“It is a parallel to taxation without representation,” Anita Davidson, a downtown condominium owner, said. “I just don’t call it that because they have worked around state property tax laws such that it’s not called a tax; it’s called a fee.”
The city of Portland unanimously voted to accept a new report recommending changes to its Enhanced Services District, or ESD, program on Feb. 14, four years after the Portland city auditor released a scathing report in 2020. That report found the city needed to provide more oversight to the ESD program after it collects mandatory fees from businesses and residents within the districts.
An hour-long afternoon council session highlighted ongoing concerns raised by residential property owners, small business owners and nonprofits living and working in the 213-block ESD known as Downtown Clean & Safe. Clean & Safe is technically run as a nonprofit organization, and it is inextricably tied to the Portland Business Alliance, or PBA. The PBA rebranded as the Portland Metro Chamber in 2023. However, the contracts are explicitly between the city and the PBA.
The PBA manages Clean & Safe’s contract with the city of Portland, and tax records show all Clean & Safe staff members are employees of the PBA. The Clean & Safe contract subsidizes up to 50% of PBA executives’ salaries, including 45% of PBA President and CEO Andrew Hoan’s $317,360 annual salary, according to public records.
BDS Planning and Urban Design, a Seattle-based firm hired by the city of Portland to assess the ESD program, produced a 70-page report outlining concerns and recommendations to improve the program, which the council accepted on Feb. 14.
The ESD program includes three districts in total: Central Eastside Together, which has a $1.5 million budget; Lloyd, with a $750,000 budget; and Downtown Clean & Safe, operated by the PBA and boasting an $8.37 million projected annual budget by 2026, according to public records.
While BDS Planning’s report focused on the citywide ESD program, most written and oral testimony focused on Clean & Safe’s lack of transparency in the face of the city’s requirement that every business or building owner in the downtown radius pay for it.
“When we do not have representation on a private membership organization that we cannot join, which is the PBA, we will never have representation,” Davidson said. She is on the budget committee and the board of directors for the downtown condominium where she lives.
As a chamber of commerce, the PBA is a 501c(6) organization explicitly providing membership opportunities for businesses. Membership options range from $1,200-17,250 per year for businesses.
“They can say who they want to be members, and if you're not in that category of membership, you can't join,” Davidson said. “We can't see their bylaws. We don't see their detailed budget. We can't see their agenda. We don't see their minutes. They’re a completely private organization.”
Public records show Clean & Safe received $6.3 million in funding from ratepayers in the district in 2022. Businesses paid 72% of those funds, while residential property owners, nonprofits, and public entities — including the city of Portland and Multnomah County — paid over 25% despite having no representation or pathway to decide how the money is invested. Apartment tenants do not pay directly into the fund, but building owners may pass on the fees to tenants who live in the buildings.
Of the $6.3 million in ratepayer funds, roughly $1.5 million is dedicated to cleaning services, and $2.5 million is allocated for security services, according to public records. Clean & Safe was formalized in city code in 1991 and is charged with providing additional services in the downtown core beyond the traditional services provided by the city, such as cleaning sidewalks, removing graffiti and providing security in collaboration with Portland police.
Recommendations
BDS Planning’s topline recommendations include requiring ESD boards to more adequately represent the various types of ratepayers; developing guidelines to make the line between ESD boards and management associations more accountable to ratepayers and the city; and continuing to include residential properties as ESD ratepayers, despite protests from some downtown residents.
Brian David Scott, BDS Planning founder, told the city council the current system leaves room for improvement with regard to transparency and accountability.
“There's confusion about elections, decisions, priorities and accountability,” Scott said. “As a result, there is a lot of speculation and suspicion about what's happening there.”
Scott, who is from Portland, was a strong voice in the early creation of ESD programs in the 1980s. He helped write the state law that created economic improvement districts, then played a consulting role when the Clean & Safe district was created in 1988.
"We have a lot of ethical concerns around our funds going to ... further traumatize and entrench our community in poverty."
Lauren Armony, Sisters of the Road
The BDS Planning report said Portland’s ESD program is not aligned with national best practices, while offering little definition of what those practices are. Davidson said the lack of clarity may effectively create the illusion of national best practices in order to justify the fees.
“It's almost self-fulfilling,” she said. “If we tell enough cities that all the other cities are including residences and homeowners, then they're going to do it and pretty soon everybody will be doing it.”
As the fees subsidize PBA executive salaries, critics remain concerned that the policies the PBA lobbies for do not represent the needs of the ratepayers. No clear distinction exists between Clean & Safe activities and the lobbying arm of the PBA, and in some cases, the PBA lobbies against the very issues some nonprofits in the district would like to address. PBA did not respond to Street Roots’ request for comment at the time of publishing.
Critics agree the lack of transparency is concerning, saying the Clean & Safe contract blurs the line between its downtown improvement activities and the lobbying efforts of the PBA. The Clean & Safe program’s monopoly brings together an unlikely coalition of Portlanders.
Lauren Armony, Sisters of the Road program director, said the nonprofit paid $1,275 last year for Clean & Safe services, but has no input on how the money is spent, and sees little benefit.
“As a nonprofit, we have a lot of ethical concerns around our funds — which are donated; we're primarily small donor funded — going into these organizations that do not necessarily uphold our mission or vision, and in fact further traumatize and entrench our community in poverty.”
Sisters of the Road has provided food, community and other resources to homeless Portlanders since 1979. The organization recently purchased a building in the Old Town neighborhood, which lies inside the Clean & Safe boundaries, and is currently undergoing renovations.
“If people like Ground Score Association got these contracts to help clean up our own community, we would actually have no issue in investing,” Armony said. “But as a nonprofit, we are not benefiting from all of their business webinars or whatever. These are not things that are benefiting us, and yet we’re being forced to pay into it.”
Ground Score Association is a low-barrier employment opportunity for current or formerly homeless Portlanders. Through collaborative partnerships with city, county and Metro programs, Ground Score overlaps with some Clean & Safe activities, like trash collection and disposal, while working to destigmatize homelessness.
Armony said PBA lobbyists, using money donors sent to Sisters of the Road, act in opposition to the solutions in which the organization would like more investment.
“We know that they’re lobbying against our best interests,” Armony said. “They’re lobbying for more police, they’re lobbying for more private security, they’re lobbying to get Measure 110 overthrown. We’re caught between a rock and a hard place and being forced to invest in this system.”
Monopoly
Davidson told the city council the recommendations are a good starting point but argued that the fee schedule is unfair and there is inconsistency in how the city assesses fees.
Homeowners get hit harder than anyone because they can’t deduct the fee as a donation, which would be possible if it went directly to Clean & Safe, Davidson told Street Roots. Downtown homeowners cannot deduct the fee as a business expense either, as the ratepayer is an individual despite paying the same rate as a business.
Davidson said her building alone paid $47,000 in 2023 to be a part of the ESD, marking a total of $532,000 paid since 2011.
“If we did not spend that $532,000 on Clean & Safe, guess where we would spend it?” Davidson said. “Even if it’s disposable income, we would spend it for the good of downtown, and we would have our opportunity to choose where we spend it.”
Mark Wells, vice president of Downtown Services and executive director of Clean & Safe, focused public comment on the BDS Planning recommendation that the city expand its ESD program — a veritable gift to an organization funding half of its lobbying efforts through an opaque nonprofit that collects mandatory fees from businesses, nonprofits and residents in the central city.
“Portland should sustain and expand its ESD program at the same time it works to improve both the city’s oversight and individual ESD operations,” the recommendations said.
Wells said he sees an opportunity to address the ongoing issues while simultaneously expanding its reach into other corners of the city.
“We recognize the current assessment and fee collection methodologies de facto only allow for the formation of an operation of ESDs in the central city,” Wells said. “We strongly support the adoption of new policies and policy changes that will help facilitate the growth of new ESDs around Portland.”
The BDS Planning recommendations come as the city welcomes a new ESD coordinator, Devin Reynolds, to implement the changes adopted by the city council. The city initially hired former ESD coordinator Shawn Campbell in 2021 to address the 2020 auditor’s report. Campbell abruptly left the position in 2022, just one month after submitting his report seeking to address the auditor’s concerns. That report never saw the light of day.
In written testimony provided to the city council, Armony wrote on behalf of Sisters of the Road to express concerns over the ESD program and BDS audit response recommendations.
“Our mission is to alleviate the hunger of isolation in an atmosphere of nonviolence and gentle personalism that nurtures the whole individual, while seeking systemic solutions that reach the roots of homelessness and poverty in an attempt to end them,” the letter said.
Armony said the organization is concerned the fees will ultimately pay into the very system that criminalizes homelessness and further entrenches homeless Portlanders into poverty.
“It feels like it's just getting rammed into our eyeballs and our earholes, that business is going to save our economy,” Armony told Street Roots. “It can't, when the rest of the population is so starved and impoverished that we can't even participate.”
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