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A new group of businesses and commercial property owners is asking Gov. Kate Brown to stop lenders from declaring them in default on their mortgages.
The group, which calls itself United for Relief, wants to bring attention to a looming problem: If tenants don't pay landlords, then the landlords could default on their loans. The group is asking Brown to prohibit lenders from initiating default proceedings during the COVID-19 state of emergency and to prohibit them from demanding balloon payments for deferred payments when the emergency is over.
One of the earliest forms of financial relief Brown offered in response to job losses from the COVID-19 pandemic was a temporary ban on residential evictions March 22, which the governor followed with a similar ban on commercial evictions April 1. Those were important steps but left landlords exposed: If their tenants can't pay and cannot be evicted, landlords may struggle to meet their own debt payments.
On its website, United for Relief applauds Brown for protecting Oregonians but notes potential consequences:
"The executive orders have also produced a significant shortfall in rents—which translated directly to serious negative operating cash flows for landlords starting in April," the group says. "For property owners big and small, these shortfalls will create a widespread inability to make commercial real estate mortgage payments on May 1."
United for Relief includes among its members landlords such as New Seasons co-founder Stan Amy, Urban Development + Partners' Eric Cress, Anyeley Hallová of Project^ and Chris Nelson of Capstone Partners, Troy MacLarty of Bollywood Theater and Sam Purvis of Good Coffee.
They are hoping Brown will join Nevada Gov. Steve Sisolak, who earlier issued an executive order prohibiting commercial foreclosures.
"My wish is for my tenants to be successful," said Roslyn Hill, a Northeast Portland property owner who is part of United for Relief. "I want them to make money and be profitable, and I want the building to be full and be lived in and worked in. An empty building does nothing. But not all landlords can offer their tenants months of deferral. Many will need help to offer that."
Caitlin Baggott Davis, executive director of the North Star Civic Foundation, is working with United for Relief campaign. She says Brown's office has been responsive.
"The governor's office has been very engaged," Baggott Davis says. "They have sought out input and recommendations from stakeholders to better understand how to address this problem. The campaign has shared the Nevada executive order with them, along with key recommendations."
Brown's spokesman, Charles Boyle, says the governor's office is considering the request.
"Gov. Brown took immediate action by halting evictions so that Oregonians can remain in their homes and businesses can stay in their locations during this public health crisis," Boyle said in a statement.
"While we know that removes immediate pressure, we also understand that further executive or legislative action may be necessary in the future to address other issues that may arise. As we work with stakeholders and elected officials on the governor's framework for reopening Oregon, we are considering what further executive or legislative actions can help to bring additional relief to Oregonians, including what additional actions may be necessary to address issues such as the ones you've raised."