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Cities

How Government Helped Turn Portland Entrepreneurial

View of Portland via Shutterstock

In 1973, Oregon Governor Tom McCall established growth management legislation that has profoundly affected the evolution of Portland, the state’s largest city. Now Portland is a boiling pot of collaboration, innovation, and entrepreneurship, nestled in a backdrop of lush green. This picture could have looked much different if the city’s urban renewal and economic development agency, Portland Development Commission (PDC), hadn’t pushed entrepreneurialism.

After Portland adopted plans to contain urban sprawl, the government used taxpayer dollars to make existing infrastructure more efficient, livable, and business friendly. Aimed at protecting surrounding farm and forestlands, the program also encouraged innovative thinking about how to better use land within the city’s growth boundary.

Stimulating the formation of new companies has proven to be one of the fastest ways to spur economic activity in Portland’s neighborhoods, and tax-increment financing (TIF) is one of the strategies PDC has used to foster thriving Portland business communities. “When the city defines the boundaries of an urban renewal area, the county assessor freezes the assessed value of real property within the district,” explains Anne Mangan, PDC’s senior communications coordinator. “Urban renewal districts then raise money by borrowing against future growth in property taxes. The city uses the borrowed money to pay for capital improvements, which spur more development.” As investment in the urban renewal area increases, property values go up. Property taxes above those collected when the values were frozen—the tax increment—are then used to repay the loans. The strategy has kindled flourishing communities like the Pearl District, Old Town, and the Central Eastside.

With these pockets of local economic activity humming, PDC is expanding its existing strategies to further support cluster industries like software and clean tech, and advance trade activity to export more Portland goods and services around the world. Recent initiatives include the Portland Seed Fund, an early-stage investment fund and startup accelerator in which the city is an investor, and Startup PDX Challenge, which rewards select companies with a $10,000 working grant, free legal and operational services, and a year of free office space in a Central Eastside district dubbed Produce Row.

According to Jared Wiener, Senior Project Manager and Business & Industry Liaison for PDC, the massing of new businesses in urban areas is crucial for encouraging entrepreneurial activity and innovation. Real estate strategies have traditionally been the key focus for economic development agencies, says Weiner. However, he explains, “We have to do whatever we can to improve economic conditions and serve 21st century goals. While real estate is a large part of that, what we really want to see happen is entrepreneurship, innovation, and job creation throughout our community.”

Beyond seeking to revive neighborhoods and stimulating business and job growth in Portland, PDC aims to change the way city government gets involved with business. The city can strategically strengthen relationships with companies by serving as a customer. Says Wiener, “We’re looking at ways to streamline the city’s process to become a beta customer of new innovative companies. These relationships can help the city save money and provide better services, but the process is cumbersome. We have so much data and so many resources, so if we can help new companies validate products or technology, we’ll be providing even more value.”

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