March 29, 2007

Tram’s Neighbors Balk at Size of City’s Bills

By Ryan Frank, The Oregonian, Portland, Ore.

Mar. 29--So how much would you pay to live near Portland's new aerial tram?

Three of the tram's neighbors opened their mail this month to find a bill from the city of Portland for the new silver people-mover and said:

Not that much.

The Oregon Department of Transportation, an industrial engineer and a 31-year-old townhouse buyer objected to the fees the city wants to charge those who own property next to the $57 million tram.

Developers sold the tram as the linchpin for opening the South Waterfront district to the medical and condo towers that now run the riverfront.

In other words: Without a tram, the city says, the riverfront property would be worth far less.

Not everyone sees it that way.

"We as homeowners in South Waterfront are not seeing any benefit that a homeowner in Northeast doesn't see," said Rich Heuser, a Realtor who bought a $533,000 townhouse in the Meriwether who says he doesn't ride the tram. The tram fee for his townhouse was $815. ". . . To me, that's a good enough reason to have the homeowners not front the tram cost.

"Us homeowners in South Waterfront have paid enough."

Heuser was one of 341 people billed. A majority of South Waterfront property owners agreed in 2004 to bill themselves to help cover the tram's construction costs. The fees can be paid over 20 years.

The theory is that property surrounding the tram rises in value thanks to the new investment. Since they share in the benefits, the city says, the owners should also share in the costs.

Property owners will pay a total of $37 million for the tram.

Of that, 95 percent comes from three major property owners: Oregon Health & Science University, barge builder Jay Zidell's companies and the South Waterfront's lead developers, North Macadam Investors led by Homer Williams.

That leaves $1.7 million to be paid by the Average Joe and Jane.

While most of them haven't objected, Heuser wanted to fight.

That is, before he learned that the people who built his condo -- North Macadam Investors -- will cover his $815 fee and fees for all other South Waterfront condos.

Heuser, 31, and his wife, Tanya, 29, are a real estate agent team that has sold condos in the Pearl and South Waterfront districts.

The native Oregonians had a condo in the Pearl, but they liked South Waterfront because it was a clean slate. South Waterfront's condos sprouted from mostly bare land and vacant warehouses with $126 million in help from local, state and federal taxpayers over eight years.

"To me, it's exciting to see something go from dirt to a $100 million building," Rich Heuser said.

Last summer, they moved into an 1,800-square-foot townhouse on the ground floor of the Meriwether. They've since watched the John Ross, Atwater Place and OHSU's Center of Health & Healing rise.

The streetcar and tram moved in and re-connected this hard-to-reach spot with downtown.

"Now, a year later, it's a community," Heuser said. "It's a neighborhood. That's what drew my wife and I down here, being able to experience that."

Joy and Ed Hays objected to their nearly $100,000 bill.

Ed Hays has run an engineering firm for aluminum and paper plants along Macadam Avenue since the 1970s. Joy Hays likes what's happening in South Waterfront and knows their property value will rise. But she can't see how it benefits their business's bottom line. "I'm not sure it's worth staying here for the amount of taxes," Joy Hays said.

State transportation officials were the last to object, to their $52,000 bill for two properties under a freeway ramp.

South Waterfront is the biggest economic development project in Portland history and boasts a number of sustainable features, such as the streetcar and green buildings. The state transportation office's mission is to help provide "a safe, efficient transportation system that supports economic opportunity and livable communities for Oregonians."

But with the tram, the cost to promote alternative transportation appears to be too high for the state.

Harry Whitney, a state senior agent in property management, said in a letter that the tram doesn't translate into any benefits for their vacant land hemmed in by the freeway.

On Wednesday, the City Council overruled the three objections.


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