Tuesday, May 21, 2013
The city of Portland is once again facing a choice between spending its limited economic development capital to facilitate a project, or sitting back to see what the market might do on its own. In the case of the Federated Cos. proposed mixed-use development on a former rail yard in Bayside, the city's involvement would do something good for the community that the private sector could not do without help.
The price for this project is a city-financed parking garage that would cost taxpayers about $9 million. In exchange, Federated is proposing to build two towers with 160 to 175 units of high-end, market-rate housing and about 40,000 square feet of retail space. In a second phase, Federated plans to build another 430 to 482 units of housing and another garage.
That would have a positive impact in any neighborhood, but as important as what is proposed is where it would go. The old railroad property in a vacant industrial lot sits smack in the middle of a neighborhood which has been slated for redevelopment for more than a decade but has failed to thrive. Although there have been significant developments on the Marginal Way edge of the neighborhood, the center is still dominated by scrap yards and vacant lots, which make new investment risky.
Adding hundreds of units of market-rate housing in the center of the neighborhood would generate the kind of street life that discourages crime and encourages economic activity. This development would go a long way toward transforming the ugly industrial backyard of the city into a welcoming, vibrant urban front door.
Even though the deal does not include a tax break, it will be compared to others that do, which makes sense, since public money is public money, regardless of how the subsidy is structured.
The Bayside proposal stands up to the comparison. Building this garage for $9 million would trigger $38 million of private investment. By comparison, the Forefront at Thompson Point would use about $30 million in public subsidy (in the form of returned property taxes) to attract a $100 million investment. Both make sense, and the city should not miss the opportunity.