HAPPY HOTEL: Does the Benson need a $158,000 savings? IMAGE: Jarod Opperman

Memorial Coliseum is not the only historic structure whose fate is the subject of contentious, big-dollar debate.

Multnomah County officials are gunning in the Legislature for one of Oregon’s sacred cows: the state’s pioneering historic-property tax break. That 34-year-old benefit helps hundreds of local property owners, and in the process costs the county and other local taxing jurisdictions about $10 million a year.

“When governments spend money directly, there is scrutiny and accountability for those expenditures,” says Rhys Scholes, spokesman for Multnomah County Chairman Ted Wheeler. “Very often there is less scrutiny of tax breaks.”

In 1975, Oregon became the first state to implement the historic property tax break, according to county research. The break, which freezes the taxes for qualifying property owners if they meet state preservation guidelines, gives fits to chronically cash-strapped governments.

“Our research on the treatment of historic property by other states indicates that this benefit, indeed the substantial generosity of the program as a whole is unparalleled,” Multnomah County Assessor Randy Walruff told the Oregon Senate Revenue Committee in March.

Oregon’s program—really, Portland’s, since local properties account for about 80 percent of the tax breaks statewide—is more generous than other states’ in a couple of ways. The tax breaks last for up to 30 years, far longer than other states. And they cover the property’s entire value rather than just improvements made after the benefit is granted.

The county wants to shorten the duration of the tax break from as long as 30 years to 10 years, make it one-time only and limit the benefit to the value added in renovation.

“Why do we have to subsidize the Benson Hotel?” Scholes says. “Would they tear out the walnut paneling and the granite counters? Isn’t it in their interest to preserve the historic character of that building?” (County tax records show that the Benson’s historic tax break saved its owners $158,000 last year.)

The property tax program is set to expire June 30. In 2007, lawmakers appointed a task force to review the program and make suggestions about whether and how it should continue.

Advocates, who include developers such as Mark Edlen—whose firm used historic tax breaks to help renovate the Brewery Blocks and Portland Armory for Portland Center Stage—say the tax freeze on the entire value of a property is crucial to preservation. The task force concluded the status quo, with a couple of tweaks, is fine.

Roger Roper, of the state’s office of Historic Preservation, which administers the tax breaks, says developers would be beating down his door if the program was such a giveaway. But only about three dozen property owners statewide apply for the benefit each year, Roper says. He also says Multnomah County is focusing exclusively on lost revenue and ignoring the economic benefit from preservation to entire neighborhoods such as the Pearl District and Northwest 23rd Avenue.

Sen. Ginny Burdick (D-Portland), chairwoman of the Senate Revenue Committee, which is considering legislation that would extend the historic tax break, sympathizes with the county.

“What I want to do is make the program more accountable and tie it to real investment in these properties,” Burdick says. “I’m not willing to go forward with an extension unless the county’s concerns are addressed.”