You can’t spell “Parking Deal of the Century” without P.D.C.

Maybe you can’t afford to eat at Lucier, which aims to be Portland’s swankiest French restaurant when it opens in March. But take heart: You’ll subsidize the parking of those who can.

Using public money, the Portland Development Commission bought 100 parking spaces for $6.6 million beneath the restaurant of developers Jack Onder and Homer Williams.

Appropriately pricey? Perhaps, given that the Lucier will include a 12,000-bottle wine cellar.But good policy? No, according to PDC critics.

The restaurant is in a RiverPlace condo development called “The Strand.” Last week, at a North Macadam Urban Renewal Advisory Committee meeting, PDC officials astounded some committee members with their explanation of the economics behind 100 publicly financed parking spots below the Lucier.

“The price just seems exorbitant,” says Jerry Ward, a frequent PDC critic and architect who’s on the North Macadam URAC.

Subsidy for a luxury waterfront project highlights a larger question about PDC’s use of urban renewal dollars, which are raised by borrowing against future property taxes in defined districts. The policy issue is whether money should still be pumped into North Macadam, which has gotten massive infrastructure investment.

City Commissioner Erik Sten recently called for a new urban renewal approach (See “PDX’s Robin Hood Tale,” WW , Sept. 26, 2007) that shifts money from the River District (which includes the Pearl District) to the comparatively poor David Douglas School District.

“I don’t think urban renewal can survive as an effective tool unless we are more creative in finding ways to use the money to take on the challenges of neighborhoods that really are blighted,” Sten says.

In PDC’s defense, the Strand does occupy what the agency has called one of the Central City’s “most challenging brownfield sites.” The site was contaminated with petroleum products and asbestos. And in 2004, PDC sold Onder and Williams the land for $30 per square foot, a price reflecting a brownfield discount.

But here’s what concerns some URAC members: In February, the project’s developers sold the spaces to a PDC-financed nonprofit called RiverPlace Parking Garage Associates for $66,000 per space.

According to the RS Means company, which produces construction cost estimates nationally, the 2006 cost for underground parking in Portland was about $31,290 a space. Also, last year, PDC agreed to buy 100 above-ground parking spaces at $30,000 apiece from OHSU in a yet-to-be built nearby garage.

Onder says PDC’s request for 100 spaces resulted in a major expansion of the excavation that included removal of additional contaminants. He adds that the RS Means estimate doesn’t include professional fees and other “soft” costs. He calls the OHSU garage example an “apples to oranges comparison.”

“I think PDC got a fair deal,” Onder says.

PDC won’t charge RiverPlace Parking Garage Associates any interest on the $6.6 million for two years. When Garage Associates begins payments in February 2009, it will be paying 1 percent on half the total and no interest on the rest. A balloon principal payment is due in 30 years.

PDC senior project manager Larry Brown acknowledges that the transaction doesn’t pencil out but adds, “These are investments that serve a public purpose and that the community wants.”

Brown notes that events in Tom McCall Waterfront Park regularly overwhelm RiverPlace’s parking capacity. PDC also wanted development that would preserve access to the Willamette. Initially, PDC pushed for a hotel on the site, insisting the Strand include a restaurant.

Brown says the result will benefit the city.

“The challenge of doing ‘brownfields’ developments is the huge cost impediments,” he says. “You’ve got to look at the economics in the context of 100 years of benefits, not just today.”