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City/County Issues & Updates

Alliance opposes increase in development fees
Alliance presents urban renewal proposal to City officials
Election Day endorsements: Alliance backs local initiatives
Alliance supports recycling growth
Hotel will maximize investment in Convention Center
City Council moves to implement SAFE Committee recommendations
City Council approves next step in Burnside couplet
County moves toward Business Income Tax relief
City Council supports business license fee reduction

Over the past year, the Alliance has participated in the Park Systems Development Charge (SDC) Advisory Group, working towards a way to fairly impose the city's first non-residential Park SDC. In a statement issued to Commissioner Dan Saltzman, the Alliance opposed the existing proposal for a 75 percent recovery rate through a new, non-residential Park SDC.

Due to significant increases in construction costs, statewide property tax limitations and diminishing federal assistance for infrastructure, SDCs have been increasingly used by local jurisdictions to fund expansion for public services, such as transportation, sewer, water, parks and schools. These and other fees and charges impact business competitiveness and the economic feasibility of development.

"The Alliance supports parks, but cannot support such a large recovery rate as is proposed in the form of a new non-residential Park SDC," said Sandra McDonough. "These increased costs would not only impact commercial and industrial development and businesses, but also housing affordability."

Read the letter to Commissioner Saltzman

In October, three members of the Alliance Urban Renewal Area Task Force (Owen Blank, Tonkin Torp; Gwenn Baldwin, Baldwin Consulting; and Karen Williams, Lane Powell) presented the Alliance's proposal to the City's Urban Renewal Advisory Group. With two downtown urban renewal areas (URA) ending in the next few years, the Alliance's urban renewal task force developed a set of recommendations that were recently approved by the Board. These recommendations take a new and progressive look at how urban renewal areas can more quickly provide additional funds for county services and schools.

The Alliance's recommendations include immediately terminating issuance of new debt in the two existing downtown urban renewal areas, which would mean forgoing as much as $30 in funds potentially available for downtown projects. It would enable an early return of the two downtown districts to the tax rolls, which results in the local governments realizing the full benefit of the increased property values within those districts by 2012. This additional tax revenue will help local governments fund critical services, such as Multnomah County's health and human service programs as well as local schools. The approach also enables creation of a new urban renewal district in downtown as early as 2012, which could be structured to meet future needs of the City.

Response to the proposal by the City's advisory group appeared positive with City Commissioner Erik Sten calling it, "a great intellectual and practical suggestion." The City's advisory group will meet several more times before a final recommendation on how to resolve the expiring urban renewal areas is made. The Alliance task force will continue to monitor and participate in the process.

A recent story in the Portland Tribune highlighted the Alliance's proposal. Read the article >>

The Alliance Board of Directors recently voted to support three local initiatives appearing on the ballot this November.

In September, the Alliance announced its support of Measure 50, the "Healthy Kids Initiative." Measure 50 would provide health coverage to 100,000 Oregon children, as well as increase the budget for tobacco education and prevention.

The Board endorsed a Clackamas County ballot measure that would expand the Clackamas County Board of Commissioners to a five-member board, instead of three. The Alliance Board believes this measure is important because Clackamas County is one of the most rapidly developing counties in the State of Oregon and the need for additional elected representation has been voiced by a number of civic and business organizations in the area. The measure would also create a Chair for the Board of Commissioners, to be elected by county voters.

Also endorsed by the Alliance board is ballot measure in Portland that would change the Fire and Police Disability and Retirement Fund by extending medical benefits to officers for a service related injury upon retirement. In November 2006, voters approved changes to the City of Portland Charter related to the Fire and Police Disability and Retirement Fund, but the changes did not address the disincentive for officers that have received a service related injury to return to work. Under the current system, officers will receive medical benefits for a service related injury while on disability, but is not eligible for the benefits upon retirement.

Portland is becoming known nationally and internationally for the number of companies that are adopting sustainable business practices such as recycling. Long a leader in the field, Portland has one of the highest recycling rates in the country at 63 percent. Many businesses in the region are finding that sustainable practices such as recycling aren't just feel good measures, but a characteristic that differentiates them from the competition and attracts customers.

The City of Portland is in the process of developing a new recycling plan that would increase the required level of recycling, currently 50 percent, to 75 percent by 2015. The Alliance supports the goal of increasing recycling for both residential and commercial customers and is encouraging the city to take an approach that builds on the success a growing number of Portland area businesses have had in increasing their recycling rates. The city's Blue Works program, Portland Recycles! and Portland Composts! programs managed by the Office of Sustainable Development offer education, marketing and technical assistance to help businesses achieve higher recycling levels.

One of the issues considered in the plan was whether to franchise commercial garbage service in the city. Currently, commercial customers in Portland have a choice of which waste hauler they want to use. This customer choice is critical to keeping service quality high and prices reasonable. The Alliance supports continuing this market-based, customer friendly approach to commercial waste hauling in Portland as the best way to ensure efficient and cost-effective service. Franchising remains an option that council will consider in the coming weeks.

The city's plan identifies three areas where recycling can be significantly improved: paper, food scraps and construction waste. The Alliance has urged the city to set recycling targets for these three areas that are achievable and recognize that each business faces unique challenges in terms of space, product or service and cost. A number of businesses have had success in dramatically increasing their recycling of these three items and believe the city can achieve even greater success through more technical assistance, education and marketing.

Finally, Commissioner Sam Adams has asked city staff to explore how business incentives could be used to increase the level of recycling in the city. The Alliance fully supports an incentive-based approach and are encouraging staff to fully explore this avenue for achieving our collective goal of increasing recycling rates and increasing the sustainability of our community.

Alliance President and CEO Sandra McDonough testified this month at a Metro Council Public Hearing in support of establishing a headquarters hotel near the Oregon Convention Center. The Alliance believes that a hotel will maximize the public investment in the Convention Center and drive economic opportunity in the region.

Studies show that if a hotel is built on the property adjacent to the convention center, Portland will be able to attract national conventions and trade, creating jobs and producing an economic value of $54.5 million annually and $2 million in annual state and regional tax revenue.

Consultants, overseen by the MERC Commission and staff, have identified the lack of a headquarters hotel as the number one reason Portland is missing out on national convention business.

In her testimony at Metro, McDonough urged a vote in support of moving forward with the necessary due diligence on the project finances. "We understand the importance of a solid financing plan that mitigates risk and is sustainable. No business would make a decision in the absence of this information. Now it's time to put together a financial model and analyze the feasibility of the project," said McDonough.

Read the letter to Council President David Bragdon

On Wednesday, August 15, the Portland City Council voted to implement the Sidewalk Access for Everyone (SAFE) Committee recommendations. The recommendations, created by a broad group of stakeholders including city government representatives, residents, homeless advocates and local businesses, take a holistic approach to ensure Portland's streets are welcoming and open to all who use them.

"The city's leaders created a process by which a diverse, cross-section of our city could come together and develop a way to make Portland's sidewalks and streets more accessible while helping to meet the needs of the homeless population," said Sandra McDonough, President and CEO of the Alliance. "Today's vote to implement the recommendations is not only good for business, but is also good for all people living, working and visiting Portland. We thank Mayor Potter and the City Council for their tremendous work to make SAFE a reality."

The SAFE recommendations include enactment of an ordinance prohibiting sitting or lying on sidewalks in downtown and the Lloyd District during business hours while providing homeless individuals with additional services in the Central City, including:

• A day access service center;
• Additional public bench seating;
• Access to public restrooms, including a 24-hour restroom; and
• Shower and locker facilities.

The Alliance and the Downtown and Lloyd Business Improvement Districts are contributing $150,000 over a two-year period to support implementation of the new homeless services. Approximately $79,000 of those funds will be used to operate Transition Projects' day shelter with the remaining funds to support other services as recommended by the SAFE Oversight Committee during the next two years.

After a contentious six-hour hearing, the Portland City Council unanimously voted on April 11 to move forward with the next stage of the Burnside/Couch couplet project. This project will turn West Burnside and Couch into one-way streets between 2nd Avenue and Interstate 405, and includes a new streetcar line. The concept of the couplet was first approved by Council in 2002 and the Alliance has consistently supported the project since that time.

The couplet is expected to improve many issues associated with Burnside that make it a barrier between north and south portions of downtown, including safety, urban design and transportation. Currently, Burnside has some of the most dangerous intersections for pedestrians in the city; the couplet design will reduce the crossing distance for pedestrians. In addition, the couplet will allow for left turns, improving the connections between residential, retail and employment areas on either side of Burnside. Finally, the couplet is forecast to create significant redevelopment opportunities that will improve the look and feel of Burnside and reduce the number of "closed doors" facing the street.

With this vote, the project will move forward with preliminary engineering. Scheduled to take one year to complete, the preliminary engineering work will result in a better understanding of the total project cost. City Council also voted to move forward with design work on an enhanced Burnside Plan as an alternative, should the couplet prove financially prohibitive.

On Thursday, April 12, the Multnomah County Board of Commissioners voted unanimously to increase the gross receipts exemption and owners compensation deduction to more closely align the county's business income tax (BIT) with the changes recently approved by the city council to Portland's business license fee (BLF).

"We want to thank the Multnomah County Commission for their leadership on this issue," said Sandra McDonough, president and CEO of the Alliance. "Getting the city to reduce taxes on businesses was a huge step. Getting the county to follow suit is just as important. This is a great day for businesses in the county and the city."

The county changes to the BIT mirror those adopted by the City of Portland in January. The gross receipts exemption would be increased from the current $25,000 to $50,000. The owners compensation deduction would be increased from the current $61,500 to $80,000. However, unlike the city changes, which take effect in tax year 2007, the county's changes could not be implemented until tax year 2008.

The county also established a firm goal of raising the owners compensation deduction to $125,000 within five years.

"Getting to the $125,000 level has been a key goal of the Alliance for a long time. These are changes that really help us maintain, grow and recruit businesses to the Portland area," said McDonough.

The changes adopted by the county were developed by a working group appointed by Chair Ted Wheeler and led by Commissioner Jeff Cogen. Among the recommendations were the implementation of a county minimum tax of $100 for firms with gross sales of over $50,000 to align the city and county tax structures more closely, stabilize county budgets and allow for eventually reaching the $125,000 owner's compensation target.

On the working group were small business representatives, chamber representatives from Gresham and east Multnomah County, the African American Chamber of Commerce, the Alliance and others. The city's Small Business Advisory Committee supported the working group recommendation. The Alliance Government Affairs and Small Business committees reviewed the proposal and the Board of Directors approved a resolution of support.

At today's hearing, Portland City Council took the historic first step of providing relief from the City's business license fee (BLF), a tax that is particularly hard on small, locally owned businesses and professional providers operating in the City of Portland.

The Council voted unanimously to support the ordinance at the first hearing today. Final passage is expected in two weeks.

The Alliance, along with several partner business organizations, has worked closely with Commissioner Sam Adams, who presented his proposal to increase the gross receipts minimum to $50,000 and the owner's compensation deduction to $80,000. Sandra McDonough, Alliance President and CEO, testified at today's hearing, stating that the council's action sends an important "signal... to the local business community." The Alliance has worked on getting relief from this tax for a long, long time, and it has become a bellwether issue. This tax cut, however modest, is a huge step in the right direction."

"We are particularly pleased that Council has committed to raising the owner's compensation deduction to $125,000 over five years. We believe this is a more fair level and corrects the inequity created by the fact that the owner's compensation deduction was not adjusted for inflation for more than two decades," said Judy Peppler, President of Qwest Oregon and Chair of the Alliance Board of Directors.

The Alliance thanks Commissioner Adams for his leadership on this issue and the commitment of Mayor Potter and other members of Council to creating a healthier business climate for local businesses. Business license fee reform has been a longtime priority for the Alliance because it adds a financial burden on Portland area business owners, putting them at a competitive disadvantage compared to businesses in other cities in the Portland-Vancouver metropolitan area.

The Alliance is also working with Multnomah County leadership to achieve similar relief from the County's Business Income Tax. Earlier this month, Commissioner Lisa Naito announced that she wanted to lead such a discussion at the county level.

Click here to read an Oregonian editorial entitled "Tax reform would welcome smallest of small businesses."