157-2024

Report

Accept Portland Enhanced Services District Program Assessment and Recommendations report

Accepted

See attached report.

Impact Statement

Purpose of Proposed Legislation and Background Information

In August of 2020, the City of Portland’s Auditor released an audit of the existing Enhanced Services District (ESD) program. This audit highlighted concerns from the public surrounding perceived lack of transparency of ESD budgets and bodies of work, and lack of oversite provided by the City, among other things.

The audit highlighted the following key needs, among others the City needs to address:

  • Review the purposes of the districts and the City’s responsibility for them
  • Develop guidelines for district formation
  • Review scope of allowed services in public spaces
  • Encourage more inclusive district governance
  • Develop guidelines for accountability and transparent reporting
  • Revise district contracts based on recommendations
  • Develop process for effective City oversight of district agreements

These recommendations led to several initial changes to the ESD program, including the creation of the ESD Coordinator position, tasked with providing oversight of each ESD, as well as the incorporation of numerous provisions intended to improve oversight and transparency in new contracts with each of the three ESDs.

In addition, the City hired a third-party consultant to further review audit findings, engage with stakeholders and make recommendations to City Council on ESD program improvements based on experience with national best-practices. This work began in September 2023 and their recommendations are being presented with this report to City Council. Implementation efforts are anticipated to begin following the Council presentation and will likely take several years to fully implement.

Financial and Budgetary Impacts

Portland currently has three Enhanced Services Districts (ESDs): Central Eastside Together, Downtown Portland Clean and Safe, and the Lloyd ESD. All three ESDs combined encompass 1,230 acres, or nearly two square miles of Portland’s downtown core. The oldest ESD is Downtown Portland Clean and Safe, formed in 1989 and the newest is Central Eastside Together, formed in 2019.

ESDs perform vital functions that directly and indirectly benefit the businesses, property owners – both commercial and residential – and visitors within their districts. These activities benefit the City at large because they help create safe, vibrant, healthy commercial districts that are appealing to private investment and economic development.

Some of these functions include:

  • Janitorial work that beautifies the sidewalks and alleys for residents, employees, and visitors
  • Private security that integrates with Portland Police resulting in a unified approach to curbing anti-social criminal activities
  • Public art that enhances the public realm and gives a platform to local artists
  • Business attraction and retention efforts aimed at filling vacant commercial spaces and supporting existing businesses
  • Transportation assistance aimed at reducing single occupancy commutes resulting in less traffic and carbon emissions

The property owners within these three districts have opted to assess themselves more than $8.8 million dollars annually to fund the aforementioned services, augmenting the City services already provided, and enhancing the overall experiences in their districts for residents, employees, property owners, and visitors.  Furthermore, these districts attract visitors from near and far who spend tourism dollars year-round. People choose to live, work, set up shop, and/or visit these districts in part because they are home to:

  • Moda Center which hosts the Portland Trailblazers, concerts, and more
  • Oregon Convention Center
  • High end hoteliers like The Ritz Carlton, the Benson, Hilton, The Duniway, KEX Portland, Jupiter, Hotel Grand Stark, and more
  • Foodie attractions like Voodoo Doughnut, Le Pigeon, Kachka, Canard, Lechon, Tercet, and more
  • Popular breweries like Wayfinder, Away Days, Deschutes, Rogue, Baerlic, and more
  • Pioneer Courthouse Square
  • Tom McCall Waterfront Park
  • Oregon Museum of Science and Industry
  • Powell’s Books

Because these three districts are home to some of Portland’s top attractions, lodging, and food, the ESDs’ value and impact supporting these districts cannot be understated.

Community Impacts and Community Involvement

Overall, providing needed oversight of Portland’s existing ESDs while establishing guidelines for district formation, governance, and management will improve accountability and transparency, benefiting the ESDs, their stakeholders, and the City.

In developing their recommendations, BDS Planning spent several months engaging with public officials, civic leaders, ESD stakeholders (including condo owners, business owners, and property owners within the ESD), ESD leadership, and City staff. Their engagement involved one-on-one and public meetings held virtually and in person, with hybrid options available for all meetings.

BDS Planning unveiled their draft recommendations in a public (hybrid) meeting on Tuesday, December 12, 2023. A pdf of the draft recommendations, the presentation slide deck, and an audio recording of the meeting was added to the City’s ESD webpage and public comment was accepted via email through January 15, 2024. BDS Planning integrated themes reflective of the public comments received, into their report. Furthermore, all public comments in-full can be found in the report’s appendix.  

Communication for all public meetings and updates on the progress was sent out via an email list. This email list is comprised of interested stakeholders who expressed interest in staying informed about the City’s response to the 2020 Audit on the ESD program. Interested parties were added to the email list after they clicked the, “Join email list,” button on the City’s ESD webpage and this list has continued to grow since late 2021. This email list was utilized during the BDS Planning work and there are currently more than 90 recipients on it. Progress on the audit response was also regularly updated on the City’s ESD webpage. One final email reminder about public comment period, and council hearing date went out on January 9, 2024.  

This Council action is acceptance of the report. Depending on direction from Council, implementation of some, all or none of the recommendations will follow. Some of these changes will require formal amendments to City Codes and/or approval of amended contracts with the districts. To the extent these implementation actions will require City Council approval, there will be additional opportunities for public input.

100% Renewable Goal

Not applicable. 

Budget Office Financial Impact Analysis

No fiscal impact to accept the report, which advocates that Portland should sustain and expand its ESD program at the same time it works to improve both the City’s oversight and individual ESD operations. The report recommends that each ESD should continue paying the City the same percentage (2%) administration fee for calculating, collecting, disbursing, and reporting ESD assessments. The report does not contain any estimates for how much it would cost to implement its recommendations.

Document History

Item 157 Time Certain in February 14, 2024 Council Agenda

City Council

Accepted

Motion to accept the report: Moved by Mapps and seconded by Gonzalez.
  • Commissioner Carmen Rubio Yea
  • Commissioner Dan Ryan Yea
  • Commissioner Rene Gonzalez Yea
  • Commissioner Mingus Mapps Yea
  • Mayor Ted Wheeler Yea

Introduced by

Contact

Karl Lisle

Spectator Venues Program Manager

Devin Reynolds

Enhanced Services District Coordinator

Requested Agenda Type

Time Certain

Date and Time Information

Requested Council Date
Requested Start Time
2:00 pm
Time Requested
90 minutes
Confirmed Time Certain