Opportunity Gateway Program Advisory Committee Meeting Minutes

February 16, 2005

In attendance:

Duke Shepard, Chair, Dorene Warner, Vice-Chair, Frieda Christopher, Bob Earnest, Grace Fitzgerald, Ted Gilbert, Arlene Kimura, Jerry Koike, Alesia Reese, Fred Sanchez, Phil Selinger, Stuart Gwin for Laurel Wentworth, Carol Williams, Dann Wonser

Staff and Guests in attendance:

Sara King (PDC), Susan Aldrich (PDC), Mark Murray (PDC), Leah Greenwood (PDC), Ann Griffin (PDC), Lisa Abuaf (PDC), Jon Connor (PDC)

Not in attendance:

Teena Ainsle, Beth Baltz, Ron Brown, Dick Cooley, Andy Cotugno, Steve Dotterrer, Merced Flores, Mark Gaulke, Renee Jensen, Aleta Woodruff

1. Welcome from the Chair

Duke opened the meeting and welcomed the members. He gave a brief overview of his joining the City Club and voting against the City Club report on the Portland Development Commission that was released last month. He stated that he had written a letter to the City Club clarifying his objections against the report and that the City Club responded and thanked him for his involvement and interest, but showed no inclination to change the report. He announced that the City Club report had been approved.

2. GatewayTransitCenter Update/Park and Ride Spaces Relocation

Phil said that the Transit Center development was on schedule. They expect to break ground this summer. Currently, the major challenge to moving the project forward is to find temporary parking to replace the Park and Ride spaces lost during construction. Original plans were to replace half of the spaces at the Elks site and half (approximately 115 spaces) at the Fred Meyer/Pac Trust parking lot. He said that they recently learned that to use the Fred Meyer/Pac Trust lot would require the approval of all the shopping center tenants’ national representatives. He added that this approval was not likely. The Federal Transit Administration (FTA) requires that the Park and Ride spaces be relocated so TriMet is looking for additional ideas for sites. They are willing to pay some amount for the relocated parking. The spaces need to be near to the 102 nd Avenue MAX stop or within one or two blocks of other MAX stations in the area.

Bob suggested the Winco parking lot, which is rarely full especially at the north corner. Sara inquired whether the Qwest parking lot might work. Bob answered that the Qwest lot is strongly posted to prohibit adjacent tenants from using the lot, and probably would not be an option. Alesia asked whether there was unused parking at the Park Rose Station. Arlene recommended the Smart Lab/liquor store lot on 102 nd that is often not full as well as the wrecking yard off 99 th and Burnside. Sara suggested Bill Bitar’s property that is at 99 th & Burnside as well. Phil requested that PAC members contact him or Sara with any additional ideas for replacement parking sites.

3. Gateway URA Budget Discussion

Sara introduced Mark Murray, Budget Officer at PDC, and other PDC staff in attendance, including Leah Halstead with the Housing Department, Ann Griffin with the Economic Development Department, and Susan Aldrich, Lisa Abuaf, and Jon Connor with the Development Department. Copies of the Gateway Regional Center Outreach Budget and Activity Descriptions were distributed. Sara gave a brief overview of the budget, covering this fiscal year FY 04/05 and the five year forecast. She and Mark stated that this discussion was for the PAC to provide budget recommendations which will be reviewed by PDC by February 28 th, presented to the Commission in April, and then presented at a City Council citywide budget hearing. She added that the primary task is to provide feedback and recommendations on the current staff proposed budget. She explained that the addition of a Tier column in this year’s outreach budget is the result of staff’s decision to discuss project prioritization. She requested feedback on tier prioritization as well as input on the budget.

Sara first reviewed the Resources section of the budget. Mark clarified that Short Term Debt is comparable to money in the bank versus Long Term Debt which is debt or credit that is received from the City and paid back when bonds are taken out. She reviewed the amounts of line items, including Loans – Interest Earned, Other Contracts, Property Sales, Interest – City Investment Pool, and the Beginning Fund Balance which was carry over from projects underway or not completed from last year’s budget.

Alesia asked how much of the Beginning Fund Balance is not committed and, therefore, available for future year’s use. Mark responded that while he didn’t have specific numbers in front of him, he believed that most was committed to projects that are ongoing—NE 99 th and Glisan and Economic Development programs—and is not available for reprogramming. Alesia requested clarification on why the FY 05/06 Forecast Beginning Fund Balance was higher than FY 04/05. Susan explained that capital projects are often multi-year projects and, therefore, do not fit neatly into fiscal year time frame. For example, there are encumbrances committed for construction that occurs over subsequent years. Alesia added that she would like to know which Beginning Fund Balance funds are uncommitted without encumbrances and potentially available for future projects. Sara responded that the FY 05/06 Forecast Beginning Fund Balance figure of approximately $600,000 may reflect the Bingo Redevelopment, Community Redevelopment Opportunity, and Economic Development funds. She asked Mark to confirm which of the Beginning Fund Balance funds are committed versus available for future use.

Doreen inquired why TIF resources for FY 05/06 Forecast are $9 million versus the FY 06/07 Forecast amount of $2.5 million. Mark responded that in an effort to balance funds and manage cash flow, the TIF resources are distributed over five years and reflect project activity anticipated for each year. The FY 05/06 Forecast figure is higher because it reflects Transit Center redevelopment. Doreen asked why the budget balances in FY 05/06 Forecast but not subsequently and what that impact is. Mark answered the while the FY 06/07 Forecast has a large gap to close, the budget does balance over the forecast five years.

Ted asked whether land sales of currently PDC controlled property could increase resources or whether PDC could collateralize and borrow against that land. Sara stated that both are available options. Mark added that current land holdings are examples of assets that may not be being used to the highest capacity. Sara specified that collateralizing against the land would also require a lot of work with the City’s Office of Management and Finance (OMF), and the transaction may not occur quickly enough to address acquisition opportunities, such as the Bingo site. Mark stated that he has worked extensively with Eric Johansen of OMF, and they tend to be conservative about such transactions as well.

Phil asked whether The Oregon Clinic increase in taxes shows in the budget Resources. Mark responded that forecast Resources do not usually include expected tax increases. Sara added that the Physician’s Hospital improvements will likely provide a slight increase to the Resources as well.

Sara then reviewed the budget Expenditures line by line. She requested that the PAC focus on FY 05/06 and FY 06/07 Forecasts.

She stated that the approximately $10.2 million dedicated in the five year forecast to Gateway Transit Center Redevelopment is a committed amount. $10 million has been agreed to in legal development documents and the additional $200,000 is required for contingency. The Gateway Parcel 1 Acquisition is a cost neutral figure since it is shown as a Resource as well.

Storefront and Business Finance Tools are both committed funds. Storefront expenditures are spent or intended to be spent. Ann added that there is more demand than available funds in the Business Finance Tools. Of the $718,000 in FY 04/05, $500,000 has been allocated to Physician’s Hospital and $218,000 to Center Point Graphics (which requested a $245,000 allocation). Center Point Graphics will use these funds to expand their existing facility at Burnside and 99 th and increase employment. Ann stated that there were additional requests for Finance Tools funds as well.

Sara explained that the Bingo Site Acquisition had been pulled out of the MFH Opportunity and assigned as a unique line item due to the PAC’s interest in the site. Duke added that, in the past, the PAC had supported this as an important site to control. He requested that the PAC confirm how they would like to include the Bingo site in the budget. Bob asked what the $1.75 million allocated for Bingo site acquisition represented and whether this amount includes the unvacating of Clackamas Street. He also inquired why in the Activity Description table, Bingo Site Redevelopment indicates “Redevelopment of site for park and housing” when the site was originally discussed for park redevelopment only. He indicated that he does not support housing on that site.

Sara responded that the asking price for an option on the site is $1.5 million and the additional amount covers demolition and cleaning of the site. She added that redevelopment of the property would not unvacate Clackamas Street because the right of way is not on this property but part of the J.J. North property. She clarified that a thorough discussion of site redevelopment has not occurred. If PDC successfully acquires the property, the PAC will have to discuss programming on the site. Combining parks and housing use on the site reflects an effort to combine Gateway URA goals; however, there is no firm idea of what type of housing could occur. Duke added that if the property is secured, a working group or other PAC subcommittee will need to discuss site redevelopment in further detail.

Ted stated that, given his understanding from past internal PDC conversations, the site would have to include a housing component. He asked if this was still true. Sara responded that approval for staff to pursue Bingo site acquisition was based on its redevelopment as housing and park. However, staff also made clear that redevelopment of the site would require involving the community to find a solution that works for all parties.

Fred said that in previous conversations regarding site acquisition (when the purchase cost was estimated at $1-1.2 million), the original intent was redevelopment as a park. With a parcel that is only about 2 acres, he asked how a housing and park component could be integrated on the site. He added that this is also an isolated property for such development. He inquired about infrastructure costs that might be involved in changing redevelopment use and whether the property was formally on the market. Sara responded that redevelopment of the site may involve looking at an area beyond the immediate parcel to determine the impact of various development programs. She stated that no program, development, or infrastructure analysis has been done. Parks has stated that they desire 1.5 acres for park development. She added that the property is not formally on the market. Leah clarified that the owner is considering an option offer, and if they do not like the offer they may then put the property on the market.

Alesia indicated that the Bingo Site Redevelopment proposal change, together with the fact that the Parks Strategy Plan line item disappears as of FY 05/06, takes attention away from parks as a priority and does not support the Parks Subcommittee work.

Doreen requested that the PAC return to the discussion about acquisition of the Bingo site. She stated that there have been many lost opportunities (102 nd, Bingo, south of Glisan on 99 th) and that the PAC needs to get off the dime with regards to property acquisition. She added that they should prioritize getting control of the property and then discuss what to do with it. Dann suggested that given the Bingo site’s CX zoning, they could acquire the site, sell it to a developer, and use those funds to buy property elsewhere to develop as parks or housing. He emphasized that it is important to first secure acquisition.

Sara explained that Earl Blumenauer has earmarked $4.8 million in the current transportation funding bill for the 102 nd Boulevard Improvements, projected to start in FY 06/07. There is an obligatory local match of 20% or approximately $800,000. The $1 million allocated to the 102 nd Boulevard Improvements in FY 06/07 and FY 07/08 covers this local match. However, the Portland Office of Transportation (PDOT) has also discussed using System Development Charges (SDCs) to cover this match, which would free up some of these funds.

Similarly, while the Gateway Light Rail commitment is firm in terms of forecast budget years, the amount may shift. Susan stated that PDC has a $20 million commitment to TriMet for light rail, which is divided between five urban renewal areas (URAs). Currently, the Finance staff is determining a fair distribution amongst the five areas, so the budget item will be there in each forecast year, but the amount may increase or decrease.

Dann asked what types of formulas are being looked at to determine distribution amongst the areas. Mark responded that a variety of formulas are being considered, including the amount of tracks/stops/estimated ridership in each area. Distribution could also be based on the economic development potential catalyzed by light rail, although this is more difficult to measure. In addition, the $20 million can either be divided by groups of urban renewal areas— three Downtown URAs and two Outer Eastside URAs—or by individual URAs. The current $5 million allocation is based on a grouping distribution in which Gateway contributes half of the Outer Eastside’s $10 million. Phil added that the project is continuing to move forward at the federal level as well. Dann commented that while the PAC may argue over the amount that they are expected to pay, they support light rail. He asked what type of opportunity there would be for the PAC to weigh in on this issue. Mark responded that the Commission would review the budget in April, but a final decision regarding distribution most likely would not be made until budget preparation for FY 06/07.

Sara continued with the Expenditures review and explained the Prunedale Strategy and Redevelopment. She said that the Prunedale development was the cornerstone of the redevelopment strategy; this requires understanding all acquisition and infrastructure requirements. Staff earmarked funds for this strategy and redevelopment, and the PAC should provide feedback since these amounts are negotiable.

She stated that based on PAC feedback, the Bingo Site Acquisition item could be reallocated into the Commercial Redevelopment Opportunity Fund or the MFH Opportunity Gateway item. She commented that the budget needs to be slimmed by $1.8 million in FY 06/07 so reallocation may also involve a decrease of overall funds. She introduced other potential funds or savings that may help fund Bingo acquisition including:

Together, these would free up approximately $1 million of TIF for other uses.

Mark added that Administrative costs tend to decrease in the future which could help bring the gap down as well. Frieda asked if Administrative costs are allocated based on expenditures. Mark responded that they apply a very complex full cost recovery model based on staff, space, Commission resources, etc. to calculate Administrative costs. Frieda inquired whether the figures are revised based on actual costs during the year. Mark affirmed that Administrative costs are trued up at the end of the year.

Alesia asserted that if Park Strategy Plan funds are dropped across the five year forecast, then parks will be forgotten as a Gateway priority, as has occurred in the past. She added that allocating $10,000 across the five years is not too much to ask. Frieda responded that although this is true, the PAC should not put money into an item that they don’t intend to spend.

Arlene commented that she had a problem with the tiering, especially with regards to the general acquisition of sites (Commercial Redev Opportunity Fund) which has been relegated to Tier 2 even through acquisition is one of the URA’s priorities. She stated that the Commercial Redev Opportunity Fund should be moved to a Tier 1 priority. The MFH Opportunity Gateway item could remain a Tier 2 because the private sector is providing for housing development. Duke asked if there are any objections to moving the Commercial Redev Opportunity Fund to Tier 1. There were no objections.

Ted expressed support for the reprioritization of the Commercial Redev Opportunity Fund. He said that the number one goal for Gateway is good paying jobs and business. He added that he is thrilled that the Business Finance Tools are working and that, given the demand for those services, the forecast years’ allocation for this item are too small. While $2-3 million has been allocated to “maybes” (Bingo and redevelopment opportunity funds), this item provides known results. He asserted that the PAC should take a step back and look at their global priorities when giving feedback to PDC staff. Sara responded that this was a good suggestion and that the PAC needs to provide input on where extra money should be spent if it becomes available.

Ted proposed to make the Commercial Redev Opportunity Fund a Tier 1 activity and to move the Bingo items back under this line item. He stated that doing this would make those resources more opportunity driven. He added that there should also be more money added to activities that create good paying jobs. Frieda agreed that Bingo acquisition funds should be consolidated into a more general fund so that if the Bingo deal falls through, the funds are still easily available for other opportunities. Duke asked if there was a logistical or fiscal reason that this could not be done, and Mark responded that there was not. Bob concurred that the budget should not lock in Bingo if another opportunity becomes available prior to that deal being formalized.

Fred commented that he agreed with Ted on the jobs issue. From the business community’s perspective, Gateway needs to keep and expand jobs. He quoted a recent Caldwell Banker report which listed vacancy rates of 18% in the area and translates into lost jobs. He stated that Gateway needs to keep its options open and keep momentum going through the budget process. He recommended that negotiation for the Bingo site continue but that the PAC maximize their options.

Bob asked why the NE 99 th & Glisan Intersection Improvements activity is a Tier 1 if it is a done deal. He added that the list is heavy on Tier 1s. Sara responded that she would see if those Tier 1s that are underway or committed funds could get a “Not Applicable” or “Zero” rather than a “One.”

Duke summarized PAC feedback as follows:

He asked the PAC whether parks should be included within the description of the Commercial Redev Opportunity Fund. Alesia reiterated her concern that if parks is not in the budget as a distinct item, then the Park Strategy will become inapplicable and forgotten. In addition, if acquisition of property is opportunistic, then the Parks Strategy may need to be revised to reflect actual property acquired. Ted responded that the priority is to be opportunistic about property control, and then the PAC can discuss what happens with the sites and if parks are included. Alesia concurred.

Bob said that if the Park Strategy is not an item with money attached to it, it will not seem important when the budget is reviewed by PDC and the Commission. He supported including a placeholder figure for the Park Strategy Plan. Sara proposed grouping the funds under the Commercial Redev. Opportunity Fund in the short term (FY 05/06 and FY 06/07 Forecasts) and place a Parks Strategy line item in out years, when funds are more available. Duke agreed that this was a solution for allocating nonbinding funds to parks and conveying the PAC’s intent that parks are an important priority.

Ted reiterated that putting as much money in a broad category—which could be used for parks, Parks Strategy, or economic development purposes—maximizes opportunities. Alesia agreed, but stated that there needs to be some direction on spending, especially when coordinating with the Parks Bureau which needs some assurance that funds are allocated and available for parks development and maintenance. Duke restated the proposal to maximize the Commercial Redev Opportunity Fund in the immediate term and allocate decent amounts to the Parks Strategy in the out years to demonstrate parks priority.

Sara requested clarification on economic development budget items. Given the PAC’s emphasis on economic development, she inquired about the amounts budgeted in FY 05/06 and FY 06/07 Forecasts and whether these allocations should be grouped into the Commercial Redev Opportunity Fund. She added that Bingo site acquisition does not allow for increasing economic development funds over the next two years. Duke said that this should be discussed keeping in mind that funds spent on the Transit Center constitute economic development funds as well.

Frieda stated that she would like to know more about the companies that have applied for the Business Finance Tools and are interested in economic development assistance. Leah clarified that the Business Finance Tools line item provides the most flexibility. Ted asked whether the Commercial Redev Opportunity Fund description could be broadened to include economic development spending goals. He added that allocating funds to specific items involves departmental turf and could restrict opportunistic spending. Mark stated that more mature URAs tend to have general fund items and then, as projects progress, the items become more specific.

Sara summarized PAC feedback as follows:

Sara asked Mark when the next budget iteration would be available for review. Mark responded that the next version of the budget will be formally released in March and budget balancing will be done in April. He added that he could make a draft budget available for review at next month’s PAC meeting.

4. MTIP Hearing and Other Project Updates

Duke reported that there was great turn out at both the business and resident 102nd Ave. Street Improvement Project Open Houses. He said that PDOT received a lot of feedback that will impact the project, and that PDOT has already begun incorporating this input. He characterized the business community response as critical but with no outright protests and the resident community response as supportive.

He announced two upcoming events involving Gateway activities. PAC members will attend the February 17 th Design Commission review of the Gateway Transit Center development alongside PDC and TriMet staff. Also on February 17 th, Duke and Dick will testify about 102 nd Improvements at Metro’s public hearing on MTIP projects. Other PAC members were invited to attend.

Phil provided an update on the MTIP process. The initial list of projects has been winnowed down to a $62 million program. 85% of the projects are in a base program and will not be challenged. 15% will be selected based on two distinct recommended final cut programs, the Alternate Selection recommends funding the Gateway Transit Center but the Mixed Selection does not. He emphasized the importance of having PAC testimony at this final decision phase.

Duke asked Phil for clarification on the different committees involved in making this decision. Phil described Metro’s two land use advisory committees: the Metro Policy Advisory Committee (MPAC) of elected officials and the Metro Technical Advisory Committee (MTAC) of lead staff from different agencies. Phil also explained Metro’s two transportation advisory committees: the Transportation Policy Alternatives Committee (TPAC) of technical staff from different agencies and the Joint Policy Advisory Committee on Transportation (JPACT) of elected officials. The TPAC makes first round recommendations on MTIP allocation. Following additional testimony, the JPACT will make recommendations to Metro Council. He added that MTIP funds are allocated for FY 08/09, but are somewhat fluid in terms of when they are actually dispersed. A final decision regarding MTIP allocation will occur in March.

5. Public Comments and Other Announcements

Duke invited public comments from guests. No comments were given.

Alesia invited PAC members to a Citywide Parks team that she is coordinating with Amanda Fritz. The group will convene for the first time February 17 th at the Rose Room at City Hall. Ted asked about the group’s mission. Alesia stated that the group’s first meeting was to set group goals.

Frieda announced that the David Douglas School District recently approved new boundaries. The Gateway URA falls almost exclusively in the Cherry Park Elementary School District. The district also approved moving 6 th graders from elementary schools into middle schools.

Duke adjourned the meeting at 8:20 p.m.

###

The next meeting of the OpportunityGateway Program Advisory Committee will be Wednesday, March 16, at 6:30p.m. at the PortlandAdventistMedicalCenter, Amphitheater C.


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