Northeast Portland neighborhood split over new proposed service district

A proposal to create a new business district in Northeast Portland — which sticks a hefty fee on property owners — has divided an often overlooked neighborhood.

Portland City Council is considering creating a new “enhanced service district” in the Parkrose neighborhood, an area in Northeast Portland bordered by the Columbia River, Interstate 205, and the city of Maywood Park.

An enhanced service district, or ESD, is an area where property owners — both residential and commercial — in a certain geographic area must pay fees that are collected by the city. That money goes back into the district to pay for trash cleanup, private security teams, marketing programs or any other projects selected by a community board meant to improve the neighborhood and attract local business patrons.

There are currently three ESDs in Portland, all of which are in neighborhoods close to or within Downtown Portland. Those who support the Parkrose plan say the money could help revitalize a less affluent, industrial corner of the city still waiting to see the benefits of being annexed into Portland in the 1980s.

“Parkrose is a community that has been underserved for way too long, and the results, especially after COVID, are sad and very depressive,” said Héctor Márquez, executive director of ⁠Historic Parkrose, a nonprofit that petitioned the city to establish an ESD. “We don’t have basic services. The response of the police is too long, the cleanups in the streets are not often enough.”

Opponents raise similar concerns about quality of life issues, but they say that the city should be responsible for addressing them. During a council committee meeting Tuesday, several property owners said they already pay too much in property taxes — and they shouldn’t have to pay more to get their neighborhoods’ basic needs met.

“Parkrose is very impoverished,” said Nick Nichols, who said he’s lived and worked in Parkrose for more than 50 years. “I think the city has shorted us for a long time and now you’re asking us to pay for improvements, the money coming out of our pocket. What have you guys done? That’s absolutely ludicrous.”

The planned ESD encompasses just a slice of the Parkrose neighborhood, with a focus on the main business corridor along Northeast Sandy Boulevard.

Under the proposal, property owners would be charged an annual fee based on a calculation tied to the square footage of commercial and residential buildings. That fee can range from several hundred dollars to more than $10,000 annually. Most owner-occupied homes would be exempt.

Historic Parkrose, which would oversee the ESD if approved, anticipates collecting roughly $644,000 annually from these fees to spend on the neighborhood.

Some business owners and neighbors organized a new group called “Protect Parkrose” and are turning to legal action to derail the plan.

On Sunday, attorneys representing Protect Parkrose sent a legal complaint to Mayor Keith Wilson, demanding the city ditch the special service district for several reasons. That included allegedly failing to notify 41 property owners of the proposal, giving them no chance to participate in a city-led survey on the ESD. The group’s attorneys also say Protect Parkrose polled every property owner who would be impacted by the new fee, and more than 33% were opposed – which is the amount needed to terminate an ESD under city code.

“The city should abandon the proposal in its entirety as the likelihood the ESD could survive a termination vote is confirmed to be none,” writes attorney Thomas Rask.

In an email, city spokesperson Cody Bowman declined to comment on this complaint.

Devin Reynolds, head of the city’s ESD program, said that an online survey showed that only about 5% of those polled in the proposed Parkrose district opposed the ESD. But Reynolds couldn’t say how many people were polled when asked by councilors Tuesday.

Some Parkrose residents criticized the opposition at the committee meeting.

“Parkrose has reasons to be skeptical, and I don’t want to minimize that,” said Parkrose resident Karim Hassanein. “Fear of a new cost is immediate and familiar. But a late-funded opposition campaign can amplify that fear pretty effectively, but it does nothing to improve on our current conditions.”

District 1 city councilors who represent Parkrose appear to be open to the ESD. Councilor Candace Avalos hosted a public meeting in March to discuss the possibility of the program. In an email to OPB, she said she’s been listening to Parkrose residents about their concerns and curiosity about the proposal.

“My responsibility is to represent East Portland’s voices in City Hall,” she wrote. “Parkrose’s priorities for an ESD are for the community to decide, based on what the neighborhood needs. I plan on supporting that vision from my seat on the dais.”

Parkrose resident and Council President Jamie Dunphy said he supports the ESD.

“These businesses and families are my neighbors, and I want to see them succeed,” he said. “Until we are able to make change at the legislative level to guarantee equitable service to East Portland, I would like to see this move forward in a way that brings community and prosperity to Parkrose.”

This isn’t the only recent ESD proposal that has faced backlash from neighbors. In May, the city paused a project that would establish an ESD in North Portland’s St. Johns neighborhood, after an organized group of St. Johns business owners and residents came out in opposition. A neighborhood business group, the St. Johns Boosters, had initially requested the ESD.

ESDs have a rocky history of support in Portland. The oldest ESD, called Downtown Portland Clean & Safe, has sparked controversy in the past for using property owner fees to pay for armed security guards. The city also oversees an ESD in the Lloyd District and Portland’s Central Eastside Industrial District.

Councilors are expected to continue discussing the Parkrose ESD proposal later this summer.