Hostile Takeover

[March 5th, 2008]

If City Commissioner Randy Leonard gets his way, Portland’s urban renewal agency will soon lose its eight-person legal department.

“We [city commissioners] are responsible for everything PDC does, but currently we don’t have authority over their lawyers,” Leonard says of the Portland Development Commission. “Responsibility without authority makes no sense.”

City officials are currently engaged in pulling together budget proposals for the next fiscal year, which begins in July.

Leonard and City Commissioner Erik Sten, two of PDC’s strongest critics, are engaged in a review of the urban renewal commission’s budget, which was $316 million this fiscal year. But Leonard says saving money is not his motive for lopping off PDC’s legal department, which has traditionally been separate from the City Attorney’s Office.

Instead, he points to two recent events driving his latest move to curtail PDC’s independence.

The first instance, Leonard says, came two years ago when PDC pushed him to the verge of subpoenaing the commission’s documents relating to a controversial development at Southwest 3rd Avenue and Oak Street (see “A Suite Deal,” WW, June 14, 2006). In that transaction, PDC officials commissioned an appraisal that gave what Leonard and others considered an artificially low valuation to city-owned property that PDC transferred to developer Trammell Crow.

The second flash point came, Leonard says, when PDC officials told City Auditor Gary Blackmer he lacked authority to audit PDC’s books.

“Those two examples really stuck with me,” Leonard says.

In each case, the city agency was—to Leonard’s way of thinking—thumbing its nose at City Hall based on advice from the PDC legal department.

“I think it’s a result of PDC having what amounts to its own private law firm that thinks its client is PDC rather than the city attorney and the people of Portland,” Leonard says.

Leonard’s solution is to fold the PDC legal department, which is located in the agency’s Old Town headquarters, into the City Attorney’s Office in City Hall. PDC’s legal department has six lawyers, two support staffers and a $1.1 million budget.

“They can be the same people sitting in the same place, but they would just report directly to the city attorney,” Leonard says.

The proposed takeover comes on the heels of a successful ballot measure sponsored last year by Leonard and Sten to give City Hall greater budget authority over the PDC. The measure came after repeated clashes between City Hall and PDC, which, under a five-member board appointed by the mayor, has long enjoyed a high level of independence from elected officials.

Mayor Tom Potter, PDC Chairman Mark Rosenbaum, former Mayor Vera Katz and many downtown developers and business interests opposed that ballot measure in 2007 because it reduced the agency’s autonomy.

Leonard says PDC backers are equally unenthusiastic about his latest proposal.

“PDC and the mayor don’t like this idea,” Leonard says. “We’re still talking, but I’ve let them know that I have the three votes I need to transfer [PDC legal staff] to the City Attorney’s Office.”

PDC spokesman Shawn Uhlman says it’s still early in the budget process and nothing has been decided yet.

“There are ongoing discussions, and I assume this issue will be examined further as we move forward,” Uhlman says.