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With PSU's endorsement, sweeping urban renewal proposal moves forward
Author: Matt Kish, The Portland Business Journal
Posted: May 5, 2014

Click here for the original article.

Mayor Charlie Hales has reached a deal with Portland State President Wim Wiewelthat removes the biggest hurdle to a sweeping overhaul of the city's sprawling urban renewal program. The deal has skyline-changing implications and will determine which parts of the city benefit from millions of taxpayer dollars.

Earlier this year, Hales came forward with a proposal to refocus the city's urban renewal program on what it was intended to do: fix blighted areas.

That proposal meant dismantling a 2012 urban renewal area around Portland State University. The district would have provided roughly $169 million in funding over 30 years for real estate projects in the area. Portland State President Wim Wiewelobjected to the mayor's initial proposal, saying it would have jeopardized the university's efforts to meet the state's ambitious education goals.

After a series of meetings, the mayor and Wiewel on Monday said they had reached an agreement to steer $25 million to Portland State over the next 10 years, financing that roughly replaces what Portland State would have received over the 30 years of the education urban renewal area.

The $25 million could go towards several near-term projects, including redevelopment of the University Place Hotel.

The deal will allow the city to refocus its urban renewal efforts on more blighted areas, such as the area around OMSI and the South Waterfront, each of which has more dilapidated areas than Portland State, which while sleepy is still significantly more developed.

“This proposal asks: Are we using urban renewal correctly? Is it doing what it’s supposed to do? And can we make our existing tax base serve all the local governments better, without asking for any new tax dollars?” Hales said in a news release Monday.

In a nutshell, urban renewal works like this: When city planners want to improve a blighted area, they draw a circle around an area on a map. As property values in that area rise, the city steers the increased property taxes to capital projects inside the circle. Critics say urban renewal takes funding away from other essential services, such as schools.

“The mayor and I understand the importance of PSU’s role in the city, and the city's role in PSU,” Wiewel said in a news release.

The mayor's office estimates the proposal will put $1.06 billion of property back on the tax rolls. That property will generate $158 million for taxing jurisdictions over the next 30 years. Six of the city's 11 urban renewal areas would be affected.

On Wednesday, City Council will take a non-binding vote on the proposal. The Portland Development Commission will then study the issue for six months before the Council votes again.

Hales spokesman Dana Haynes said while the vote is non-binding it was necessary for the mayor to make changes to his budget released last week. Haynes also said the mayor's office knows of no formal opposition to the proposal at this point.