The Costs of Stopping the Tram
Sam Adams
A lot of people have been asking me and my staff about the specific costs of stopping the tram project.
After talking with city staff, our office learned that coming up with a solid cost figure is difficult because it would require speculation on many costs due to legal uncertainties. They did give me an estimated "floor" to such costs (the lower limit of we could owe). Right now, that floor stands at $36 million, though it could increase.
I know that this won't satisfy our most vocal bloggers, but in an effort to be as open as possible, here is the email exchange between my office and city staff below:
-----Original Message-----
From: Chlapowski, Roland
Sent: Tuesday, March 21, 2006 11:35 AM
To: X; Y; Z
Subject: Costs of stopping tram
I've been fielding a lot of inquiries on the costs of stopping the tram construction; can you please let me know what those costs would be, in a quantified form?
Thanks,
Roland
______________________________________
Roland-
It is hard to fully quantify the actual costs for stopping construction of the Tram. We would need to restore the sites. A very very rough guess for this is about $700,000. No back up, just a shot from the hip. The cost to pay Kiewit and all the subcontractors to close up shop may be around $3,000,000. Again, this just a rough guess after talking to the contractor. No back up or supporting data.
Please keep in mind, that by the time that we reach our drop-dead date for stopping the Tram using the Kiewit Contract authorization limit as the bench mark, the potential exposure to the City will have increased from the current $20 million to approximately $36 million.
Kiewit $22.3 million (currently at $11.3 million)
Doppelmayr $6.7 million (currently at $4.7 million)
Soft Costs $7 million (currently at $5.5 million)
Per the contract, Section 108.07 Suspension of Work, the contractor would be entitled to "reimbursement for its direct costs incurred as a result of the delay and 4% mark-up for both overhead and profit." Providing a reasonably accurate estimate for the actual cost for delay is difficult. There are too many unknowns. Would we delayed them for a week, a month, or a year? Mobilization and demobilization cost alone are typically 10% of the project costs. The potential impact of losing key staff to other projects and then having them gear up new staff has a cost. OHSU has provided us notice that the potential actual monetary damages for delay from their side associated with delay of the Tram opening is $1.5 - $2.5 million per month.
Per the most recent cash flow analysis, we reach the 125% Director's Authorization limit of $22,269,938 on or about mid-June. Given that actual expenditure of funds versus invoice has a 30-45 day lag, we would need to either suspend the work or terminate the Kiewit contract on or about early to mid-May. Doppelmayr is schedule to arrive on-site beginning the first week in May. If we tell them to stop, it is highly unlikely that we can get their crews back until next year. They are fully booked for the remainder of the calendar year.
Sincerely,
PDOT Staff
Office of Transportation
____________________________________
Roland:
It's a reasonable question, but any quantification would be a wild guess, with a capital "W". If this information needs to be quantified beyond what was stated at the Town Hall meeting, my suggestion is to let people know that we are not talking exact figures, but rather guesstimates that could be significantly different than the actual amounts. Given the difficulty of estimating expenses, I don't want citizens to be misled or find newspapers saying "City underestimates costs again."
Having said that, its fair to say that termination of construction means losses in excess of at least $20M. How much higher than that is open to a lot of speculation.
As you recall from the Town Hall Meeting, the City is borrowing money to pay for construction and, if the tram is NOT completed, there will be no LID to pay for the borrowed money, so repayment would come from the General Fund. Last week Rob estimated all construction costs around $20M (give or take a few million).
However, $20M does not include a) the cost of site restoration, b) the cost of terminating the construction contracts (we would owe money under our contracts for wind up costs, which is dependent on what it costs the contractor to stop), c) the cost of dealing with purchased, but unused materials, and e) the cost of staff time to devote to this. Nor does it include the cost of litigation if the City were to be sued over stopping the construction nor does it include damages in the event that a judge were to say that the City improperly terminated (as you know I have suggested we have a contractual obligation to go forward if the tram is fully funded, so if it were and we stopped, we are potentially liable for breach of contract damages in an unknown amount).
Therefore, my suggestion is that we say that $20M is likely the minimum amount it would cost and the upper end could be much more than that. How much more depends on many factors in this fluid situation.
City Attorney Staff
Posted by Sam Adams on March 29, 2006
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Filed Under Front Page, Tram, Transportation
Comments by site visitors
Has the City Attorney's office advised all staff, and all OHSU folks too, that documents related to the tram and NM would be critical to an effective investigation by the FBI and the SEC? I would include all documents pertaining to other Urban Renewal districts and anything related to the creditworthiness of the city for any bonding activity.
Bear in mind that one single initiative, or single city council vote, could wipe the slate clean of all moral obligation bonds and reset all taxes to be based on a principal of conformity with uniform taxation. The creditor's remedy is limited to effectively prohibiting the city from bonding activity for a term of five years. The outstanding moral obligation bonds would simply become worthless to the bondholders.
This would of course affect the LID upon which the City Attorney references above as a mechanism to pay for asserted City obligations pertaining to the tram. The LID owes nothing for it is just a description of a geographic and jurisdictional boundary for assertion of the City's taxing authority. It, the LID, would be part of wiping the slate clean through an initiative, thereby thwarting that source of tram funding.
Has the accumulation of such bonds and the pent up inequities of burdens and rewards grown substantial enough for the public to agree that a five year moratorium is in their own self interest? That would be a question I would like to explore, particularly if a judge agrees to place my name on the November, yes November, ballot along side that of the present City Auditor.
Posted by: Ron Ledbury | Mar 29, 2006 9:36:17 PM
Blackmer v. Ledbury City Auditor smackdown. I like it.
Anyway, thanks for the post, Sam. I'd rather the City get something for our $20 million. You're in a rough spot - quit now and flush 20 mil down the toilet, or complete the project and get something for the money. Despite all the controversial undercurrents, I say finish it.
Posted by: Stephen | Mar 30, 2006 12:09:56 AM
I put a video of the tram town hall on my web site. It is 72 meg in rm format and should be downloaded to your hard drive. After downloading find the file and click on it to launch the real player and view the file. The picture is, of course, poor but the audio is understandable. The first 15 minutes of the meeting are also missing from this video.
It is here:
http://www.portlanddocs.com/video/TramTownMeet060314-06.rm
If that name too long for you, go here and click on the file name:
http://www.portlanddocs.com/video/
I have been told that another version will run on cable fairly soon.
Thanks
JK
Posted by: jim karlock | Mar 30, 2006 3:34:07 AM
The original Tram budget was a wild guess, and you built it anyway. Even a cursory inquiry by any Commissioner would have revealed the paucity of detail underlying the $15.5 million fraudulent estimate. How can you estimate the cost of something when you haven't selected a design or any contractors?
Why would you let a "Wild Guess" termination estimate slow you down?
Posted by: Alice | Mar 30, 2006 6:57:11 AM
Sam - Thanks for providing this information. Given the costs of stopping now - with nothing to show for our investment - I think completing this project is the wisest course of action.
Posted by: Mr. Magoo | Mar 30, 2006 7:44:03 AM
Mr. Magoo,
The city failed to get a full and final release from further liability on their PERS bond issuances. They failed to obtain an outside guarantee either that the supposed 8 percent returns that justified the bond issuance was fact rather than a wild guess. The Auditor deferred to others about the economic wisdom of such PERS bonds . .. bonds that are actually held in the name of the City of Portland rather than that of the employee-retiree-beneficiaries. The PERS Lump Sum Accounts held by the PERB/OIC are available to cover city bond obligations were the city to wipe the slate clean of all such moral obligation bonds. I have made it clear to a group of PERS folks that it is in their interest to reduce their claims, whatever they are, to a final judgment in a court of law. (The swing vote in the Struck case, where I submitted a friend of the court brief, vindicates my position of relying on judicial finality.) I advocate the same too for the safety workers pension in the event of a switch to a new pension scheme going forward for future work . . . but one where I insist that there is not multiple tiers.
Wild guess government action is not accountable. I advocate additionally that individual employees are free to take the pay that is dedicated to retirement and put it instead under their mattress if that is their wish, for prospective work.
stephen, the issue of placement on the ballot is a no brainer. But I want more, I want to discuss non-spurious, substantive stuff such that Mr. Blackmer won't even appear on the ballot, in November. City attorney staff that are members of PERS and participated in, implicitly, the assumption of "liability" on the PERS bonds, and other ASSUMPTIONS of liability as with the tram, without the benefit of a court order to back up their position, is of acute concern to me. My target is the bar and the use and abuse of the power of lawyers on public policy matters. A legal opinion, particularly an opinion of a public lawyer that serves at the pleasure of a city council, is not in the same league as a judicial order of an elected judge, coupled with the availability of direct review to the Oregon Supreme Court. Bear in mind too that the court cannot, and will not, include a final resolution for matters that are based on future contingent events such as prospective returns on PERS bonds. The present assertion of speculative liability on the tram and the apparent escalation of additional expenses, subsequent to the earlier city attorney opinion as to the tram non-liability, are NOT incurred in "good faith" such that the city council or other public officials can escape personal liability.
This is not a merely philosophic inquiry. This is a test of the skill, judgment and ethics of the folks that claim membership in the bar . . . in the public interest. It is about criminal abuse of political power too.
An astute bond counsel would be mindful that they need to at least make a footnote-style reference to upstart dissatisfied citizens that can pursue legal action. The mere threat of legal action is enough to force a notation. Can you definitively dismiss the notion that I might run unopposed in November for City Auditor and that in such a position I could seek to clean up past unlawful practices going back five years? Are you willing to make a wild guesstimate on this issue too?
-- Ron Ledbury for a Debt Free Portland
http://smf.pdxnag.com/
Posted by: Ron Ledbury | Mar 30, 2006 10:22:17 AM
Two have said: complete it and get something for our money.
Such as?
Well:
• Extreme privacy invasion of Liar Hill residents.
• Unknown millions of ongoing operating costs, funded by…?
• A useless transportation vehicle foolishly designed to woo tourists (foolish because 1) what tourists will really come to Portland to ride the thing? and 2) the last thing Portland needs is more people moving here.)
• A massive eyesore on the city landscape.
• Further encouragement and aid to sweetheart Homer Williams, construction contractors, and real estate speculators.
Along with removing this eyesore in the making from our landscape, let's deconstruct Homer's towers in the making and restore the waterfront to wetlands. Doing so will save us all in money and resources. Increased development and population growth always costs more than to leave open land alone and to stabilize population. See: http://www.fodorandassociates.com/rpts_and_pubs.htm
Posted by: Long View and Now | Mar 30, 2006 10:27:07 AM
Mr Adams - More importantly, especially since the Tram is a fait accompli (I am only basing this on the fact that you are doing nothing to stop it and construction is going ahead full speed), what controls are you going to put in place to prevent these project problems from happening in the future?
I am only singling out you since you were Ms Katz' chief of staff from the time this project got started and we could benefit from your experince.
Posted by: Steve | Mar 30, 2006 12:19:52 PM
I'm sorry that valuable City staff time has been spent on such a foolish idea. Of course finish the job. I'm still scratching my head to understand the payoff for stiffing the City's largest employer, as Lenard, Sten, & co. want to do. And I dare anyone to show me a PDC funded project with as high a private sector contribution or which has leveraged as much private investment.
Posted by: Lenny Anderson | Mar 30, 2006 3:07:20 PM
Ron Ledbury--how do you propose to run unopposed for City Auditor in November, when you didn't file...and Gary Blackmer did? I don't need Sam to definitively dismiss the notion; I'll do it here and now. :)
Posted by: torridjoe | Mar 30, 2006 5:22:54 PM
Sam,
There are some hidden assumptions here:
1. The project is 6 times the original estimate. What guarantee do you have that they got it right this time? Suppose they find another $10-20 mil in costs? Would stopping it now look good in hindsight?
2. Why do we believe that if it is finished, the others will keep their promise to pay back the city? Who is guaranteeing their payment?
Thanks
JK
Posted by: jim karlock | Mar 30, 2006 5:57:40 PM
Wait 'til they have to pay the people on Gibbs Street for their violated air rights -- a serious legal issue that is still looming. Counting litigation costs and all, that ought to be another $4 million or so.
Posted by: Jack Bog | Mar 30, 2006 6:40:01 PM
I picked up some un-blue-jeans today at the Salvation Army for the benefit of the judge. (God bless the sole that left me the bargain.) I might have to paint my shoes brown to match, provided that it would be cheaper.
Posted by: Ron Ledbury | Mar 30, 2006 7:03:17 PM
Jack Bog: the latest $15M cost overrun was obvious long before Feb 1, 06. At our NM URAC meeting back in Nov 05, PDC staff reviewed the trams budgeting problems of $15M. Council and their staff knew of these budgeting problems before then, especially Sam and his staff.
Of course, Oregonian reporters were privy to these facts back then too. No reporting. They frequently attend and do follow-up calls concerning URAC business.
And if you recall, Sam was asked, and had a blog on this same subject over two months ago. The price tag then to stop the tram was $6M.
Just keep politically asking the questions, looking concerned about all the citizen's inquiries, and you can be a commissioner too.
Posted by: Jerry | Mar 30, 2006 7:38:31 PM
I dare Lenny to show anyone any piece of anything that demonstrates it was the Tram that "leveraged" anything.
The 100s of milions if free infrastucture, sweeping zoning changes, TIF and LID funding did all the leveraging.
And the project estimates for all of the public improvement infrastucture were low balled and TIF revenue projects were inflated.
Now those improvements (in addition to the Tram) are way over budget, far behind schedule, underfunded by countless millions and the Current TIF revenue is insufficient to borrow more.
Not so for the private towers going up. They had solid budgets, reliable funding with strong managment and oversight.
Yet the PDC still claims things are on track and going as planned?
Posted by: Steve Schopp | Mar 30, 2006 8:33:40 PM
Lenny,
If you were the primary banker that had lent money to home buyers on margin accounts requiring only 5 percent of the sale price of the property would your confidence rise to the level that you would advocate that the legislature adopt an anti-deficiency judgment law?
What if you were the state treasurer and thus were effectively that banker and raced to issue bonds like they were candy to make such loans?
Unless Oregon can print money in like manner to the federal reserve, at the risk of inducing inflation in the classic sense where money is used only as a means of exchange rather than to measure accumulated personal debt, then the property values are a fiction. There is no inherent value in the property. Rather, the income level (wage income) of residents is a better measure of the equitable performance of the economic strategy of the PDC and Portland.
Don't forget, I am the guy who likes the study of economics from the perspective of lesser industrialized countries . . . and not from the perspective of lawyers here who need only argue ad hoc in court that a politician had a single plausible public purpose so as to vindicate their glorious deeds against all possible objections. I am mindful too of the tax court judge's total absent minded disregard for any public objection to the lunacy of any issuance of revenue bonds that any set of elected officials might design . . . seeming to the point of using ALL sources of revenue to justify bonding them into the future and spending it all today in a drunken binge.
What performance measures do you find appropriate? Is it leverage? Leverage induces asset inflation. Such asset inflation to me is just another way of saying wage deflation, notwithstanding and irrespective of a static and cooked up CPI. As we know, asset inflation that results in capital gains, seeming by design, are not recaptured via the tax code in an equitable manner to that for wages. The flat wages over the last several years, coupled with asset inflation, makes for a rather ugly picture for the working class. Blame it on Keynes, and a focus on the CPI. I would rather see the money distributed more evenly and result, horror of horrors, in inflation that is a mere side effect of wage inflation.
Again, would you have the confidence, if you were the state treasurer (our banker in the public interest), to advocate passage of an anti-deficiency judgment law?
I would not be advocating that a selected set of folks jump on the asset inflation train. Is that the limit of your view?
Posted by: Ron Ledbury | Mar 30, 2006 9:34:54 PM
Restore the sites?! Naa, you just let 'em site! Rich-ass republican developers up in the West Hills will fall all over the opportunity to develop them!
Oh wait, only if the city gives out billion-dollar 200 year tax abatements! Then they'll want light rail down the middle of the road, and the next thing your latte sippin,' SUV drivin' yuppies will be all over.
No thank you. We should tie a boat to the foundations and rip 'em out. Drag 'em into the middle of the river and voila! New habitat for the bald eagles you bleeding hearts so want to protect.
Posted by: Yarisoba | Mar 30, 2006 10:03:38 PM
Sam: who is working on airway rights over I-5, and have they complied with the below stipulations? Uh-oh...sounds like the soft-costs are going higher!
Title 23: Highways
PART 710—RIGHT-OF-WAY AND REAL ESTATE
Subpart D—Real Property Management
§ 710.405 Air rights on the Interstate.
(a) The FHWA policies relating to management of airspace on the Interstate for non-highway purposes are included in this section. Although this section deals specifically with approval actions on the Interstate, any use of airspace contemplated by a STD must assure that such occupancy, use, or reservation is in the public interest and does not impair the highway or interfere with the free and safe flow of traffic as provided in 23 CFR 1.23.
(1) This subpart applies to Interstate facilities which received title 23 of the United States Code assistance in any way.
(2) This subpart does not apply to the following:
(i) Non-Interstate highways.
(ii) Railroads and public utilities which cross or otherwise occupy Federal-aid highway right-of-way.
(iii) Relocations of railroads or utilities for which reimbursement is claimed under 23 CFR part 140, subparts E and H.
(iv) Bikeways and pedestrian walkways as covered in 23 CFR part 652.
(b) A STD may grant rights for temporary or permanent occupancy or use of Interstate system airspace if the STD has acquired sufficient legal right, title, and interest in the right-of-way of a federally assisted highway to permit the use of certain airspace for non-highway purposes; and where such airspace is not required presently or in the foreseeable future for the safe and proper operation and maintenance of the highway facility. The STD must obtain prior FHWA approval, except for paragraph (c) of this section.
(c) An STD may make lands and rights-of-way available without charge to a publicly owned mass transit authority for public transit purposes whenever the public interest will be served, and where this can be accomplished without impairing automotive safety or future highway improvements
(d) An individual, company, organization, or public agency desiring to use airspace shall submit a written request to the STD. If the STD recommends approval, it shall forward an application together with its recommendation and any necessary supplemental information including the proposed airspace agreement to the FHWA. The submission shall affirmatively provide for adherence to all policy requirements contained in this subpart and conform to the provisions in the FHWA's Airspace Guidelines at: http://www.fhwa.dot.gov/realestate/index.htm.
Posted by: Alice | Mar 30, 2006 10:12:30 PM
Sam: your crack legal team probably secured their airway lease years ago...but (just in case), here are the relevant guidelines...Thanks Google!
AIRSPACE GUIDELINES to 23 CFR 710.405 - 710.407
December 21, 1999
The Federal Highway Administration (FHWA) has prepared this series of questions and answers to guide those who administer lands and property rights acquired as a result of a Federally-funded highway or transportation project under Title 23 U.S.C. For specific situations and project level guidance, we encourage the reader to contact the State Department of Transportation (STD) or the FHWA Division Office located in your State capital.
Introduction
In this guidance document, we will use the term "airspace lease" (lease)to cover the range of leases for highway air rights.Air rightsis a legal term used in highway terminology to describe that area above or below the plane of the transportation facility and located within the right-of-way boundaries. The right to use this area by public entities or private parties for interim non-highway uses may be granted in airspace leases, as long as such uses will not interfere with the construction, operation or maintenance of the facility or anticipated future transportation needs. Private or public uses of airspace may occur, but the preservation of the nation's highway capacity is essential.
An airspace lease may range from a short term use with few or no tenant improvements to a long-term use with substantial structures. Lands held by the STD that are excess to highway needs are subject to different rules and are not discussed in this document. This guidance also doesnotapplyto railroads and public utilities which cross or otherwise occupy Federal-aid highway rights-of- way; relocations of railroads or utilities for which reimbursement is claimed; use of real property for bikeways and pedestrian walkways as covered in part 652 of 23 CFR, and highways not on the National Highway System (NHS).
The common element for successful airspace leasing activities is coordination among the various interested participants. A good highway airspace agreement must reflect legal, planning, environmental, design, construction, maintenance, insurance and safety requirements. Participants involved in evaluating a leasing proposal may include the proposed airspace user, affected sections of the STD, Local Public Agencies (LPA), and as appropriate, the FHWA. The following guidance sets forth the Federal requirements for use of airspace on the Federal-aid highway systems and ideas on how to most effectively protect this valuable public investment.
Federal Statutes and Regulations
This guidance is published in response to the revised 23 CFR Part 710 Subpart D on Real Property Management, as published on December 21, 1999, and is subject to the requirements of that regulation and other applicable requirements. For more information on these regulations and related issues see the FHWA web site at http://www.fhwa.dot.gov/realestate
Additional Federal requirements that affect the potential leases of airspace are found within 23 U.S.C. and implementing regulations in 23 CFR. For example, some pertinent citations include 23 U.S.C. 109(a) {Standards}, 23 U.S.C. 116 {Maintenance} and 23 U.S.C. 156 {Proceeds from the Sale or Lease of Real Property}, as well as their implementing regulations in 23 CFR 1.23, 1.27 and elsewhere. Additional requirements may include the Manual on Uniform Traffic Control Devices (MUTCD) and other guides incorporated by reference in 23 CFR. For specific guidance on these requirements, contact your FHWA Division or STD.
Question 710.405_1: What is highway airspace?
Air space is that area located above or below the highway's established grade line, beneath an elevated highway structure, or adjacent to the roadway, and located within the approved right-of-way boundary. As used in these Guidelines, this includes the land and related rights held by the STD or LPA and available for such uses, subject to limitations under State law and procedures.
Question 710.405_2: Who may lease highway airspace?
An individual, company, organization, or public agency may lease airspace upon approval from the STD and where appropriate, FHWA. All non-highway use of airspace will be covered by a properly written and approved airspace agreement (lease).
Question 710.405_3: Does FHWA have final approval on leases of all airspace?
The FHWA has final approval on leases of airspace on Interstate systems. It is a very interested party on the lease of airspace on other highway systems, particularly on other roads on the National Highway System (NHS). (See discussion on Statutes & Regulations). When mentioned in this document, FHWA approval is normally required onlyfor airspace leases on the Interstate system, unless the FHWA/State Oversight Agreement provides otherwise.
Question 710.405_4:Are there fundamental restrictions against the lease of highway airspace?
Airspace cannot be leased if it is required currently or in the foreseeable future for safe operation and maintenance of the highway facility. If such conflicts exist, the existing airspace would be considered unavailable. The only exception may be for interim uses which are terminated when the airspace is needed for highway purposes.
Under no conditions shall airspace be used for the manufacture or storage of flammable, explosive, or hazardous material or for any occupation which is deemed by the STD or the FHWA to be a hazard to highway or non-highway users. This prohibition should not be construed to preclude the transverse or longitudinal installation of such items as petroleum pipelines that have been approved by the STD and where appropriate, FHWA.
Question 710.405_5: What is the basic requirement for an airspace lease?
A State transportation department (STD) may approve non-highway airspace leases where it has acquired sufficient legal right, title, and interest in the right-of-way of a highway on a Federal-aid system to grant such usage.
Question 710.405_6: When is it necessary to determine the fair market value of airspace?
An STD should always determine the fair market value of airspace, and certainly if Federal funds have been used to acquire the highway right-of-way. The STD may receive fair market income from airspace leases, and use it for Title 23 (Transportation) purposes.
If sufficient available airspace exists within the publicly acquired rights-of-way of an Interstate highway, FHWA may authorize a STD to lease such airspace without charge to a publicly owned mass transit authority, or to another public agency for non-proprietary use for social, environmental or economic mitigation purposes.
Question 710.405_7: What can the STD do with the net income from airspace leases?
Income received from the authorized use of airspace shall be the STD's responsibility. Credit to Federal funds is not required as long as the Federal pro-rata share of the project income is used for Title 23 (Transportation) eligible projects. (See 23 CFR 710.403 (e) for more details)
Question 710.405_8: Can airspace be leased for public purposes?
Available airspace may be leased to a public agency for interim uses such as green strips, small parks, play areas, parking, public or quasi-public use which would integrate the highway into the local environment and enhance other publicly supported programs. Normally, the STD should retain supervision and jurisdiction over these interim land uses, but could enter into management agreements with local political subdivisions.
Question 710.405_9: What information must be included in an airspace agreement?
The airspace agreement should be very specific and limited as to the exact rights and uses granted. Each of the following items must be included in an application:
Identification of the party responsible for developing and operating the airspace
A general statement of the proposed use
The proposed design for the use of the space, including any facilities to be constructed.
Maps, plans, or sketches to adequately demonstrate the relationship of the proposed project to the highway facility.
Provision for vertical and horizontal access for maintenance purposes.
Other general requirements as term of use, insurance requirements, design limitations, safety mandates, accessibility, and maintenance as outlined further in this guidance.
Question 710.405_10: What are the primary lease terms for an airspace agreement?
Each agreement should contain:
Provision to prohibit the transfer, assignment, or conveyance of the airspace rights to another party without prior STD approval withFHWA concurrence on Interstates.
Provision to revoke the agreement in the event that the airspace facility ceases to be used or is abandoned, or becomes necessary for highway purposes.
Provision to revoke the agreement if the terms of the lease are breached and such breach is not corrected within a reasonable length of time after written notice of noncompliance has been given. In the event the agreement is revoked, the STD mayrequest the removal of the facility occupying the airspace. The removal shall be accomplished by the responsible party in a manner prescribed by the STD at no cost to the FHWA. An exception to facility removal is permitted when the improvements revert to the State upon termination of the agreement and the STD chooses to accept them.
Provision to allow STD and authorized FHWA representatives to enter the airspace facility for the purpose of inspection, maintenance, or reconstruction of the highway facility when necessary. The manner of when and how these inspections are to be made should be specified in the airspace agreement.
Provision that the facility to occupy the airspace will be maintained so as to assure that the structures and the area within the highway right-of-way boundaries will protect the highway's safety and appearance, and that such maintenance will cause no unreasonable interference with highway use.
Provisions assuring that the airspace user will be responsible for any resulting hazardous waste contamination without liability to the STD and FHWA.
Provisions to assure full understanding that the airspace user will not qualify for relocation benefits under the Uniform Act.
Question 710.405_11: How specific must the maps or plans be?
An adequately detailed three-dimensional presentation must be prepared of the space to be used and the facility to be constructed. Maps and plans may not be required if the available airspace is to be used for recreation, public park, beautification, parking of motor vehicles, public mass transit facilities, and similar uses. In such cases, an acceptable metes and bounds description of the surface area, and appropriate plans or cross sections clearly defining the vertical use limits may be furnished in lieu of a three-dimensional description, at the STD's discretion.
Question 710.405_12: What are the insurance requirements?
Adequate liability insurance shall be required by the responsible party for the payment of any damages which may occur during construction and then use of the airspace facilities, thus holding the STD (or LPA) and FHWA harmless.
Question 710.405_13: Are there any exceptions to the insurance requirement?
Insurance may not be required if the airspace is to be leased by a self-insured public or quasi-public agency. In such cases the requesting agency is assigned the responsibility for payment of any related damages occurring to the highway facility and to the public for personal injury, loss of life, and property damage.
Question 710.405_14: What if revisions need to be made to the original proposal?
Any significant revision in the design or construction of a proposed facility shall require prior approval by the STD. When the revision impacts an Interstate highway facility, the STD will obtain concurrence from the FHWA.
Question 710.405_15: Are there design requirements for leasing of highway airspace?
Design requirements are generally in the STD's manuals, FHWA regulations and guidance from organizations such as American Association of State Highway and Transportation Officials (AASHTO). Detailed guidance on design requirements is contained in STD manuals and FHWA regulations in 23 CFR Part 625, et. Seq. For guidance and interpretation on specific proposals, contact your STD and FHWA Division Office.
The following are major design criteria to be covered on a proposed airspace use:
Consideration shall be given to seismic design criteriato assure the future safety of the highway facility and of the airspace use
Use of air space beneath the established gradelineof the highway shall provide sufficient vertical and horizontal clearances for the construction, operation, maintenance, ventilation, and safety of the highway facility.
The proposed use of airspace above the established gradelineof the highway shall not, at any location between two points established 2 feet beyond the two outer edges of the shoulder, extend below a horizontal plane which is at least 16 feet 6 inches above the gradeline of the highway, or the minimum vertical clearance plus 6 inches as approved by the State, except as necessary for columns, foundations or other support structures.
Where control and directional signs needed for the highwayare to be installed beneath an overhead structure, vertical clearance will be at least 20 feet from the gradeline of the highway to the lowest point of the soffit of the overhead structure. Exceptions to the lateral limits set forth above, when justified by the STD, may be considered on an individual basis by the FHWA as appropriate.
Piers, columns, or any other portion of the airspace structure shall not be erected in a location which will interfere with visibilityor reduce sight distance or in any other way interfere materially with the safety and free flow of traffic on the highway facility.
The structural supports for the airspace facility shall be located to clear all horizontal and vertical dimensionsestablished by the STD. Supports shall be clear of the shoulder or safety walks of the outer roadway. However, supports may be located in the median or outer separation when the STD determines and the FHWA concurs that such medians and outer separations are of sufficient width.
All supports are to be back of or flush with the face of any wall at the same location. Supports shall be adequately protectedby means acceptable to the STD and the FHWA. No supports shall be located in the ramp gores, or in a position so as to interfere with the signing necessary for the proper use of the ramp.
Proposals may involve coordination with multiple officeswithin the STD such as Planning, Environment, Traffic, Operations, and Maintenance. Details of required approvals should be incorporated into the airspace agreement as appropriate.
Question 710.405_16: What are the safety requirements for a lease of airspace?
Full safety requirements are found in the STD's manuals, FHWA guidance and in national professional organization guidelines. For specific guidance and interpretation, contact your STD and FHWA Division Office. Examples of some key areas to consider include:
The design, occupancy, and use of any structure over or under a highway facility shall not interfere with the use, safety, appearance, nor the enjoyment of the facility nor produce fumes, vapors, odors, drippings, droppings, or discharges of any kind.
The use of airspace shall not result in either highway or nonhighway users being unduly exposed to hazardous conditions because of highway location, design, maintenance, and operation features.
Appropriate safety precautions and features must be incorporated in the design to minimize the possibility of injury to users of either the highway facility or airspace due to highway or non-highway incidents.
Highway airspace facilities shall not be approved unless the plans contain adequate provisions, acceptable to the STD and the FHWA, for evacuation of the structures or facilities in case of a major incident endangering the occupants of such structures or facilities.
Any airspace facility shall be fire resistant in accordance with the provisions of applicable local codes or nationally accepted standards found acceptable by the STD and the FHWA.
Question 710.405_17: Is it necessary to provide light and ventilation?
For detailed guidance on specific proposals, refer to STD manuals or FHWA regulations in 23 CFR Part 625, and then direct specific inquiries to the STD's specialists. Generally, however:
No structure or structures built over a highway facility shall occupy more length of the highway than will permit adequate natural ventilation of the enclosed section of the highway for the conditions at the location, assuming a volume of traffic equal to capacity. Each such covered length shall be preceded and followed by uncovered lengths of a highway that will safely affect natural ventilation.
The STD shall determine such lengths for each particular case, subject to FHWA concurrence on Interstates. Exceptions may be considered when complete tunnel ventilation is provided. Unless tunnel ventilation is provided, structures over highways shall be so designed and constructed as to facilitate natural ventilation of the highway.
The underside and any supports for such structures shall have smooth and easily cleanable surfaces. Supports for such structures shall leave as much open space on the sides of the highway as feasible. Such space shall be appropriately graded where deemed necessary or desirable by the STD.
Question 710.405_18: Can a lease of highway airspace change the alignment of the highway?
Construction of any structure above or below a highway facility shall not require any temporary or permanent change in alignment or profile of an existing highway without prior approval by the STD and the FHWA as required.
Question 710.405_19: What if it is beneficial to change the highway alignment?
The STD or the FHWA may approve a proposed airspace facility that alters but improves existing highway operation and maintenance, but such changes will be provided without cost to Federal funds.
Exceptions to the cost requirement may be made if the lease improvements of a proposed facility or other interim uses are for public or quasi-public purposes and would assist in integrating the highway into the local environment and enhance other publicly supported programs. This provision is not intended to expand existing limitations upon expenditures from the highway trust fund.
Question 710.405_20: Does the STD need to access airspace after construction is complete?
Yes. Proposed airspace facilities will be designed and constructed in a manner which will permit access to the highway facility for the purpose of inspection, maintenance, and reconstruction when necessary. In the event the responsible party fails in its maintenance obligations, there will be provision for the STD to enter the premises to perform such work.
Question 710.405_21: Can highway airspace be used to park motor vehicles?
Approval for the use and occupancy of highway airspace for the parking of motor vehicles will be granted only if proper consideration has been given to the need for the following:
Parking design or arrangement to assure orderly and functional parking.
Plantings or screening measures to improve the esthetics and appearance of the area.
Surfacing, lighting, fencing, striping, curbs, wheel stops, pier protection devices, etc.
Access for fire protection and fire fighting equipment.
Question 710.405_22: Can advertising signs be displayed within highway airspace?
On-premise signs, displays, or devices may be erected on structures occupying highway airspace, but only those indicating ownership and type of on-premise activities. Any signs are subject to regulation by the STD and the FHWA for number, size, location, design, and other limitations of the MUTCD, the Highway Beautification Act (HBA) and the State-Federal sign control agreement. Local ordinances and requirements may also apply.
Question 710.405_23: What other types of compliance issues apply to highway airspace?
There are a number of additional provisions that must be met when considering a proposed highway airspace use. Coordination within the STD, and with local government and other responsible agencies should be undertaken early in the airspace proposal consideration process to allow for adequate reviews and required approvals. The STD would be the best source for requirements under State law, as well as information on where to determine other applicable requirements. Some examples of essential Federal concerns about compliance include:
Appropriate provisions within your State's Civil Rights requirements with respect to Title VI of the Civil Rights Act of 1964 and 49 CFR part 21.
Conformity with the Americans with Disabilities Act (ADA).
Conformity with the governing provisions of the Federal Aviation Administration, Federal Rail Administration, Federal Transit Administration, and other Federal agencies whose approvals may be required.
Environmental clearances under the National Environmental Policy Act (NEPA) {such as for air and water quality, wetlands, etc.}, to the degree these apply, as well as historical and other Federally-protected issues related to a proposed airspace lease.
Question 710.405_24: What are the STD obligations for management of airspace use?
The STD should maintain an inventory of all authorized uses of airspace. This inventory should include at least the following items for each authorized use of airspace:
Location by project, survey station, or other appropriate method.
Identification of the authorized user of the airspace.
A three-dimensional description or a metes and bounds description.
As-built construction plans of the highway facility at the location where the use of airspace was authorized.
Pertinent construction plans of the facility authorized to occupy the airspace.
A copy of the executed airspace agreement.
Posted by: Alice | Mar 30, 2006 10:19:00 PM
Stephen:
My sources advise the City of Portland has neglected to seek the necessary Federal Highway Airspace Lease.
The posting of the regulations is intended to demonstrate this is NOT a trivial matter (especially in light of all the other "planning" failures on the tram): posting a link would not have conveyed the complexity and dilligence required to obtain the lease.
It also illustrates that designing a complex licensing mechanism (which the City's various bureaus accomplish with much aplomb) is much easier than trying to satisfy the complex licensing mechanism.
The City of Portland is now on the receiving end of burdensome and overreaching bureaucracy: a link would not illustrate that "twist in the wind" reality because it would have understated the burdensomem and overreaching nature of the Airspace Lease. After all, we are talking about using air.
Posted by: Alice | Mar 31, 2006 1:45:00 AM
Stick with writing "State transportation department." Maybe it is my young mind but every time I get a few paragraphs into your post Alice, I can't stop laughing.
Posted by: MarkDaMan | Mar 31, 2006 9:16:31 AM
Bottom line, keep the 'conversation' going while whaling away full speed at the construction. The faster we get to the 'point-of-no-return' the faster we can tell those who are complaining 'so-sad-too-bad'.
Remember, I work with these guys both digging dirt and checking plans. It's pretty plain to us, but just keep those 'conversations' going, we're working as hard as we can.
Posted by: mmmarvel | Mar 31, 2006 9:25:33 AM
Alice -
Understood. Thanks for the explanation. I was really just ribbing you, I don't mind that you wrote the whole thing out. But jeez, it WAS long, you gotta admit.
Jack Bog - As far as airspace over Lair Hill, my understanding is that a property owner doesn't really own the rights to the airspace above them unless the current zoning regulations would allow them to build as high as the potential conflict is happening. Since most of Lair Hill is zoned residential, building up 500 ft (or however high the tram is) in those residential lots isn't allowed anyway, so no conflict. I could be wrong though - anybody know more about this?
Posted by: Stephen | Mar 31, 2006 9:49:31 AM
As reported by PDC at our last NM URAC meeting two weeks ago, the Feds and ODOT have not given approval for the air rights over I-5 and Macadam and Barbur.
Yarisoba: Lets consider "Restoring the sites" after the tram is stopped:
I propose that OHSU develop their west terminal site with its massive concrete foundation base and concrete tower with added concrete to create a "St. Jude" statue similar to Rio's statue in S. America that over looks the city from Sugar Loaf (Pill Hill). Now, there's a real tourist attraction.
As for the east terminal site next to OHSU's Health Club, I propose turning the massive concreted deep hole in Gibb St. into a "reflection pool" that connects up to Zidell's launch basin on the Willamette to create the "Urban River Park" that was promised in all the years of the Greenway Designs for NM. With 200 cherry trees planted around the basin with a gentle landscaped park grade down to the river's edge, that would certainly serve the city taxpayers and tourists.
We were promised four parks in the over one mile long North Macadam UR area. Now we are down to two: one under the Ross Island bridge-about 60 ft wide; and the other far away from the river with no views right next to the soon-to-be-busy Moody St. with all its vehicle and trolly traffic on both sides with a 25 story building on its south side blocking all the nice sun. Urban Planning!????
Posted by: Lee | Mar 31, 2006 10:10:39 AM
I forgot to mention, the Moody St. Park land cost the taxpayers $7.2M just for the land. The improvements for the future park is now estimated (we know how that price will go up in the future) at $6M. That is not including the interim price tag of seeding the soon-to-be vacated Storage Co. site, adding sidewalks around the site to the tune of $500T. And that will be torn up in a few years to start over.
Posted by: Lee | Mar 31, 2006 10:19:40 AM
Stephan,
Zoning is subject to change in the future through a simple vote or through an initiative.
Though it remains a matter of faith as to whether a present restriction is a restriction or whether removing a restriction creates public property.
Posted by: Ron Ledbury | Mar 31, 2006 10:44:12 AM
Lee:
Has the required Federal Highway Airspace Lease been drafted or submitted for consideration?
Clearly, the FHWA can't give their approval if they haven't received a formal request.
Posted by: Alice | Mar 31, 2006 10:53:49 AM
Ron, I'm not sure what you mean by your second statement; could you elaborate? What do you mean by "removing a restriction creates public property"?
As for zoning, I know it can be changed, but even in the regional comprehensive plan the majority of Gibbs Street on Lair Hill is only slated to be the lowest form of multi-family residential (duplex, townhouses, etc.), nothing of the type that would come close to the elevation of the tram's cables. So, I'm still wondering if there's any cause for concern about the City getting sued for airspace violations (from homeowners, not the Feds) when even in the comprehensive zoning plan there's (seemingly) no room for upward growth of the scale required to cause a conflict. There's certainly no Measure 37 claim here IF the property owners weren't allowed to build that high anyway due to zoning restrictions that were already in place.
Posted by: Stephen | Mar 31, 2006 11:08:53 AM
"Zoning is subject to change in the future through a simple vote or through an initiative"
And when downtown developers ride the rail/density, vision/pipe dream wave & fill campaign coffers they get plenty of simple Council votes for every zoning change they want.
Then while their projects progress under their strict management they remain insulated from the soaring public costs and debt resulting from the less managed surrounding and immediate infrastructure they got for free.
Can't blame the developers though. It's business as usual when the public's interest is lost in the bureaucracy.
Posted by: Steve Schopp | Mar 31, 2006 11:10:57 AM
Stephan,
The arbitrariness of the sequential height adjustments to one group and not another come immediately to mind. Suppose every height adjustment for condo towers, regardless of designated accommodation of the publicly policy choices as to protected view corridors, was granted equally to all the property below the proposed tram cable? Surely there is a sufficient factual nexus between them to be a relevant, even material, consideration in court.
There is a set of folks that believe that all land and all improvements and all enterprises are entirely public. It is a belief. As such it is nearly impossible to affect their beliefs through reason. However, it is a factor that one must consider when predicting the outcome of the any political policy choice and the ultimate resolution in court. It is thus unanswerable but still relevant. Stick a wet finger in the air to test the direction of the wind is the best one could do.
"IF the property owners weren't allowed to build that high anyway due to zoning restrictions that were already in place."
Professor Huffman might claim, I suppose, that M37 was a property rights vindication measure. I say, as you implicitly note above, that it actually enables the belief that a restriction, once imposed and where someone had an opportunity to object, forever removes the property owner from regaining that right. The imposition of a restriction thereby transfers to the public any value that could be had upon the subsequent removal of the previously imposed restriction. This makes for a great tautology, one that might offend even a dean of a law school. Your guess would be as good as mine I suppose on how it would be treated in a court. I would favor pointing instead toward equal privileges and immunities and to the application of the contracts clause to private contracts for the sale of property.
Posted by: Ron Ledbury | Mar 31, 2006 11:50:08 AM
Stephen and Ledbury:
I think Ledbury is making the point that even though a present zoning/comp. plan may designate a certain building height, that it can change in the future and sometime in the very near future. Consider how NM changed from 35-65 ft. heights to 325 ft in one swope.
It could be argued that for Lair Hill property owners that maybe in 25 year their zoning heights could be changed to 150 ft. But those property owners directly along Gibbs wouldn't be able to enjoy those same rights because of the tram car/cable heights being less than the 150 ft. Those property owners or successors would be harmed financially by devalued property not equal to nearby or adjacent property owners.That is one basis of the lawsuit potentially pending.
Posted by: Lee | Apr 1, 2006 12:40:09 PM
Alice, from my understanding from PDC staff is that Fed application has been made for the tram.
Posted by: Lee | Apr 1, 2006 12:43:18 PM
I spoke with the Federal Highway Administrations right-of-way/Airspace program manager on Friday (3/31/06): he said he has not received anything on the OSHU Tram.
He also said he is unaware of any aerial tram crossing any other U.S. highway.
Posted by: Alice | Apr 1, 2006 1:08:15 PM
Thanks Alice. Well, that's it for the tram. Now we can move on to the $125M shortfall in the NM UR area five year budget that is being hidden by PDC. And that is conservative.
Posted by: Lee | Apr 1, 2006 6:11:45 PM
From the O: http://www.oregonlive.com/printer/printer.ssf?/base/news/1143869120119990.xml&coll=7
"We've never done anything like that before, for sure," said Randy Woolwine, the U.S. vice president of
sales for Doppelmayr, an Austrian firm that has built trams since the early 1900s.
And what who pays if they don't get it right?
Thanks
JK
Posted by: jim karlock | Apr 2, 2006 8:24:43 AM
It seems to me that OHSU’s decision to build their new hospital building right in the same spot as where the upper tram terminal was originally planned has contributed to much of the cost overruns. It also appears that OHSU along with Dame and Williams attempted to hide the facts thereby bilking the City in a scam to collect more taxpayer money for the project. I agree with the three City Commissioners that say enough is enough. It is up to OHSU, and Dame and Williams to come up with the money to pay the cost overruns.
And as for keeping OHSU in Portland. As just announced, another cat was let out of the bag. OHSU will have a presence in Eugene. So just who is going to be trusted to build that tram?
Posted by: Terry Parker | Apr 2, 2006 4:13:24 PM
Lee,
Thanks, that makes sense. I'm no lawyer, so I'll leave it to persons more knowledgable than I to sort this issue out...
Posted by: Stephen | Apr 2, 2006 10:07:12 PM
"As just announced, another cat was let out of the bag. OHSU will have a presence in Eugene."
and the UofO will be building an Architecture School in Portland. The world must have gone mad!
Posted by: MarkDaMan | Apr 3, 2006 11:38:22 AM
The world (Oregon) is all about our public/semi public institutions becoming "developers". OHSU (in the hotel, parking garage, commercial space, health club, commercial space business), U of O, Portland State wanting to expand into Lair Hill with a "world university", OSU with several campus branches, etc.
Of course, being "developers" with public taxpayer dollars with no consequences. What happened to following an instiutions mission statement?
Posted by: Lee | Apr 3, 2006 1:56:24 PM
Sam:
Have you asked PDOT staff about the FHWA Airspace Lease? My sources indicate it's barely advanced beyond the "visioning" stage: there's a raft of federal guidelines that have to be documented, engineered, and lawyered up.
If you're counting on the Feds to give Portland a nice guy pass, I would urge you to consider the EPA's hardline stance on cryptosporidium. Hanging high tension cable and two trams full of people above a Federal Interstate has never been done before.
You might ask Randy to work on this little FHWA regulation:
Highway airspace facilities shall not be approved unless the plans contain adequate provisions, acceptable to the STD and the FHWA, for evacuation of the structures or facilities in case of a major incident endangering the occupants of such structures or facilities.
Posted by: Alice | Apr 5, 2006 7:28:15 AM
Along with Alice's suggestion many folks are waiting for:
1) Full and genuine life cycle cost of the Tram.
2) The State law required yearly reports on Urban Renewal impacts to basic services.
3) Updated accounting of SoWa including completed work, current project estimates, revenue projections, progress schedule and projected timeline for public improvements completion.
To those studying the prior budget projections and progress in SoWa it is clear that the greater SoWa is following the same path as early Tram estimates with even more severe cost overruns and project delays.
How are we to believe there have been lessons learned with the Tram when there is ample and conclusive evidence that the same mistakes are being made with the other non Tram elements in SoWa?
If anyone wants a copy of the most stark example of the amateur hour mismanagement in SoWa please email me for a copy of the so called "budget update" given to the South Waterfront Urban Renewal advisory committee.
It is truly a display of chaos.
stevescare@aol.com
Posted by: Steve Schopp | Apr 5, 2006 8:42:56 AM
If the tram is stopped, lets turn the unfinished sctructures over to the Portland Institute of Contempory Art (PICA), the people who put on the moveable art festival.
I think these unfinished structures would make great sculpures with some creative additions.
We have an artistic community that is very adapt in transforming such objects into very memorable pieces of art that can place Portland prominently on the arts map!
Cleara
Posted by: Cleara | Apr 8, 2006 9:39:12 AM
The Tram is much better as kinetic art...as the rider is lifted from the riverside base, the view of the entire region will graduall unfold. No one will be looking down at Lair Hill. Take a ride on the 8 bus to the VA Hosp and walk across the ped bridge to OHSU Hosp. The view will knock your socks off, and the Tram will be even better. Surely Portland's first "Wow' project.
Posted by: Lenny Anderson | Apr 10, 2006 1:06:45 PM
The vast majority of riders will be nurses and interns seeking cheap parking in SoWa.
Based on the ridership projections of OHSU, they'll be packed like sardines in the cars.
No one will enjoy the view since most are simply trying to get to their offices.
What a dumb reason to expend millions of dollars... a "wow" project. Like, wow, man. Keep Portland wierd.
Posted by: john prentice | Apr 10, 2006 3:50:29 PM
I guess I overlooked the "wow factor"
just as Lenny overlooked the entire cost, financing, impacts, affordability, other needs and fiscal stability.
Of course Lenny has also disregarded all of these other considerations when raised.
It's a remarkable phenomenon that one can disregard every measure of merit and legitimacy by simply applying a "wow".
I wonder how that would work if I were to head out one day, finance a Ferrari and start an adulterous affair with a hot young thing.
After all, when my wife points out how we can't afford the Ferrari and my affair is destructive to our marriage I'll just explain to her the "wow" factor.
I'm sure her reaction would be about the same as taxpayers when the true costs of the Tram and SoWa pile up and the city says,
"Wow, we need more money".
Posted by: Steve Schopp | Apr 10, 2006 5:28:35 PM
Wow, Steve, this Tram must have so much WOW factor that the credit rating agencies are overlooking the risk you say this is causing Portland's general fund.
In fact, last time I checked, Portland has a respectable credit score of around 686.
www.nationalscoreindex.com
http://moneycentral.msn.com/content/Banking
/Yourcreditrating/P80782.asp
That means our credit score is higher than the national average and equal to New York. It is also higher than San Francisco, Chicago, Phoenix, LA, Houston, and Denver; just to name a few. Cities that I would argue, aren't poised for financial ruin.
WOW is right! These people that determine Portland's credit worthiness think our leaders are doing a better job with our finances than Chicago? Phoenix? They are building a CC hotel BTW, have you been hammering them too since you like to stick your opinions into cities you don't even reside in, ie. Portland?
We know you want every answer now, and every answer you are given isn't good enough. It looks like it is time for you to attend a PDC meeting to express your concerns. Obviously the answers you are looking for aren't going to come from this blog.
Posted by: MarkDaMan | Apr 11, 2006 9:07:06 AM
MarkDaChild:
The "average" credit score of the people living in Portland HAS NOTHING TO DO WITH the City's Bond Rating. Their criteria and application are completely distinct: the only thing they have in common is geography.
Consumer credit rating agencies (like TRW) are very different than the Big Three municipal bond rating agencies: Standard & Poors, Moodys, and Fitch.
Your assertion is kind of like saying that all the people who worked at Enron had "good credit" so the Corporation should never have gone bankrupt. Wrong: the individuals who work there (or live in Portland) have no impact on the corporation's (or the City's) credit rating. The only correlation is the percentage of the citizens paying their property taxes on time (which many people with lousy credit scores manage to do).
Posted by: Alice | Apr 11, 2006 9:52:44 AM
Here's Mark again.
Slinging every thing but substance.
Today he's attempting to get people to avoid focusing on the details of the real problems and instead simply look at the mostly irrellevant credit rating.
Or that I don't live in the CoP.
Never mind that regional, State and federal dollars are being misspent through highly questionable Urban Renewal and other schemes.
Or that many Portlanders are involved in scrutinizing and criticizing the ongoing and worsening Tram and other fiascos.
Who's interests is Mark lobbying for?
Certainly NOT the voters, the taxpayers, homeowners or housing advocates, school children,
police, fire, parks, libraires or any other civic interests.
Mark apparently hopes that his efforts involding diversion, distortion and falsehoods will continue obstructing from widespread public consideration some of the most important reasons for many of the city's and region's problems.
Mark's message?
"Don't concern yourselves with the following details because Steve doesn't live in Portland.
Due to excessive Urban Renewal, over $4 Billion in Portland real estate value is NOT having ANY of it's property taxes going to schools or other basic services.
$65 million, just this one fiscal year, is being diverted away from these services.
At $5.00 per thousand of value, $20 million of it would be going to schools and the rest to police, fire parks and other basic services.
That's from the county tax assessor.
SoWa promises to worsen the problem.
Along with PDC plans, budgets, reports, amendments, URAC meeting documents and news reports a far different reality than the one Mark is selling emerges.
The city prohibited earlier development, (without the current massive public subsidies), from happening in SoWa years ago. Pile upon the heap of other enormous public costs the loss of years of property taxes from that development that otherwise would have occurred.
Your claim that no developement was possbile is a lie.
It will likely be 40 or more years if the full extent of the planned projects are completed at public cost as planned before UR property taxes return to basic services.
The greater SoWa is being handled as recklessly as the early Tram estimates.
From the PDC website and SoWa plan:
"By the end of FY 2024/25, sufficient urban renewal tax revenue is projected to be collected to retire all outstanding bonded indebtedness necessary to finance the plan. Urban renewal taxes would therefore be projected to cease"
http://www.pdc.us/pdf/dev_serv/pubs/dev_macadam_report.pdf
Unfortunately it won't be 2025 either because that was the assumption when the plan was adopted in 1999. At that time it was projected to be $288 million in projects and $160 million in debt service. (same link table 6).
Every dollar paid by property taxes from the entire 409 acre district.
Not just the new 130 acre development.
The cost is far higher now and it will take countless millions more and at least an additional 15 years to retire the debt and return the taxes to basic services.
Because now we have:
Nearly every infrastructure and public project cost being way over budget.
Revenue far short of projections.
Exceeded TIF borrowing capacity.
Money being borrowed from other districts.
Progress far behind schedule.
Years of interest rate increases which could easily double the debt service cost. That's another $160 million just for added debt service.
And OHSU now owns 20 more acres of the 130 and they pay no property taxes
What else is the city doing or not doing?
1) No confirmation of the FHWA Airspace Lease for the Tram.
2) No full and genuine life cycle cost of the Tram has ever been provided.
3) The PDC refused to provide the State law required yearly reports on Urban Renewal impacts to basic services.
4) There is no current accounting of SoWa including completed work, current project estimates, revenue projections, progress schedule and projected timeline for public improvements completion.
5) The most recent so called "budget update" given to the South Waterfront Urban Renewal advisory committee was a laugher with missing numbers, unknown project costs, entire components missing and no totals of either costs or revenue. E-mail me for a copy. It is truly a display of amateur hour accounting. stevescare@aol.com
6)OHSU LID commitments to pay off the Tram will carve away $3.6 million a year for 20 years from their operating budget. Something they did not plan on when they decided to expand.
7) The "linchpin" for SoWa is the now $700 million, and rising, public cost of free infrastructure for the developers.
8) The Tram and SoWa are both way over budget and behind schedule yet public officials, PDC's Bruce Warner, are telling the public things are on track and going as planned.
9)While claiming biotech research expansion is underway OHSU has been pursuing the Hotel business, a commercial/retail/parking operation and stated recently they really wanted an "Institute for Excellence in Nursing and the Rural Frontier Delivery Program" but they decided to help the city develop SoWa?
10) OHSU has yet to put any real money into the Tram or SoWa.
11) They got their Doctor's 501c3 OHSU Medical Group to build the first building.
They haven't paid one dime for the Tram yet.
Not one dime for any of the SoWa infrastructure.
And no LID payments.
12) OHSU has been paid:
$5 million cash from borrowed TIF funds from the PDC for something labeled "commercializable biotech research space" .
$3 million cash from borrowed TIF funds for reserving 100 parking spaces in a future building OHSU will be building. (the OHSU retail/commercial/parking building)
$3 million cash from borrowed TIF funds for structural upgrades in that future building.
and $3 million TIF cash in matching funds for lobbying for fed funds for that future building.
13)OHSU was guaranteed a new 3rd LID of their own to finance that new retail/commercial/parking building when they do build it. OHSU is to become landlords in the retail/commercial/parking business?
14) Members of the SoWa Urban Renewal Advisory Committee have calculated that currently there are $127 million in over budget/unfunded public improvements with basic transportation improvements far behind schedule.
15) The PDC has reported that the TIF borrowing capacity has been exceeded.
Posted by: Steve Schopp | Apr 11, 2006 10:09:08 AM
Oh dear...the sky is falling on Portland! Is that why I see all the construction cranes? Is that why home prices are climbing?...because everyone is running for the exits?
Now, that the Tram is a done deal...let's talk about Major League Baseball. A city needs to have fun too.
Posted by: Lenny Anderson | Apr 11, 2006 10:43:02 AM
Steve Schopp, though we disagree (I think) on whether or not the tram should be finished (I think it ought to be), I am in agreement with you on many of your points of concern. So no need to address those.
I do wonder, however, if you ever get tired of being so doom-and-gloom. I realize things with the Tram are bad, but do you ever look at the positive? I've seen elsewhere on this blog that you have run for public office (for Metro I believe?). I want my elected officials to, among other things, be able to see the positive in our City. I cannot imagine you doing that from the way you post on this blog. I want to go cut my wrists after reading your long lists of Why I Should Hate City Council. Okay! We get it, they screwed up! We know already! You don't need to convince the majority of us, and those that don't see that probably won't ever be convinced.
I think Lenny's right - you need some baseball!
Posted by: Stephen | Apr 11, 2006 12:20:24 PM
"Mark's message?
Don't concern yourselves with the following details because Steve doesn't live in Portland."
Steve, you have an agenda. You spout your analysis but yet you don't bother to present it to the appropriate people. You claim myself and anyone else who disagrees with you is a liar, a cheat, or someone who has something to gain. Your world must be truly sad if you believe that everyone with an opinion opposite of yours is somehow conspiring to "hide the truth."
Your in the face style is what turns me off to your message. Numbers have a funny way of presenting themselves. We can be given the exact same set of numbers, and my analysis gives me x, yours gives you y. I HAVE NEVER said that you don't have a point, or that your analysis is wrong. What I do say is that if you are truly concerned, and are holding onto decisive data, than you would be speaking up at PDC meetings and Portland City Council meetings. Your notebook of facts and data would accompany you to back up your disturbing analysis.
I am not an urban planning expert. I cannot look at your information and determine whether or not it holds any water compared to what the PDC presents. I vote for people who I think are in the best position to understand alternative analysis, weigh those analysis with what the PDC has conjured up, and can make an informed decision based on the opposing views. For whatever reason, you have decided to hammer away here and on boJack, instead of the appropriate channels.
What you appear to be is an anti-Portland bully that lives in the burbs and likes to bitch about the big city a 'lil further north. You speak but you have no action. For months I've been reading your 'concerns' that never seem to get answered. Every minor bump the CoP faces is a major mountain to you. If your information is a solid as you claim you should be able to present the facts and allow us to decide instead of repeating your analysis again and again and on thread after thread. You must love spreading divisiveness instead of solutions while attacking those that are trying to get a better understanding. It keeps your name prevalent on this site.
The funny thing is, I see some of your points look concerning. I just can't understand why someone who has obviously made a living out of second guessing the city of Portland is unable to show his face at the appropriate forums to discuss his analysis.
Posted by: MarkDaMan | Apr 11, 2006 1:23:21 PM
Lenny Anderson Oh dear...the sky is falling on Portland!
JK: You got that right - you must be reading the papers.
Lenny Anderson Is that why I see all the construction cranes?
JK: It is mostly taxpayer supported projects with money that should be going to basic services instead of millionaire condos. Is that something that you consider good?
Lenny Anderson Is that why home prices are climbing?
JK: Yeah, right out of reach of the average person. Is that something that you consider good?
Lenny Anderson Now, that the Tram is a done deal...let's talk about Major League Baseball
JK: With money from which basic service? Or do you propose a new tax for baseball? Or perhaps take the income tax that the players would normally pay into basic services and schools and divert it to the stadium?
Thanks
JK
Posted by: jim karlock | Apr 11, 2006 9:57:22 PM
MarkDaMan |I just can't understand why someone who has obviously made a living out of second guessing the city of Portland is unable to show his face at the appropriate forums to discuss his analysis.
He has. He got ignored. He is getting better results now.
Thanks
JK
Posted by: jim karlock | Apr 11, 2006 9:59:09 PM
OK friends,
First, I have not said whether or not I think the Tram should be finished or not.
I am telling you the city portion is far greater than the stated amount and SoWa will be far worse.
People can decide for themselves what
they support.
Is there something wrong with the public being informed?
If any of you dispute any item on that list fine. Let's hear it.
If some of you either don't believe any of them, don't want to hear it or disregard them all because you are hearing them from this gadfly on a blog.
Well, so be it.
But most of the numbers and points on that blog are from the PDC. Others are from the SoWa Advisory Committee, and others.
That list (above) is not analysis.
What you should be wondering (or outraged about) is why you are hearing it from a gadfly on a blog instead of from officials, the PDC and our newspapers. WW has done some good work regarding the first OHSU building etc.
http://www.wweek.com/editorial/3201/6926/
http://www.wweek.com/editorial/3203/6965/
It is quite possible that the SoWa plan, deemed feasible by staff and approved by council in 1999 will cost the public hundreds of millions more than the $448 million projected in that plan.
A collection of PDC plans, amendments, budget reports, new estimates, new revenue projections and rising Municipal bond interest rates indicates that feasibility was based on faulty numbers. Both in project estimates and revenue projections.
The result will far greater cost, many lengthy delays on the public improvements and many years longer to return the property taxes to the general fund and basic services.
Not by a little but by hundreds of millions and possibly decades more to retire the debt.
The plan is no longer "feasible".
Piled on top of the others this fast and loose use of Urban Renewal Tax Increment Financing at SoWa will make much worse the diverting of property taxes away from basic services for use on these reckless misadventures.
The PDC knows all of this and has 227 people and deep pockets to craft any public message they choose.
The fact that they withhold so much from the publc, (and likely council too), should be troubling to most people.
Posted by: Steve Schopp | Apr 11, 2006 10:22:03 PM
"The fact that they withhold so much from the publc, (and likely council too), should be troubling to most people..."
Only to those who hate to see wasted tax dollars and malfeasance in our public agencies. Which, consequently, is most logical clear-thinking people.
People like Lenny and Mark would rather attack the whistle-blower. I'd love to see Lenny's, Mark's and even Sam's position on SoWa if it was the brain-child of a Republican agency, developer and Mayor.
Of course, they'd be winging about the "rich getting richer" and "taxes being diverted from basic services."
Posted by: Chris McMullen | Apr 12, 2006 12:47:47 PM
So it will take 33 million to 'STOP' a 10 million dollar tram?
Wow...
I mean the 10... no 15... no 45... no 55.5 million... No.. .. the 100 million dollar Tram?
The folks living below the Tram are suing over the damage done to their property values...
I bet they said 'WOW'.
The riverfront development sat idle for 3 decades until the City needed a rationale for the tram...
I bet the owners of the homes who saw their views destroyed said 'WOW'.
When you look at Portland the city has been zoned so that short buildings line the river with taller buildings behind to preserve that balanced 'look' and gradiation up the hills.
That has been tossed out the window.
Now 325 foot tall towers are going up creating a whole new downtown on Macadam...
A road without infrastructural improvements that will now have to handle an additional 37,000 daily commutes...
A burden that will also fall upon the unimproved Sellwood bridge that saw it's repairs put off as it's funds were diverted to the... Tram.
I bet all those commuters will say... 'WOW'.
As they sit in the worst traffic congestion in North America.
Posted by: DANEgerus | Apr 24, 2006 12:29:15 PM
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What would the termination costs have been on February 1, when the latest $15 million overrun became obvious? You guys kept borrowing and kept building, even though there's no one but the city on the hook to pay the bills in the long run. Very curious stewardship of the city's bonding capacity.
Posted by: Jack Bog | Mar 29, 2006 6:16:40 PM