Hawthorne Bridge ramp move: It might be for condos
We wondered aloud the other day why the City of Portland would sell $9 million of taxable bonds and give the proceeds to Multnomah County to pay for moving an off-ramp from the Hawthorne Bridge to make way for a new county courthouse. As usual, the city's debt manager, Eric Johansen, has answered our questions, but the answers he has given us are disturbing indeed.
The reason the interest on the bonds is taxable, instead of tax-exempt, is that the financing of the courthouse is so uncertain at this point that it might turn out that the block from which the ramp is being moved will wind up in private developers' hands!
Here's the latest Q & A with Johansen:
bojack: Why is a public bridge/courthouse project being financed with taxable bonds?
Johansen: PDC provided Multnomah County with $8.82 million for the purpose of making a parcel of property available for development by relocating the Hawthorne Bridge off-ramp at the west end of the bridge. The parcel is currently expected to be the site of a new County courthouse, but the property may be developed for other purposes. The County does not currently have funding for a new courthouse; nor does it have necessary land use entitlements to construct a courthouse on the site. While the County continues to pursue this site for a courthouse, it is possible that the courthouse may ultimately be sited elsewhere. If the proposed site is not ultimately developed as a courthouse, it may be sold for private redevelopment.
Under federal tax law, tax-exempt bond proceeds generally may only be spent on projects that are reasonably expected to be used for governmental purposes for the life of the bonds. Because the ultimate use of the Hawthorne property (public or private) remains uncertain, the City and PDC, in consultation with legal counsel, determined that in order to accommodate either public or private use, taxable financing was necessary.
bojack: When was the nearly $9 million drawn on the line of credit for this project? Why was the line used for this project? Has the work even begun?
Johansen: Pursuant to an agreement between PDC and Multnomah County, PDC provided $8.82 million to the County in March 2008. The source of funding was a draw on the Downtown Waterfront line of credit. (The remaining $182,000 will be provided to RACC to satisfy public art requirements.) Urban renewal projects are routinely financed through a line of credit until such time as the line is taken out with long-term bonds. The entire balance of the Downtown Waterfront line of credit has since been paid off with a portion of the proceeds of the recently issued urban renewal and redevelopment bonds for the area.
The ramp relocation project is being managed by Multnomah County. Questions on project timing are better addressed to them.
Why we're spending this $9 million at this point -- indeed, the city's already spent it by forking the money over to the county last month -- for a courthouse that may never be built, is still a mystery to us. The thought of the spendy ramp relocation making way for "private redevelopment" is particularly troublesome.
Maybe the city ought to do one of its goofy "satellite urban renewal district" deals and redirect this money down Sellwood way. We know some bridge work down there that's much, much more pressing.