North Macadam

North Macadam District
Urban Renewal Advisory Committee Special Meeting
For the Central District Development Agreement
Monday, July 7, 2003
8:30 a.m. – 10:00 a.m.
REVISED

1. Welcome & Opening Comments

Mr. Saito opened the meeting at 8:30 a.m. He welcomed the Committee members to the special meeting scheduled for further discussion of the Central District Development Agreement.

2. Review & Approval of June 24, 2003 Meeting Minutes

Mr. Saito asked for comments regarding the minutes from the previous meeting. The minutes were approved as submitted.

3. Revised Housing Strategy Update

Jane Ediger (Housing, PDC) presented the revised North Macadam Urban Renewal Area Housing Strategy. She said that revisions and clarifications had been made to the Strategy based on comments provided by the Development Commission at the June 11, 2003 meeting.

The first clarification, at the end of section 8, states that once 3,000 market rate units are constructed, affordable housing production for the remainder of the District will be based on the City-wide income profile.

The second clarification is for recommendation 9, regarding acquisition of land for affordable housing. Purchase of land for affordable housing is proposed outside of the Central District, either in the South Waterfront Plan area or some other location within the North Macadam Urban Renewal Area; land acquisition within the Central District is not necessary since affordable units are already proposed.

Mr. Pascuzzi asked how land acquisition would be funded. Ms. Ediger responded that the Smart Growth Fund could be used for purchase of land until TIF is available. The Smart Growth fund is a loan that would require repayment. Mr. Farkas confirmed that the Smart Growth fund would require repayment, which would be possible after TIF revenue is generated.

Mr. Shain asked about how PDC would go about purchasing land. Ms. Ediger responded that public transit and allowed density would be factors in selecting property.

Mr. Ward asked if any properties had been targeted for acquisition. Ms. Ediger responded that PDC has not yet targeted any properties for acquisition.

Mr. Saito asked what Ms. Ediger was seeking from the URAC—approval of the Strategy or recommendations on the Strategy. Ms. Ediger said that she is asking the Committee for acceptance of the Housing Strategy. She would like to report to the PDC at the July 9, 2003 meeting that the URAC had accepted the Housing Strategy. The PDC will review and discuss the revised Housing Strategy at this meeting.

Mr. Saito asked about the relationship between the Housing Strategy and the South Waterfront Plan. Ms. Ediger responded that the South Waterfront Plan lays out the goal of 788 affordable housing units. The Housing Strategy makes clear that the build-out of 3,000 housing units does not appear to be the full build-out of the District and addresses what the affordable housing requirement will be, beyond 3,000 market rate housing units.

Ms. Ediger noted that a table in the back of the Housing Strategy describes the City-wide profile percentages.

Mr. Shain said that PDC is not looking at providing housing for families in the District, but is focused on housing based on income levels. This goal will not bring families into the District. Ms. Ediger said that the Housing Strategy for this District discusses the need for providing a broad range of housing types, which could accommodate families. Mr. White added that a yearly review of River District housing attempts to provide family-friendly units.

Ms. Walker said that Portland is making a big mistake by not making the City friendly for families. Family supportive services are needed within this District to support families and make a real difference in bringing families into the City.

Mr. Pascuzzi asked if TIF would be the only funding source for affordable housing. Ms. Ediger responded that TIF and other public funds would be used for affordable housing.

Mr. Shain asked if there is a document that incorporates all of the Housing Strategy changes. Ms. Ediger responded that the revised Housing Strategy is not yet available.

Ms. Ediger added that the Housing Strategy can be revised to encourage family size units in the District.

Mr. Shain said that he supports family supportive housing and noted that the City-wide goal should speak to this issue, not just the North Macadam District Housing Strategy. Ms. Walker seconded his comment. Ms. Ediger said that in discussions with developers for Central City development, the PDC Housing Department is trying to encourage more family-friendly units.

Ms. Walker said that we need to acknowledge that family-friendly units in the Central City do not exist. Mr. Williams said that one of the problems is the focus on the economic cross-section that needs to be served. He said that the South Waterfront District is the perfect place for families, particularly with all of the amenities that are planned.

Ms. Walker added that we need to focus more on why families are important to the future of the City. She said that it may be appropriate to have a District that is not as family-friendly, but the entire Central City should not ignore this need and discourage families from living in the City. Mr. Williams said that South Waterfront is an excellent opportunity for families with kids because of the public transit and parks and open spaces. Mr. Shain said that he supports the integration of families into the District and noted that basing affordable housing on income distribution is problematic.

Ms. Ediger responded that the annual resolution that directs how to spend Community Development Block Grant (CDBG) funding includes providing family size units in the context of income distribution. She said that she could strengthen the language that supports family housing. Mr. Williams said that the baby-boomers are not likely to support parks and schools as strongly as the younger folks.

Mr. Saito summarized URAC comments. He began by saying that the connection between the Housing Strategy and the requirements of the South Waterfront Plan is unclear. Ms. Ediger responded that the Strategy clarifies the South Waterfront Plan.

Mr. Saito said that the South Waterfront Plan process involved a lot of people and was an extended process that did a very good job of developing housing policy. He does not want the approved Plan to be affected by a new Housing Strategy.

Mr. Saito asked the Committee if they would like to accept the Housing Strategy given that a redraft is not available. Mr. Williams said that perhaps the Committee should accept the Strategy with the family-friendly policy rewrite. He said that the income distribution and family housing need should be balanced. Mr. Ward did not support acceptance of the Strategy. Mr. White recommended stronger language supporting family housing.

Ms. Ediger added that the Housing Agreement is a dynamic document and she stated that she will continue to take feedback and update the document accordingly.

Mr. Saito asked if the Housing Strategy had already been presented to PDC. Ms. Ediger replied that the Commission reviewed the Strategy at the June 11, 2003 meeting. She said that the primary concern of the Commission was single-purpose affordable housing buildings.

Mr. Williams pointed out that when we look at the balance of the income stratum there are limited dollars to be spent in Phase 1. If we don’t want to address the 0-30% MFI right now, then we should focus on what we can get done, not what we are unable to do.

Mr. Saito pointed out that the URAC is not required to accept the Housing Strategy at this meeting. He asked Ms. Ediger if she had enough information from the URAC to pass on to the Commission and make changes as requested. Ms. Ediger replied that she had enough information, and she thanked the URAC for their time.

4. Central District Development Agreement Discussion

Don Mazziotti (Executive Director, PDC) began the agenda item by emphasizing the amount of effort and time spent working on the Central District Development Agreement. The project is now at a point where we have an agreement that will be a catalyst for the South Waterfront Plan, which North Macadam needs. The Agreement does not, however, answer all of the goals and objectives of the district. Mr. Mazziotti told Mr. Saito that he hoped that the URAC understands that the Central District is only a small fraction of the whole.

Mr. Mazziotti said that the City has been faced with many challenges throughout the history of the District. Initially, the South Waterfront Plan did not have a financing component. PDC has developed a Funding Strategy that will provide the fuel necessary to build out infrastructure for the next 10-15 years of development in the South Waterfront District. A considerable amount of investment is needed in the early years to complete the projects that will generate tax increment financing (TIF). The Funding Strategy relies on a variety of funding sources including TIF, SDCs, State and Federal funding and private funding.

Mr. Mazziotti noted that Barbara Walker was exactly right about the need for family supportive housing. Family housing will not be a primary focus, particularly in the early years of the development. PDC has recently been contacted by representatives of a large private school with interest in locating in the Plan District. Over the next 10-20 years, the District should house people of all family structures and income types.

Mr. Mazziotti referenced two large-scale development projects that he personally has participated in that involved the building of a medical center. The first was the City Center in Philadelphia. While this area anchors what has become one of the premiere research centers on the east coast, it has not been successful in creating a neighborhood. The second project was in Hershey, Pennsylvania. The Hershey Medical Center in Dairy Township does include family housing as well as affordable housing. However, with square footage costs of approximately $10/square foot, the project was easier to realize than Central District costs closer to $60-70/per square foot.

The Central District project takes the realities of the marketplace and weaves them into what will become a huge workplace, but it is just the spark and not the fire. The project will create 1,000 jobs fairly immediately and 500 jobs by virtue of secondary benefits.

After approval of the Central District Development Agreement we can negotiate with property owners to focus on development that brings job improvement. Phases 2 and 3 of the project offer the prospect of satisfying goals that economically are not possible in the first phase.

The Greenway is a regional facility. With a wider Greenway, averaging 125 feet in width, the amount of developable land has been decreased and has thereby increased the cost of land in this area.

Mr. Mazziotti concluded his comments by stating that the Central District Development Agreement will begin redevelopment, which will generate TIF and allow for achievement of public goals.

Kia Selley (Development, PDC) presented a handout that provides background information as to when and why the URAC was established and the roles and responsibilities of the URAC. It also states the purpose of the URAC meeting held today.

Ms. Selley pointed out that the comments and recommendations of the URAC must focus within the Urban Renewal Area and be consistent with approved plans and policies including the recently adopted South Waterfront Plan, Code and Design Guidelines. The purpose of the meeting today is to discuss the proposed South Waterfront Central District Development Agreement, within the context of the Urban Renewal Area, and forward recommendations to the Development Commission for the July 9, 2003 meeting. She pointed out that at the July 9, 2003 Development Commission meeting the Development Commission will discuss the Development Agreement, hear public testimony, and render a decision.

A question was raised as to whether or not the members of the URAC who have participated in the Development Agreement process should vote on the Development Agreement recommendation. Mr. Lazenby asked if the concern related to a conflict of interest issue. Mr. White said that it is less of a legal issue and more of a public perception issue. He said that the public has less confidence in the URAC as an objective review body if URAC members involved in the Development Agreement process voted on the URAC recommendation. Mr. Lazenby said that groups such as the URAC have been constituted by the City and PDC because it is important to get input from stakeholders. If there is a close vote at the URAC meeting, the PDC will take to heart the concerns of the URAC. The PDC however, has the legal authority to approve the Development Agreement with or without the URAC recommendation. He said that it is not a legal problem or a conflict of interest problem. Mr. Shain noted that the URAC is a public interest body; everyone around the table has a different interest in the project.

Mr. Lazenby said that the PDC Commissioners are subject to ethics rules and that they must disclose a conflict of interest or abstain from decision-making. Under definition of the statute, the URAC is not subject to ethics rules. Mr. Ward asked whether or not public comment is required to be heard at the URAC meeting. Mr. Lazenby responded that public comment is not required, but as a matter of politics there should be an opportunity for the public to share their input because it ultimately informs decision-makers.

Mr. Saito said that in response to the last commentary, public comments will be heard although limited to those things that pertain to the URAC charge at hand as described in the handout and presented by Kia Selley.

Mr. Saito began the URAC discussion on the Central District Development Agreement by commenting on the multitude of information that has been made available to the public on the deal. He asked for comments from the Committee. He started by saying that one of the concerns at the last meeting was the amount of information available versus the information that was soon to be released. His main concern has been addressed in that he now has all of the information and was afforded enough review time. He has also had some discussions with URAC members that have provided him with some recommendations.

Mr. Ward said that the CTLH neighborhood board voted 8-0 strongly recommending to the URAC, PDC and City Council that the Development Agreement not be adopted because of inadequate public review time. The CTLH board contends that CTLH Tram mitigation is not addressed adequately in the Development Agreement. Based on those two issues, the Board voted against approval of the Development Agreement and in support of delaying the approval process for 30 days.

Mr. Saito asked for a list of CTLH issues with the Central District Development Agreement. Mr. Ward presented his list of CTLH concerns:

• CTLH interprets that ¾ of the streets to be improved are at the expense of the public.
• The neighborhood park was reduced from 3 acres to 2 acres.
• A pocket park does not provide enough space for families.
• Only $2M has been designated for CTLH pedestrian and bicycle improvements and the proposed improvement lacks specificity.
• CTLH traffic concerns have not been addressed.

Matt Brown (Portland Office of Transportation) responded to the CTLH concerns presented by Mr. Ward. He said that the CTLH Tram mitigation priorities had been addressed by the Tram Citizen Advisory Committee (CAC) within the Work Plan that was made available at the last URAC meeting on June 24, 2003. Not all of the answers have been provided yet, but resolution of these concerns will be necessary to Tram approval. He also said that several of the Tram mitigation priorities fall outside of the Urban Renewal Area so additional resources will need to be brought to the table.

In terms of traffic from the South, $8.3M is being provided for Macadam Avenue access improvements which will include funding for the SW Bancroft/Macadam Avenue intersection. Also, improved Tri met access is being explored. Traffic management for Macadam Avenue is also being reviewed which could include signal synchronization.

Mr. Ward asked what the traffic solution at SW Bancroft would be for people driving south. Mr. Brown responded that if nothing was done in the South Waterfront District, the Bancroft intersection would still be failing. The development in the South Waterfront District is not the issue. The SW Bancroft/Macadam Avenue intersection will be controlled for the north/south flow, which will keep traffic from moving through the CTLH neighborhoods. South Waterfront is intended as a transit-rich development and combined with improvements to north/south traffic movements, traffic problems should be curbed.

Mr. Saito clarified that traffic management planning is in-progress. Mr. Brown said that traffic management plans were prepared in 1999 and that additional improvement is intended.

Mr. Ward reiterated that the Tram mitigation priorities are not reflected in the Central District Development Agreement.

Ms. Walker said that she hears the CTLH neighborhood concerns but believes that their concerns have been addressed and that there is a City commitment to start making long overdue changes. These changes are not funded but that leads to the most important point – the Urban Renewal Area is a perfect candidate for urban renewal. This area has languished for half of a century undeveloped and without the infusion of public funds it will remain a wasteland. For the future of this City, redevelopment of the North Macadam Urban Renewal Area is essential.

Mr. White said that he agrees that the Urban Renewal Area needs some public investment to kick-start redevelopment – a public-private partnership. He is concerned about some of the CTLH neighborhood issues. Housing advocates accepted a goal of 13% affordable housing with 788 units. Now the Development Agreement has further reduced the affordable housing goal to 7%. The River District requirement for affordable housing is 22%. Under the new Housing Strategy the Committee endorsed going to the City-wide income profile in later stages of redevelopment. He is not sure to what extent the Development Agreement incorporates the requirement of the affordable housing percentage meeting the City-wide goal after 3,000 market rate units are constructed.

Mr. White also asked what remedies are in place if the housing market overperforms to expectations. Overperformance of the housing market could mean public subsidy amounts were higher than what was necessary.

Mr. Farkas responded that the Development Agreement allows for more public amenities to be provided if the development is more successful than expected – tier 1 and tier 2 projects could be implemented earlier and more fully. Affordable housing has been moved from a phase II commitment to a phase I commitment and $3M in TIF has been allocated to affordable housing. PDC has approached the Housing and Urban Development Department and the Veterans Administration and will continue working with a broad range of housing advocates to secure funding for affordable housing. If more TIF is available earlier, this funding would be made available to affordable housing, among other public objectives such as Greenway implementation.

In the Framework Plan (1999), lower density housing was anticipated, but now the housing is higher density and has thus become more expensive to construct. Subsidies for affordable housing are in the $30-35,000/unit range so the trade-off has been that not as much of that funding will be made available in the 0-30% MFI range but more in the 50-100% MFI range. If there are additional funds available, the lower MFI range will be reviewed. PDC will also pursue land acquisition within the Urban Renewal Area for development of affordable housing that is not high-rise but within the range of 4-5 stories because this type of development is more affordable.

Mr. Farkas said that the 788 units of affordable housing noted in the Framework Plan (1999) was for the entire 130-acre South Waterfront District so there is opportunity for developing affordable housing in other locations than the 31-acre Central District. Over 400 units of affordable housing are being developed within the Central District per the Development Agreement, but additional units could be developed in other areas within the Plan District. There is a provision in the Development Agreement that allows the developer to build market rate condos instead of apartments if the market for rental housing is not available. The apartments would then be developed in phase II.

Ms. Walker said that that we have now reached a point where we know which priorities we want in later phases of redevelopment. She said that redevelopment is based on TIF so we should all work together to make it succeed so we can get what we want – other public objectives such as parks and open spaces.

Mr. Ward pointed out a concern about trading park land. He cited a portion of the Development Agreement that allowed current park land, not currently developed for park use, to be sold to generate funding for the Central District Neighborhood Park purchase.

Mr. Ward also asked for clarification of section 6.5.1.2 of the Development Agreement. Section 6.5.1.2 reads: “NMI will design and construct an interim improvement that provides ADA accessible public access from a public right-of-way to an outlook on the NMI Greenway Parcel (“Outlook Improvement”). The Outlook Improvement will include a trail or walkway and plantings and may include benches and lighting. The Outlook improvement will allow public access to at least 200 linear feet of the NMI Greenway Parcel.” Ms. Selley clarified that this language requires NMI to develop early Greenway improvements for public enjoyment that span approximately 1 block (200 feet of waterfront) while the Greenway land is still in private ownership. She explained that the Greenway property will be dedicated to the City after 2006 so these early improvements will provide the public with access to the river in this area as soon as June 1, 2004. Also, requiring early interim improvements that are not extensive but support public access and enjoyment is a balanced approach since many of these improvements will be removed when the Greenway Development Plan is implemented. The Greenway Development Plan is a project being led by Parks that will yield a schematic design for the entire South Waterfront District Greenway and design development level drawings for the Central District area. Per the Development Agreement, the City must implement the Greenway Development Plan in the Central District by 2012.

A question was asked about the public funding of the Greenway Development Plan improvements. Mr. Farkas responded that early funding has not been secured and that a phased approach to implementation will be developed both as part of the Greenway Development Plan process and the Greenway Implementation Strategy process.

Mr. Edlen expressed concern that if the URAC does not move forward and recommend approval of the Central District Development Agreement, the City will lose an opportunity. TIF will make possible the funding needed for affordable housing and parks.

Mr. Shain said that he supports Oregon Health & Science University (OHSU) because they are a part of the community.

Mr. Ward asked for clarification as to why the pocket park could not be located next to the Greenway as required in section 9.21.1 of the Development Agreement which reads: “…The site to be offered by NMI to the Parks bureau shall not be adjacent to either the Greenway or Macadam Avenue.” Mr. Farkas responded that the Parks Bureau established this standard for the pocket park location to distribute open space evenly throughout the South Waterfront Plan area.

Ms. Walker clarified that the Greenway in the South Waterfront District will not be like the Willamette River Greenway in the John’s Landing area, where public access is limited to a strip of trail land. The Greenway Development Plan will provide for accessibility of the Greenway and activity in the Greenway. Mr. Williams said that the proposed Greenway in the Central District is 125 feet average in width whenever the Code requirement is 100 feet in width.

5. Public Comments

Mr. Saito opened up the meeting for public comment. He asked to restrict the comments to those within the purview of the URAC task at hand and the Urban Renewal Area.

1. A representative of Prometheus Development, a private property owner in the South Waterfront District, said that Prometheus supports the Central District Development Agreement. Concerned was expressed however about affordable housing requirements that may fall to other District developers. If the Central District property owners build 16% of the required affordable units, this could mean that Prometheus (with only 8 acres of development) may be required to construct a disproportionate amount of affordable housing.
2. The CTLH Neighborhood Land Use Board Chair spoke on behalf of the CTLH neighborhood Board about several concerns.
• The South Waterfront District needs to be considered as part of the CTLH neighborhood. The CTLH neighborhood extends to the middle of the Willamette River and includes the South Waterfront District.
• Although 10,000 jobs are proposed, the Central District Development Agreement does not substantiate this number.
• It is not clear as to why land on 14th and SW Montgomery is mentioned in the Agreement.
• The Development Agreement will impoverish the City because of proposed tax abatements.
• Approval of the Development Agreement should be delayed for 30 days to allow more time for public review.
3. A resident of the CTLH neighborhood asked for an update on environmental remediation in the District.
4. The CTLH neighborhood liaison to the Portland Aerial Transportation, Inc. (PATI) Board noted that the IGA scopes have not been included in the Development Agreement. For this reason, approval of the Development Agreement should be delayed for 30 days. He also expressed concerns about the impacts of District traffic on the CTLH neighborhood. He asked for interim transportation improvements. He also said that the CTLH neighborhood should be a party to the Central District Development Agreement.

Mr. Saito asked for a response to public concerns:

1. Mr. Farkas responded that housing is allowed throughout the 130-acre South Waterfront Plan District and that PDC will work to ensure that the affordable housing goals are spread throughout the Plan District and that construction of the 788 affordable housing units are not focused only within the residential focus area.
2. Mr. Saito clarified that the goal of 10,000 jobs is for the entire 130-acre Plan District, not just the 31-acre Central District. Mr. Farkas added that job creation in the Central District is substantiated, particularly with the OHSU presence. The second concern was about the location of the park land. Mr. Farkas clarified that Parcel J is currently in use as a parking lot. Lastly, there was a request for a 30-day delay of the Development Agreement approval. Mr. Saito clarified that the URAC has been asked to make a recommendation for the PDC meeting scheduled for July 9, 2003. The URAC is not being asked to approve the Development Agreement but to provide recommendations. The URAC is an advisory group to the PDC. The City Council will not approve the Development Agreement, but can choose to accept it and the accompanying IGAs.
3. The concern about contamination in the area was addressed by Mr. Farkas. He said that DEQ will require standards for safe, clean areas for redevelopment. Mr. Williams also said that in the Central District the contamination is very minor and the area will not be capped because the contamination is so minor.
4. The last concern was that the document is incomplete. Mr. Farkas noted that the basic contingencies will ensure that the documents that are referenced, but not fully completed or executed, are in fact completed prior to work moving forward.

Mr. Pascuzzi asked if the affordable housing requirement could be addressed in areas outside of the Urban Renewal Area. Mr. Farkas responded that affordable housing would need to be implemented somewhere within the North Macadam Urban Renewal Area.

Mr. Ward asked if Floor-Area-Ratio (FAR) could be traded outside of the Urban Renewal Area. PDC staff will come back to the next meeting with an answer.

Answer: FAR cannot be traded outside of the Urban Renewal Area.

6. Central District Development Agreement Recommendation

Mr. Shain moved that the URAC forward recommendation of approval of the Central District Development Agreement to the PDC.

The motion was seconded.

Vote
10 URAC members voted in favor of the motion and 2 URAC members voted against the motion.

7. Closing Remarks

Mr. Saito thanked the URAC and other meeting participants for their patience.

Next URAC Meeting:
August 7, 2003
8:30 a.m. – 10:00 a.m.
1900 S.W. Fourth Avenue, Second Floor
Room 2500A

Central District Development Agreement Approval Process Upcoming Meetings:

City Council
July 31, 2003
2:00 p.m. Time Certain
City Council Chambers
Actions: Resolution Accepting North Macadam Urban Renewal Area Housing Development Strategy
Public Testimony on Council Proposed Amendments and Exhibits
Ordinance Adopting Intergovernmental Agreements to Implement the Development Agreement

PDC
August 13, 2003
3:00 p.m.
PDC Commission Conference Room
Action: Resolution Accepting City Council Recommended Amendments to Development Agreement

City Council
August 14, 2003
3:00 p.m. Time Certain
City Council Chambers
Actions: Resolution Accepting Amended Development Agreement

For more information please contact Kristina Hannon at (503) 823-2595

 

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