Why wait? Call now.
I never watch infomercials. "Make millions in real estate without using your own money!" "There are millions of dollars of free government grants out there just waiting for you to take them!" Yeah, right... click.
But I'm seriously thinking of changing my viewing habits as I read story after story about the major giveaways to the local developer crew by the Portland Development Commission.
For example, last week they announced that they had closed on the sale of the bombed-out "Heritage Building" on NE Martin Luther King Jr. Boulevard to a group of developers for, literally, one dollar. This is property that the PDC paid $400,000 for in 1999 -- now gone for a buck. That and $2.4 million in low-interest loans is supposed to get the new owners cracking, finally, on turning the property into something useful, after years and years and years of talking about it.
Back in 2001 (when the property was still being called the Weimer Building), the story was that the PDC was going to sell the building to a developer for around $500,000 (see page 4). "But just like everything else, I guess those crazy dreams just kinda came and went."
Gee whiz, hand me a $400,000 piece of property and lend me a couple of million on a subsidized basis, and I could probably build something nice, too. One report last May had the developers putting up a big $30,000 total of their own money. Where do I sign up?
I'm not saying it won't be nice to have some PDC money spent on something other than tacky condos. Or to get something good built around the nice folks at Hankins Hardware. But I am saying that the only way the PDC gets anything done any more is by giving away the candy store -- multiple candy stores, in fact. This kind of economic development is hardly anything to crow about.
In other PDC deal news, they're bringing a few dozen nice white-collar jobs to the Lents neighborhood -- by stealing them from Gresham! Take that, Lonnie!
| Posted at 3:55 PM | Permalink |
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Comments (14)
Porkland lives, and quite well thank you!
Posted by Al | October 10, 2005 4:17 PM
That's the dirty little secret of most of the "innovative" development in the Portland region - it wouldn't have happened without some level of public giveaway. That's not necessarily a bad thing, but the level of public knowledge about these tax expenditures or plain handouts is embarassingly low.
Posted by Brian | October 10, 2005 4:26 PM
Let's change that, Brian. Help me, folks.
Posted by Jack Bog | October 10, 2005 4:27 PM
The problem I can see with this sort of thing is that no smart business would ever buy a depressed piece of property on its own if they suspect that the PDC might buy it and sell it to them for some bargain basement (heck: elevator shaft beneath that bargain basement) price. If you are a developer and you want to buy some land, but you know the PDC is interested, why do anything? Just let them buy it, wait a while, and then tell them that you are now willing to buy that "depressed" piece of property and develop it.
I don't mind my tax dollars being used to spruce up run-down parts of town--I actually think that's a great use of public $$$. I only object when that land might have been developed anyway, without a ridiculous public giveaway thrown in.
BTW, Jack, nice Mellencamp quote.
Posted by Dave J. | October 10, 2005 4:50 PM
Having watched the story witht his piece of property unfold over the last few years I can tell you why they needed to so heavily subsidize its sale. They PDC seeks a predetermined type of development that the market won't bear.
Look at the few blocks on MLK that surround this property. One was developed for the Portland Police, another for Multnomah County and the rest are non-profit oriented, or small space businesses.
The PDC has been talking about a "Natures" style grocer for awhile. Any other result just won't do. There is a vision for MLK that doesn't connect with reality of a lower-middle class neighborhood. It can't be Fremont but the PDC won't accept it.
Posted by foxtrot13 | October 10, 2005 5:57 PM
Jack Bog at October 10, 2005 04:27 PM:
Let's change that, Brian. Help me, folks.
JK:
We are trying. See: www.saveportland.com and www.PortlandDocs.com
Also see cable channel 11 Sunday at 10pm; Channel 22 Monday 5pm and channel 23 Friday at 5pm
foxtrot13 at October 10, 2005 05:57 PM
They PDC seeks a predetermined type of development that the market won't bear.
JK:
Social engineering!
JK:
Don't forget the "Headwaters" project just off Barbur in SW. We added up all of the public money (that we found) in that $20+ million project and figured that the developer put up less than 10% of the total project money.
Thanks
JK
Posted by jim karlock | October 10, 2005 6:27 PM
I'll admit I don't know anything about the details on this, but is it possible that the subsidy is part of a package deal that calls for a larger project that the market couldn't handle on its own?
Surely, big box retail is economical, and would fly without a public dime. But what about bottom floor retail with some other uses above?
I wouldn't be surprised if PDC has fallen down on this one, since they seem to be good at that, but what do we really know about this deal? Maybe it really is as stinky as it looks...
Posted by mark o p | October 10, 2005 10:25 PM
One of the reported beneficiaries of this handout is development partner Jeana Woolley, a longtime Northeast Portland resident and also one of the would-be developers of another badly mired PDC project on MLK, Vanport Square. According to the most recent news account, a large part of the financing for the construction at the Weimer site is coming from Albina Community Bank. On the bank's website, Ms. Woolley is identified as a member of the bank's board of directors.
Posted by Jack Bog | October 10, 2005 11:29 PM
Well well- shades of the Holman Building- the PDc ponies up 2.2 million for renovations and sells it for $200,000 to some Beaverton company. You can't even buy a house in Inner Se for $200,000 anymore! Where do I sign up?......
Posted by Lily | October 10, 2005 11:38 PM
With a dollar in your hand, they laugh you right out of Starbucks.
Posted by Jack Bog | October 10, 2005 11:39 PM
i wanted to comment on the vanport development because that truly is a crapfest. they have drug their feet for a few years now with no progress. in my humble opinion, it's because of the street, not the $$$. nobody wants to take the project away from a minority. is this another one of those situations? MLK and the neighborhood deserves better. look what's happening just 6 and 10 blocks to the east with the development on N. Williams and the whole Mississippi area. other than storefront improvement loans, all of that is being done by small business (except for grand central bakin.) maybe pdc should be looking to small businesses to revitalize MLK and not developers. Billy Reeds revitalized it's little area. So did Echo a little further down. There's a great new coffee shop called Tiny's down by the Hert's dealer. MLK doesn't need another walgreens or strip mall. MLK needs business to attract walkers and shoppers.
Posted by dieselboi | October 11, 2005 6:29 AM
Here's another fun government tidbit on the Headwaters fiasco at Barbur & 30th: it includes over 100 apartments to be owned by the Housing Authority of Portland, rented at market rates to middle-class people. Some apartments will go for $1k/mth.
I attended a meeting on this project and asked the City's official mouthpiece why they were dabbling in middle-class, unsubsidized housing. He said it was to "prove they could". Hooray!
Here's an idea, City of Portland: prove to me you can stay the heck outta my neighborhood with your patently moronic ideas. While you're at it, have the City's Dump Truck O' Cash deliver a load to my backyard. It's probably worn through Homer's Italian marble driveway anyway.
Posted by Anahit | October 11, 2005 7:45 AM
As bad as this giveaway is (and it is BAD), what really frosts my nards is the other story about Assurety NW moving from Gresham to Lents. So this is what the PDC is reduced to, stealing businesses from outlaying cities with huge subsidies?
Someone please explain to me how moving their office 4 miles to the west helps the overall metro area at all? Did you see the terms? No payments on their loan for the first 5 years..... Buying the land at 2/3 of its market value... a $310k loan that becomes a grant... an agreement to lease space from Assurety if the project flops because no one REALLY wants to start new businesses in the area. While their current office on 182nd isn't exactly in the Garden of Eden, I wonder how happy their employees will be with in the inevitable rise in car prowls they'll experience parking near Felony Flats.
Posted by LK | October 11, 2005 8:35 AM
As a purely outside observer, it seems to me that in the past, PDC hired/contracted unqualified black people ostensibly to show a commitment to diversity. I don't think PDC was interested in whether the people they hired had any experience negotiating big commercial real estate deals with the objective of maximizing the benefit to the PDC/City/citizens. Heck, they still don't even care if their "managers" know how to manage!
I suspect that the PDC hired unqualified black people so that they could be manipulated: it sounds like PDC's negotiators were friends the lawyers on the other side, so they negotiated sweetheart deals and sold them to the black PDC management as urban redevelopment.
Since naysayers have to invoke race to call out this stinker scheme, nobody will ever do it. No real dealmakers want to join PDC becasue of this suffocating bureaucracy.
Posted by art w. | October 11, 2005 9:03 AM