191071

The City of Portland ordains:  

Section 1. The Council finds:  

1. Local, State and Federal under-investment in housing, access to capital and social services, exclusionary public policies and laws, the legacy of traditional urban renewal practices and land use decisions, and infrastructure investments have collectively harmed the economic health of Communities of Color   in Cully and citywide. These include African American and Black persons; Indigenous and Native American persons; Latino/a/e persons, and persons of color. Priority Communities also include immigrants and refugees of any legal status; renters; mobile home residents; persons with disabilities; low-income people; houseless people; and other population groups that are systemically vulnerable to exclusion from Cully due to gentrification and displacement. 

2. As private market pressures intensify in Cully as the area becomes more desirable, there is an urgent need for restorative and transformative community-centered investments that can be used to intervene in the market and proactively and strategically combat rising residential and commercial rents, which disproportionately affect Communities of Color due to prior harm. 

3. On May 25, 2011, City Council adopted the City of Portland Neighborhood Economic Development Strategy (NED Strategy) with the goal of fostering economic opportunity and neighborhood vitality throughout Portland through community-based partnerships, including: Objective I. Create the Focus Area Program for commercial areas within priority neighborhoods and Objective II.B.3. Establish Neighborhood Opportunity Districts as small scale, long-term, debt-free tax increment finance districts in three to six commercial hubs within priority neighborhoods. 

4. On April 11, 2012, in alignment with the NED Strategy, City Council approved the creation of six micro tax increment finance (TIF) districts - in 42nd Avenue, 82nd Avenue and Division (Jade District), Cully Boulevard, Division-Midway, Parkrose, and Rosewood – with the purpose of investing in and launching the Neighborhood Prosperity Network (NPN) of partners in commercial areas and along specific corridors with lagging investment, higher poverty rates, lower median income, greater racial diversity, and interested community groups. 

5. Prosper Portland has cultivated strong relationships and facilitated equity-centered, small-scale community economic development priorities within the Cully area through partnership with two NPN districts in Cully, Our 42nd Avenue and the Cully Blvd Alliance, whose accomplishments include:  administering small scale TIF grant funding to respond to community economic development needs, from physical improvements for small businesses to community plazas to managing and tenanting affordable commercial space; engaging community and businesses to highlight activities of the district such as the Cully Farmers Market and Community Coffee Hour; creating connections to business technical assistance and workforce supports; and, deploying critical resources to address community and business needs during the pandemic in partnership with Prosper Portland, the City and Multnomah County by disbursing multiple rounds of grant funding, providing Personal Protective Equipment (PPE), encouraging diverse businesses to apply for federal funds, and assisting with grant applications. 

6. The Portland Housing Bureau (PHB) has cultivated strong partnerships in Cully to deliver on affordable rental housing and housing stabilization in partnership with Habitat for Humanity, Home Forward, Community Development Partners (CDP), Native American Youth and Family Center (NAYA) and Hacienda Community Development Corporation (Hacienda CDC), amongst others, which most recently resulted in nearly $24 million of Portland’s Affordable Housing Bond resources in two affordable housing projects. Combined, these projects create 191 new homes that will be permanently affordable to low-income households, ranging from studios to three-bedroom apartments. 

7. The Bureau of Planning and Sustainability’s Gentrification and Displacement Risk Typology Assessment shows the Cully area in Dynamic and Late Type 2 phases of gentrification. The dynamic phase indicates an area currently undergoing gentrification with higher shares of vulnerable populations and the Late Type 2 phase indicates areas that have experienced demographic change by losing higher shares of vulnerable populations. 

8. Cully has a larger share of low-income residents than Portland as a whole, with a mean household income that is almost $20,000 less than that of all Portland households, and is experiencing increased market and gentrification pressures through rising retail and office lease rates (37% and 51%, respectively) and increased housing costs. 

9. The 2020 State of Housing in Portland Report found that rental housing is unaffordable to three-person extremely low-income households, Black residents, and single mothers in Cully-Roseway, outlined how homeownership is affordable only to couples with children and white residents, and identified Cully-Roseway as the neighborhood with the second largest loss of racial diversity between 2013 and 2018. 

10. In 2018, seven community-based organizations working in the Cully neighborhood of northeast Portland -- Our 42nd Avenue, Cully Boulevard Alliance, Cully Association of Neighbors, Habitat for Humanity, Native American Youth and Family Center, Verde, and Hacienda CDC -- approached Prosper Portland to explore creating, within Cully, a full-sized Tax Increment Financing district or urban renewal area (Cully TIF District or Area), building on the work of the Neighborhood Prosperity Network and community based partners and scaling City support to counter market pressures and center people most at risk of displacement. 

11. The seven partner organizations referred to above, and other residents, formed an Exploration Leadership Committee (ELC) to facilitate and lead a community conversation around the potential new Cully TIF District. The creation of the Cully TIF District aims to equitably address challenges and center the experiences and needs of communities most at risk of displacement pressures that could accelerate gentrification. Between 2019 and 2022, the ELC, together with Prosper Portland and PHB staff, facilitated a community led process regarding a potential new Cully TIF District with funding from a Metro 2040 Planning and Development grant, City General funds, and Prosper Portland funds. 

12. The ELC issued a Preliminary Report establishing a 2040 vision of the Cully neighborhood as a place that provides a sense of belonging for its residents, particularly for those most vulnerable to displacement, with plentiful safe, affordable housing, thriving Black-, Indigenous-, and People of Color (BIPOC)-owned businesses, rewarding employment opportunities, safe and accessible transportation options, parks and open spaces, a clean and healthy environment, climate resiliency, with places and programs that reflect the cultural diversity of BIPOC individuals. The Preliminary Report also identifies many challenges in Cully, including rising costs of housing and rents, sparse commercial development, poor walkability, insufficient transit, brownfields and a lack of open space/recreational opportunities and provides a baseline of input regarding initial shared priorities for the district from community members. 

13. Prosper Portland, PHB and the ELC partnered on engagement in the preparation of the proposed Cully TIF District urban renewal plan (Cully TIF District Plan), TIF report required under ORS 457.087 (TIF Report),  and Governance Charter, with City agencies focused on broad public engagement and the community engagement subcommittee of the ELC leading deeper, focused engagement with Cully’s Black and African American community, Latine and Hispanic community, Somali community, Indigenous and tribal communities, low-income homeowners, mobile home park residents, small business owners and workers and houseless people. 

14. In August 2022, the ELC voted in favor of supporting the City’s adoption of the Cully TIF District Plan, TIF Report and Governance Charter. 

15. Approval of the Cully TIF District would provide $350,000,000 in maximum indebtedness and significant resources over the life of the Cully TIF District to stabilize residents and small businesses, with more modest resources available in the first five to ten years that will be critical to its stabilization. Forty-five percent or $143,000,000 would be reserved for PHB-stewarded investments in line with the City of Portland’s Housing Set Aside Policy and the remaining would be administered by Prosper Portland with a minimum of 45 percent reserved for economic development investments. The Cully TIF District is expected to reach maximum indebtedness in 2059. 

16. Affordable housing and economic development investments within the Cully TIF District will be guided by 5-Year Action Plan priorities, which will be co-created with a forthcoming Community Leadership Committee (the Committee) as further outlined in the proposed Governance Charter and align with the list of eligible TIF investments outlined in the Cully TIF Plan. 

17. Implementation of the Cully TIF District Plan will be undertaken with significant community leadership and partnership as set forth in the Governance Charter which further details the Committee’s role in decisions, recommendations, and accountability oversight; how the Committee will make recommendations regarding implementation; as well as membership, Charter compliance, and other pertinent matters. 

18. The Cully vision aligns with Prosper Portland’s Strategic Plan goals to create healthy, complete neighborhoods, foster wealth creation within communities of color, and form 21st century civic network, institutions, and partnerships. 

19. The Cully TIF District Plan, the TIF Report, and the Governance Charter, each attached hereto as Exhibits A, C, and Exhibit 2 to Exhibit A, respectively, have been drafted to address how TIF investments in Cully will accomplish development of the projects described in the Cully TIF District Plan. 

20. The Cully TIF District Plan has been prepared in conformance with ORS Chapter 457 and with public involvement in all stages of its development. 

21. The approval procedures required by ORS 457.095 were followed, and notice of the November 9, 2022, Council hearing was sent on October 3, 2022, to postal patrons in the city of Portland, as required by ORS 457.120. 

22. The Area, as a whole, is blighted (as defined in ORS 457.010(1)) based on the information set forth in Section XI of the Report. The indices of blight identified in the Report include: 

    1. Based on information from the Portland Bureau of Transportation, Section XI(B)(1) of the Report shows that 47 percent of the streets within the Area are in poor or very poor condition. Such inadequate rights of way constitute blight in accordance with ORS 457.010(1)(e).

    2. Based on information from the Bureau of Environmental Services, Section XI(B)(2) shows that sewer and stormwater lines in the Area are in poor or very poor or immediate attention condition. Such inadequate utilities constitute blight in accordance with ORS 457.010(1)(e). 

    3. Based on information from the Portland Water Bureau, Section XI(B)(3) of the Report shows there are water main deficiencies in the Area that are in poor or very poor condition. Such inadequate utilities constitute blight in accordance with ORS 457.010(1)(e). 

    4. An analysis of the improvement to land ratio (“I:L”) in the Area, summarized in Section XI (D)(3) of the Report, shows that over seventy-nine percent (77%) of the Area has an improvement to land ratio of less than 1:0. Such prevalence of depreciated values and underutilized properties constitute blight in accordance with ORS 457.010(1)(g). In addition, there are two hundred thirty-three vacant parcels in the Area for a total of 107.55 acres of land. 

23. The stagnant and unproductive condition of the land, combined with the inadequate rights of way set forth in the Report result in the Area, as a whole, being blighted as defined by ORS 457.010(1). Rehabilitation and redevelopment are necessary to protect the public health, safety and welfare of the community by curing the identified blight. 

24. Acquisition of real property is necessary to carry out the Cully TIF District Plan. The purpose and use of parcels to be acquired are described in Section VII of the Plan. 

25. No housing displacement is anticipated in the Plan. If displacement occurs, provisions for such displacement will be made in accordance with ORS 35.500 to 35.530. Section XI of the Cully TIF District Plan establishes the procedures for the relocation of displaced persons in accordance with ORS 457.095(2)(d). 

26. Adoption of and carrying out the Plan is economically sound and feasible, based on the Financial Analysis of the Plan as set forth in Sections VI, VII, and VIII of the Report. 

27. The City will assume and complete any activities prescribed to the City by the Cully TIF District Plan. 

28. On September 14, 2022, the Prosper Portland Board of Commissioners held a public hearing and, after considering testimony and other information presented to it, unanimously recommended approval of the Cully TIF District Plan (Resolution No. 7465). 

29. Pursuant to ORS 457.089(2), notice of the intended Cully TIF District was forwarded to the governing body of each affected taxing district on September 15, 2022, with confirmation of receipt of the documents by all taxing districts received as of September 20, 2022. Prosper Portland has consulted and conferred with such taxing districts, and the City Council has not received any written recommendations from these districts. 

30. The Prosper Portland Executive Director, under authorization from Prosper Portland’s Board of Commissioners, submitted the Cully TIF District Plan, Report and Governance Charter, along with supporting materials, to the Council for final approval in accordance with ORS 457.095. 

31. On September 27, 2022, the Portland Planning and Sustainability Commission held a public hearing and voted unanimously to recommend that the Portland City Council adopt the Cully TIF District Plan and found that it conforms to Portland’s Comprehensive Plan. Chair Steph Routh’s letter of support is attached as Exhibit D to this Ordinance. 

32. On October 27, 2022, PHB and Prosper Portland met with the Multnomah County Board of Commissioners to review the Cully TIF District Plan, including the projects, the maximum indebtedness, and the time frame of the plan. 

33. On November 9, 2022, the City Council held a public hearing to review and consider the Cully TIF District Plan, Report, Governance Charter and Planning and Sustainability Commission recommendation, and to receive public testimony. 

34. Pursuant to ORS 457.095, the City Council has considered any public testimony on the Cully TIF District Plan, Report, Governance Charter, the materials provided by Prosper Portland, and the Planning Commission recommendations. 

35. The City Council finds that the Cully TIF District Plan conforms to the Portland Comprehensive Plan, as shown in the Findings of Fact Report, attached as Exhibit B to this Ordinance.  

36. The City Council finds, as set forth in the Findings of Fact Report, that the proposed Cully TIF District area is blighted and that rehabilitation and redevelopment described in the Cully TIF District Plan is necessary to protect the public health, safety or welfare of the city. 

37. The City Council finds that the Cully TIF District Plan provides an outline for accomplishing the urban renewal projects described therein, it complies with ORS 35.500 regarding housing and displacement, and adoption and carrying out of the Cully TIF District Plan is economically sound and feasible. 

NOW, THEREFORE, the Council directs:  

1. As set forth and described more specifically in the Cully TIF District Plan and in accordance with the Cully TIF District Plan, the Board encourages investment in healthy public/private/community partnerships and projects with community development corporations, community-based organizations, and culturally specific businesses and real estate developers with ties to Cully and Priority Communities to achieve the objectives of the Cully TIF District Plan. 
    
2. The Cully TIF District Plan, attached hereto as Exhibit A, and incorporated herein by reference, is hereby approved and will be effective thirty (30) days after passage of this ordinance.  
    
3. The Report on Cully TIF District, attached hereto as Exhibit C, and incorporated herein by reference, is hereby approved. 
    
4. The Governance Charter, attached hereto as Exhibit 2 to Exhibit A, and incorporated herein by reference, is hereby approved. The consequences for not following the agreements and procedures outlined in the Governance Charter are set forth exclusively within the document. 
    
5. That the success of TIF District implementation long term, with its intentional focus on Priority Communities, will require community-based staff to help coordinate and advocate for the forthcoming Community Leadership Committee; continue to engage with vulnerable communities to ensure Action Plan priorities reflect their needs; and proactively provide navigation services. It is expected that Prosper Portland will bring forward a proposal to satisfy these needs prior to the next budget cycle. 
    
6. Prosper Portland shall administer implementation of the Cully TIF District Plan, and the Portland Housing Bureau shall assume and complete activities agreed upon by the City and prescribed to it by the Cully TIF District Plan. 
    
7. The Plan shall be financed, in part, by division of taxes as provided in ORS 457.420 to 457.450. 
    
8. The City Auditor shall forward to Prosper Portland and the Planning Commission certified copies of this Ordinance upon  approval by the Council. 
    
9. The Prosper Portland shall record in the Deed Records of Multnomah County, Oregon, a copy of this Ordinance and the Cully TIF District Plan, upon adoption by the Council. 
    
10. The Prosper Portland shall send a copy of this Ordinance and the Cully TIF District Plan to the Multnomah County Assessor. 
     
11. The Prosper Portland, in accordance with ORS 457.115, shall publish notice of adoption of this Ordinance approving the Cully TIF District Plan, including the provisions of ORS 457.135, in the newspaper having the greatest circulation in the City within four days following adoption of this Ordinance.