Wednesday, October 27, 2010

Old Town's Block 8

Ryan Frank reports that the Naitos - Bill Naito Company - is meeting with Commissioner Saltzman to discuss a height variance for their Old Town project on Block 8. He actually implies that the Naito Company owns the property, but I don't believe that is accurate.

I don't think that any portion of this block is owned by the Bill Naito Company. It was acquired by PDC for the Ankeny Burnside project that failed. There has been planned development by the Naito Company for the Oregon College of Oriental Medicine site ever since; but although it was speculated that the Naito Company would reacquire the land - it doesn't appear that it has.

It would be for good reasons that the Naito Company would not want to reacquire the land until the project appears feasible. This is not the first go around on a height variance. And development in Old Town  faces many obstacles, e.g., those often raised by the historical preservationists. Thus, ownership would leave the Naito Company paying property taxes on property it has been deterred from developing.

A goal of urban renewal is more property tax revenue.
But land acquired by PDC is removed as a revenue source. Until the property is transferred to private ownership not only is there no tax revenue that virtually funds everything done by the local governments, e.g., basic services, it shifts the burden to other property taxpayers to "pay" for urban renewal.

Arguably, it is an absolute money loss. This entire block has been owned and unused by PDC resulting, since 2004, in a loss of about $2 mil per year in property tax revenue. And given that this project will, more likely than not, receive various tax incentives - it will never produce property tax revenue to make up for the loss. 

Urban renewal Portland style is an absolute financial failure. There is no evidence that the city is financially better positioned because of urban renewal - no cause and effect.