New math at Metro: "Buy high, sell low"
By John A. Charles
Gresham residents should be outraged at the continued tax giveaways to developers of Gresham Station, the so-called "transit oriented" mall adjacent to City Hall.  Metro has bought a 2.2-acre segment of the parcel for $700,000 from Peak Development, and plans to sell it back to Peak for about $400,000. In return, Peak promises to build a high-density, mixed-use development-as if that's some kind of public benefit. 
In addition to the cheap land, Peak expects to receive a property tax exemption for building near light-rail.
Metro will also spend $1.4 million for a 4.3-acre parcel owned by Center Oak Properties within the same development. Planners aren't yet saying how much of a discount they will sell the land for.
These are just the latest in a long string of tax subsidies for Gresham Station. Prior giveaways included the construction of Civic Drive (the little-used "road to nowhere") which was built with $2 million of state gas tax money; and $2.1 million for a new light-rail stop which is not even open, and probably won't be for years.
Gresham Station was originally envisioned in the mid-1980s as a $100 million mall that would be different from a traditional suburban mall. People would live there in apartments or condos, walk to stores, and take light-rail to work. At one point a euphoric Metro planner gushed that this would be "one of the seven wonders of the world," and Tri-met estimated that so many people would use MAX that light-rail would become profitable.
Unfortunately, after various private developers came to their senses and realized that this was a complete fantasy, the plans fell apart. The land remained vacant throughout the 1990s.
The project is finally being built, but developers continue demanding more subsidies at each phase. Why are government planners so eager to comply? Because they cling to the dream that if we build enough mixed use, high-density projects along light-rail, suburbanites will give up their automobiles and travel by transit.
One major problem exists: there is absolutely no evidence that a significant number of people want to live that way, and if they did, they would probably live in Portland's Yuppiefied Pearl District, not east Multnomah County. 
The developers apparently understand this, because the mall itself, despite a couple of Disney-like side streets, is actually not very different from shopping centers anywhere else in suburbia. You have big chain retailers like Old Navy and QFC, serviced a by sea of parking.
Not only is light-rail virtually irrelevant, it seems to be a hindrance to development. The land adjacent to Division Street was developed first; it's the land closest to light rail that is requiring additional subsidies to lure private investment.
Nonetheless, the planners are unrepentant. Gresham Community and Economic Development Director Max Talbot says, "If we let the market do what it wanted to do, we'd have a big box power center here, with additional traffic..." 
Sorry to break the news, but Gresham Station is a big box center, and it's already generating additional traffic. I spent 3 hours walking around the center last week and monitoring passenger boardings at the existing light rail stop, City Hall (which is actually more convenient to the mall than the new station will be if it ever opens). I saw a total of four people get off MAX and walk to the mall, while there were hundreds of cars-predominately SUVs-using the convenient parking.
The reality is, any successful development is going to generate traffic because people overwhelmingly prefer to travel by car. Instead of fighting it, Gresham should be accommodating this preference by simply improving the road system. 
Metro's obsession with transit-oriented development will eventually strangle the regional economy. This was confirmed in a recent report by the Brookings Institution, "City Growth and the 2000 Census: Which Places Grew, and Why". The report notes, "Cities built for cars grew, but cities designed for mass transit and pedestrians tended to shrink. The average growth rate for those cities in which more than 10 percent of commuters took public transportation to work in 1990 was nearly zero. The average growth rate of those cities in which less than 3 percent of commuters used public transportation 1990 was 17 percent."
It's time to cut our losses on Gresham Station. If private developers aren't willing to risk their own money to finish it, there is no reason to force taxpayers to make up the difference.
John Charles is environmental policy director at Cascade Policy Institute, a free-market research center in Portland. He lives in Sandy.