Taxpayers on hook for $10 Million in Square Rehab

Monday, September 01, 2014

Shelby Sebens, GoLocalPDX Reporter

Photo Credit: Steve Morgan

If passed, the biggest chunk of money from a $68 million Portland parks bond headed to voters this fall, would go to just one park, Pioneer Courthouse Square, a venue that generated over $2 million in revenue and in-kind contributions last year.

But that money doesn't go to major repairs.

“Why is the most programmed city of Portland park in the city of Portland, with three major tenants and over 300 annual events a year not generating sufficient funds to maintain its facility?" Southwest Portland resident Wesley Irisher asked during a July council meeting; the city unanimously voted at that meeting to refer the parks bond measure to the November ballot. "That’s a lot of money for one specific park in a whole entire park system that has very significant needs."

The $68 million bond proposal would replace a parks bond expiring in 2015 and go to fund more than $365 million in parks repairs and maintenance projects the city says it needs. If voters reject the bond, taxes would go down $13 a year for the average homeowner, according to city documents.

About 15 percent of the proposed bond, about $10 million, is slated for deferred maintenance at Pioneer Courthouse Square. The city's Parks and Rec Bureau is responsible for the plaza's upkeep and maintenence and it doesn't get any of the cash generated by the square per a 30-year-old agreement with Pioneer Square Inc., a nonprofit that runs the public plaza.

Deferred maintenance

Steve Novick

City commissioner Steve Novick

While the cost of the park's bond doesn't amount to much money for an average Portland, critics point out that the square is a very visible sign of how the city doesn't set aside enough money to take care of the assets it has.

"On at least one occasion in the past, it concerned me that it seemed the council had authorized building a new park without having the opportunity to consider during a budget process the costs of ongoing maintenance compared with other city priorities," Portland Commissioner Steve Novick, who voted for the parks replacement bond, said in an email. He added he was optimistic after an early August meeting during which commissioners adopted a revised set of financial management policies and procedures. "I expect moving forward that we’ll all have a more realistic understanding of parks, as well as other capital funding needs."

Cascade Policy Institute president and CEO John Charles said the council needs to do a better job of paying for the city's needs as they arise.

“People tend to overlook the question of how do you get in that position where year to year you never put money aside for these needs," Charles said. “Then voters are asked to pay for bond debt. Somehow the general fund can’t be manipulated sufficiently to solve all these construction problems. I’m not saying that the parks needs are unimportant and I’m not saying that the parks management has been derelict,” he added. “If you keep asking people to support bond measures and special levies, at some point people feel tapped out.”

Portland Parks and Rec spokesman Mark Ross deferred to Commissioner Amanda Fritz questions about whether the city should adjust its agreement with the nonprofit to include maintenance of the city park.

Fritz could not be reached for comment.

The city last voted on its agreement with the nonprofit in 2008. It states that the nonprofit cannot make major changes or improvements to the square without city approval.

Portland's living room

Known as Portland's "living room," the plaza is a beloved civic space. Its 1984 conversion from a dusty downtown parking lot into the popular public space is part of the city's progressive mystique.

"It's time for Portlanders and all Oregonians to renew and recommit to the collective vision for Pioneer Courthouse Square," Thomas Lauderdale, Founder of Pink Martini, said in a PSI report. "It is meant to be about us. A defining place that brings people together."

Multiple studies and engineering reports commissioned by the nonprofit state that the square needs fixing.

A waterproof membrane under the plaza, that keeps rented office spaces below the square dry, started failing in 2006. In 2012, leaks got so bad that workers at the Travel Portland office housed beneath the square set up buckets to catch water pouring from the ceiling, according to Pioneer Square Inc. (PSI) reports. The nonprofit forked over some money then for a bandage fix to the roof, according to a report by the group concerning issues at the square.

PSI said it needs $5 million to repair the membrane and another $5 million for "critical repairs," despite the fact the square makes money each year.

The popular gathering place brought in about 300 events in 2014, including a telecast of the MLS All Star-Game, a Portland Farmers Market, the city's annual Christmas tree lighting and dozens of festivals and exhibits.

Cash on hand

Oregon Ballet Theater

Oregon Ballet Theater members practice at Pioneer Square on Wednesday

The square brought in about $2.2 million in fiscal year 2012-13 from rent, donations, events and support from the city. The square has five commercial tenants, including an office for TriMet and studios of KGW NewsChannel 8.

None of the income generated by these sources funds critical maintenence though about $2.5 million in private donations have been used to make urgently needed repairs to the square over the past five years, according to a PSI report.

"Unfortunately, there have not been enough dollars to meet Pioneer Courthouse Square’s most dire needs," the report adds.

Officials said the square ran a deficit last year and had to make budget cuts. And of the $2 million in income, $729,123 was in-kind, non cash contributions.

The group spent most of it on events, basic maintenance such as cleaning and ensuring the square is safe for the public, administration, and capital expenditures, said Theresa Vetsch-Sandoval, the square’s marketing director.

The nonprofit spent $1.1 milion on events and sponsorships, $294,070 on janitorial and maintenance, $247,573 on property management, $224,377 on administration, $195,861 on security, $113,221 on capital expenditures with the rest going to investment fees and depreciation.

"The rents are collected by the nonprofit Pioneer Courthouse Square," Ross said, "and are used by the nonprofit for operating, programming, maintaining, repairing and improving the square as outlined in their agreement with Portland Parks and Recreation."

Homepage Photo Credit: Steve Morgan

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Taxpayers on hook for $10 Million in Square Rehab

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