.

Now, County Commissioner Jeff Cogen, who’s overseeing the disposition of the property for Multnomah County, said the county will issue a request for information from interested developers within the next two to three weeks.

But the lone development team looking at the land is prepared that the county may not move forward … again.

“If the county doesn’t get back to us in the next couple of weeks, I’ll have to again ask for a more specific date,” said Ron Paul, whose Melvin Mark Development team envisions a public market on the property.

Paul, a former restaurateur and city employee, is leading the only development team that has expressed interest in the property. He describes the planned James Beard Public Market, named after the Oregon-born chef, as something akin to Pike Place Market in Seattle: A year-round food market featuring locally sourced produce and meats.

It’s an ambitious project, the developers say, because it’s never been done in Portland.

“We have to remember, developments like this don’t happen overnight,” said Dan Petrusich, president of Melvin Mark’s development division.

Cogen said one reason the county’s request has been delayed is because it hopes to attract more interest from developers.

Cogen said he believes the site will generate more interest, depending on when the county’s request for information goes out to developers. A lagging real estate market has made the county cautious about moving forward, he added.

“It is a very challenging property, and I haven’t seen a better use for the property (than the public market),” Cogen said. “But if someone has a better idea, we’ll go with it.”

Paul and Petrusich said they wouldn’t give up on the project if that happened, but they still believe that they have a better shot than other developers. They’ve spent the year performing market research on public markets and designing their project.

“Most developers would probably have problems with the (Morrison Bridge’s) ramps, which go through the property,” Petrusich said, “but we think they actually fit our project perfectly.”

Paul said he hopes other developers show interest in the property.

“We’d like to have some (competition) to our project,” he said. “We don’t want this handed to us.”

Once the RFI comes out, developers will have 60 to 90 days to issue their development plans. Paul said he’s spent the last year studying other public markets and the Morrison Bridgehead site in anticipation of the RFI.

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