Good money after bad
It's official. Portland taxpayers are now $4.6 million into the "Heritage Building" on NE Martin Luther King Boulevard: $400,000 to buy the property, which was then handed to a developer for a dollar; $2.4 million in direct loans to the developer, still outstanding; and now another $1.8 million just spent to buy out a construction loan that Albina Bank made.
The developer's whining that neither he nor prospective tenants have the money to finish the inside of the building. The Portland Development Commission says it will try to find the guy financing for the rest of the improvements. But let's face it -- the project's a clunker, having already been in bankruptcy once and default twice. No one in their right mind will lend against it unless they get a lien on the property that trumps the city's interest -- and maybe not even then.
To our untrained eye, a lot, if not most, of that $4.6 million is as good as gone. The city's got the property assessed at a market value of $3.125 million, and that may be pushing it.
Meanwhile, the bank that the PDC just bailed out got some additional good news the other day. They're been awarded eight figures in new federal tax credits:
Albina Bank will get $10 million in new tax credits as a result of the American Recovery and Reinvestment Act, the U.S. Treasury announced Wednesday.Uncle Sam puts up 39% of your play money? Meanwhile, if you make a bum loan on a PDC property, the city takes the bad paper off your hands. Must be nice.The bank will receive a reduction in taxes in exchange for making private sector investments in low-income communities over the next seven years. It will earn the full $10 million tax credit in exchange for spending $25.6 million.
| Posted at 10:51 AM | Permalink |
|
Comments (5)
But rest easy - the money was well-spent, because, according to the O, the PDC says:
"the building hit social goals the agency had set for the building. It won a gold environmental rating from the U.S. Green Building Council and more then 30 percent of its contractors were small businesses or owned by a minority or woman"
I recall a PDC statement on the Vanport Square fiasco to the effect that one of the major goals of that project was to make some Black millionaires with the taxpayers' money. (I thought that was the NBA's job) Wouldn't it be cheaper simply to pick a couple of Black folks at random & give them the money? Maybe we could race-norm the Lottery & disband the PDC.
Posted by Lalawethika | May 28, 2009 12:58 PM
"...more then 30 percent of its contractors were small businesses or owned by a minority or woman."
Was that the problem? Sigh.
The whole PDC has that same problem.
Posted by anonymous | May 28, 2009 1:16 PM
Lemon socialism is the new black.
Posted by Dave C. | May 28, 2009 4:27 PM
And these guys (the PDC) want to build and operate a hotel? Puh-leeze!!
This command and control mindset permeates the blue state and the federal government. When will people come to there senses? I hope before we become a third-world state.
Posted by JoWriter | May 28, 2009 7:57 PM
Why is Vanport a fiasco? I recently looked at buying a condo there and it is almost all sold out - only one vacancy.
Posted by mediadoubt | June 3, 2009 9:58 PM