Prosper Portland Declines to Provide Reviews of Loan and Grant Programs

Prosper Portland has declined to provide a copy of external reports it commissioned to gauge the success of its taxpayer-funded loan and grant programs, even after an agency-backed project that secured $7 million from the city flopped spectacularly this spring and drew the scrutiny of local elected officials and the public.

Late last year, Prosper’s newly seated executive director, Cornell Wesley, commissioned a law firm to conduct a review of Prosper’s loans, grants, policies and procedures. But the city’s economic development agency is declining to provide those reviews to WW, citing attorney-client privilege.

That’s notable because the loans provided by Prosper—which include smaller loans and grants but also large loans up to $5 million for new construction, renovations and building acquisition—are taxpayer-funded. And members of the current City Council have repeatedly worried that Prosper, which is governed by its own board and has a separate budget process, doesn’t have the oversight needed to ensure it’s using that money wisely and in line with community desires.

Prosper has an annual budget of around $200 million. Its primary book of business for decades was creating tax-increment financing districts, more colloquially known as urban renewal areas. Starting about a decade ago, a city reckoning with the gentrification caused by urban renewal districts forced Prosper to diversify its portfolio to include smaller grant programs and downsize its TIF district model, though it still creates TIF districts.

Into this transitional period for Prosper stepped a new Portland City Council in 2025, whose left wing has expressed frustration with some of Prosper’s work and held the belief that the agency still capitulates to moneyed interests.

A project Prosper helped fund in early 2025 provided the eager council with a ripe example of a Prosper loan gone wrong. The agency in February 2025 approved a $7 million loan to a shoe manufacturing project to buy two buildings in the services-rich Old Town neighborhood. Its principals, former athletic company executives and entrepreneurs, envisioned a nine-block campus and promised a revitalization of the beleaguered neighborhood.

The project came under intense scrutiny shortly after the Prosper board approved the loan, following WW’s reporting that the loan was far riskier than Prosper’s own underwriting guidance would advise.

And soon after, the project was floundering and its principals weren’t making loan payments on time.

After offering the project leniency, Prosper finally lost patience earlier this spring. The project had fallen behind on loan payments and failed to secure the private funding it had promised Prosper. In May, Prosper’s board voted unanimously to reposses the building in lieu of foreclosure. The project never paid back the remaining loan; Prosper had dusted its hands and called it a day.

Members of the Portland City Council publicly criticized Prosper for funding a project that was mostly built on government funding and an overblown characterization of neighborhood support.

During a Finance and Government Committee of the Whole on July 23, Prosper executive director Cornell Wesley appeared before the council to vouch for two Prosper board appointees. But the conversation was quickly derailed after councilors began asking questions about the Made In Old Town failure. Councilors had previously said they felt Prosper erred when it initially approved the loan, then continued to err when it let the project limp along even after it materially defaulted on the loan by failing to secure private funding.

Wesley defended Prosper’s decision to grant the loan, telling council what Prosper has said from the beginning: It exists to provide loans to ambitious projects that traditional lenders wouldn’t dare touch, making risk inherent. (The board approved the loan six months before Wesley arrived.) Wesley conceded that the project had failed but also defended the board’s pace of action this spring when it decided to finally reposses the building after months of materially defaults from MiOT.

Still, Wesley said, the Made In Old Town controversy “dropped right in my lap” after he took the agency job. So, he told the council, “immediately I audited every programmatic lane in Prosper. Every grant, every loan, every police and procedure have been audited. I’ve commissioned two independent studies to reimagine how we chart our new policies and procedures and guardrails, and underwriting guidelines moving forward.”

Following the meeting, when asked to clarify what Wesley meant in his remarks, Prosper provided little additional information about the studies.

“Cornell requested a law firm complete the reviews to get an outside perspective on current Prosper Portland loans, grants, policies, and procedures,” Prosper spokesman Shawn Uhlman said in an email.

But Prosper is declining to provide those reviews publicly, citing attorney-client privilege.

Prosper declined to provide basic details of the reports, saying even the scope and topline findings of the reviews are protected by attorney-client privilege. While “follow up” work remains ongoing, Uhlman said, the current cost of the reviews by two law firms—Ice Miller and Taft—is $102,000. (Prosper’s executive director can enter into contracts up to $500,000 without board approval.)

“Given that he’s still relatively new to his role, Cornell requested the reviews to get an outside perspective,” Uhlman said in a statement. “Any more selective description of a privileged work product risks waiving privilege entirely, so we’re declining to characterize the reports beyond Cornell’s high-level summary at Council.”