Development Assistance

Commercial Property Redevelopment Loan Program

Creating healthy vibrant neighborhoods and business districts throughout the City

The Portland Development Commission (PDC) makes loans to assist private partners with redevelopment, new development and tenant improvements that encourage property revitalization and wealth creation within urban renewal areas (URAs).

The Commercial Property Redevelopment Loan Program is intended to supplement equity contributions and traditional bank financing, and make a project feasible by filling gaps between available financing and project costs. PDC Loan terms are flexible; interest rates can be below market, and can be subordinate to primary financing.

A PDC Redevelopment Loan provides financial assistance for commercial or mixed use development projects that demonstrate a significant public purpose, which can include:

redevelopment of blighted sites or buildings (vacant, abandoned or under-utilized)
preservation of historic buildings, identified as listed or eligible for listing on the National Register of Historic Places or listed on a local Historic Inventory
transit-oriented development, defined as mixed-use development within ½ mile of light rail stations and ¼ mile of frequent transit service.

Eligible Uses of Funds

PDC provides loans at different stages of the real estate development process for a variety of project costs. Most costs related to the development are eligible for PDC’s assistance, including:

hard and soft project costs,
development feasibility analysis,
property acquisition associated with a redevelopment project,
environmental analysis and remediation,
seismic upgrades and tenant improvements, and
public infrastructure improvements related to a development project.

Funding for this program is through tax increment financing (TIF) and, therefore, is tied to the infrastructure and physical improvements (including tenant improvements) of real estate projects within URAs. Loans types available include predevelopment, construction, and permanent financing.

Necessary Criteria

Project is commercial or mixed-use (contains two of the following uses: office, retail, residential, community service, or commercial). Residential product types can be ownership or rental,
Project is in an advanced stage of design or already has permits for immediate redevelopment, construction or renovation, i.e. ‘shovel-ready’,
Applicants can demonstrate that they have secured primary financing,
Project contributes towards PDC's goal to support sustainable building practices;
Project contributes to PDC’s goals for labor diversity on construction projects, and
Proposed project meets the URA Plan goals and objectives - www.pdc.us/ura

Preferred Criteria

Project is a catalyst to spur additional private redevelopment and reinvestment in the neighborhood. Elements of catalytic projects include:

is supportive of job creation, job growth or job retention,
is likely to spur additional private investment and revitalization,
is located in a highly visible area or intersection,
project design is innovative yet complementary to the existing neighborhood, and/or
offers an identified service need in the neighborhood.

The PDC loan fills a gap, which can be the funding needed to complete the project or by subsidizing operations through the loan repayment terms, or both. Generally, PDC looks to provide up to 10-20% of the project funding, and can offer flexible loan terms and repayment options to fill the gap.
The project provides or supports long-term job creation.

Project supports PDC goals for wealth creation through homeownership or commercial condominium offerings.
Project will capitalize prior PDC investment such as streetscape improvements and Development Opportunity Services grants (DOS).

Other PDC Requirements for Loans

Applicants may be required to comply with the following PDC policies depending on the PDC loan amount AND the amount of hard construction costs:

Program	Loan Amount* AND*Construction Costs
Workforce Training & Hiring	> $300,000	> $1,000,000
Good Faith Effort MWESB	> $300,000	> $300,000
Prevailing Wage Requirement (See ORS Chapter 279c, Sections 279C.800 to 279C.870)	≥ $750,000	N/A
Green Building Policy *	≥ $300,000	≥10% of the total project cost
* And building structure is equal to or exceeds 10,000 SF.

Eligible Borrowers

Property owners (fee simple or long-term ground lease with term remaining that exceeds the loan term by at least five years) are eligible. Parties in negotiation for acquisition of City-owned property are also eligible. For a Predevelopment Loan, eligible borrowers include parties with an option to purchase the property.

Service Area

All URAs, as funding is available. Currently, funding for new projects is available in these URAs:

Interstate Corridor
Oregon Convention Center
Lents Town Center
River District
Central Eastside
Gateway Regional Center

To Apply

Applicants must complete a PDC Commercial Property Loan Application and provide the additional documents detailed on the application form.

This program is one of many financial assistance products offered by PDC, and staff is available to help you find the tool that best fits your need. Those interested in the program should contact Becki Marsh by e-mail or at 503-823-0308 or Estee Segal by e-mail or at 503-823-3317.

for PDC's News & Information E-mail Lists
View the e-mail archive \| Unsubscribe from our e-mail Lists

Find us on:

Portland Development Commission | 222 NW Fifth Ave | Portland, OR 97209-3859
Phone: 503-823-3200 | Fax: 503-823-3368