A politically connected downtown developer wants the city of Portland to ignite construction in Old Town Chinatown by taxing and eventually prohibiting surface parking lots in the historic Skidmore district.

The contentious proposal puts developer John Russell on a collision course with another prominent and powerful name in Portland real estate, the Goodman family.

Russell owns several Old Town buildings wedged between parking lots tied to the Goodmans. He’s not a fan.

“Parking lots are the worst neighbor that you can have,” said Russell, who developed the PacWest Center in 1984 and rehabilitates historic buildings. “I’ve joked that I’d rather have a brothel, because there’s at least something going on.”

Greg Goodman’s family handed off management of its parking lot empire to another company last year but still owns the land. As a result, Goodman said he wouldn’t pay the tax directly. But he still finds Russell’s disdain for parking lots an affront.

“Frankly, for somebody who’s done close to nothing in 20 years to say it’s the problem, I find agitating,” Goodman said. “And if there’s a parking tax, I don’t pay a dime.”

Goodman said rather than taxing parking lots, the city should be subsidizing development in an area where projects currently don’t pencil out.

The competing concepts from two Portland heavyweights have drawn attention, irritation and intrigue from the Portland Business Alliance to the offices inside City Hall. To help push his pitch, Russell has bankrolled opinions from two high-powered law firms that say the city legally could move forward if there's political will. (Read the opinions from Garvey Schubert Barer and Stoel Rives).

An advisory group of business owners, developers and neighborhood leaders is now considering Russell's proposal as part of the long-range planning process for downtown.

It would seem that Russell has found a sympathetic ear in Charlie Hales, although Portland's mayor isn't tipping his hand.

Wrestling with parking in the West End as a city commissioner 12 years ago, Hales said of the Goodmans’ parking lots: “I’m not interested in putting the Goodmans out of business, and I’m not interested in enriching them. I’m interested in having them have reason to convert their surface parking lots to better and higher uses.”

Portland, Oregon--January 2, 2013-- New Portland Mayor Charlie Hales says hello to seven-year-old A. J. Wight after his swearing in ceremony. Wight is on the shoulders of his step-grandpa, John Russell, who says he was at the swearing in ceremony because he is crazy about Hales.

Asked about Russell’s proposed parking tax, the mayor said in a statement that it’s worth considering.

“I’m not sure John Russell is right,” Hales said. “But on any proposal, if you can prove that it will get something going in Old Town, then it deserves a discussion. And if you can prove that it will get nothing going in Old Town, then it’s dead. But let’s have those conversations.”

Russell is confident

Russell is a major player in city politics and real estate. Beyond his role developing the PacWest Center, he owns the 200 Market Building and served for a time as chairman of the Portland Development Commission, the city’s urban renewal agency.

Since December 2006, Russell has individually or through his companies made campaign contributions exceeding $185,000. He contributed to the campaigns of everyone on the City Council, including $6,450 to Hales.

Three weeks ago, Russell and Hales shared a lengthy conversation in a ballroom at the Sentinel hotel after the mayor delivered his annual State of the City speech.

Russell said he first spoke with Hales about his proposal after Hales took office in 2013. Russell wants the city to create a tax on income from surface parking lots in the Skidmore district. Eventually, his plan would use the zoning code to eliminate the lots altogether.

Portland needs a thriving historic district, Russell said. But without strong financial disincentives, parking lot owners won’t voluntarily kill off their cash cows and build atop the asphalt.

Developer John Russell, in 2006, standing in front of his 1890's Friemann Restaurant and kitchen Southwest 1st Avenue and Oak Street.

Russell has a financial interest in seeing new development in Old Town Chinatown. He owns about one-third of a block between Naito Parkway and First Avenue, including an 1800s-era building he wants to restore.

Late last year, he wrote to a city advisory panel to say that "my restoration can't succeed" with parking lots surrounding it.

City planners are now considering formal recommendations from a group that Russell assembled, including: former city planning chairmen Bing Sheldon and Rick Michaelson; urban planner Ethan Seltzer; historian Chet Orloff; and Peggy Moretti, executive director of Restore Oregon.

The group also supports taking a portion of taxes collected from parking lots and pumping that money into development projects in Skidmore, to help accelerate construction on parking-lot properties.

“We are confident that we will ultimately prevail,” Russell said.

Goodman finds ally



PORTLAND, OR -- Greg Goodman in 2005 in front of one of the family's parking lots.

For more than 50 years, the Goodman name has been synonymous with parking in Portland.

But last year the family sold its City Center Parking business, which included operations of 198 facilities and about 30,000 parking stalls, to Imperial Parking Corporation of Vancouver, B.C.

Separately, Imperial now manages or leases about 30 properties owned by the Goodmans, who are focused on development projects of their own.

War on parking?

For more than 40 years, Portland has deemed downtown’s surface parking lots a kind of public enemy.

Portland’s renowned 1972 Downtown Plan regarded surface lots as an “interim use” that “are not a desirable solution to Downtown parking.”

Hoping to encourage more trips by bus and eventually light-rail, city officials in 1975 removed surface parking lots from the list of permitted uses downtown. Existing operations were grandfathered, essentially creating a monopoly.

Four decades later, surface lots remain abundant.

That’s especially true in the Skidmore Old Town historic district. Surface parking lots comprise about 4 acres of the area’s 40 acres (acreage that includes streets and Tom McCall Waterfront Park).

Portland’s Goodman family owns about 2 acres used as parking lots, according to property records.

-- Brad Schmidt

Any new tax wouldn’t have a direct impact on the family unless a parking lot shut down, Goodman said. But he still doesn’t like the idea.

Goodman’s opposition to the parking-lot tax is shared by the Portland Business Alliance.

Earlier this year, the business group’s 45-member board of directors voted unanimously to oppose the tax plan.

To justify construction costs, developers would need to charge rents that are double what tenants in the neighborhood currently pay, the alliance concluded. Tax collections wouldn’t be enough to bridge that gap.

"Instead, property owners would be more likely to simply close parking lots and leave the property vacant exacerbating blight," Sandra McDonough, president of the alliance, wrote in a letter to the City Council last month.

Goodman also said that unlike Russell, his family’s Downtown Development Group has been plenty active in real estate market.

They’ve landed big tenants such as Tasty n Alder, Nike and Sephora in existing or redeveloped buildings.

The family also shuttered a parking lot and contributed the land for Twelve West, a 22-story tower in the West End developed by Gerding Edlen in 2009. Goodman said his family was the largest investor in the $137 million project.

Those efforts, he said, should more than demonstrate his family’s willingness to build.

“There’s not demand for that area,” he said of Old Town Chinatown. “Because if there was, we’d be doing something.”

-- Brad Schmidt