Council convenes as Prosper Portland Budget Committee to receive the Prosper Portland FY 2024-25 Proposed Budget and hold a public hearing
Budget Message from Kimberly Branam, Executive Director
To Members of the Prosper Portland Board of Commissioners and Portland City Council:
Prosper Portland focuses on creating economic growth and opportunity toward a future in which Portland is more globally competitive, equitable, and prosperous. Advance Portland: A Call to Action for Inclusive Economic Growth, adopted by City Council in April 2023, establishes a focused plan to collectively deliver inclusive and sustainable economic growth. Shortly after adoption of Advance Portland, the Prosper Portland Board of Commissioners approved an update to the agency’s Financial Sustainability Plan to i) adjust for impacts of the COVID pandemic and ii) incorporate budgetary changes tied to the conclusion of most tax increment finance (TIF) districts between 2020 and 2025 and return of funds to the City. The updated Financial Sustainability Plan provides a clear path toward funding the programs, priorities, and policies necessary to implement elements of Advance Portland being led by Prosper Portland.
Prosper Portland’s fiscal year (FY) 2024‐25 Proposed Budget prioritizes implementation of Advance Portland and aligns with the Financial Sustainability Plan. The inclusion of returning TIF General Fund resources together with existing ongoing General Fund, Community Development Block Grant, and Cannabis Tax Funds provides the foundation to support operations as the current generation of TIF districts conclude; expands programming to launch the Office of Small Business; and broadens citywide lending programs to meet the needs of small businesses and to develop new middle-income housing development. Additional resources allocated from the Portland Clean Energy Fund (PCEF) enable new loans, grants, and technical assistance supporting small businesses and commercial development that further both Advance Portland and the Climate Investment Plan priorities.
The FY 2024-25 Proposed Budget deploys the final resources for projects and programs in concluding TIF districts while finalizing work with stakeholders to bring forward new, potential TIF districts to support Inclusive development and affordable housing resources in the Central City and East Portland for the next 30 years.
FY 2024‐25 BUDGET OVERVIEW
Prosper Portland’s FY 2024-25 Proposed Budget totals $208 million in expenditures and 105 positions, up from 98 positions in FY 2023-24. The Proposed Budget is currently balanced using 1) the latest updates on projects and programs and resources from TIF district community action plans, 2) constrained General Fund, Recreational Cannabis Tax Funds, and Community Development Block Grant funds 3) the Returning TIF Decision Package, and 4) updated estimates for loan portfolio and property income revenues.
In total, the budget includes $17.3 million in Ongoing, One-Time and Returning TIF General Fund resources, $4.6 million in Recreational Cannabis Tax Fund resources, $137 million for TIF district spending and $5.1 million in Federal Grant and other resources. All remaining American Rescue Plan Act (ARPA) funds supporting economic support for small businesses, events and workforce development will be spent by December 31, 2024.
The FY 2024-25 Proposed Budget incorporates the Returning TIF Decision Package and transitions a significant portion of funding for programs and operations from expiring TIF districts to new Returning TIF General Fund resources. Specifically, the Returning TIF decision packages direct $2.6 Million to fund the full cost of current citywide economic development programs; $3 Million to deliver $45M in financial assistance and investment outside of TIF districts, small business tenanting and leasing assistance, and ongoing loan and asset management; and $2 Million for a total of seven positions across the previously one-time supported Office of Events and Film and the newly established Small Business Office.
The Proposed Budget also incorporates an additional $1.9 million in funding that is included in the Mayor’s Proposed Budget. The funding includes:
- $1 million in one-time funding to support the Office of Events and Film with an additional position, and resources to support events and activities through FY 2024-25,
- $200 thousand in additional one-time resources to implement the Small Business Office,
- $500 thousand in one-time funding for additional repair grants to support small businesses and,
- $200 thousand in ongoing funding for a position to engage with large scale, public private real estate projects outside of established Tax Increment Finance districts
FY 2024‐25 BUDGET ALIGNMENT TO ADVANCE PORTLAND
Prosper Portland’s General Fund, Cannabis Tax Fund, Community Development Block Grant, and Enterprise
Zone Funds, along with remaining ARPA funds, provide critical citywide resources to work toward the goals of Advance Portland. In total, $28 million in General Fund, Community Development Block Grant, Cannabis Tax Fund, ARPA, and Enterprise Zone resources are aligned to the Advance Portland objectives in the following ways:
- Propel Inclusive Economic Growth & Innovation through traded sector business retention, expansion, and recruitment, Enterprise Zones, international trade development, and film recruitment and navigation through the Office of Events and Film.
- Support BIPOC Entrepreneurs to Start, Scale and Innovate through creating the new Office of Small Business (which includes and builds on the Small Business Hub and Inclusive Business Resource Network), Reimagine Oregon Economic Opportunity Grant Fund, Mercatus BIPOC Business Registry, small business repair and stabilization grants, and My People’s Market.
- Foster a Vibrant Central City & Neighborhood Commercial Districts through the Neighborhood Prosperity Network, partnership with Venture Portland, funding to explore new TIF districts in East Portland and the Central City, events navigation and activations through the Office of Events and Film, and preserving affordable ground commercial space at The Fairfield.
- Connect Portlanders to High Quality Jobs through youth and adult workforce development programs serving culturally and geographically diverse populations across Portland and initiatives like Portland Means Progress.
TIF Districts will support significant projects in FY 2024-25 as many existing districts conclude. Three districts, North Macadam, Gateway and the City’s newest district, Cully, will continue to receive new tax increment proceeds, while all other districts (South Park Blocks, Oregon Convention Center, River District, Central Eastside, Interstate, and Lents) will be sunsetting, and concluding as final TIF District proceeds are spent. TIF District resources and action plans are aligned to the Advance Portland objectives in the following ways:
- Foster a Vibrant Central City through the Old Town Action Plan; Broadway Corridor; OMSI Master Plan; and South Waterfront/North Macadam TIF District investments in infrastructure to unlock new mixed-use, mixed-income development.
- Foster Vibrant Neighborhood Commercial Districts through the N/NE Community Development Initiative Action Plan and the Williams & Russell project; the Lents Action Plan and related development at SE 92nd and Harold; the Gateway Action Plan and anticipated infrastructure improvements and related development at NE 102nd and Pacific; as well as community livability grants and small business grants and loans along key corridors. The Cully Action Plan will be completed and launched.
- Support BIPOC Entrepreneurs to Start, Scale and Innovate through business lending programs which can be scaled citywide through the Strategic Investment Fund as TIF districts close out; affordable commercial tenanting at projects like The Nick Fish, Lents Commons, Alberta Commons, and the Fairfield; via small business grants, and investments of the Construction Equity Fund.
- Connecting Portlanders to High Quality Jobs through major projects like infrastructure improvements and affordable housing development at Broadway Corridor and other public private partnerships, traded sector business loans and grants for capital improvements in key job centers like the Central Eastside, and longer-term impacts through the Construction Equity Fund and related outcomes.
BUDGET PROCESS
Prosper Portland staff reviewed the FY 2024‐25 Draft Budget with its 14‐member Community Budget Committee (CBC), which met three times over the course of the budget cycle and whose members represent a diverse array of geographic, industry‐sector and community stakeholders. The Prosper Portland Board held a work session on February 1, 2024, to review General Fund programming and TIF district spending plans that were incorporated into the Requested Budget. The Requested Budget became part of the overall Requested Budget submitted by the Community Development Service group with the budgets for the Bureau of Planning and Sustainability, Portland Housing Bureau, and Bureau of Development Services and presented to the Portland City Council on February 13, 2024. Staff also reviewed specific TIF district Requested Budgets with community and neighborhood organizations to receive input. The CBC letter and a summary of TIF district budget outreach is included in the Budget Process section of the Adopted Budget. These partnerships will continue to shape economic development priorities in FY 2024‐25.
Official Record (Efiles)
Impact Statement
Purpose of Proposed Legislation and Background Information
Portland City Council is convened as the Prosper Portland Budget Committee to receive the FY 2024-25 Budget Message and Proposed Budget and hold a hearing on the Proposed Budget. City Council will vote to approve the Prosper Portland budget, with any amendments on May 15, 2024.
Financial and Budgetary Impacts
Prosper Portland’s FY 2024-54 Proposed Budget totals $208 million in expenditures and 105 positions, up from 98 positions in FY 2023-24. The Proposed Budget is currently balanced using 1) the latest updates on projects and programs from Tax Increment Financing (TIF) District community action plans, 2) the latest TIF forecasts developed in conjunction with debt management staff at the City Office of Management and Finance, 3) the City Budget Office’s current service level funding of General Fund resources for economic development, and 4) updated estimates for loan portfolio and property income revenues.
Prosper Portland’s General Fund, Cannabis Fund, Community Development Block Grant, and Enterprise Zone Funds, along with remaining federal funds from the American Rescue Plan (ARPA), provide critical citywide resources to work toward the goals of Advance Portland. In total $28 million in General Fund, Community Development Block Grant, Cannabis Fund, ARPA, and Enterprise Zone resources are aligned to the Advance Portland objectives.
The FY 2024-25 Proposed Budget incorporates the Returning TIF Decision Package and transitions a significant portion of funding for programs and operations from expiring TIF districts to new Returning TIF General Fund resources. Specifically, the Returning TIF decision packages direct $2.6 Million to fund the full cost of current citywide economic development programs; $3 Million to deliver $45M in financial assistance and investment outside of TIF districts, small business tenanting and leasing assistance, and ongoing loan and asset management; and $2 Million for a total of seven positions across the previously one-time supported Office of Events and Film and the newly established Small Business Office.
Total additional funding included in the Mayor’s Proposed Budget includes:
• $1 million in one-time funding to support the Office of Events and Film with a senior position and resources to support events and activities through FY 2024-25,
• $200 thousand in one-time resources to launch the Small Business Office,
• $500 thousand in one-time funding for additional small business repair grants,
• $200 thousand in ongoing funding for a position to engage with large scale, public private partnerships outside of established Tax Increment Finance districts.
The staffing increase to 105 positions comes as a result of a small business focused Portland Clean Energy Fund package that includes six new staff who will be deploying over $30 million in resources over the next five-years as well as incorporating the Returning TIF Decision Package and additional one-time and ongoing General Funds included in the Mayor’s Proposed Budget outlined above.
Community Impacts and Community Involvement
Prosper Portland’s fiscal year 2024‐25 Proposed Budget supports interventions and investments in furtherance of Advance Portland: A Call to Action for Inclusive Economic Growth. The proposed budget will help Portland’s small businesses, traded sector industries and Central City and neighborhood commercial districts to stabilize and grow – through community‐driven, equity‐centered programs like IBRN, Mercatus, My Peoples Market, Portland Means Progress, TIF district action plans, small business grants and loans, and the Neighborhood Prosperity Network. Recognizing the critical need to strengthen diverse small businesses, the budget includes resources for: operating and capital funding for immediate window repair, and longer-term business growth and expansion; helping industry partners to deploy innovative green products and services; and igniting major events to drive foot traffic back and tourism. The FY 2024-25 Proposed Budget also continues to incorporate ongoing Reimagine Oregon and Inclusive Business Resource network funding from the Recreational Cannabis Tax fund.
Prosper Portland staff reviewed the FY 2024‐25 Draft Budget with its 14‐member Community Budget Committee (CBC), which met three times over the course of the budget cycle and whose members represent a diverse array of geographic, industry‐sector and community stakeholders. The Prosper Portland Board held a work session on February 1, 2024, to review General Fund programming and TIF district spending plans that were incorporated into the Requested Budget. The Requested Budget became part of the overall Requested Budget submitted by the Community Development Service group with the budgets for the Bureau of Planning and Sustainability, Portland Housing Bureau, and Bureau of Development Services and presented to the Portland City Council on February 13, 2024. Staff also reviewed specific TIF district Requested Budgets with community and neighborhood organizations to receive input. The CBC letter and a summary of TIF district budget outreach is included in the Budget Process section of the Adopted Budget. These partnerships will continue to shape economic development priorities in FY 2024‐25.
100% Renewable Goal
- Prosper Portland’s Green Building policy establishes certain LEED standards for all property dispositions, leased real property and projects receiving certain levels of financial assistance included in the FY 2024-25 Proposed Budget.
- The FY 2024-25 Proposed Budget includes funding for implementing Advance Portland and the Green Cities cluster, working collaboratively with a broad category of companies producing innovative products, services, and technologies that benefit the environment or conserve natural resources.
- The FY 2024-25 Proposed Budget includes new programs to be implemented by PCEF funding, providing resources to help small business and property owners attain energy saving improvements through grants, loans and technical assistance.
Financial and Budget Analysis
Analysis provided by City Budget Office
This action convenes Council as the Prosper Portland Budget Committee to receive the Prosper Portland FY 2024-25 Proposed Budget. Prosper Portland’s FY 2024-54 Proposed Budget totals $208 million in expenditures and 105 positions, up from 98 positions in FY 2023-24. City Council will vote to approve the Prosper Portland budget, with any amendments on May 15, 2024.