*Authorize conveyance of City-owned real property located at 5020 N Interstate Avenue to 5020 AA Limited Partnership or a Community Development Partners / Self-Enhancement, Inc. affiliate for development of a new 63-unit affordable housing project
The City of Portland ordains:
Section 1. The Council finds:
- The Portland Housing Bureau purchased 5020 N. Interstate Avenue (described in the address of record as 5050 N. Interstate Ave and referred to commonly as 5020 N. Interstate Ave, the “5020 N. Interstate Property”) using Interstate Corridor Tax Increment Finance District resources in 2016, as part of its North/Northeast Neighborhood Housing Strategy.
- Per the North/Northeast Neighborhood Housing Strategy the 5020 N. Interstate Property was land banked for the purpose of providing affordable housing opportunities for N/NE Preference Policy (“Preference Policy”) households.
- The Preference Policy addresses the harmful impacts of urban renewal by giving priority placement to housing applicants who were displaced, are at risk of displacement, or are descendants of households that were displaced due to urban renewal in North and Northeast Portland.
- In the spring of 2021, PHB published a Metro Bond Opportunity Solicitation (“M-BOS”) inviting developers to submit proposals for affordable rental housing projects. The M-BOS offered the 5020 N. Interstate Property for affordable housing development.
- The Metro Housing Bond (“Metro Bond”) Measure 26-199 was approved by voters in the Metro region in 2018 authorizing Metro to distribute the Metro Bond funds to local jurisdictions to fund affordable housing.
- The Portland Housing Bureau (“PHB”) is charged with implementing the housing policies of the City of Portland (“City”) under City Council Ordinance No. 184329 including the Local Implementation Strategy for the Metro Bond approved by City Council Ordinance No. 190095 on August 12, 2020.
- On November 23, 2021, PHB issued an Award Letter to Community Development Partners (“CDP”) and Self-Enhancement, Inc. (“SEI”) indicating selection of their project to receive up to $9,216,838 in Metro Bond funds and development rights to the 5020 N. Interstate Property.
- CDP and SEI will form a limited partnership, 5020 AA Limited Partnership (“Developer”), to acquire the site from PHB for a nominal fee to develop a new 6-story, mixed-use rental project known as 5020 N. Interstate consisting of 63 affordable units in the Overlook neighborhood (“Project”). PHB will require a 99-year covenant to maintain use of the site as affordable housing.
- Forty-six (46) units in the Project will be affordable to individuals and families earning up to 60% of area median income (AMI) and 17 units will be affordable to those earning up to 30% AMI.
- All units in the Project are subject to the Preference Policy targeting households who have histories of displacement from North and Northeast Portland.
- The Project consists of 15 one-bedroom units, 23 two-bedroom units, and 25 three-bedroom units. Forty-eight (48) units will be family-sized, being two-bedroom or larger, comprising 76% of the total units.
- The Developer will enter into a regulatory agreement with PHB for 99 years to continue affordability requirements and comply with additional City requirements. The 63 affordable housing units will count toward the City’s total unit production goals for the Metro Bond.
- The Project will result in the conveyance of a vacant City-owned parcel to support the development of affordable housing.
- On May 5, 2022 the PHB Housing Investment Committee recommended approval of the use of Metro Bond funds and conveyance of the 5020 N. Interstate Property for development of the Project.
NOW, THEREFORE, the Council directs:
- The Director of the Portland Housing Bureau is hereby authorized to execute, amend or modify a Disposition and Development Agreement and any other documents as may be required to convey the 5020 N. Interstate Property to 5020 AA Limited Partnership or a Community Development Partners (CDP) / Self-Enhancement, Inc. (SEI) affiliate, and advance the Project, subject to the approval as to form of such documents by the City Attorney’s Office.
SECTION 2. The Council declares that an emergency exists because a delay in the City’s approval would impair the ability of the Project to meet the timeline required by other financing sources and would delay the Project and could affect the budget; therefore, this Ordinance shall be in full force and effect from and after its passage.
An ordinance when passed by the Council shall be signed by the Auditor. It shall be carefully filed and preserved in the custody of the Auditor (City Charter Chapter 2 Article 1 Section 2-122)
Passed by Council
Auditor of the City of Portland
Mary Hull Caballero
Purpose of Proposed Legislation and Background Information
- This Ordinance requests City Council approval to convey the City-owned 0.46-acre site located at 5020 N. Interstate Avenue (described in the address of record as 5050 N. Interstate Ave and referred to commonly as 5020 N. Interstate Ave) to 5020 AA Limited Partnership or a Community Development Partners (CDP) / Self-Enhancement, Inc. (SEI) affiliate (Developer).
- PHB awarded development rights to the Developer for the 5020 N. Interstate site through the spring 2021 Metro Bond Opportunity Solicitation. The award also included Metro Bond funds in an amount up to $9,216,838.
- The land conveyance will allow the Developer to construct a new 63-unit, mixed-use affordable rental housing project at the site, known as 5020 N. Interstate (Project). Approval of the Ordinance will authorize the Director of the Portland Housing Bureau to execute a Disposition and Development Agreement (DDA) governing the terms of the conveyance and to advance the Project including construction and operation of the development as affordable housing.
Financial and Budgetary Impacts
- The Metro Bond award of up to $9,216,838 is from the City of Portland’s eligible share of Metro Bond funds totaling $211,056,579.
- PHB will regulate and monitor the project for a term of 99 years.
- PHB will charge a fee over the life of the project to cover compliance monitoring costs.
- The Project has been approved for System Development Charge (SDC) waivers, which collectively total an estimated $1,120,413 in foregone City revenue.
- Costs to PHB to maintain the site (security, cleanup) will be eliminated in the FY 2022-23 budget after the Project reaches financial close, anticipated Q3 2022.
- PHB purchased the site for $2,000,000 with Interstate Corridor Tax Increment Financing resources in 2016. The value of the property will be removed from the City’s accounts upon conveyance.
Community Impacts and Community Involvement
- 63 units of affordable housing in north Portland, in the Overlook neighborhood.
- Redevelopment of a vacant half-block site near high-capacity transit.
- Activation of N Interstate Avenue will be achieved via ground floor commercial space.
- The project is subject to PHB’s N/NE Preference Policy. Priority will be given to households who have histories of displacement from North and Northeast Portland due to harmful urban renewal practices.
- 17 (or 27%) of the units will be restricted to households earning 30% AMI or less and remaining 46 units at or below 60% AMI.
- 48 (or 76%) of the units will be family-sized (two and three bedrooms).
- Self-Enhancement, Inc. will provide resident services to help residents navigate social services and access community resources.
- The Project is on track to meet or exceed PHB’s required equity in contracting goals of 30% certified DMWESB-SDV firms for construction costs and 20% for professional services.
CDP and SEI elected to use the existing Project plans from the previous developer, Proud Ground. Prior to involvement by CDP/SEI, Proud Ground engaged the Overlook Neighborhood Association (OKNA) as part of the Design Review process, including presentations at OKNA’s November 2018 board and general meetings. OKNA appealed to the City’s Design Commission to deny a requested adjustment that would have eliminated active use square footage on the ground floor. The Design Commission agreed with OKNA and 5020 N. Interstate will have ground-floor commercial space as required by the Centers Main Street Overlay Zone.
Earlier engagement by Proud Ground also included discussions with Portland African American Leadership Forum, the Urban League, Black Parents Initiative, and SEI, along with participation in the 2014 community forums—attended by more than 450 people—that led to development of PHB’s N/NE Neighborhood Housing Strategy. To respect the prior outreach efforts, as well as feedback from CDP/SEI’s engagement with the N/NE Oversight Committee in 2021/2022, the Developer elected to retain all of the 2- and 3-bedroom family units in the building plans, maximize the number of 30% AMI units, and reconfigure the ground floor to add space for resident services delivery.
Unit Mix and Affordability
Project Overview: New multifamily rental housing construction
Total Units: 63
Permanently Affordable: 63 (17 at 30% AMI, 46 at 60% AMI)
Permanent Supportive Housing (PSH)
100% Renewable Goal
5020 N. Interstate is pursuing Earth Advantage Multifamily Gold certification. This project will contribute to the City’s goals to reach 100% of energy needs with renewable energy by 2050.
Budget Office Financial Impact Analysis
This property was purchased with Interstate Corridor Tax Increment Financing Resources in 2016. Ongoing maintenance costs will be eliminated from PHB’s budget after the project reaches financial close. The developer was awarded development rights and Metro Bond Funds up to $9.2 million as part of the Spring 2021 Metro Bond Opportunity Solicitation.
399 Consent Agenda in May 18-19, 2022 Council Agenda
- Commissioner Dan Ryan Yea
- Commissioner Jo Ann Hardesty Yea
- Commissioner Mingus Mapps Yea
- Commissioner Carmen Rubio Yea
- Mayor Ted Wheeler Yea