Portland "urban renewal" bond sale -- the forecast calls for pain
The City of Portland's going to the well again -- it's about to borrow $69.8 million for past and future "urban renewal" boondoggles in the Convention Center district. The bonds are rated Aa3 by Moody's -- that's the fourth rung from the top. Some of the money will be borrowed for as long as 13 years, and most of the bonds will bear taxable interest. Apparently, the money's to be repaid only out of increased property tax collections from the district, and there's already around $37.2 million of debt outstanding against those funds.
So what kind of interest will the banker types charge for that kind of loan? The city recently sold 12-to-15-year taxable Paulson stadium bonds, rated two notches higher, at yields in the low 3% range. We'll see what the Convention Center bonds go for next week. In the meantime, the official sales pitch is here.
What will we taxpayers get with the borrowed money? About half of it's already been spent, but here are the goodies that the rest of it is to be spent on:
Infrastructure. Approximately $236,000 is expected to be spent on infrastructure through FY 2012-13, including funding for the Holladay Green Street Master Plan.
Property Redevelopment. PDC is expected to invest $34.3 million in property redevelopment activities between FY 2011-12 and FY 2015-16 to support revitalization of the Rose Quarter and Lloyd District. Specific investments are expected to include the following:
• Rose Quarter Development. The City and PDC staff are working closely with representatives of the Portland Winterhawks hockey team, the veterans community, Portland Arena Management, and AEG Facilities (facilities manager of Rose Quarter venues) on the conceptual design of the renovated Veteran’s Memorial Coliseum. Discussions are currently focused on necessary capital and code mandated improvements and arena improvements needed to support the Portland Winterhawks and enhance venue programming. Approximately $23 million is currently allocated for this project.
• Convention Center Hotel. Property redevelopment includes an allocation of $4 million in FY 2012-13 for potential development on blocks currently owned by the PDC.
• Eco District. Budgeted at $3.6 million, Eco District is a public/private partnership to identify and implement district-wide solutions for energy, carbon use, water, and urban design. This project provides funding assistance to the Portland Oregon Sustainability Institute.
Housing. Through an intergovernmental agreement, PDC expects to invest $12.3 million on affordable housing activities between FY 2011-12 and FY 2013-14. The Commission’s housing budget and plan over the next five years anticipates expenditures that will meet the 26 percent City policy target.
Business Development. Approximately $3.2 million is anticipated to be spent through FY 2015-16 on various business development activities. The majority of this amount is allocated to PDC’s Business Incentive Fund ("BIF"). The BIF program supports PDC’s Economic Development Strategy by promoting target industry clusters (i.e. Clean Technology, Athletic and Outdoor), high growth businesses and neighborhood economic development.
Are these things worth the millions and millions of dollars of interest that will be burned to acquire them? They'd better be -- funds will be taken from all sorts of other public services to pay the tab.