How does PBOT determine if a utility vault lease is required?
There is strong demand for use of Portland’s rights-of-way resulting in competition for a very limited public asset, particularly on and below street-level. Such competing interests include utilities (sewer, water, electric, gas, fiber optics, and cable), as well as street features (signals, light and catenary poles, signs, trees, meters, trash receptacles, fire hydrants, parking, planters, storm water facilities, landscaping, and public transportation stations). Private use of the public right-of-way for utility vault purposes can directly limit, alter, or eliminate the aforementioned uses.
As part of the permitting process,PBOT's Development Review division conducts a preliminary review of the utility plans and adds a vault lease requirement to the permit check sheet. They then notify PBOT’s Utility Permitting section to confirm the lease requirement, who will then provide a conceptual approval of the vault’s location, the type of vault, and dimensions.
Apply for a lease
If your development requires a lease, reach out to PBOT's Right-of-Way Acquisition section at 503-823-1372 or RWALeases@portlandoregon.gov. Staff will provide a lease application, review the lease template with you, and direct you how to pay the associated lease drafting fee. PBOT's current fee schedule can be found here.
After these items are submitted and PBOT approves any requested revisions, PBOT will draft a lease and send the document for signature(s). In some cases, PBOT may need additional information before completing the final lease. When PBOT's Right-of-Way Acquisition team receives the signed and notarized lease back from the lessee and verifies signature authority, they will remove the hold on the permit within the city’s AMAMDA permitting system, thus allowing others, such as Development Review, to verify the completed item. The documents will also then be routed for internal signatures.
Application: After the lease application and drafting fee are submitted, PBOT typically has a 2-week turnaround to draft the lease and send it to the applicant. This is for an uncomplicated lease that doesn't require revisions to the language. Any additional changes by the applicant might require further PBOT or city attorney review and may take longer.
Construction: Construction cannot begin until the signed and notarized lease is returned and approved by PBOT's Right-of-Way Acquisition team. Only then can PBOT remove the hold on the building permit and issue a Street Opening Permit which allows the utility company to install the vault in right-of-way.
Rent. Rent starts as soon as PBOT issues the Street Opening Permit. If any location and/or dimensional changes were made to the vault, PBOT's Right-of-Way Acquisition team will draft an amendment so the lease reflects these changes. Note: changes to the dimensions may influence the rental rate.
Rent calculations, explained
PBOT uses a consistent formula to calculate the rent for a utility vault lease based on factors such as market value and the vault dimensions. PBOT's Right-of-Way Acquisition team determines market value using several factors, including comparisons of bare land sales, zoning, and floor-to-area ratio. The lease dimensions are determined by PBOT's Utility Permitting team and are based on the utility plans. The dimensions include not just the vault but also the vents as well as a 1-foot buffer around all sides within the right-of-way. The following algorithm is then applied to determine rent: square footage x $/square foot x 50% alienation rate x 10% rate of return. Note: certain affordable housing projects may be eligible for a rental discount, but all leases must at least meet the minimum lease rate as set by Portland City Council.
Lease formulas and methodology can be found here: TRN-8.11 - Right of Way Leasing: Fee Structure.
PBOT may make minor modifications to rates through authority granted under TRN-3.450 - Transportation Fee Schedule or through adoption of the rate schedule by council.
Drafting fees should be made out to the City of Portland and sent to: City of Portland, attn: RWA, 1120 SW Fifth Ave, Ste 1331, Portland, OR 97204.
Rent payments should go to a different address: City of Portland, attn: General AR, P.O. Box 5066, Portland, OR 97208.
Authorizing code and charter for utility vault leases
International Building Code chapter 32, section 3202.1.2, Vaults and other Enclosed Spaces, states that the construction and utilization of vaults and other enclosed spaces below grade shall be subject to the terms and conditions of the applicable governing authority. Administrative Rule TRN-8.11 provides guidelines for leasing real property and public right-of-way under the existing authority of the Director of the Bureau of Transportation, Title 17, Chapter 17.16.140(E). Under this Administrative Rule, leases are required for utility vaults and other enclosed spaces.