Commercial Property Redevelopment Loan Program
The Portland Development Commission (PDC) uses the Commercial Property Redevelopment Loan Program to assist property owners with redevelopment, new development and tenant improvements that encourage business development and job growth 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 provides 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 that furthers economic development in commercial areas or on 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).
Loan Program Goals
To be eligible for this program, a project must align with URA 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, Neighborhood Economic Development Strategy, and Downtown Portland 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. 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 historically have 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:
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.
- 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.
This program is geared toward assisting developers or business owners that occupy 50% or less of the project space. For business owners that occupy more than 50% of the project space, PDC Business Finance programs may be more appropriate.
Loan 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.
Summary of Key Loan Program Terms
- fixed interest rate with a maximum of Prime + 3%
- 1% loan fee
- loan term up to 10 years, with an amortization period up to 25 years
- minimum 10% equity contribution
- maximum combined Loan to Value of 100%
- PDC loan secured by the subject property plus personal and/or corporate guarantees
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:
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.
All URAs, as funding is available. Currently, funding for new projects is available in these URAs:
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.
Interstate URAs, Neighborhood Prosperity Initiative and Main Street Districts, and other neighborhood areas
Bernie Kerosky: 503-823-3459 or email
Brian Lord: 503-823-3326 or email