North Macadam

North Macadam District
Urban Renewal Advisory Committee Meeting
June 24, 2003
8:30 a.m. – 10:00 a.m.
Portland Development Commission

Members Present: Rick Saito (Chair), Pasquale Pascuzzi, Steven Shain, Homer Williams, Glen Taylor, Lois Davis, Jerry Ward, Will White, Abe Farkas (staff), Cheryl Twete (staff)

Members Absent: Mark Edlen, Barbara Walker, David Stephens

1. Welcome & Opening Comments

Mr. Saito opened the meeting at 8:40 a.m. He welcomed the Committee members to the meeting.

2. Review & Approval of May 15, 2003 Meeting Minutes

Mr. Saito asked for any comments on the minutes from the previous meeting. There were no comments and the minutes were approved as submitted.

3. South Waterfront Greenway Development Plan Update

Kia Selley (Development, PDC) provided an update for Parks project manager Henry Kunowski. The professional services contract with the Walker Macy team will be presented to Council June 25, 2003 for approval. Following this approval, a notice to proceed will be issued to the consulting team. The project will start on July 1, 2003.

The draft public participation plan for the Greenway Development Plan will be available within the next week. Also within the next two weeks, the composition of the Greenway Development Plan advisory committee, Project Advisory Team (PAT), will be announced. The Greenway Development Plan is expected to be finished by February 2004.

4. Aerial Tram Update

Matt Brown (Portland Office of Transportation) passed out the draft Work Plan for the project developed by the Tram Citizen Advisory Committee (CAC). The last CAC meeting was June 17, 2003. Community issues were identified at this meeting and the work plan was developed. The CAC has been formed to give advice on the project and make recommendations to Portland Aerial Transportation, Inc. (PATI) and the City Council.

Several projects are associated with the Tram project (see page 3 of handout). The neighborhood along and underneath the alignment is being analyzed. Pedestrian connections to the South Waterfront District are potential projects as well as improvements per the South Portland Transportation Plan. Recommendations for neighborhood enhancement and mitigation will be prepared along with a package of recommendations for the Aerial Tram project. These recommendations will be presented to City Council in 2004 for their review and approval. A total of $2M is currently allocated for neighborhood improvements as part of the Funding & Financing Plan for the Central District. Additional funding may be needed and sought from other sources..

Four design development steps are planned for this project (see page 7 of the handout). The end product of the first step is the work plan for the project, which is now in draft form. The second step is pre-design with the Aerial Tram design team, which will include refinement of the design program – size of cabins, restrooms at terminus points, etc. The third step is schematic design, which is a more detailed level of design. Some of the neighborhood improvement concepts will take form through this step in the process.

5. Draft North Macadam Urban Renewal Area Funding Strategy Update

Cheryl Twete (Development, PDC) began the Funding Strategy presentation, which was presented in draft form at the last URAC meeting. The Strategy describes how funds will be allocated through the life of the North Macadam Urban Renewal Area (through 2019).

Ms. Twete informed the URAC that the Funding Strategy was presented to the Development Commission on June 11, 2003. In August or September, the Development Commission is expected to adopt the Funding Strategy, which will be updated over time as appropriate.

Jane Blackstone (Development, PDC) reviewed major highlights of the Funding Strategy.

• The Strategy includes $273.8M in resources. The majority of these resources will be dedicated to Transportation and Parking (32%, $89.2M).
• $131M in TIF is expected to be generated over the life of the District (2019) and the majority of these resources will be dedicated to Infrastructure and Utilities (24%, $31.1M).
• The leveraging of public funds is considerable, approximately $1.6B of investment in the District.
• In response to a request at the last URAC meeting, handouts provided additional detail on committed versus uncommitted funding sources.

Mr. White asked for the assumptions that were used to calculate District development outside of the Central District. Ms. Blackstone responded that the funding strategy and TIF projections are consistent with the South Waterfront Plan assumptions (10,000 jobs and 3,000 residences).

Mr. Ward asked for the TIF investment inf roads and other infrastructure, excluding Tram and Streetcar. Ms. Blackstone referenced the handout and said that TIF funding of basic street improvements through 2007-08 is estimated at $6.6M.. She also pointed out that an additional $2M investment is anticipated for neighborhood improvements.

Mr. Pascuzzi asked if it would be possible to break out the LID amounts from the rest of the private investment. Ms. Blackstone responded that she could bring it to the next URAC presentation.

6. Housing Strategy Update

Jane Ediger (Housing, PDC) began by saying that the Strategy was presented at the June 11, 2003 Commission meeting. She said that Commissioner Russell requested more clarity in Section 9 as to how to acquire land to further the goals of the Strategy. The revised Strategy will provide more detail in response to this request. A clarification as to the broad range of income levels served in this District has also been made in the revised version.

The Strategy points out that the city-wide goal for affordable housing will not be met because of constrained funding. In three years, District build-out will be reviewed to see if affordable housing goals can be revised to achieve the city-wide housing goal.

Mr. Saito asked if the Strategy is for the entire North Macadam urban renewal area. Ms. Ediger responded that the Strategy is for the entire North Macadam urban renewal area, not just the Central District.

Mr. Saito asked if the Strategy would be revised based on City-wide performance of affordable housing goals. Ms. Ediger said that every couple of years, the Central City is reviewed to understand how well the City is meeting affordable housing goals.

Mr. White commented that 14 affordable housing advocacy groups are following the North Macadam urban renewal area redevelopment. The groups are interested in how the urban renewal area will meet City-wide affordable housing goals, but they are cognizant of the District’s funding constraints. TIF is the major potential revenue resource for affordable housing because block grants are limited. The production goal in the South Waterfront Plan District is currently 788 units, with the understanding that if additional funds become available this baseline would be increased. These 14 housing groups are endorsing the baseline of 788 units, with the understanding that after 3,000 housing units are completed the additional TIF revenue from additional housing units be dedicated to increasing the number of affordable housing units.

Ms. Ediger said that she would distribute a revised version of the Strategy to the URAC via email. The PDC will be asked to endorse the Strategy at the next regularly scheduled meeting on July 9, 2003 at PDC (Commission conference room).

7. Central District Development Agreement Briefing

Abe Farkas (Development, PDC) began by noting that over the past 5 years the extensive South Waterfront District planning process has included two major public involvement processes with over 200 public meetings. Those planning efforts have created the foundation upon which the Central District Development Agreement has been built.

The Development Agreement responds to several major public goals. The Agreement satisfies the goal of economic development by establishing a platform for research for Oregon Health & Science University (OHSU) and later, the Oregon Graduate Institute (OGI) and Portland State University (PSU), creating Portland’s equivalent of a major university that can drive comprehensive research efforts.

The Development Agreement addresses the goal of affordable housing by addressing affordability and ensuring a broad range of housing types. The goal to establish the Greenway and District parks as well as sustainability with LEED requirements and innovative stormwater management were also key considerations. The Agreement also strives to integrate women, minority, and emerging small businesses into the project workforce.

The Development Agreement also includes remedies to ensure protection for private and public interests in the deal.

Mr. Farkas turned the discussion over to Cheryl Twete (Development, PDC). Ms. Twete discussed the contents of three handouts made available at the meeting: Development Agreement Review and Approval Schedule, Summary of the Proposed Development Agreement, and the matrix that describes “How Central District Project Achieves South Waterfront Plan Goals”. Ms. Twete pointed out that the next step in the Development Agreement review and approval process is a PDC public work session and hearing on June 25, 2003.

On July 9, 2003 at the PDC regularly scheduled Commission meeting, the PDC will hear public testimony and take action on the Development Agreement. On July 10, 2003 the City Council will hear public testimony on the Development Agreement and is expected to take action.

Ms. Twete began by establishing the context of the Development Agreement. Over the last 5 years, an extensive public planning effort has been in-progress for the South Waterfront District. The South Waterfront District Plan was adopted in November 2002 by City Council, which has guided the Central District Development Agreement negotiations. The goals for the District are high -- 10,000 jobs, a minimum of 3,000 housing units, with a broad range of housing types and affordability, an exemplary 100-foot wide Greenway, public transit (bus, Streetcar, Tram) to address the limited transportation portals and reduce parking demand and congestion, a series of parks distributed throughout the District, and a life science economic development focus.

Ms. Twete then walked through the Development Agreement Summary Document. The full Development Agreement will be available to the public on June 27, 2003 on the PDC website as well as via email upon request. The Development Agreement is a business deal between the PDC and private investment entities and OHSU.

Development Agreement negotiations began with very broad goals and the desire was to achieve these goals early on in the District. Redevelopment in the district has not happened for 15 years. The need for taxable development was also recognized because tax increment financing is needed for public investment in parks and public transit. Appropriate measures for protecting public and private investment through remedies were also incorporated.

The Development Agreement recognizes a three phase build-out in the Central District. A high level of detail has been included for Phase 1 of the development program. Detail of subsequent phases will be provided later.

Total private investment in Phase 1 is $440M. Total build-out projected through all three phases will potentially include up to 2,700 housing units with 1.5M sq. ft. of OHSU space. The total public and private investment in the Central District at full build-out will be $1.3B.

State and Federal funding will be pursued to achieve Phase 2 and Phase 3 public projects. These projects include Final Greenway Improvements, Final Neighborhood Park Improvements, Streetcar to Bancroft Street, and the Economic Development – Bioscience Accelerator.

A 125-foot wide Greenway tract will be dedicated to the City in 2006 (the required Greenway setback is 100 feet).

The Development Agreement includes a full range of public benefits:

Affordable Housing –430 units minimum. The Phase I contribution toward this target is 30 affordable ownership units for persons with 80-120% MFI and 200 apartments affordable to persons with 0-100% MFI.

Economic Development – OHSU research and clinical programs are expected to catalyze bioscience industry growth in the District to create more stability for the local and regional economy. A total of 4,500 new quality jobs are projected for OHSU Central District and Marquam Hill Campuses. PDC will invest $5M in OHSU’s first building to further this goal and support commercializable research.

M/W/ESB and Other Contracting Requirements, Workforce Training and Hiring Program and LEED Certification are other public goals that have been at the forefront of negotiations.

Provisions are made in the agreement that provide gap payments to the City if private obligations are not met. This ensures that the City TIF needs are met to continue public investment in the District. This is a unique provision that is a fair tool for both the City and the Developer parties.

If OHSU does not perform, damages will be paid to the City.

Discussion:

Mr. Pascuzzi asked how the $5M initial OHSU investment would be funded. Ms. Twete said that the $5M would come from the Strategic Opportunity Fund.

Mr. Ward asked how the economic accelerator funding would be provided. Ms. Twete responded that this funding has not yet been confirmed.

Mr. Shain asked about how the funding and financing plan would be incorporated into the Development Agreement. Ms. Twete said that a six-month check-in will happen prior to development obligations to ensure that all necessary financial resources are confirmed. Basic contingencies must be in place before projects move forward.

Mr. Shain asked for information on the PGE line assessment. Ms. Twete said that this assessment would bring PGE trunk line service into the District. Ms. Blackstone said that PDC is awaiting a tariff proposal from PGE to front end the funding of the trunk line.

Mr. White asked if the Development Commission would be reviewing more detail of the Development Agreement. Ms. Twete responded that the Development Commissioners had already been briefed on key elements of the Development Agreement.

Mr. White presented comments from 14 affordable housing advocacy groups.

1. NMI/RCI are developing a large share of the total housing units in the Plan District, but a disproportional share of affordable housing production.
2. Given the proposed number of market rate housing units in the Central District, the public investment may not benefit a broad range of the City’s residents.
3. The proposed Central District affordable housing production does not address housing needs for 30% MFI and lower, which is Portland’s most pressing affordable housing need.
4. In the later phases of build-out in the Central District, when funding is not as constrained, the developer is not required to build out their proportional share of affordable housing. After 3,000 housing units, the production of affordable housing should be accelerated to more closely match the city-wide income profile.

Mr. Ward discussed the Corbett-Terwilliger Lair Hill (CTLH) neighborhood TRAM mitigation priorities, presented earlier to the Tram Citizen Advisory Committee (CAC) and sent to the Board of Portland Aerial Transportation, Inc. (PATI).

1. Downsize Naito Parkway to the configuration and dimensions similar to those of existing SW Corbett Street.
2. Reestablish connections across Naito Parkway for east-west neighborhood streets.
3. Remove “spaghetti” at the west end of the Ross Island Bridge.
4. Redirect Highway 26 around the Lair Hill neighborhood.
5. Provide an “intelligent traffic management” system along Macadam Boulevard – traffic synchronization, hazard warning message boards, etc.
6. Create a program for City purchase (at fair market value) of properties for owners who want to relocate for a period of 5 years after tram operation.
7. Preserve existing community gardens on Gibbs Street and Naito Parkway.
8. Provide a pedestrian connection from the CTLH neighborhood west of I-5 to the South Waterfront District and develop a system for managing commuter use of residential parking west of I-5.

Mr. White said that it would be difficult for him to recommend approval of the Development Agreement given his stated concerns regarding the current Central District affordable housing proposal.

Mr. Williams clarified that with student housing in the calculation, 20% of the units in the Central District will be affordable units. He said that while student housing is not affordable housing it is also not market rate housing, but it confuses the calculation of affordable units since student housing units are included in the total housing production number. Mr. Williams noted that 2000 market rate units are planned in the Central District along with 430 affordable units and 250 student housing units. The South Waterfront Plan calls for 788 affordable units in the entire 130-acre Plan area, not just the 31-acre Central District.

Mr. Shain said that there is no reason for the URAC not to move forward their recommendation of the Development Agreement. If the URAC does not make a recommendation there is no clear message sent to the Development Commission.

Mr. Ward said that the process should not move forward until CTLH concerns are addressed. Ms. Twete responded that the Development Agreement is not the only place for resolving CTLH concerns.

Mr. Saito urged Mr. Ward to provide him with a copy of the CTLH letter detailing TRAM mitigation priorities and a summary of affordable housing concerns from Mr. White. He asked if the Committee should follow Mr. Shain’s recommendation or if the URAC should take more time to prepare their Development Agreement recommendations.

Mr. Saito announced the three upcoming public involvement opportunities.

Special PDC Work Session & Public Hearing
June 25, 2003
3:00 – 5:30 p.m.
PDC Commission Conference Room

PDC Meeting – Public Hearing/Decision
July 9, 2003
3:00 – 5:00 p.m.
PDC Commission Conference Room

City Council – Public Hearing/Decision
July 10, 2003
2:00 p.m. Time Certain
City Council Chambers

Mr. Saito stressed that the Committee needs to make a recommendation to the Development Commission on the Central District Development Agreement. He recommended that the URAC discuss the Development Agreement further at another meeting, prior to the PDC meeting on July 9, 2003.
Mr. Shain pointed out that the URAC recommendations may be more effective if presented to the Development Commission at the June 25, 2003 work session instead of at the July 9th public hearing and decision.

Mr. Shain moved that the Urban Renewal Advisory Committee (URAC) recommend approval of the South Waterfront Central District Development Agreement along with comments from URAC member Mr. Ward of the CTLH neighborhood and URAC member Mr. White of the affordable housing community.

Mr. Pascuzzi seconded the motion.

Mr. White said that he would not be able to support Mr. Shain’s motion unless a response to housing concerns could be provided prior to the PDC work session on June 25, 2003.

Mr. Shain noted that there would be additional forums for public input on the Development Agreement at City Council. Mr. Shain also pointed out that the Central District reflects only a portion of the solution to affordability housing goals.

Vote on the motion:
In favor – Mr. Shain, Ms. Davis, Mr. Williams, Mr. Pascuzzi, Mr. Farkas
Opposed – Mr. Ward, Mr. Taylor, Mr. Saito, Mr. White

Mr. Saito suggested that another URAC meeting be scheduled for Monday, July 7th (8:30 a.m. – 10:00 a.m. at PDC) for further discussion. Prior to that meeting, the full Development Agreement will be sent to the URAC for additional discussion of the concerns raised at the meeting today.

Mr. Saito asked for PDC staff to brief URAC members who are not present at the meeting.

Mr. Shain asked for PDC staff to prepare a summary of the motion, vote and concerns raised at the meeting today for URAC use at the next meeting scheduled for July 7, 2003.

Mr. Saito said that he is not suggesting that the Committee hold up the Development Agreement review process but that they thoughtfully consider the issues presented at the meeting today by reconvening on July 7, 2003.

8. Other Discussion/Public Comments

A concern was expressed about the building heights being proposed in the South Waterfront District. Mr. Farkas and Mr. Shain both responded that building heights were discussed and approved through the South Waterfront Plan development process led by the Bureau of Planning. The South Waterfront Plan was approved in November 2002.

Mr. Saito recommended that building heights concerns be discussed with the Bureau of Planning.

9. Closing Remarks

Meeting adjourned at 10:30 a.m.

Next meeting tentatively scheduled:
July 7, 2003
8:30 a.m. – 10:00 a.m.
Portland Development Commission
Commission Conference Room

The purpose of the meeting will be to discuss the Central District Development Agreement and forward recommendations to the PDC.

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