OHSU

Backgrounder Q & A On Tram Financing Package

04/20/06  Portland, Ore.

Portland City Council gave final approval to the financing package for the Portland Aerial Tram in a 3-to-2 vote Wednesday. During the course of the discussions, city commissioners asked questions about a couple of key issues. Attached is a summary in Q & A format addressing those questions.

Federal lobbying credit


Under the South Waterfront Central District Development Agreement, the Portland Development Commission owes Oregon Health & Science University $3.4 million of additional tax increment in a future OHSU project as a credit to OHSU for its role in obtaining $11 million in Highway Reauthorization Bill federal funds for the city to help meet the city's South Waterfront transportation obligations..

As part of the funding package approved Wednesday, OHSU has agreed to contribute this credit toward the tram project rather than an OHSU project.
 
Q. When was the federal credit agreement originally made?
Q. What was the deal?
Q. How much has OHSU spent on the lobbying effort?
Q. Whose idea was it to put together a South Waterfront-focused lobbying effort?
Q. Why did the parties pursue this strategy instead of each independently pursuing federal funding strategies?
Q. Who were the lobbying firms involved?
Q. Have the DA parties received federal support beyond the $11 million for transportation as the result of the joint lobbying effort?
Q. What federal priorities are PDC and OHSU jointly pursuing for South Waterfront?
Q. What projects did OHSU defer so it could collaborate with the PDC on this federal funding agenda?
Q. Did the PDC, North Macadam Investors or the City of Portland contribute funds to the lobbying effort?
Q. Who were the main supporters in Washington, DC?
Q. Why is the tram and its related improvements considered a qualified public improvement?
Q. Is OHSU receiving $4.3 million in SDC credits from the city to help meet its tram funding obligations?

Q. When was the federal credit agreement originally made?

A. The agreement was added to the Development Agreement in the Third Amendment to the DA, signed June 25, 2004.  The amendment was approved by the Portland Development Commission and the Portland City Council. Both votes followed presentations by staff and public testimony on the Third Amendment.

Q. What was the deal?

A. The deal required OHSU to re-orient its entire federal funding priorities in a joint effort with the City to focus on the South Waterfront needs, including housing, transportation and OHSU programs to be located there.  The deal entitles OHSU to a credit equal to 50 percent of every dollar received by the city for infrastructure it would have needed to fund out of tax increment dollars, above a floor of $4.2 million.  In 2005, Congress appropriated $11 million to the City of Portland from the Highway Reauthorization Bill for South Waterfront.  Thus, under the federal credit formula, OHSU is entitled to a credit of $3.4 million related to this appropriation ($11 million minus $4.2 million, multiplied by 50 percent).

Q. How much has OHSU spent on the lobbying effort?

A. OHSU will have invested more than $1.2 million through December 2006.  The current year contract involves a monthly $25,000 retainer, plus reimbursable expenses.

Q. Whose idea was it to put together a South Waterfront-focused lobbying effort?

A. The idea was first proposed by Don Maziotti, then the PDC's executive director.

Q. Why did the parties pursue this strategy instead of each independently pursuing federal funding strategies?

A. All of the DA parties believed that, by working together, they could tell a compelling story that effectively communicates the interrelationship between jobs, housing, transportation infrastructure, environmental restoration and research growth that is uniquely characteristic of the South Waterfront re-development.  An example of the success of this strategy is the $11 million from the Highway Reauthorization Bill as well as additional federal funds that have been obtained for transportation and housing.

Q. Who were the lobbying firms involved?

A. The DA parties have worked primarily with The Gallatin Group, which has a Washington, D.C. office and a Portland office.  The Gallatin Group initially partnered with another firm, Cassidy and Associates, based in Washington, D.C.

Q. Have the DA parties received federal support beyond the $11 million for transportation as the result of the joint lobbying effort?

A. Yes.  The City of Portland has received an additional $2 million for transportation plus$850,000 toward affordable housing. OHSU has also received directprogram funding.

Q. What federal priorities are PDC and OHSU jointly pursuing for South Waterfront?

A. Federal funding priorities for South Waterfront in the current Congressinclude: 1) additional funding for I-5 and Macadam Avenue that wouldimprove ramp access into the South Waterfront; 2) funding for abioscience accelerator that would provide wet-lab space for biosciencestartup companies; 3) affordable housing construction funds; and 4)infrastructure funding for the greenway and neighborhood park.

Q. What projects did OHSU defer so it could collaborate with the PDC on this federal funding agenda?

A. Some OHSU initiatives that were deferred include the School of Nursing's Healthy Aging Project and construction funding for the Center for Women's Health in the Kohler Pavilion.
 

Q. Did the PDC, North Macadam Investors or the City of Portland contribute funds to the lobbying effort?

A. NMI contributed $200,000. The PDC provided staff and research funding for the effort.  The City of Portland did not contribute funds to the lobbying effort.  OHSU and the PDC worked closely with city staff to ensure that the South Waterfront federal initiative did not interfere with other important city priorities. 

Q. Who were the main supporters in Washington, DC?

A. The entire Oregon delegation has been and remains supportive of the South Waterfront project.  Because each member has unique committee assignments, some members of the delegation have been focused on transportation, while others have been able to help with bioscience and housing initiatives.

Transportation improvement credits


Portland's system development charges (SDC) help meet the city's infrastructure needs for roads, multi-modal transportation and related transportation improvements that occur as a result of development.

The SDC ordinance makes every applicant paying an SDC charge eligible to apply for an SDC credit if the developer builds or funds a transportation capacity improvement that is a "qualified public improvement" or is a project on the SDC-Capital Improvement Plan List.

In other words, these credits are not unique to OHSU. If any developer funds or builds a transportation improvement that would otherwise be funded or built by the SDC charge, they receive a credit. SDC charges are not used for maintenance of existing roads. They are used strictly for new capacity improvements.
 

Q. Why is the tram and its related improvements considered a qualified public improvement?

A. In addition to OHSU's LID (local improvement district) and cash contributions to the tram, the university also funded and built at its own expense a public access portal, a public pedestrian way and a public tram plaza to help the tram function as a form of public transportation.

The tram and its improvements were built with greater capacity than necessary to serve the OHSU campus alone, making OHSU eligible to seek these credits.

Q. Is OHSU receiving $4.3 million in SDC credits from the city to help meet its tram funding obligations?

A. No. The $4.3 million in credits relate to investments that have nothing to do with the tram funding package. OHSU will receive up to $4.3 million in credits to the extent it funds or constructs eligible transportation capacity improvements and qualifies for the credits. To date, OHSU has qualified for $2.1 million in SDC credits for its development of a public access portal, a public pedestrian way and a public plaza for the tram.

While OHSU is eligible for SDC credits on its future projects in the South Waterfront Central District, it has agreed to cap its credits at $4.3 million. OHSU is not required by the SDC Ordinance to accept a cap on its credits. However, OHSU is foregoing all credits that it may have otherwise received above $4.3 million, and will pay all transportation SDC credits above $4.3 credit over the life of the South Waterfront Agreement.

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