Oct 29, 2006

Private/Public Partnerships-Taxpayer Booty Call?

The City of Troutdale has recently been approached by two different private entities with invitations for "private-public partnerships".

Troutdale gallery owner Rip Caswell came to a city council work session with his architect with a proposal for a new building for his art gallery. Part of his proposal includes subdividing parts of his land on the north side of downtown Troutdale into several individual storefronts, similar to those already in existence east of his existing gallery.

Caswell proposed that the city enter into a private-public partnership: he'd build the new retail spaces, and the city would then build the parking lot behind the new retail spaces. This is a similar partnership that occurred when Troutdale developer Max Maydew constructed downtown Troutdale's existing north side several years ago.

I thought the design for Caswell's new gallery was great. The new storefronts would be a logical extension to the existing storefronts on the north side of town. Having said that, I think the city council needs to take a long and careful look at this proposal.

Caswell is entitled to build whatever he wishes on his own property. I wish him nothing but success with his building project. In addition, he's been a great business partner with the city as well as other Troutdale businesses and organizations for several years. There is a precedent to his request to have the city build the parking lot- we did it for Max Maydew. I'm guessing the cost to the city this time for a parking lot would be at least $100k, but a higher figure is likely.

I'm sure the city could finance the parking lot without much of a problem. My main concern is one of supply and demand for retail space in downtown Troutdale. There are several vacant storefronts right now. I'm concerned about the impact of adding several brand new storefronts. It's an issue we need to address. It's not a deal-breaker, but demands serious discussion.

A more questionable request for a public-private partnership came from a group called Manufacturing 21 Coalition. The Manufacturing 21 Coalition is a private-public partnership formed to support and advocate for Oregon and Southwest Washington manufacturing and infrastructure engineering economic clusters.

The Coalition wants to create this support by creating a modern research and development center to educate the region'’s work force; test new materials and manufacturing technologies; and become a magnet for the area'’s manufacturing and infrastructure engineering clusters.

The Coalition, which is made up of manufacturing leaders such as Boeing, Freightliner, Cascade General, Portland General Electric, ATI Wah Chang, ESCO Corporation, Oregon Steel Mills, and others, sees the center as one-stop location for industry information, training and applied research and development. (The Portland Development Commission is also part of the Manufacturing 21 Coalition. Surprise, surprise.)

The East Metro Economic Alliance responded to the Coalition's RFP with a proposal to build this 86,000 square foot site on Troutdale property located next to Mt. Hood Community College.

The fine print in the Coalition's RFP indicates they expect Troutdale's public contribution toward this "partnership" to be a waiver of SDC and building permit fees. Bottom line: a gift of about $350,000 from the City of Troutdale alone. The fine print also says the new research center would only provide about ten jobs. That amounts to $35,000 of Troutdale's tax money for each new promised job.

I'm uncomfortable with this one. The Manufacturing Coalition's members include Boeing, Blount/Oregon Cutting Systems, Freightliner, Oregon Steel Mills, and other multinational corporations. Freightliner's annual revenues alone are in the billions of dollars. Billions with a big B. Boeing's annual revenue? Also in the billions. And that's just two of dozens of multi-nationals in this Coalition that are sticking their hands out for a public-private booty call.

Troutdale's total general fund? Well under $30 million. The question the Troutdale city council needs to ask itself is this: Is a gift of $350k to a Coalition of billion dollar corporations a good use of public tax dollars? Maybe it is. Folks are free to convince me. Until then, I'm thinking this is not such a good deal for Troutdale's taxpayers. It's only my opinion. Only time will tell if the rest of the city council disagrees with me.

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