Metro’s $5 billion transportation measure has emerged as perhaps the hardest-fought local ballot issue, and one that has split real estate and construction interests.

The measure would approve funding for a series of infrastructure projects, most notably construction of a light-rail line from downtown Portland to Bridgeport Village in Tigard. It would be paid for by a payroll tax on employers with more than 25 workers, something that has led to fierce opposition from big business, including Nike and Intel.

The ballot issue, Measure 26-218, has attracted some sharp critics, ranging from a well-known local economist to the well-heeled Portland Business Alliance. It has also caused splits in the business community and among companies involved in real estate and construction.

In favor: construction companies such as Stacy and Whitbeck and Colas Construction, which have extensive experience with major public contracts, along with major unions including the Local 48 Electricians PAC.

Opposed: Commercial real estate brokers and investors including Melvin Mark Brokerage Co. and Harsch Investment Properties.

It’s not a mystery why commercial real estate and construction interests are on opposite sides of Metro’s transportation plan, Portland pollster John Horvick said.

“Clearly, the union and construction guys have an interest in big construction projects, and the commercial real estate guys are worried about payroll taxes,” said Horvick, political director for DHM Research.

The measure appears to be on track to be closely decided. A poll conducted by DHM Research and commissioned by OPB found the measure leading in a close contest, with 47 percent in favor and 42 percent opposed. The poll surveyed 1,000 likely voters in the Portland metro area from Oct. 7 to 11.

“The measure’s close,” Horvick said. “If it narrowly passes, that wouldn’t surprise me. If it failed by 12 points, that wouldn’t surprise me.”

Tax measures tend to tighten as an election nears, Horvick said. “It’s just a lot easier to get people to no than it is to yes.”

At stake is years’ worth of construction jobs. The Southwest Corridor light rail project alone is expected to cost $1.8 billion, with $975 million coming from the bond measure and the rest from federal and other leveraged funds. The project would also require rebuilding the Vermont and Newbury trestle bridges on Barbur Boulevard.

The Metro measure would also fund improvements to deteriorating state highways such as Tualatin Valley Highway and 82^nd Avenue, electrifying Trimet’s bus fleet and paying for students to take city buses.

Metro spent years putting together a group of projects from around the region that would attract political support. Still, the measure was only barely ahead in Multnomah County, with 55 percent support, and well behind in Washington County, where many of the projects are concentrated.

“That’s a real warning sign — that in the most tax-friendly jurisdiction it’s barely over 50 percent,” Horvick said of the Multnomah County survey results. “In Washington County, where most of the money would be spent, it’s underwater.”

In Washington County, 43 percent were in favor and 45 percent were opposed.

Commercial real estate firms have joined other business groups in opposing the measure:

• Harsch Investment Properties donated $25,000 to the Stop the Metro Wage Tax PAC on Sept. 17, public records show. Jordan Schnitzer’s company manages 3.5 million square feet of office and industrial property in the Portland area. A message left for a Harsch spokeswoman was not returned.
• Melvin Mark Brokerage Co., which owns or manages 3 million square feet of office space in metro Portland, donated $10,000 to the Stop the Metro Wage Tax PAC on Sept. 21. Melvin Mark also did not respond to a request for comment.
• Developer Vanessa Sturgeon donated $1,000 to the political-action committee on Oct. 14. “A tax on wages during an economic crisis is a really bad idea,” Sturgeon said in an email.
• Law firms Schwabe, Williamson & Wyatt and Davis Wright Tremaine each donated $10,000 to the Stop the Metro Wage Tax.

The political action committee has sent cheeky mailers with the message “Packy Never Forget,” referring to an elephant that died at the Metro-owned Portland Zoo in 2017.

Construction and labor have been the strongest backers of the pro-Metro side. Among the campaign’s biggest boosters:

• Stacy and Whitbeck Inc. gave $150,000 to the Get Moving PAC in August. The company, based in Alameda, California, has built previous light-rail lines in Portland, including the MAX Orange line. A company spokeswoman did not respond to a message seeking comment.
• Local 48 Electricians PAC donated $100,000 to the get moving PAC on Aug. 24.
• HNTB Corp., a Kansas City, Missouri, engineering firm with a Portland office, donated $65,000 to the committee on Oct. 19.
• Hamilton Construction Co., a contractor based in Springfield that focuses on public infrastructure projects, donated $10,000 to the PAC on Oct. 13.
• Colas Construction Inc. donated $2,500 to another pro-ballot measure group, the Infrastructure Jobs are Good Jobs PAC, on Sept. 14.

The Associated General Contractors of Oregon-Columbia chapter has stayed out of the fray, taking no official position on Measure 26-218.

While the Metro measure directly stands to affect billions of dollars in projects, industry officials are also watching other races, including Portland’s mayoral election, which has a community activist, Sarah Iannarone, challenging Mayor Ted Wheeler.

AGC Oregon-Columbia Executive Director Mike Salsgiver said he’d like to see more balance in the state Legislature, which is dominated by Democrats.

“Supermajorities in either direction don’t tend to serve the public very well,” he said.

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Construction companies will not be subject to the city of Portland’s new clean energy excise tax after all.

City commissioners voted unanimously Thursday to amend city code to exempt construction companies as well as sales of residential garbage and recycling services and qualified retirement plans from paying a 1 percent surcharge on gross revenue from retail sales within Portland. The surcharge was imposed by Measure 26-201, approved by voters in 2018, and applies to Portland retailers with total annual retail revenue greater than $1 billion and Portland annual retail revenue over $500,000.

The measure created the Portland Clean Energy Fund (PCEF), which will provide both money for clean energy projects and training for workers. But commissioners admitted Thursday that the measure as approved by city voters applied to a larger portion of the business community than previously assumed.

“It wasn’t until after it passed that we found out the definition was much broader than we anticipated,” said Commissioner Jo Ann Hardesty, a longtime and staunch supporter of the PCEF, which is intended to provide economic opportunities to underprivileged communities. “I wouldn’t have supported a tax on anyone’s retirement account, period. I don’t think adding a tax to affordable housing or school construction or garbage hauling for residential homes was something we ever envisioned would take place.”

The Portland Business Alliance had lobbied City Hall, as well as a work group of PCEF stakeholders, to add the exemptions approved on Thursday. Many professionals within the construction industry had previously raised concerns about the tax’s potential impacts.

Preemptive action was taken by some parties, including Oregon Health & Science University, which in September directed general contractors working on its numerous building projects to include the tax in their proposed budgets.

Although financial data for large firms is typically kept under wraps, industry officials told the 91��Ƶ in October that without changes to the ballot measure sizable general contractors including Hoffman, Fortis, Turner, Skanska, Mortenson, JE Dunn, Howard S. Wright and others would likely be subject to the city’s tax.

Meanwhile, the amendment will mean less money for the PCEF. Thomas Lannom, director of the city’s Office of Management & Finance‘s Revenue Division, told the City Council that anticipated revenue from the clean energy surcharge could fall by as much as $10 million. That rankled several citizens who showed up Thursday to protest the amendment.

“It’s a little bit disingenuous to say exempting construction projects helps low-income and affordable housing,” Portland resident Charles Johnson said.

Johnson suggested that exemptions should be for affordable housing projects themselves, and not construction in general.

Mayor Ted Wheeler said that while he wholeheartedly supports the PCEF, he also endorses the exemptions.

“I acknowledge these changes are less than ideal,” he said, “but this program will continue to be a model for the rest of the country.”

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In November 2018, Portland voters were asked to support a 1 percent gross-receipts tax on large retailers to fund green-energy projects and job training. The tax was promoted as applying to “large retail corporations, such as Wells Fargo, Apple, Comcast and Banana Republic,” according to campaign materials.

Nearly a year later, clients of large construction companies are surprised to find themselves footing the bill. Major institutions such as Oregon Health & Science University have told general contractors to include the tax in projected budgets, and some pending project teams are waiting on further clarity.

“What was sold to voters is it was a tax on large retailers,” said Dan Drinkward, vice president of Portland-based Hoffman Construction. “We were surprised by the guidance that came out of the city that said it applied to construction firms, and we are working with the city and have had informal conversations with other stakeholders to try to clarify the rules so it would not apply to construction firms.”

Months after the measure’s passage, the city’s Revenue Division in April interpreted the initiative’s wording broadly, issuing guidance that construction firms and other service providers qualify as retailers subject to the tax.

“Basically, construction is a service,” said Scott Karter, spokesman for the Revenue Division.

The city so far has collected about $11 million from the tax, Karter said. The Revenue Division declined to specify how much of that came from the construction industry because, he said, it could lead to identifying individual taxpayers.

The Portland Business Alliance is leading an effort to persuade the City Council to carve out exemptions.

“I’m very hopeful that those conversations will be fruitful and the clarification will come through the city that construction is not affected,” Drinkward said.

It’s not clear what degree of support a construction exemption has among commissioners. A spokesman for Mayor Ted Wheeler, who controls the key bureaus, declined to comment.

With the possibility of a change in city policy uncertain, developers, builders and clients are beginning to take the tax into account.

“The uncertainty is affecting projects right now,” Drinkward said. “It’s a significant impact to project budgets. Schools, hospitals, airports and other important projects are grappling with how to put this into their budgets, adjust their scope, or otherwise plan for this.”

OHSU has directed its general contractors to include the 1 percent tax as a budgeting line item, and to incorporate the tax into the guaranteed maximum price, according to a Sept. 17 email from Jennifer Taylor, OHSU’s director of design and construction, to general contractors.

“OHSU is aware of a potential cost increase associated with the city’s clean energy surcharge,” spokeswoman Tracy Brawley stated in an email response to questions. “Until the city presents its plans for implementing this program, the specific impact to OHSU is unclear.”

The tax essentially adds 1 percent to the cost of any large project. Drinkward gave the example of the new Lincoln High School, an upcoming Portland Public Schools project with a $200 million price tag. The tax could affect what ends up being included in the project, he said.

“You know, it’s $2 million,” he said.

The tax applies to all “retailers” with more than $1 billion in annual global revenue, and $500,000 in revenue generated within the city of Portland.

While the revenue data of the privately held major construction firms are not public, industry officials said firms including Hoffman, Fortis, Turner, Skanska, Mortenson, JE Dunn, Kiewit, Howard S. Wright and Knife River are likely subject to the city’s tax.

A representative of a business-backed tax policy group said Portland’s gross-receipts tax, which was passed by initiative rather than the legislative process, was not drafted artfully.

“They attempted to create a retail sales tax borne by business, and in doing that, they created a whole bunch of issues,” said Nikki Dobay, Portland-based senior tax counsel for the Council on State Taxation, a policy and advocacy group based in Washington, D.C.

“There’s no definition out there of a retail service,” she said. “That’s going to be a major issue for many taxpayers.”

Traditional retail sales taxes, of course, are paid at the point of sale. That is not the case for Portland’s gross-receipts tax.

“They’re trying to implement it in a manner more similar to an income tax,” Dobay said.

Portland’s construction industry has enjoyed flush years since the Great Recession, riding population and jobs growth that brought expansions in the office, multifamily, hospitality and industrial sectors. Even with warning signs of a slowing global economy, hundreds of millions of dollars in voter-approved school and affordable housing projects should continue to buoy the local construction industry, Drinkward said.

“What this tax could do is push some development out of Portland,” he said.

On Sept. 25, the City Council appointed five people to a newly created Clean Energy Fund Benefits Committee that will award grants generated by the tax revenue.

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The Portland Business Alliance and the City Club of Portland will host a community forum on jobs in east Multnomah County.

“A Closer Look: East Multnomah County” will take place from 6 to 7:30 p.m. on April 9, at the Mt. Hood Community College Theatre on the Gresham campus.

The public is invited to join a community conversation about the challenges and opportunities for attracting and retaining jobs in east Multnomah County. The event is a continuation of the PBA’s “Value of Jobs Economic Check-Up.” Local leaders as well as community based-organizations will be on hand to discuss the findings from the PBA’s recent report and what can be done to support a future-proof economy in the region.

This event is free and open to the public. To register, visit .

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A combination of low supply and high prices for housing in the Portland-metro area is the foremost economic problem facing policy makers, an economist said Wednesday.

Prices in the Portland area are about five times median household income, putting housing out of reach of many residents and burdening low-income renters, said John Tapogna, president of ECONorthwest, a Portland-based economic consulting firm.

About 34 percent of households in the Portland-metro area are considered “cost-burdened,” spending at least 30 percent of their income on housing, Tapogna said. The problem is worst among renters, with 49 percent cost-burdened, he added.

“That’s unworkable,” he said.

Tapogna spoke at the Sentinel Hotel to give his annual report on the value of jobs for the Portland Business Alliance.

Mike Wilkerson, an ECONorthwest project manager, said he expects housing construction, which already lags demand, to slow in 2020 and 2021 as the market continues to react to rising construction costs, higher interest rates and policy interventions such as Portland’s inclusionary housing program.

Tapogna said inclusionary housing was “well-intentioned” but “needs to be reconsidered.”

When an audience member asked what trade-offs the business community needs to make to encourage housing, Tapogna suggested it’s up to residents to welcome more housing into their neighborhoods.

“The trade-off is going to be the parking spot in front of your house,” he said. “It’s going to be how many neighbors you have in your leafy, single-family neighborhood.”

There are several legislative proposals in the Oregon Capitol and at Portland City Hall that seek to address the housing crisis. House Bill 2001 and Portland’s Residential Infill Project would change traditional single-family zoning to encourage “middle housing” – duplexes, accessory dwelling units and the like. Other proposals would cap rent increases and place restrictions on evictions without cause.

Cost-burdened renters are significant contributors to the Portland region’s short-term homeless population, Tapogna said.

“What is driving Portland’s homelessness crisis is the high cost of housing,” he said.

The housing troubles come amid a historic economic expansion. In July, barring a recession, the expansion will officially become the longest since World War II. Employment data from January showed 304,000 net new jobs in the U.S. despite a prolonged government shutdown.

In Oregon, construction employment led the way, growing 7 percent in the 12 months ending in November.

The Portland-metro area has added high-wage jobs, improving to 16th in median income among American cities.

“These are good numbers,” Tapogna said.

Venture capital investment in Portland still trails such investment in comparable cities such as Seattle, Austin and Salt Lake City, Tapogna said.

“This is not a huge venture capital town,” he said.

ECONorthwest’s report also looked at East Multnomah County. The portion of the county east of Interstate 205 suffers from commuting churn: 69 percent of residents work outside of the area, while 67 percent of East Multnomah County workers live elsewhere. That creates a strain on workers who log long commute times and expensive child care bills, Tapogna said.

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Multnomah County and city of Portland officials are eyeing a long-vacant warehouse near the Steel Bridge as a potential site for a 200-bed permanent homeless shelter.

Converting the warehouse, at 320 N.W. Hoyt St., into a shelter could exacerbate tensions with property owners and business operators in the Old Town Chinatown neighborhood, but it also would offer public officials a long-term alternative to the temporary-shelter hopscotch they’ve engaged in recently.

“We haven’t had a big permanent shelter in the downtown core, and we still see that need,” said Denis Theriault, spokesman for Multnomah County and the Joint Office of Homeless Services.

Negotiations with the property owner, Alco Investment Co. of Seattle, are under way, Theriault said. The Joint Office is seeking a long-term lease for the shelter.

“There isn’t a lease yet,” he said.

The Joint Office has applied for an early assistance meeting with the Bureau of Development Services to determine whether the property could host a shelter.

The warehouse, built in 1925, needs significant renovations before it can function as a shelter, Theriault said. Carleton Hart Architecture and project management consultant Shiels Obletz Johnsen are at work on the project. Transition Projects, a Portland nonprofit, would operate the shelter.

Some neighbors are fighting the drive to establish another center for homeless service in Old Town Chinatown. The Old Town Chinatown Community Association has held public forums on the topic, and met with Mayor Ted Wheeler and Multnomah County Chairwoman Deborah Kafoury.

“It’s just not the right time to add any additional social services to the neighborhood,” said Helen Ying, chairwoman of the neighborhood association.

The group has sent a letter to Wheeler and Kafoury protesting the proposal.

Guardian Real Estate Services President Tom Brenneke said adding a shelter would not conform to a years-old agreement with the neighborhood that there would be no net gain in shelter beds. Guardian owns two properties nearby – Block 33 and the Tuck Lung property.

“I am opposed to it,” Brenneke said. “The area’s overburdened with that type of social service. We already have a significant facility in Bud Clark Commons, and adding 200 more beds doesn’t seem to be in keeping with the agreement.”

Theriault said the shelter could make a positive contribution to the neighborhood.

“We understand there are livability concerns in Old Town Chinatown,” he said. “This shelter is a way to help.”

Public officials continue to receive complaints of homeless individuals lining up to wait for a bed in Portland’s few available shelters. Part of the strategy to address those complaints is to offer a 24-hour, low-barrier shelter with in-house services, Theriault said.

The Joint Office is evaluating the possibility of closing other facilities in Old Town Chinatown if and when the Hoyt Street shelter opens to lessen the burden on the neighborhood.

Wheeler supports the Joint Office’s strategy, spokesman Michael Cox said.

A large shelter would also lessen the city’s and county’s reliance on short-term, temporary shelters hosted by developers. In recent winters, the Menashes, Malsins and others have agreed to host short-term shelters.

The Portland Business Alliance supports using the Hoyt Street site, president and CEO Sandra McDonough said.

Neighbors have legitimate livability concerns, she said, but those are being addressed by measures such as increased police patrols on foot.

“There’s not a lot of sites,” McDonough said. “So this represents a good, long-term site that will work.”

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When Barry Menashe, president of real estate firm Menashe Properties, told his son, vice president Jordan Menashe, that he wanted to use one of their empty buildings to accommodate homeless men, the buy-in was immediate.

“When Dad brought up the idea, I said, ‘Let’s roll,’ ” he said.

The idea, Jordan Menashe said, is to help people – homeless disabled veterans, in particular – endure the winter. So Washington Center, at 425 S.W. Washington St., became a night shelter.

With the city’s support, the building opened this week and filled with 100 homeless men on the first night, Jordan Menashe said.

“We are working with Commissioner (Dan) Saltzman and the mayor and the Portland Business Alliance,” he said.

The temporary shelter is being managed by Transition Projects, a nonprofit that manages many of the city’s homeless shelters, Jordan Menashe said.

Some property owners in the vicinity were not happy about the building being used by homeless individuals, but Jordan Menashe said he believes detractors should “have a heart.”

“That’s our decision and we stand by it,” he said. “There are no lines (and) the same folks are sleeping there (each night). They can keep their stuff dry and people can bring them food.”

Menashe said the shelter helps alleviate downtown homelessness.

“We have 400 people sleeping (on the streets) in a four-block radius and here they sleep inside like human beings should,” he said.

The temporary residents are given clean cots to sleep on as well as access to bathrooms and a “wake-up room” where they can have coffee and tea in the mornings before returning to the streets at daytime.

“Everyone staying there has been nothing but appreciative,” he said.

Despite the complaints, Jordan Menashe said he has been “overwhelmed” by the hundreds of positive messages and emails he has received in the past few days.

“Really, people are saying, ‘How can we help at the shelter,’ ” he said. “Even though it’s a temporary shelter, we are bringing hope and respect for those people living there. We are all human beings.”

Homelessness touches everyone, Jordan Menashe said, and touched his father’s family directly.

“He had a brother and sister, both with mental problems, who were on the street for many years and are now passed away,” he said. “So homelessness is a soft spot for our family, and we wanted to help – even though it’s temporary.”

Although the agreement with the city is for the temporary shelter to stay open for up to six months, the building is still on the market, Jordan Menashe said. Menashe Properties acquired the building last year for $9 million, he added.

Jordan Menashe said he plans to keep seeking ways to combat homelessness. He hopes other property owners will step up and help.

“We all need to work together,” he said.

Saltzman, who oversees the Portland Housing Bureau, said opening a building that is unoccupied but still on the market is highly unusual.

“I’ve never heard of anything like this and really appreciate the generosity of the Menashe family for even thinking of this potential use,” he said. “I don’t think most property owners think about it, but I’d absolutely encourage them and would love to have other properties to provide shelter opportunities.”

The city has an agreement with Menashe Properties to provide the building, free of charge, as a night shelter for three to six months, Saltzman said. The city is paying for utilities.

“I hope it’s six, but it’s at least three months,” Saltzman said. “It’s out of the blue and the shelter is full, and so far, so good.”

Roma Peyser, director of development for Transition Projects, noted that the city in November opened a nighttime shelter for women and couples in the Jerome F. Sears Army Reserve Center at 2730 S.W. Multnomah Blvd. The shelter, also temporary, now houses 167 people and will be open through the winter months.

“Like the one (at Washington Center), it is a ‘low barrier’ shelter so people can bring a pet with them,” she said.

Peyser said her office is calling the Washington Center shelter the “Peace Shelter” and said she hopes more building owners like Menashe Properties will offer their vacant properties for temporary shelters.

“As far as we know, it is the first time a private owner has offered up a building, but also with the intention of speaking about it so publicly in order to have others join in on this,” she said.

Anyone who wants to help the city provide even temporary lodging for homeless residents can contact Transition Projects Executive Director George Devendorf at 503-280-4700 or Mayor Charlie Hales at 503-823-4120, Peyser said.

The post Office building becomes temporary homeless shelter appeared first on Daily Journal of Commerce.

The Portland City Council, in a split vote, this week approved a hike in system development charges (SDCs) on new development to support the city’s parks system.

Commissioner Amanda Fritz, in charge of the city parks department, said “development needs to pay its own way” and defended the increase.

But Commissioners Dan Saltzman and Steve Novick both objected.

“I still don’t understand why there has to be such a tremendous revenue increase, especially when we’re facing a crisis for middle-income earners in the city,” Saltzman said. “This is the wrong move at the wrong time.”

Both the Home Builders Association of Metropolitan Portland and the Portland Business Alliance criticized the plan to at least double fees for new commercial construction and increase rates for residential construction greater than 700 square feet. Low-income or affordable housing and college dormitories will be exempt under the new fee system, which will take effect July 1, 2016.

Novick said he objected to the methodology for the new fees and would have liked to have had more time for study.

“I think it makes sense to delay this decision until we take a longer look at housing affordability,” he said, indicating that higher costs would be passed on to renters and homebuyers.

But Mayor Charlie Hales said the methodology for the new fees is sound, and voted in favor of the change. Commissioner Nick Fish also voted to support the new fees.

More about SDCs for parks is available at: www.portlandoregon.gov/parks/article/520092.

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The Portland City Council won’t vote whether to increase system development charges (SDC) for parks until Wednesday, but developers already have an extension.

At the May 20 council meeting, Mayor Charlie Hales introduced an amendment to the proposed ordinance that will delay its implementation until July 2016. Originally, it was supposed to take effect in July 2015, and a subsequent amendment, now superseded, would have set the implementation date for January 2016.

The amendment passed unanimously, but Commissioner Amanda Fritz noted that exemptions as noted in the plan can be filed 30 days after final approval of the ordinance.

The new SDCs for parks would mean higher costs for homebuilders and developers, but allow Portland Parks and Recreation to increase capacity and buy land for future parks, according to the bureau’s website. The fees could not be used for parks maintenance.

The proposed plan has drawn criticism from several sources. Dave Nielsen, CEO of the Home Builders Association of Metro Portland, has complained that the new rates are not fair because they more than double commercial rates and unfairly penalize construction of big houses. Sandra McDonough, president and CEO of the Portland Business Alliance, wrote to parks director Mike Abbaté and stated her concern that “the city still lacks a plan” for park maintenance. – Beverly Corbell

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Higher costs will be in store for builders and developers in Portland if proposed system development charge rate increases for parks are approved by City Council.

Voters last year approved a bond measure to provide for parks maintenance and restoration, but there was no provision for expansion of capacity to keep up with population growth.

Portland Parks and Recreation wants more money to buy land and increase capacity for future parks, and that money, they hope, will come from SDC fees. Those dollars, according to the parks department’s website, can be spent only on capital improvements to increase parks’ capacity, and not for operations and maintenance.

are tacked onto building permit fees for new development, both residential and commercial. Development of the proposal to increase rates began in December 2012 via a task force of stakeholders appointed by Commissioner Nick Fish and parks director Mark Abbate, according to the parks department website; Commissioner Amanda Fritz endorsed the task force’s work when she took on parks oversight in 2013.

Public comments on the plan will be received by Portland City Council during its April 15 meeting at 2 p.m.

Instead of using five residential categories as in the past, ranging from single-room occupancy with a flat fee of $4,942 to single-family occupancy with a fee of $8,594, the new plan calls for residential rates determined by size. The lowest would be $5,454 for a new building smaller than 1,000 square feet inside the central city, and the highest would be $13,185 for a new house larger than 2,500 square feet outside the central city.

The proposed SDC parks fee for non-central city development would be more equitable, according to the parks department, because it would account for use of city parks by employees of businesses in areas outside the city center. As a result, the fee for a new non-central city warehouse of 122,640 square feet would jump from $6,623 to $24,528, the fee for a 10,000-square-foot retail building would go from $3,800 to $14,400 and the fee for a 15,000-square-foot industrial structure would go from $3,600 to $13,650.

The commercial SDC rate would continue to be based on a certain amount per square foot in five categories. Parks SDCs for a new hospital inside the central city, for example, would jump from $1.15 per square foot to $2.52. For a hospital outside of the central city, the rate would increase from 51 cents per square foot to $1.93.

Some stakeholders say the rates would be too high. Dave Nielsen, CEO of the Home Builders Association of Metropolitan Portland, said it’s not fair to more than double commercial rates and penalize people with big houses. He said that people with big houses are less likely to have an impact on public parks because they tend to have big backyards, as stated in a critique by the HBA in February.

“It is more reasonable to assume that the smaller urban multifamily units will use the city’s parks in greater numbers than the single-family home residents as they do not have the option of recreating in the front or rear yards or using local HOA parks,” the report states.

But Jennifer Yocom of Portland Parks and Recreation said the SDC is based on the availability of the park system to everyone and is determined by the average number of persons in dwelling units, developed from data from the U.S. Census. Larger dwellings have an average of more people, she said, and Nielsen’s assertion “does not account for the fact that Portland Parks provides many, many recreational opportunities that are not available in the yards or HOA amenities of large homes.”

Sandra McDonough, president and CEO of the Portland Business Alliance, last month stated in a letter to Abbate her concern about fee increases “while the city still lacks a plan” for park maintenance.

The parks department states on its website that funding for all park maintenance will continue to come from the city’s general fund, which McDonough sees as a problem. She said her group endorsed the bond measure “with the provision that a long-term financing strategy … be developed for ongoing maintenance of city parks.”

McDonough wrote that her organization is “extremely concerned” with the negative impact of the increases on new development and that SDCs for parks are already among the highest.

McDonough suggested that a sliding scale be used for workforce and affordable housing developments, and added that the replacement value of Forest Park should not be included in the new rate proposal because “it skews the level-of-service measurements.”

She also urged the parks department to “keep the recovery rate at 78 percent and not the proposed 86.6 percent.” She suggested that higher fees could be phased in over time “to minimize adverse impacts on development.”

McDonough also complained that the proposed rate increases were not revealed until the task force’s final meeting in January.

“A better process would have been to allow this group of stakeholders to see, question, comment and review the actual proposed rate changes,” she said.

But Yocom said the entire report was distributed to the task force at its Dec. 8 meeting.

“The task force had an additional month to consider those rates, and they were discussed again at their final meeting held on January 14,” she said.

On the 14-member task force, Raihana Ansary represented the Portland Business Alliance and Justin Wilson represented the Home Builders Association. Other members include community members and representatives from the League of Women Voters, Coalition for a Livable Future, Portland Development Commission, Development Review Advisory Committee, Concordia University and the Portland Parks Board.

If City Council approves the proposed SDC rates for parks, they will take effect July 1.

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