Anchoring for the future

Sometimes bigger is not always better. At least that’s the case when it comes to urban renewal projects.

Around the end of last year, Portland Mayor Sam Adams shelved an ambitious urban renewal proposal that sought to redevelop 345 acres of downtown land, after he deemed the project too large for the city’s budget.

Nearly five months later, during his State of the City address in February, Adams came back with an equally ambitious, but perhaps more realistic proposal of an urban renewal project for the downtown area. The latest proposal is smaller in size but places bigger emphasis on Portland State as an “anchor” point in the area.

University administrators are reportedly excited about the new proposal. As a growing institution with about 28,000 students, PSU’s bid to be seen as a major player in the city’s economy may finally be recognized.

PSU was one of the key stakeholders that pushed for last year’s proposal, along with the Portland Development Commission. The plan was met with concerns from the Multnomah County Chair Jeff Cogen over the scope and impact of the project on his county’s budget. While the old proposal called for the redevelopment of 345 acres of land, Adams’ new proposal calls for only 130 acres of downtown area.

What this potentially means for students is that properties in the surrounding PSU area could be turned into affordable housing and academic space. According to an early map outlining the district, the space allocates at least 45 properties to be developed into housing or academic space, which include classrooms and research facilities.

According to Mark Gregory, associate vice president for finance and administration at PSU, the university believes that there is a strong case to be made for the economic benefits that could come from developments around the university district. A large part of those economic benefits come from the university itself, he said.

In a recent booklet produced by PSU, in 2010 the university’s economic impact exceeded $1.4 billion, an amount that represents the multiplying effect of the dollars spent by the school. In real estate alone, PSU spent $62.8 million in new construction, repairs and renovations last year, and the research expenditures stood at $58.2 million. 

Gregory said if the urban renewal works the way it’s supposed to, there are huge potential benefits to be realized for the university. But with any real estate projects, there is a risk that the result may not be as one expected. Gregory himself pointed out that in the past, the Lent and Gateway neighborhood urban renewal projects have not produced the revenue the city hoped for. Still, Gregory said he believes that in this project because its potential benefits outweigh such risks, at least for PSU.

According to Gregory, the purpose of urban renewal is to channel property taxes in a designated area into a separate account, which is then used by the city to stimulate property developments. This brings property value up and drives economic activities.

In the case of the PSU urban renewal project, people living within the district would still pay taxes. However, the county would have to wait 25 years before it received any of the tax revenue. Cogan expressed concerns that taking money away from public goods—such as money that goes toward Portland Public Schools—during the current difficult economic times may not be a wise move.

Dave Austin, communications director for Multnomah County, said given the fact that Cogen’s office learned about the project only recently, it is still early for him to comment on whether he thinks it is good or bad for the county.

According to Austin, Cogen is also interested in learning how and when the mayor will put together a committee of stakeholders to discuss it. 

“What we’re doing is…trading in money today that’s going toward public goods, for future growth and more public goods,” Gregory said. ” People who look at it conservatively say, ‘I’d rather have the dollars today,’ while others say they’d rather take it tomorrow.”

According to Gregory, usually the money that is redistributed toward development projects only covers about 5 or 6 percent of the total cost of the projects. However, to developers, that “seed” money is enough to encourage them to choose one land over another, he said.

Kimberly Schneider, communications director for the mayor, said the Mayor’s Office has not officially identified the major stakeholders in the PSU urban renewal project yet. But due to PSU’s master planning, the mayor is more convinced this time around that an urban renewal proposal is the right step to take.

“We haven’t heard anybody coming forward with opposition to the project at this point,” Schneider said. ?