Interest rates are at an all-time low right now. You can borrow money on a 15-year mortgage at around 4.25% a year, if your credit is good. But just to show you how low the City of Portland has sunk, about a week and a half ago it quietly borrowed $36.8 million for the "urban renewal" games now under way in the Lents neighborhood at interest rates that run as high as 6.284% for a 14-year term.

The bonds were rated A1 by Moody's -- the fifth-highest rating and in the middle, not the top, of the investment grade pack. Only some of the interest will be tax-exempt to the lenders who buy the bonds -- probably because much of the money is going to be used for the benefit of private companies -- and that accounts in part for the high rates of interest. It's not clear if the federal government will be subsidizing the highest interest rates Portland will be paying here, but subsidy from Uncle Sam or no, 6.284% for 14-year money is darned expensive.

Now, the people who run these schemes are quick to point out that the bondholders can't collect from the city's sacred "general fund" -- which makes it sound as though the average Portlander isn't paying that fat interest. But as has been explained here before, that assertion is misleading, for two reasons.

First, every Portland property owner pays an "urban renewal" tax, and landlords pass that charge along to tenants, even if they don't live or work anywhere near an "urban renewal" zone. That tax is not for the benefit of the Lents "urban renewal" district, but it does feed, directly or indirectly, the voracious mouth known as the Portland Development Commission payroll.

Second and more importantly, because the bonds will be paid from property taxes collected out in Lents, any significant increase in the costs of providing city services out in the Lents neighborhood (salaries and benefits for city workers, for example) will be paid by Portlanders from other neighborhoods. That is, property tax increases in Lents will all go to pay the bonds -- Lents property taxes available to pay for basic services will essentially be "frozen" for decades on end. And if "urban renewal" actually "works," there will be plenty more people, and plenty more service costs, out that way over those decades.

And so anyone who lives in Portland should be aghast at those interest rates, because that's all coming out of our pockets. If it costs that much to finance these things, maybe we should be scaling back our delusions of real estate grandeur for a while.

Of course, that's not really an option. Much of the money that's being borrowed through these bonds has already been blown. Of the $36.8 million borrowed from Citibank and its customers this month, $21.7 million is being used to pay off a line of credit that the city quietly took out and drew upon some time ago for Lents. Chances are it was with Bank of America, the city's backroom lender of choice. Those "interim" loans don't stay open forever, and when they come due, the city has to find the cash to pay them, no matter how expensive that may be. Back when the line of credit was authorized, it was impossible to tell what the money was going to be used for. Now that the pricey permanent financing is here, it's either borrow new money or default on the old line of credit. Once the city puts itself in that position, the public never gets a chance to challenge the frivolous spending.

Only $11.7 million of the latest bond proceeds is going into a construction fund to build something now. The rest has been spent, or soon will be spent, on other things.

The final repayment of the bonds isn't scheduled to take place until 2030. And of course, if the city doesn't have the cash flow to pay at that point, it will just go out and borrow from Peter to pay Paul, at whatever rates are available for its credit rating at that time. Then again, a city bankruptcy in the next 20 years could conceivably change everything.

Anyway, it's funny to see who the city touts as the economic drivers in Lents. Here are the top employers:

Tri-Met, which doesn't pay property taxes, and Wal-Mart, whom the City Council would run out of town on a rail if it could! Good thing those bondholders don't think too much.

Here are the top property taxpayers:

There's old Wal-Mart again. And Blockbuster! Never mind that bankruptcy warning. Full steam ahead. Go by streetcar!