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Backers of a proposed shoe manufacturing campus called Made In Old Town are asking state lawmakers for more money as they struggle to finance an ambitious plan to jump-start economic development in the gritty urban core.
As WW has previously reported, principals of of the project, which aims to build a nine-building shoe manufacturing campus in the Old Town neighborhood and has promised to transform the area, have for more than a year lobbied local and state governments for millions in funding to acquire the first buildings.
They received $2 million from the state legislature (after a scolding from Gov. Tina Kotek earlier this year about the project’s lack of private financing) and another $7 million loan from Prosper Portland. Other funding requests—to the city of Portland for $25 million in Portland Clean Energy tax dollars, to the regional government Metro and to Business Oregon—were rejected.
And on the heels of WW‘s reporting that showed the project’s principals were using little private financing and relying heavily on public financing to get the project up and running, emails between a top state senator and one of the project’s principals would suggest the project is on increasingly shaky financial ground.
In a series of emails this month between Made In Old Town principal Elias Stahl and the office of Sen. Kate Lieber (D-Portland), Stahl repeatedly asked Lieber to help Made In Old Town secure another $5 million from the state legislature in the current session, which ends June 29.
“While we’re aiming to fill the remaining $5M needed to outfit the buildings to move tenants in and open our doors from private investors, the stigma of Old Town and working with the City of Portland is proving challenging,” Stahl wrote to Lieber’s office on May 9. “When efforts like these have been successful in the past...state and local investments have ranged from $50-100M. If we can have the same impact for a fraction of that cost and in less than two years we will have done our part to really accelerate the state’s economy.”
Stahl persisted on May 13: “I understand the current timing and challenges associated with our funding ask for $5M this session and do not make it lightly; Oregon has a unique opportunity that comes at a time of tariffs and trade volatility that will not be there next session,” Stahl wrote. “If this didn’t have the ability to so significantly impact Oregon and reverse an urban doom loop, not in the far future but this year, I would not be so insistent."
Stahl listed letters of support for the project penned by shelter nonprofit CityTeam, prospective tenants of the buildings, and four business associations. Stahl wrote that he would “love to work with your staff to hand deliver them and set a time for us to bring these stakeholders together in-person at your offices over the next few weeks.”
On May 13, the senator’s office put the kibosh on Stahl’s pleading.
Her budget director, Tatiana Amrein, wrote to Stahl that it would be inappropriate for Lieber to make any funding commitments during an ongoing budget cycle as the Co-Chair of Ways and Means.
"When we met on April 9th, Senator Lieber let you know that you had unfortunately missed the Capital Construction form request deadline of April 1st. This is unfortunately still the case. Regardless, the Senator knows about this request and does not need to meet again," Amrein wrote. “Similarly, it would be inappropriate, and we do not have capacity, for our staff to send out these letters to folks.”
Amrein told Stahl he could distribute the letters himself at the capitol, should he desire to do so.
The email exchange shows how a once-promising project that received full-throated support from Sen. Elizabeth Steiner (D-Portland) may be getting a frostier reception now from public officials.
The project’s principals did not immediately respond to a request for comment from WW.
As WW reported earlier this year, the Prosper Portland board unanimously granted Made in Old Town a $7 million loan to buy an office building and its annex to become the project’s headquarters. The city agency flouted many of its own risk guidelines when it approved the Made In Old Town loan, and at the time the agency defended the loan, saying it was its responsibility to offer loans to risky projects that can’t secure traditional lenders, like a bank.
The project’s principals told WW that they intended to use the Prosper loan as proof of matching funds in order to unlock the remaining $800,000 of a state grant the legislature approved in spring 2024. Gov. Tina Kotek agreed note to veto the early 2024 bill after striking a deal with the project’s principals that they would receive the first $1.2 million installment and then provide proof of matching funds for the remaining $800,000.
Kotek was unhappy when she learned that the project intended to use other public funds—obtained from the city—to unlock the remaining state funding. At the time, in February, she in a statement urged public officials to think hard before granting more money to Prosper.
“The governor expects recipients of taxpayer dollars to come to the state in good faith with viable projects that bring direct benefits to the public, and to meet the conditions set by the state in order to authorize funds,” her spokeswoman, Elisabeth Shepard, said in February. “To date, this standard has not been met.”
Portland City Councilor Mitch Green in a statement expressed his displeasure at the Prosper board’s release of the funds, too. “I want to know that we’re good stewards of public money. A loan on those speculative terms, with no business plan as far as I can tell, it’s basically the city saying, ‘We don’t expect the money to ever come back.’”
Green has since introduced a budget amendment that would take $11 million in city general fund dollars from Prosper and require that Prosper backfill the cuts with an investment fund it has that contains more than $50 million. Green’s proposal, crafted in conjunction with a fellow Prosper critic on the council, Jamie Dunphy, was first reported by The Oregonian.
The proposal sparked a heated exchange between the two councilors and the agency over what the proposal would and wouldn’t do, with Prosper’s interim executive director saying the proposal would be devastating to the agency, and Prosper’s board publicly stating it would cut Prosper programs–like support to small businesses—rather than backfilling the cuts from its Strategic Investment Fund.
Green in a social media post on Monday said his proposal gets to the heart of what he sees as a fundamental flaw with Prosper: that it’s largely self-governed, outside of direct reach of the City Council.
“What’s at issue here is who gets a say over how public dollars are spent,” Green said. “Is it our elected officials, or is it Prosper’s appointed board? ”
On Tuesday afternoon, a group of progressive nonprofit and organizing groups, including Next Up Action Fund and Sunrise Movement PDX released a statement in support of the Dunphy-Green proposal, saying Prosper has “operated as an unaccountable entity that prioritizes corporate interests over community needs, exacerbates displacement, and perpetuates inequity.”
Kotek’s office did, ultimately, approve the release of the last $800,000 in March to Made in Old Town—after the project provided proof of future rent from a tenant that’s currently in the office building they purchased in Old Town using the Prosper money.