Referendum on PDC

This month's election is a big one for Portlanders. Voters will decide whether to approve a change in the city charter that would hand control of bureaus (planning, parks, fire) from commissioners to the mayor. Understandably, that's received a lot of attention. But equally important is Measure 26-92, which proposes that the City Council assume control of the Portland Development Commission's budget.

It's easy to see why this measure was put on the ballot, for PDC has experienced a lot of controversy and trouble in the last couple years over the way it has run itself, both in terms of employees and projects. Giving elected officials more oversight seems to indicate a greater degree of checks and balances.

I would welcome the comments of those in favor of Measure 26-92, but I plan to vote against it.

The City Council already approves PDC's urban renewal districts and appoints volunteer citizens to oversee expenditures. PDC has been independent since its creation in 1958, and as former mayor Vera Katz writes in the Multnomah County voter's pamphlet, "has been the envy of cities worldwide."

Although many such as Mayor Potter favor 26-92, the editorial board of The Oregonian also argued against ending PDC's relative independence, saying it would be "...a terrible mistake. Name something you like about Portland, from Pioneer Courthouse Square to the Classical Chinese Garden, RiverPlace to the South Waterfront, and the PDC made it happen."

I worry that if the City Council gained oversight of PDC, urban renewal in Portland would fall victim to politicians' pet projects and electoral concerns. Moreover, as Katz writes, 26-92 would "...give City of Portland politicians control over money that isn't even theirs to spend. Most urban renewal money is not City of Portland tax money. More than 60% would otherwise go to Multnomah County."

By no means is PDC above reproach - a lot of mistakes have been made by the agency. But since I've been borrowing already from other people's words in this post, I'd like to quote hear from Bill Clinton's words while president, referring to Republican efforts to end affirmative action, another imperfect but very necessary endeavor: "Mend it, don't end it."

Comments

[Richard]

I've never understood the arguments for the PDC's independance from political oversight. Why should the PDC be any more independent than the water bureau or parks department or any other institution meant to serve the community as a whole?

The way our representative government is generally supposed to work is that politicians, elected by citizens, are ultimately in charge of civic and governmental institutions. With politcians in charge of an istitution, I guess you could say, as every critic of 26-92 does say, the institution becomes "politicized." But that's just a pejorative way of putting it; another way of looking at it is that with politicians in charge, an institution becomes more democratized. The PDC should be more accountable to the public in how it spends public funds and affects the physical structure of our community. The only way of making it accountable, short of putting all its proposals to public vote, is to put elected officials in charge of it.

As for PDC's record of achievement, I know it has been involved in some good things, but I'd like to see a complete list of its projects. How about the South Auditorium devastation project of the 1960s, where an entire neigbhorhood was razed without regard for any historical, architectural or cultural value that neigborhood may have had? How about the several recent cases in which the PDC myseriously undervalued land before turning it over to developers? Maybe some of the bad stuff wouldn't have happened if elected officials were more directly answerable for PDC actions. And maybe the good, popular stuff would have happened anyway. (We all like parks, right?)

I personally want a greater voice in how the PDC operates, and the only way I'm going to get that is through my elected representatives. The way you phrased it, Brian, was meant to be alarming, but when I think about it, I actually DO want urban renewal in Portland to "fall victim to politicians' pet projects and electoral concerns." Better that than it fall victim to certain well-heeled and well-connected developers' pet projects and politicians' lack of electoral concern.

[Bean]

Richard, that is a well written retort. I have always leaned towards keeping PDC independent, but you have some good points.

Where exactly does ALL of the money that PDC has come from? If it does not come from taxpayers, then the city should not have oversight of PDC. Seems straightforward.

Anyone know this?

[kjw]

Brian,
I am voting no. The PDC will be ham strung with this kind of political oversite. They need a certain amount of latitude to do business with the sharks and blood gets spilled every now and then. Unfortunately, if this passes, Portland will have a bleaker future with fewer civic minded projects.

[ws]

I'm not clearly aware of the reasons for PDC's auntonomy, but I'm generally inclined to think it has to do with a reaction against the big city machine syndrome some big city's became notoriously synonymous for in the last century...'40's-'50s or somewhere around that time. Like Chicago and Mayor Daley.

With the inherent power and specific autonomy associated with their position in city government, the thought and the reality, is that commissioners might be tempted to be instrumental in enabling development in ways designed to fulfill their personal ambitions rather than or before their official responsibility.

No system is perfect I suppose, but I favor Portland's current comissioner government with its indenpendant PDC. There've been irritations and aggravations with it, but no major incidents of graft and so forth.

Re; the south auditorium "devastation" project. I think support for that kind of wholesale reconfiguration of a city neighborhood was a product of many factors in addition to that of an entity like PDC. That kind of thing probably wouldn't happen here in Portland today.

[Randy Leonard]

I too think the PDC should be free of improper influence- whether it be from politicians or private sector interests.

Where we might disagree is that I believe the PDC is currently handicapped because it is unduly -if not improperly- influenced by some private sector developers.

For an example, PDC has undertaken a strategy to avoid paying "prevailing wages" on projects they invest public dollars in.

Often, the PDC will purchase property at or above the market rate. Subsequent to that purchase, the PDC has an appraisal done that shows the property is only worth a negative value.

Why would the PDC do that?

State law requires the payment of "prevailing wage" if anything of public value is invested in a project. If what is given to a developer by the PDC has no value, prevailing wages do not have to be paid. In partnership with some developers that work in Portland, the PDC made a decision to skirt the laws requirement for paying prevailing wages by having properties assessed at a negative value so as to argue "nothing of value" was given to the developer. Thus, sub-standard wages could be paid to workers who actually constructed the project.

For an example, look at the transaction for the property at SW 3rd and Oak (there are other examples). The PDC bought the 3rd and Oak property for $800,000 (it was appraised at $500,000) and spent another $500,000 remediating the site. Notwithstanding having $1.3 invested in the property, PDC had an appraisal done that said the property had a negative value of negative $2.7 million.

Documents reviewed later by the city council showed that the intended recipient of the SW 3rd and Oak property, Trammel Crow Developers, actually wrote the appraisal instructions that were the basis of the negative value assigned to the SW 3rd and Oak property.

That strategy, by itself, I believe, justifies having elected oversight of the PDC's budget. But there are other problems.

More recently the PDC has actually told the elected city auditor, Gary Blackmer, that he could not audit their financial records until he agreed to the conditions set by the PDC.

That position by the PDC says more than I can ever articulate about the PDC's current culture and so called "independence".

It is my view that the PDC has lost sight of the fact that it is a publicly financed economic development agency. I have no interest in distracting the PDC from doing its legitimate economic development work. However, I do have an interest that their transactions be as transparent as possible and that their development policies are consistent with the clear will of Portland taxpayers (over 70% of Portland's voters rejected a private sector attempt to repeal the statute).

[Ibid.]

If it passes we'll understand just how much good the PDC has done for Portland and how very little politicians know about creating a livable city.

As for oversight: The PDC Commissioners are appointed by the Mayor and approved by City Council.

Add to that the fact that the PDC holds public meetings for citizen involvement and the whole thing seems more like a play for power than so-called reform.

[ws]

I would agree with Randy Leanord's recounting of PDC's meandering away from the prescribed ethics associated with its responsibility to the public. When I first read about the negative value appraisal routine, I wondered why PDC would do that (actually, my first awareness of this sort of thing was the negative value deal Tri-met cooked up with the developers of the Allegro.).

A number of reasons might account for their action. Maybe it was altruistic and they of PDC thought they were doing the public and the City a favor in a move that they thought would expedite good development. Or, maybe there was just a little funny business going on. Hard to tell sometimes unless such incidents are put through lengthy, expensive court proceedings.

I still think an autonomous PDC is a good idea, but considering some of the deals they've been party to of late, it does look like greater oversight of their work is in order.

[Randy Leonard]

I should have said

..."(over 70% of Portland's voters rejected a private sector attempt to repeal the prevailing wage statute)."

[Frank Dufay]

I find Commissioner Leonard's arguments compelling. I'm sort of torn on this, because it doesn't feel like the complete answer, but in the current environment, more elected officials' oversight seems better than less.

the whole thing seems more like a play for power than so-called reform

What is "reform" other than a change in power relationships? In this case, giving more citizen oversight, at least through their elected officials.

[sk]

PDC is an independent agency, like TriMet and the Port of Portland. All three are governed by a board appointed by an elected offical. They all operate from taxes, and should have the same public accountability. They all affect the physical and natural environment of the city. So if this is about reform, why pick out PDC for this oversight but not the other two? Don't tell me it is more controversial. Heck, does anyone really know what the Port is spending its money on?

Seems like a power play by the most disfunctional city council in 20 years. I am voting no.

[Frank Dufay]

if this is about reform, why pick out PDC for this oversight but not the other two? Don't tell me it is more controversial.

OK, I won't tell you PDC is more controversial. But I think your point is well taken...indeed there should be more oversight and accountability for both the Port and TriMet. "Appoined boards" don't really cut it these days in terms of giving citizens a real say in policy-making. At least with elected officials you can vote them out of office.

[Ibid.]

Frank, seriously. You think that we're going to get progress in Portland by putting the PDC in the direct hands of politicians? As if.

I'm voting no.

[sk]

Yes, I agree that the politicians can't be trusted.

First of all, this city council has been making real estate deals regarding public property behind closed doors (Ball School, Mt. Tabor parkland). My fear is that they have the potential to do even more, and be able to blame PDC when the public finds out about them.

Also, the problem with elected officials is that they do not understand the complexities of real estates transactions and property investment. Regarding the project Commissioner Leonard describes above, see Randy Gragg's response in his January 7, 2007 Oregonian article (see link). Anytime you have private restrictions and/or heavy public requirements, it is going to negatively affect the value of property. We can not necessarily expect developers to pay "market value" for property which we require to to be developed in a particular way to promote a civic agenda.

Third, while commissioners say they don't want influence from developers over PDC's actions, they themselves intervene in their own bureaus' actions to produce outcomes that the staff wouldn't promote themselves. While sometimes that is a good thing, it is often not (i.e. land use decisions).

I don't trust this city council. This is all about promoting their own political careers. The City Coucil should set the goals of PDC, but not control it's budget or specific projects.

[Frank Dufay]

Anytime you have private restrictions and/or heavy public requirements, it is going to negatively affect the value of property. We can not necessarily expect developers to pay "market value" for property which we require to to be developed in a particular way to promote a civic agenda.

What a load of baloney. Just what "restrictions" were put on that property to create a negative value? What "civic agenda?"

You don't "trust politicians." Well, fine...who DO you expect to control and spend the public's money then?

[Joe Blow]

The public?