New Markets Tax Credits Aimed at MLK

PORTLAND-Proceeds from the sale of $100 million in federal tax credits will be invested in the redevelopment of several vacant and underutilized properties along Martin Luther King Boulevard in Northeast Portland. The New Market Tax Credits were awarded by the US Department of Treasury to a partnership of the Portland Development Commission, which is the city’s urban renewal agency, and the Portland Family of Funds, a community investment bank. Congress created the three-year-old tax credit program as part of the Community Renewal Tax Relief Act of 2000 in order to encourage investment in low-income communities. The partnership intends to focus its first activities with this award on several properties along NE MLK Boulevard owned by the PDC. At the top of the list for funding is the historic Heritage Building at 3934 NE MLK Blvd. At a cost of $4.5 million, the long vacant warehouse building will be renovated into a commercial-retail building. The Portland Family of Funds will be the anchor tenant. The developer is The Heritage Building LLC, which is comprised of John Eric Wentland, Inc., JMWooley & Assoc., Howard Louks and Dennis Hadley.Also on the list is 3510 NE MLK Blvd., a site that currently holds a vacant 3,000-sf convenience store. The plan is to redevelop the site with an 11,000-sf building that will house retail space on the ground floor and office space above, and seven for-sale row homes along NE Grand Avenue. The developer is Fremont Partners LLC, a joint venture of Public Private Partnerships Inc. (Rob Tucker and Mazen Abualhaija) and First Oregon Development LLC. (Ron Sykes, Abe Killings).In between those two properties is 3701 NE MLK Blvd., a vacant 30,000-sf parcel for which no specific plans have been made. The PDC has targeted the site for job creation. A market study is underway and outreach is being made with several businesses that have expressed interest in this location.The fourth project site is an 80,000-sf site at 3368 NE MLK Blvd. The property currently holds the Grant Warehouse Building, which contains serious environmental issues. The zoning and community vision for these blocks indicates 4-5 story of mixed-income housing with ground floor retail. A request for developer proposals is expected to be issued late this year.The final project site is located at the intersection of Alberta and NE MLK Boulevard. At 180,000 sf, it is the largest developable site along NE MLK Boulevard. Current plans indicate the possibility of a grocery store with additional retail shops and housing facing the adjacent neighborhood. The developers are Vanport Project LLC, ERL Development, JM Wooley & Assoc. and Gerding/Edlen Development. The New Markets Tax Credits were awarded after a competitive application process in which 271 applications were filed by last June’s deadline, seeking approximately $30 billion in credits. After a juried decision process, 62 allocations were made nationwide in the amount of $3.5 billion. There were two other allocations to Portland organizations, including a $72-million allocation for renovation of the Meier & Frank Department store building in Downtown Portland. Oregon received the sixth largest allocation of any state. The PDC and Portland Family of Funds plan to apply for another allocation of New Markets Tax credits for the 2004 cycle. Applications are due to the U.S. Treasury in June.