November 15, 2010

From The Portland Tribune:

Urban renewal funds up in the air for county-owned site

Multnomah County Chair Jeff Cogen has a special reason for pushing the Morrison Bridgehead redevelopment project now: The county needs the money.

The county owns four pieces of property on the west end of the bridge that are being used as parking lots. At Cogen’s direction, the county is looking for a developer to buy and build on them.

According to Cogen, the county is likely to need the money from the sale of the property to help balance the annual budget that takes effect on July 1, 2011. Although the county is currently projecting a $5 million to $6 million budget shortfall, the gap could be $60 million or more if the next session of the Oregon Legislature substantially cuts spending to close the state’s estimated $3.2 billion deficit.

“By county standards, a $5 million to $6 million shortfall is not as bad as recent budgets have been. But if the state cuts the money that usually flows to the county by $55 million or so, we’re in real trouble,” Cogen says.

The country acquired the property in the 1950s when it replaced the original Morrison Bridge. A 2005 appraisal valued them at up to $8 million, depending on how they are redeveloped.

Cogen knows that many large redevelopment projects have been canceled or postponed because of the bad economy. They include the Burnside Bridgehead project at the east end of the Burnside Bridge, which is currently being redesigned.

But Cogen believes the property uniquely situated for a landmark project. Among other things, it offers unobstructed views of the river and is located along the MAX light-rail line that connects downtown to the rest of the tri-county region.

“The west end of the Morrison Bridge is the gateway to downtown Portland,” Cogen says.

Consistent with goals

Three developers have already expressed interest in the property. One is Portland’s Melvin Mark Companies, which has teamed with the nonprofit organization that has been hoping to build a permanent public market in in the city for many years.

Now the county has issued a formal request for proposals designed to pin down specific projects and financing plans. Responses are due by Feb. 9, 2011. Proposals are also supposed to include the price the developers are willing to pay for the county property.

Cogen says the county may not necessarily choose the proposal that generates the most money for the property. Instead, Cogen says county officials will also consider which project best meets a range of goals.

“We want a project that is appropriate for this location, that will create jobs and boost the economy, and that provides a reasonable return on our investment,” Cogen says.

As Cogen sees it, the right project will include a mix of uses, including ground floor retail space.

“It must be consistent with downtown Portland development goals, which includes retail opportunities,” Cogen says.

Tighter budgets ahead

Complicating the process is uncertainty about whether the Portland City Council will create a new downtown urban renewal project that includes the property. The Portland Development has used urban renewal funds to encourage and support many downtown projects over the years, including the redevelopment of the landmark Meier & Frank building.

The PDC is studying whether the council should create a Central City Urban Renewal Area. A draft plan has it stretching from the Goose Hollow neighborhood to Northwest Portland, with an extension to the Morrison bridgehead site.

The process is in limbo, however, in part because of Cogen. He sits on a committee appointed by Mayor Sam Adams to advise the PDC on the potential urban renewal area. Cogen has repeatedly questioned whether it is needed or even a good idea. Under state law, local governments cannot collect the property taxes on the increased value of the land for their general funds for decades.

“If we’re headed for a period of even tighter budgets, does it make sense to limit our property tax collections,” Cogen says.

No money available

In early October, the PDC sent an e-mail to committee members saying the process was nearing its end. That surprised Cogen, who does not believe the committee members have debated the need for the project yet. He responded with an Oct. 9 e-mail that said, “It appears that this conversation is being short circuited. Am I missing something here?”

Shortly after that, Adams directed the PDC to slow down the process to make sure all concerns are addressed. No new meetings of the committee have yet been scheduled.

Because of the uncertainty, the request for proposals issued by the county says, “No Multnomah County or PDC financial assistance will be available for the development of the project. It is required that development teams submit development concepts and approaches that demonstrate the Property can be successfully redeveloped without Multnomah County or PDC funds.”

The county will not know whether this requirement undermines interest in the property until the Feb. 9 deadline.


Get more information from the Morrison Property website. Download the Request for Proposals here .