Gov. Kate Brown reversed course Tuesday on her plan to veto $2 million in state lottery funds to add sidewalks and bike lanes to Capitol Highway in Southwest Portland.

Brown had objected to lawmakers appropriating money for the project after it failed to make the cut to be included in a $5.3 billion transportation bill that lawmakers agreed on this year.

But after she announced her veto plan last week, the governor ran into pressure from local, state and federal officials who support the project.

As of Friday, the five members of the Portland City Council, two Democratic state senators and U.S. Rep. Earl Blumenauer, D-Portland had all called for Brown to reconsider. The project's legislative advocates included Sen. Richard Devlin of Tualatin, a co-chair of the Joint Committee on Ways and Means, and Senate Majority Leader Ginny Burdick of Portland. The portion of highway targeted for improvements is sandwiched between their districts.

"In the past week, I've received significant input from a wide range of constituencies since providing the veto notice," Brown said in an explanation filed with Secretary of State Dennis Richardson. "It's clear the city of Portland Southwest Capitol Highway Safety Improvements project is a good project and should be funded. In the interest of all who have worked so hard on this project, I will not veto this item."

At the same time, Brown wrote that lottery money "should be used only as a last resort on road projects" and "I hereby serve notice of potential veto on all future road projects funded with general or lottery funds."

In statements Tuesday, Burdick and Devlin praised Brown's decision to spare the highway project. "It will make a huge difference for the people living in those communities who choose to walk and bike for transportation," Burdick said. "This project will improve walkability and bicycling opportunities, and quite possibly save lives."

Devlin pushed back against Brown's argument the project bypassed the vetting process imposed on other transportation proposals.

"There was a thorough vetting process for this project, and it has a big impact in that neighborhood, affecting 30,000 to 40,000 people," Devlin said. "It will be a big boost to quality of life in that part of the community, as well as provide safety for pedestrians and bicyclists."

Upon hearing of the governor's decision Tuesday, former Portland transportation commissioner Steve Novick had a one-word reaction: "Yay!" Novick, a resident of Southwest Portland and longtime advocate of the project, said he told the governor's advisers it was fine for Brown to establish the principle that lottery money should not pay for transportation projects, but she should not apply it retroactively.

The city already committed $8 million to the project, which is expected to cost $10 million all together. "I'm delighted to see what should be the final piece in the puzzle," Novick said of the governor's decision.

The governor also decided to cancel her plan to veto a $1 million appropriation to restore the Holly Theatre in Medford. Brown had said she would strike that project, along with two others in the Medford area. She did veto the latter two.

Republican Rep. Sal Equivel, in whose district the projects are located, had secured a promise to fund them from legislative leaders in exchange for his key vote in support of a $550 million tax plan to sustain Oregon's Medicaid program. The tax was a top priority for Brown in the legislative session. Esquivel provided a "yes" vote, but later joined an effort to try to kill much of the tax by putting it to voters in 2018.

"I am not a fan of this type of explicit horse-trading on unrelated legislation," Brown wrote in her veto explanation. "But, having served in the Legislature, I understand that political compromise is often necessary. The representative broke this straightforward agreement, and in the interest of being able to negotiate support for future legislation that all sides honor, I must hold him accountable."

However, Brown said she'd received "extensive input from the Southern Oregon community on the importance of the Holly Theatre project" since announcing her plan to veto it. She did veto the other spending items in Esquivel's district: $750,000 for the Harry and David Field ballpark and $1.9 million for the Bradshaw Drop Irrigation project.

Esquivel defended his actions last week, saying of Democrats, "I gave them their vote."

As she had said she would, Brown also vetoed House Bill 3355, which would have allowed psychologists to prescribe drugs, and Senate Bill 689, which would have extended the work of a task force examining policies affecting people who were formerly incarcerated.

-- Hillary Borrud

503-294-4034; @hborrud