Development Assistance

Commercial Property Redevelopment Loan Program

Creating healthy vibrant neighborhoods and business districts throughout the City

The Portland Development Commission (PDC) makes loans to assist property owners with redevelopment, new development and tenant improvements that encourage property revitalization and wealth creation within urban renewal areas (URAs).

The Commercial Property Redevelopment Loan Program is intended to supplement equity contributions and traditional bank financing, and make a project feasible by filling gaps between available financing and project costs.  Generally, PDC looks to provide up to 10-20% of the project funding.  PDC loan terms are flexible and loans can be subordinate to primary financing.

This Program will provide financial assistance for property development or rehabilitation of blighted sites or buildings, identified as vacant, abandoned or under-utilized in commercial areas or commercial corridors.  Because funds are limited and insufficient for all projects, PDC may focus its scarce resources in certain areas of an Urban Renewal Area. PDC will leverage prior PDC investments in the area (such as transit and streetscape improvements) and at the subject property (such as Development Opportunity Services grants).

To be eligible for this Program, a project must align with Urban Renewal Area goals and include one or more of the following elements:

• preservation of older and historic buildings, as identified on the National Register of Historic Places, either individually listed or identified as contributing in an historic district, or an older building eligible for 10% Historic Tax Credits
• transit-oriented development, defined as mixed-use development within ½ mile of light rail stations and ¼ mile of frequent transit service.
• supportive of permanent job growth or job retention that reflect the strategic priorities of PDC, as defined in the Portland Economic Development Strategy, PDC Strategic Plan, proposed Community Economic Development Plan, and Downtown Retail Strategy.  Current business categories include:
• Target Cluster businesses are defined as traded sector firms, in a target cluster, having the highest potential for growth due to the concentration of firms in the city and the existence of critical elements to competitive advantage over other industries.
• High Growth businesses are defined as traded sector firms characterized by robust historical sales growth, identified markets for potential exponential growth in sales, and previous success in raising either debt or equity capital to finance initial start-up and expansion.
• Community Economic Development businesses promote wealth creation opportunities for small business owners and jobs for neighborhood residents and offer a mix of goods and services, and investing in these businesses furthers the promotion of physical revitalization in neighborhood commercial corridors.
• Downtown Retail businesses reside inside the Downtown Retail corridor.

• integration of sustainable and green building practices into construction projects.  This could include implementation of PDC’s Green Building Policy.
• advancement of social equity through providing contracting and employment opportunities to Portland’s diverse populations, particularly those that have historically been underutilized. This could include implementation of PDC’s Business Equity Program (formerly the Good Faith Effort Program) or the Workforce Equity Program (formerly the Workforce Training and Hiring Program). 

Eligible Uses of Funds

PDC provides loans at different stages of the real estate development process for a variety of project costs. Most costs related to the development are eligible for PDC's assistance, including:

• hard and soft project costs,
• development feasibility analysis,
• property acquisition associated with a redevelopment project,
• environmental analysis and remediation,
• seismic upgrades and tenant improvements, and
• public infrastructure improvements related to a development project.

Funding for this program is through tax increment financing (TIF).  Therefore, only costs necessarily incurred to construct physical improvements to real property located within a URA are eligible for funding.  If property acquisition costs are included as part of the requested funding, no more than 49% of the total TIF funds for the project may be used to pay for acquisition.

Loans types available include predevelopment, construction, and permanent financing. To be considered for construction and permanent financing, the project must be ‘shovel-ready’ and have secured primary financing.

The Program will be used to negotiate terms for financial assistance in a disposition of PDC-owned property under a Disposition and Development Agreement.

The Program is not intended to be used for development of solely residential projects.  To qualify as mixed-use, an eligible project that includes housing must also include significant commercial space or work/live units.

Other PDC Requirements for Loans

Applicants may be required to comply with the following PDC policies depending on the PDC loan amount AND the amount of hard construction costs:

Eligible Borrowers

Property owners (fee simple or long-term ground lease with term remaining that exceeds the loan term by at least five years) are eligible. Parties in negotiation for acquisition of City-owned property are also eligible.

Service Area

All URAs, as funding is available. Currently, funding for new projects is available in these URAs:

• Interstate Corridor
• Oregon Convention Center
• Lents Town Center
• River District
• Central Eastside
• Gateway Regional Center

To Apply

Applicants must complete a PDC Commercial Property Loan Application and provide the additional documents detailed on the application form.

This program is one of many financial assistance products offered by PDC, and staff is available to help you find the tool that best fits your need. Those interested in the program should contact Becki Marsh by e-mail or at 503-823-0308 or Estee Segal by e-mail or at 503-823-3317.