Pressure to expand Portland's untested downtown tax credit
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The tax incentive is valid in these four highlighted areas. Map: Courtesy of the City of Portland
A $25 million tax credit program intended to bring companies back to the central city has excluded businesses who now want the program to expand.
Why it matters: The credit is limited to businesses in just four of Portland's 10 central city districts, although other areas also have available commercial space.
What they're saying: "Maybe the perception is that we aren't hit with the same problems but I think we have our fair share," Andy Munson, a building owner with two vacancies in his three-suite building on Portland's central eastside, tells Axios.
- Stan Penkin, president of the Pearl District Neighborhood Association, tells Axios it was "very strange" that the program did not include the Pearl district, nestled next to two eligible areas.
How it works: The incentive offers up to a $250,000 tax credit per business.
- To qualify, a company must lease new space or extend a lease for at least four years.
- It also must keep 15 employees physically working half-time in the central city — mirroring a plea Mayor Ted Wheeler repeated Thursday.
Details: The areas eligible for the tax break saw the most loss of businesses and foot traffic — and have so much available office space that they need to be "reimagined" rather than just "reinvigorated" according to a study by the economic consulting firm ECOnorthwest
- That means finding a different mix of uses, ECOnorthwest's director of analytics Mike Wilkerson, tells Axios.
By the numbers: Portland sent information about the program to 119,000 businesses.
- As of Wednesday, 19 companies had applied and approvals "will start going out soon," says interim revenue division director Tyler Wallace.
- If demand exceeds $25 million, businesses receiving the credit may see the amount adjusted downward.
Meanwhile, commercial real estate broker Kathleen Healy tells Axios that it's "really hard to decipher how big an impact" the tax credit is having, since "multiple factors" play into leasing decisions.
Of note: The tax credit is one of several resources available for businesses, including a small program run by Downtown Portland Clean & Safe that gave four grants this year to new retailers moving into downtown or Old Town.
Zoom in: Businessman Kao Khamphilavong got $20,000 — enough to cover two-thirds of the cost of installing a sink and power outlets for his fifth bubble tea shop, which is planned to open downtown early next year.
- He's unsure if he'll hit the employee numbers needed to apply for the much bigger tax credit.
What we're watching: City officials are considering whether they "have the ability to adjust or enhance" the tax credit program, says the mayor's economic advisor Andrew Fitzpatrick.
Yes but: There is no "current conversation" about increasing the $25 million cap, and they don't expect to keep the program beyond next year.
What's next: City officials are saying the program could expand its boundaries "based on performance" Carolyne Holcomb with the Central Eastside Industrial Council tells Axios.
- Matching it with tax breaks from other governments is also one idea in front of the governor's downtown task force — which is due to unveil tangible plans at a summit on Dec. 11.
Editor's note: This story has been updated to include information about other business resources available in downtown and Old Town.