Interstate Corridor

Interstate Corridor Urban Renewal Area Advisory Committee Meeting
OAME – 4134 N. Vancouver

ICURAC Special Budget Meeting Notes
February 25, 2004 at 6:00 pm

Attendees: Public: Stephanie Luciano; Committee, Sheila Holden, Walter Valenta, Kay Newell, Julie Metcalf-Kinney, Scott Jensen, Lisa Home, Carl Flipper, Pam Arden, Warren Fluker, Pauline Bradford, Marque Scherer, Lenny Anderson, Doug Hartman, Cathy Galbraith, Cynthia Sulazki (for Betsy Radigan), Brad Halverson, Larry Mills; Staff: Lois Cortell, Carol Herzberg, Leah Halstead, Fred Atiemo, Mark Murray, and Art Pearce

Welcome & Introduction

Co-Chair Walter Valenta welcomed everyone and introduced the principal themes of the meeting as future revenues, past spending, next year’s budget balancing, looking forward five years, and considering priorities in the URA. Lois distributed the budget handouts and introduced Mark Murray, PDC budget analyst and Fred Atiemo, PDC Business Finance Manager.

Public Comments & Announcements

Cathy Galbraith asked about the TriMet $25 million savings and how that was being considered. Brad Halverson reported that TriMet had provided updates to the IMAX Citizen Advisory Committee twice and there are handouts available describing the draft plans. Lois Cortell can distribute this information to interested ICURAC members. Lenny Anderson commented that generally TriMet wants to retain and spend as much as of the savings as possible along the alignment but the Federal Transit Administration has to approve all expenditures and there are limitations based on the original scope of work submitted with the original funding request. Expenditures for transit-oriented residential development could be a part of it and TriMet is talking about other project ideas. Walter invited the group to the March 15th IMAX Citizen’s Advisory meeting where they will be working on more specific project ideas.

Revenue Projections Follow up

Walter reported that he had sat with PDC finance staff to understand and get answers to the various financial questions that came up at the last meeting. He started by explaining how revenues estimates were based on assumptions of assessed value. He noted they were preliminary and will be updated regularly as more information is available. He compared the light rail debt service to making a mortgage payment. As the assessed values increases the City can take out more bonds and PDC can draw more lines of credit to fund projects. There is a debt payment each year on the bond and what is left—known as the “du jour” – goes down when we when have bigger loan payment. We need to pay $30 M, but only have $25M now for 04/05; but if more is available more will be borrowed, so the debt payment could go up in the next draft budget. Interest and charges augment this.

Carl clarified that we’re looking only at du jour; asked why other urban renewal areas look at projects first. Lois noted that the budget does not reflect a complete list of projects, some urban renewal areas have unfunded projects listed (but not all do) but the unfunded list in Interstate is so vast given the resource constraints. Leah Halstead added that the older URAs have the ability to issue bonds based on planned projects since their capacity to pay back the bonds is greater. Interstate still doesn’t have capacity to bond much so projects generally rely on du jour. Co-Chair Sheila Holden suggested we show more projects unfunded to show the need. Walter said the light rail debt is an estimate – it may be greater or less – if we are able to bond the entire $30M in one year.

The du jour amount (about $2.5 million) is also based on assumptions that will change over the next months as more information is available on assessed values in the district—this may change a couple of times. Sheila asked about the difference between floating a bond and a line of credit. Mark Murray explained that the City agrees to use their credit worthiness to get a line of credit (like home equity) with the understanding is that when PDC issues the bond the line of credit will be paid back. Sheila clarified that the line of credit + du jour = money available to spend. When PDC pays back the city’s line of credit it is paying back the line plus interest. Mark stated the district’s funding should get better over time as assessed values increase and the light rail obligation is paid off.

Lenny suggested the ICURAC look at all the strategies and plans, look at the ICURAC’s vision for the district and make a dream list of projects. He suggested using a professional facilitator. There was general agreement about starting a list, which would also help the ICURAC to consider new opportunities as they come in. Lenny provided the example that the Killingsworth Streetscape discussion started with the ICURAC Transportation Subcommittee and that it may have had a head start in terms of the broad support for other funding because it had been discussed in that forum and there were opportunities to leverage Portland Community College’s campus investments.

Cathy recommended and committee members agreed that the meeting needed to focus on this year’s budget and that the ICURAC look at the project list in a later meeting.

Draft FY 04/05 Project & Program Budget Overview

Lois Cortell summarized the budget memo that was provided to ICURAC members before the meeting and provided a quick overview of the three department budgets.

Department specific comments/recommendations

Housing Department Budget: Leah summarized the Housing Department budget. The Killingsworth block project is the main line item - $600,000, which assumes site acquisition loan payoff, site preparation activities, and development financing. The total budget will include a carry forward $800,000 from the current 2003/2004 fiscal year. The current budget is constrained because PDC borrowed funds from the Enterprise Foundation for the site acquisition totaling $1 million plus interest payments (up to a total investment of $1.2 million). The development pro forma for the project is not firmly set yet, but there is a general idea of what the development needs are based on the development proposal submitted. Lisa Horne from Peninsula CDC (a member of the selected Killingsworth Block development team) said the total cost to build the Killingsworth project is currently about $8 million. Walter noted the project won’t pencil out without public assistance. Lenny encouraged the ICURAC to look at the public subsidy in relationship to a return on investment and leverage, and that 1:6 ($1 of public funding for $6 of private funding) seemed reasonable. Sheila noted the importance the project meeting URA goals and Cathy expressed concern about scale of the project.

Leah reported the proposed $50,000 for Interstate housing would be mostly predevelopment work to determine the types of projects to spend future funding on. This is similar to the Interstate Redevelopment item as was summarized by Lois. There was concern raised about how the Killingsworth block was acquired. Lois noted that during property acquisition there has to be a period of confidentiality and that this is a typical process for sensitive negotiations. Larry Mills said the key to the Killingsworth Block development was the Request For Proposals (RFP), and that as more properties are acquired the ICURAC should focus their energies on the RFP because that will drive the projects.

Cathy asked about the $150,000 earmarked for homebuyer assistance, noting there are substantial homebuyer assistance programs available city-wide and asked why the rental preservation/rehab budget was so low. Leah stated that most home buyer assistance programs do not reach low and moderate income residents enough, so PDC has products that it combines with existing homebuyer programs to reach a lower income level. PDC programs can also buy down rates and provide renovation funds to existing homeowners. There are also a number of PDC administered loans that aren’t urban renewal funded including the Oregon Residential Bond Loan and Fannie Mae loans.

Sheila expressed concern about the effectiveness of PDC in getting these loans to local residents. It was stated that potential buyers who have called PDC are told there are programs for them and that the HOME 24 program funding did not go to North/Northeast residents. Leah responded that PDC now has someone on staff assigned to investigate how to revise program to work with prices/issues in the Interstate area, and we are trying to do more and better outreach and addressing minority homebuyer issues. Leah stated that 20-25% of applicants for the HOME 24 program are northeast residents out of about 350 total applications. She also stated that the Oregon Residential Loan program which is associated with HOME 24 is available to anyone right now allowing people to access the low 4.95% on residential rates even while the HOME 24 program is closed. Doug Hartman said he thought $150,000 allocated to home buyers is some of the most effective money out there for home buyer assistance. He encouraged people to call Phyllis Gaines at PDC because there is funding currently available and we need to get the word out. Leah also reported that the Portland Housing Center Grant which is intended to leverage federal funding for homebuyer assistance is having problem finding qualified buyers and homes in Interstate.

Lois reiterated that the goal of the meeting was to review the proposed budget and provide feedback before it goes to the Commission for consideration. The ICURAC may agree or disagree with the recommendations. There is a public hearing in late April, more changes may be made, and then the budget is adopted by the Commission in May. Carl Flipper asked if the ICURAC is recommending any changes. Lois summarized that she heard concerns about the Killingsworth Block project but the ICURAC understood the Smart Growth loan had to be repaid. She heard there was support for homebuyer assistance but concern about how best to get the funds out. There was also support for rental rehabilitation/preservation if possible. Lois stated that the priorities and approximate numbers are more critical now than the exact budget amount.

Development Department Budget

Lois said the Development budget covers three of the URA’s strategic areas, Station Areas, Community Livability, and Transportation. Interstate Redevelopment is used for such things as market studies, DOS predevelopment, station areas efforts.

Cynthia Sulaski reviewed the proposed Parks budget, which falls under the Community Livability category. She noted that the Parks sub-committee met monthly and aimed to reach parks throughout the URA, with concentration on improvements to the neediest parks To date, she noted, the sub-committee has not recommended money to be put into land acquisition and trails. There are about 100 projects identified on the Parks needs assessment. Walter noted that the Park subcommittee was a citizen driven effort, whose members have done their homework and that previous subcommittee discussions eliminate ICURAC-wide discussions at the micro-level. As a result, he noted, the group had moved ahead on several projects, while projects in other areas languished.

Lenny asked how much leverage was being generated from the Parks projects and was told that the Trenton Park project, budgeted at $41,000, was being leveraged at 50% from the Parks levy. It was noted that the Community Livability budget also included a $25,000 allocation for an ongoing historic home painting project. Sheila asked for input on the community livability budget. The group consensus was that it wanted to fund the budget at $150,000 and if there were leftover carryover funds would want to fund an additional $25,000 for two identified lesser priority projects. In later years, the group would consider acquisition of parks

Transportation was reviewed by Art of PDOT, who noted that the Russell and Denver streetscapes are currently unfunded Lenny suggested that they get in line as potential projects. It was noted that Emanuel Hospital is making a permanent parking lot on Russell and this project could be a leverage opportunity, working with Oregon Convention Center URA, the adjacent urban renewal area (which includes a large part of Russell) [Follow up note that PDOT sent a letter to Michael McElwee, PDC’s OCCURA manager, requesting that $1M be considered for fund from OCCURA on Russell in a future year. It did not get budgeted.] Lenny said that Killingsworth streetscape would be the first big opportunity to do work that sits at the center of neighborhood, said there was a spectacular turnout in support of the project at City Council when that plan was accepted.

Lenny said a proposed company expansion on Swan Island might hinge on the MTIP Going Street rail overpass replacement project. If built, it would be funded from a variety of state bridge & freight funds (OTIA?) as well as an LID. He suggested that the URA be a partner ($.5 to 1.5 million) in a larger project, and that some of the local URA funds could then be used to improve the bike/pedestrian route along Going Street to the same standard as required for new construction. The potential company expansion/consolidation would add up to 1,000 jobs and add close to $100 million to the TIF tax base.

Art noted that Killingsworth streetscape is still $100-$150,000 underfunded. The question was raised that if there are funds available and/or carryover from this year, was there support to increase it? Lenny said yes, that he prefers giving additional funding to Killingsworth to get the project done correctly. Doug suggested keeping it at $450,000. That might come at the expense of a block or two not being done. There was agreement that Art would go to other partners and say try to leverage more funding before changing the amount.

Lois noted that Interstate Redevelopment is also under funded. It would be used to include projects out of the current Kenton stimulus plan. If there is activity at major station areas, it allows us to respond, also on major commercial corridors, like Killingsworth, Russell, Vancouver/Williams. We still need to seek how much carryover we have unspent from this year.

Economic Development Department Budget

Economic Development this year will work differently by wrap all loan programs into one Ec Dev tool kit so businesses can work with Finance officer to find the loan product appropriate for their need. Both storefront and business loans are fully encumbered this year. They are underfunded. Business recruitment was not spent this year. A few years out, based on the industrial lands study, they are hoping to acquire/have large jobs related projects. It was pointed out that of the $90K business retention fund only $2K has been spent. Fred said at the end of the fiscal year they can redirect business recruitment funds to storefront improvement or business loans. Doug suggested if it was not spent by such and such a date to move it to another Economic Development source. Kay noted that Kenton needed to recruit a major regional draw, suggested that money be used to kick-start for retention and recruitment there, to leverage the redevelopment study. Larry said he was approached by a person who wanted to put in a business but needed funds. Lois encouraged him to call her.

Final Public Comments & Adjourn

There was a comment about TriMet describing the large number of new businesses opening up on Interstate Avenue during the VIP IMAX ride in February,. There was a request to invite TriMet to present their report on the number of businesses that went out of business and that are now open. [Follow up note: TriMet is happy to send a written report on this topic to the ICURAC for the April 19th meeting, but they are not available to come present, because of all the grand opening event planning. However, they can attend the regular July 19th ICURAC meeting to follow up with any Q&A on the April report.}

There was a comment about getting an ICURAC preview ride on the IMAX, perhaps including the Interstate businesses who have received ICURA funding. Brad Halverson and Lois Cortell will coordinate to try to do this. [Follow up note, this has been set for April 6th at 5:30 starting at the IMAX Rose Quarter station.] There was an announcement about the next IMAX advisory committee meeting on March 15th at 6 pm, where the savings spending and the grand opening events are likely agenda topics.

There was an announcement that the next ICURAC meeting is set for its usual time, on April 19th. To facilitate that meeting, there was an announcement that the former Station Area Assessment Committee is likely to be called together in advance to talk about the Killingsworth Station mixed use project. When a time and date is set the ICURAC will be notified too if members would like to attend. [Follow up note, this is set for April 13th at 6 pm at OAME; the 11 original committee members have been called.]

There was a request to have more information about the status of the HAP-Alliance situation at the April 19th meeting or at a special meeting on that topic for interested parties.

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