Council Watch: Banking on brownfields

Zidell Yards is springing up on a former brownfield site in the South Waterfront neighborhood.

Portland considers a tax incentive program to ready polluted properties for development.

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The city is home to about 600 brownfields representing 910 acres. [View a map of the city’s brownfields here.] In Multnomah County, the numbers are even higher — more than 6,300 acres.

These sites harbor soil polluted by a range of businesses: gas stations, dry cleaners, farm supply stores. The 910 acres come with a $240 million cleanup price tag, and the city aims to help pay for the cost by giving developers who take on cleanup a tax break.

The council discussed the proposed incentive on Wednesday and approved a resolution to develop the program next year.

Participating businesses would receive a tax credit worth 50% of the cleanup cost. The credit represents “a new tool to help clean up brownfields and put them back to work,” Commissioner Nick Fish said.  

Andy Reid, Prosper Portland project manager, said the program will allow Portland to pursue projects inside urban growth boundary, “on land that in spite of our booming economy is not converting to development at this point.”

The program also includes incentives for so-called secondary benefits such as affordable housing or equitable contracting. Businesses would receive an additional 25% credit for each secondary benefit — up to 100% of the cleanup costs.

Estimates show the program could create 31,000 new jobs and an additional $40 million in annual city revenue.

House Bill 4084 paved the way for the brownfield program by allowing cities to incentivize development and environmental cleanup with property tax credits.

Portland would be the first in the state to take advantage of the incentive.

In the past, brownfield cleanup in Portland has moved forward without tax incentives. The Pearl District and South Waterfront are the best known examples of successful development on former brownfields.

Remediating these sites required $1.5 billion in investment, but they are now iconic examples of successful mixed use development, Prosper Portland executive director Kimberly Branam said.

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“We know that no one tool is going to clean up Portland’s brownfields, but a property tax incentive, properly used, will help us move one step closer,” Fish said.

Commissioner Chloe Eudaly talked about the potential for affordable housing. Of the 910 acres in Portland, 35% is zoned for multifamily and mixed-use development.

“What we hear over and over again from developers is it’s too expensive and there’s nowhere to build,” she said. “I’m going to be especially interested in how we can most strongly incentivize affordable housing.”

Sen. Lew Frederick is a longtime champion of brownfield incentives. He said although this program allows the city to finally utilize untapped resources, he would like it to go one step further and incentivize job creation.

“That’s a little difficult with our budget the way it is,” Frederick said during Wednesday’s meeting. “But I think that [incentivizing jobs] may be another way to do it.”

Metro Councilor Sam Chase agreed job creation was an important piece of the puzzle. 

“I think that is our biggest challenge — to make sure everybody has the opportunity to succeed in our region,” Chase said.