One of Portland’s oldest and most culturally significant neighborhoods is on the cusp of a renaissance, thanks to a trio of redevelopment projects in Old Town that could be transformational for the neighborhood.

Through it all, no group has wielded more influence over Old Town's growth and revitalization than the Old Town Community Association (OTCA). But lately, the group’s sway over the city’s economic development spending and its leaders’ financial ties to major projects have raised questions about the group’s power dynamics and sphere of influence.

Those dynamics are influencing current budget discussions at CIty Hall. Elected leaders are considering a substantial shift in Portland’s financial support for its economic development agency, Prosper Portland–a primary funding stream for OTCA.

Key players 

At the helm of OTCA is Jessie Burke. Burke has served as the organization’s president since 2020. Burke’s husband, Jonathan Cohen, is the OTCA treasurer. The couple are deeply invested in Old Town—literally. They own the Society Hotel in Old Town. Cohen is also a real estate developer. 

The couple has been laser-focused on recruiting new businesses to Old Town, while maintaining the area’s cultural history. But over the past decade, they say few, if any, investors have taken an interest in the neighborhood. Thus, Cohen partnered with other industry professionals for a new endeavor: helping footwear manufacturing companies locate in the heart of Old Town by rehabbing vacant commercial properties. The result: an ambitious athletic wear design and manufacturing site in the works called Made in Old Town. 

Made in Old Town plans to reinvigorate several commercial properties into a sprawling, multi-building sportswear campus. The project is the brainchild of urban planning and project designer Matthew Claudel, Hilos footwear founder Elias Stahl, and Cohen. 

So far, it appears to be working. The project’s backers report dozens of companies have expressed interest in the forthcoming campus. But Cohen and Burke’s proximity to the Made in Old Town project has come into question since the project launched.

Last year, Made in Old Town was able to nab a $2 million state grant for the first phase of the project, only after OTCA agreed to be a fiscal sponsor for the grant. Made in Old Town has since secured additional funds, including a low-interest loan from a city agency that Cohen and OTCA have a close working relationship with. The funds were used to purchase three properties in Old Town.

While Burke insists OTCA has no direct connection to Made in Old Town, she and her husband do. The properties acquired as part of the first phase of the project each list the Society Hotel as the mailing address for tax bills and other municipal notices. 

The community organization has been a champion of the project, writing letters of support in funding applications to various government agencies. It makes perfect sense that OTCA would embrace a project like Made in Old Town, which promises an innovative approach to bringing new industry and jobs to the area.

But the project, which is heavily driven by Cohen, has undoubtedly been given a leg up by the organization.

‘Big, bold ideas’

Made in Old Town has relied on several public funding streams, including the $2 million from the state, and a $7 million loan from the city’s economic development agency, Prosper Portland. The loan came with just 3 percent interest–a fraction of the financing rates currently offered by private banks. 

Prosper Portland says the loan helped kickstart a promising economic development endeavor. Skeptics say Prosper Portland is acting as a piggy bank for a risky, overly ambitious project. 

As envisioned, Made in Old Town will be a “campus” for light manufacturing, design, and related office spaces. The project’s backers say it will bring athletic footwear manufacturing back to Oregon. While Oregon is home to some of the world’s most prominent athletic wear companies, most of what gets created here are the designs. Manufacturing mostly happens overseas.

“Old Town needs big, bold ideas. The neighborhood has seen many small attempts at development, but nothing as strategically integrated as Made in Old Town,” Claudel, an urban design specialist who's one of the key players behind Made in Old Town, tells the Mercury. “In addition to being a footwear and apparel innovation campus, it will also include workforce development and training, retail, housing, and public amenities. That means it will be a holistic economic base for the neighborhood.”

Still, some question the project’s potential for economic returns to the community.

Bill MacKenzie is a Portlander who runs a blog site called Thinking in Oregon. The site’s social and political commentary leans conservative. MacKenzie questions whether public agencies are throwing money at a project whose beneficiaries stand to gain more than the general public. He opined on the Made in Old Town project late last year, calling it “more corporate welfare.”  

“My objection to the Made in Old Town project is principally based on opposition to taxpayer money going to a project that, if it is as viable as its backers say, should not need an injection of taxpayer money,” MacKenzie told the Mercury. “With all the footwear businesses already operating in the Portland Metro area and the struggles in the American apparel manufacturing space, spending taxpayer money on this project seems particularly unwise.”

It’s a fair concern, Claudel says. 

“I totally understand that people would be skeptical about office buildings in Old Town. The post-pandemic shift to hybrid work has made offices around the world redundant,” Claudel says. “But Made in Old Town is an entirely different model—it’s based on real, physical production and in-person connection. MiOT offers resources (specifically, sample-making capabilities and a vendor ecosystem) that brands cannot find anywhere else.”

Claudel noted the demand for space and membership at the forthcoming commercial campus “has far exceeded expectations.”

Claudel is among the movers and shakers who have benefitted financially from OTCA’s working relationship with Prosper Portland. In addition to Made in Old Town, Claudel is the force behind No Vacancy, a real estate marketing effort that helps lure entrepreneurs to fill empty commercial spaces and storefronts. No Vacancy is currently being paid by OTCA using funds granted from Prosper Portland. 

Much like No Vacancy, Made in Old Town appears symbiotic. Using government grants and public financing, vacant properties are purchased to usher in new businesses that could help breathe new life into Old Town. In the long run, the project could help reinvigorate the iconic neighborhood into a place where more Portlanders live and work. Both arrangements also benefit property owners and real estate developers like Cohen. 

Aside from Cohen’s major stake in the project, another OTCA member has already seen a significant financial boon, thanks to Made in Old Town.

One of the first property purchases for the apparel industry campus was a building owned by Tom Clark, who recently served on the OTCA Board until last summer. Clark’s property was purchased with a portion of the $2 million state grant awarded to the Made in Old Town project using OTCA as the fiscal sponsor. Records show Cohen established a limited liability company (LLC) to facilitate the property purchase. The OTCA Board says there was no connection between Made in Old Town and Clark’s property at the time the fiscal sponsorship was approved, noting a property hadn’t been selected for purchase yet.  

Other potential conflicts have cropped up along the way. Last year, the city’s Bureau of Planning and Sustainability applied for $662,000 in public funds from Oregon Metro on behalf of Made In Old Town. As Willamette Week first reported, the funding proposal included large contracts for companies owned by Claudel and Cohen—two of Made in Old Town’s key leaders. Metro never approved the funding request. It’s unclear whether Cohen and Claudel have been paid for services using other funding streams for the footwear campus. 

Forces at play

The majority of development and redevelopment projects in Old Town have been guided by Advance Portland and the Old Town/Chinatown Action Plan. Both plans serve as blueprints for economic development that aims to increase mixed-income housing, add restaurants and retail spaces, and support small businesses. Projects that align with the plans’ goals are typically eligible for grants or public financing with revenue from an urban renewal zone that includes Old Town.

With urban renewal (also called tax increment financing), a portion of property taxes collected in the district gets set aside for projects in that area, rather than going to the city’s general fund. Urban renewal funding flows through Prosper Portland. 

OTCA lists Prosper Portland as its “economic development partner.” That means OTCA has an outsized role in steering the decisions around how millions in urban renewal tax revenue gets spent in Old Town. 

Lately, that spending has come with increased risk to the city. Over the past six months, Prosper Portland has granted favorable, low-interest loans to multiple projects in Old Town. Each loan ran afoul of Prosper Portland’s own lending guidelines due to risk factors, including extended maturity dates and lines of credit that exceed the agency’s own recommendations. 

One of those loans went to Future Stack, the LLC that Cohen and Claudel co-manage for the Made in Old Town project. Another went toward a housing project managed by prominent real estate developer Michael Menashe. Menashe was given $7 million to rehab and redevelop the Casket Building—a former wooden casket manufacturing site that is among the oldest high-rises in the city. The loan description notes “risk that the Borrower will be unable to repay the loan” and “risk that the collateral [property] value may be lower than the Loan amount.”

Menashe has had a long-standing presence in Old Town. In 2008, he served as a stakeholder on the Old Town/Chinatown Redevelopment Strategy plan initiated by Prosper Portland (formerly called the Portland Development Commission).

According to Prosper Portland records, Menashe purchased the Casket Building in 2013 for just $125,000. Last November, Prosper Portland agreed to a 3 percent, $7 million loan to Menashe to rehab the building and convert the former commercial space into 32 market-rate studio apartments, with an onsite office space. Prior to the latest loan, Menashe got a $12,000 grant from Prosper Portland for the property the year he purchased it, as well as a $73,000 pre-development loan from the same agency the following year.

The Casket Building deal moved along with strong support from OTCA.

“Staff meet regularly with representatives from the Old Town Community Association (OTCA),” Prosper Portland’s board report for the lending proposal states. “The OTCA was instrumental in the development of the Action Plan which identifies market rate housing as a top priority. The OTCA Board has expressed support for the Oregon Casket Building conversion and an investment of Action Plan resources.”

Prosper Portland also bent the lending guidelines for another project in Old Town, with OTCA’s blessing.

In March, the Prosper Portland Board approved a $700,000 loan to Creative Homies for ongoing improvements to the Horizon Enterprise Building. While the loan didn’t comply with the agency’s risk guidelines, it was considered a better solution that would replace two prior, even riskier loans granted to Creative Homies by Prosper Portland in January 2024. 

Creative Homies occupies a mixed-use rehabbed commercial building meant to showcase Portland’s Black creatives via music and entertainment, while also giving BIPOC makers and artists a space to work and convene on creative endeavors. Cohen and Burke provided initial consulting services on the project via their company, Equity Development Lab. In fact, it was Burke who steered the Creative Homies co-founders toward purchasing the building when they were initially looking for a space to lease. It’s unclear how much money, if any, Equity Development Lab charged for its services on that project.

Prosper Portland says its lending guidelines are helpful tools, but they’re not restrictions. 

“If you are outside guidelines, it requires a board review,” Lisa Abuaf, Prosper Portland’s interim deputy executive director, told the Mercury earlier this year. “We are often taking high impact loans in really challenging markets in communities where private investment is not investing. We will take those to our board, knowing that it’s an important role we play as an economic development agency.”

Public spending raises eyebrows

Prosper Portland’s propensity for risky loans hasn’t gone unnoticed by city leaders. Last week, Portland City Councilors Jamie Dunphy and Mitch Green introduced a co-sponsored budget amendment proposal that would eliminate funding for Prosper Portland from the city’s general fund and instead ask the agency to pull from its Strategic Investment Fund to backfill that loss of city funding. 

The rationale? Prosper Portland has about $53 million at its disposal via its Strategic Investment Fund, while the city is trying to close a $93 million budget gap amid a homelessness crisis that requires every bit of funding available. 

“We can’t keep asking Parks, PBOT, and Housing to cut to the bone while leaving Prosper untouched,” Dunphy said in a memo released by his and Green’s office this week. “If we’re serious about shared sacrifice and realignment, that has to include every bureau—especially one sitting on $50 million. This is about right-sizing government to meet the moment.”

The councilors say the city hasn’t exercised enough purview over where or how Prosper Portland’s money gets spent. It doesn’t help that the agency has given sweetheart deals to developers.

“The Made in Old Town loan was 3 percent for 15 years to an entity with no financial history, unsecured collateral, and I think 182 percent, maybe 187 percent loan-to-value ratio,” Green, a former economist, told Prosper Portland leaders during a May 15 Labor and Workforce Development Committee meeting. When pressed further by the Committee’s chair, Loretta Smith, Green didn’t hold back.

“The decision was made based upon a recommendation by the Old Town Community Association Board, of which multiple members of that board are principles to this project, and I’ll just leave it at that.”

Dunphy and Green have the public’s ear. A coalition of 14 organizations–including labor unions, social justice organizations and climate-oriented groups– wrote to the mayor and Portland City Council Tuesday, May 20, saying the city needs to “rein in” its economic development agency.

“Prosper Portland is not a private entity—it is funded by taxpayers. Yet it functions as a quasi-private entity, collecting taxes, fees, and general fund dollars while evading democratic accountability,” the joint letter states. “Past City Councils may have abdicated their responsibility to rein in the agency, but the City has both the authority and obligation to redirect these funds toward participatory, equitable initiatives.”

Prosper Portland says the proposed cuts would devastate the agency’s budget and lead to the loss of at least 30 staffers, while also sacrificing some of its core programs.

Members offer differing views on OTCA’s mission, current direction

Community associations aren’t usually involved in major economic development endeavors, but Burke is quick to point out that OTCA is a joint neighborhood and business association—a unique arrangement that isn’t typical of other neighborhood-based groups. Economic development has always been part of OTCA’s fiber, she says, though it didn’t always play as big a role. Archived versions of the OTCA website show the organization (previously called the Old Town ChinatownCommunity Association) was still billing itself as a traditional neighborhood association as recently as 2016.

Some of OTCA’s members say the organization is now run more like a business alliance than the traditional community associations recognized by the city of Portland. 

Much of that appears to be driven by Burke, whose entrepreneurial instincts helped reshape the organization. Since she became board president in 2020, Burke and the OTCA leadership started bringing in more revenue, largely in the form of contributions and grants. 

Tax records show OTCA’s revenue in 2019 was $85,333, with nearly $65,000 in expenses. By 2022, the group’s revenue jumped to more than $1 million, with a reported $556,000 in expenses. Burke says during those years, she sought funding from Prosper Portland to hire staff to recruit businesses to Old Town and negotiate leases.

Over the past year, OTCA has focused on new revenue streams—namely, the implementation of membership dues. 

Up until last month, the organization asked its members to pay annual dues ranging in cost from $250 to $750. The city doesn’t allow community or neighborhood associations to charge dues, but the city’s standards don’t address rules for hybrid business/community groups like OTCA. Nonetheless, shortly before its latest election, the organization clarified that all OTCA members would be eligible to vote, and dues would instead be suggested donations “until the Office of Civic Life updates their bylaws.”

“We implemented dues as suggested donations for non-resident members. As a joint neighborhood and business association, we exist in a weird place, focusing on livability for residents AND economic vitality for the rest of our constituents,” says Burke. She told the Mercury the dues were intended to generate revenue to help pay for OTCA staff, which was previously covered by Prosper Portland grants. Now, that money is drying up and the city will no longer fund OTCA’s staff. With only eight dues-paying members, Burke said, the organization won’t be able to afford its staff after June 30.

OTCA’s members appear divided on whether implementing a fee-based membership system was the right call, especially if it could prevent non-dues paying members from voting in future board elections. 

“Membership dues limit nonprofit participation in OTCA, and while its projects have grown, governance structure has not evolved to include all stakeholders in decision-making as would usually occur in organizations with projects of comparable sizes,” a joint statement from the executive directors of the Lan Su Chinese Garden, Portland Chinatown Museum, and Japanese American Museum of Oregon reads.

If the city does update its bylaws to let OTCA charge dues in line with business associations, it could limit participation in board elections at a time when the OTCA’s power structure has come into greater focus. 

Last year, the Mercury reported on a questionable contract granted to Cohen by the OTCA, which Cohen served as treasurer of. 

The contract, which netted Cohen’s business roughly $40,000, involved overseeing several small grants from a pot of money given to OTCA by Prosper Portland. Burke said Cohen recused himself from voting on the contract award.

Searching for shared vision in a diverse neighborhood

The flurry of redevelopment projects in the works has garnered mixed reactions from Portlanders. Despite OTCA’s recent efforts to restore the Chinatown Gates and re-infuse a cultural aesthetic via decorative lanterns in the area, some worry the design and manufacturing campus, coupled with new market-rate housing in the pipeline, will gentrify Old Town and dampen the area’s character, or even displace the neighborhood’s low-income residents. 

Burke says if anything is a threat to Old Town’s character, it isn’t the footwear campus or redevelopment projects in the works, it’s an oversaturation of social service providers in the area, and rampant, unmitigated violence and drug use.

“This is not a place that any visitor I’ve ever hosted in the last five years has felt welcome – they are typically astounded at what has been normalized here,” she says.

“More than anything, Old Town needs housing, because every thriving neighborhood needs a balanced mix of residents, workers, and visitors to create a balanced ecosystem,” Burke says. “If the community is concerned about a loss of culture, then individuals or organizations with money to buy or lease these buildings need to do so, and then open something that they feel represents the culture being lost. We [OTCA], as a board, do discuss desires to balance growth with cultural preservation, but to date, there have been no tangible plans created by outside groups to buy or lease anything that would preserve what everyone is worried about losing.”

Burke notes the Made in Old Town project isn’t a redevelopment project, rather a “re-tenanting project” meaning the team is simply buying vacant or mostly vacant properties and getting the spaces ready for new leases. 

And while she says property owners, not OTCA, have sole discretion on which tenants land in the neighborhood, the organization’s grip on determining Old Town’s future has held firm. Some say it’s too firm, leaving little room for input from stakeholders who aren’t OTCA insiders. Even within the OTCA, members haven’t always been included in the organization’s decision making. 

The executive directors of the three cultural institutions mentioned earlier say they knew about plans for Made in Old Town, but didn’t know OTCA was named as the project’s fiscal sponsor in Cohen’s request for state funds. In an email exchange several months ago, the group told the Mercury it’s been difficult to gauge the full scope and impact of the forthcoming development and redevelopment projects in Old Town, noting community engagement best practices are “more than briefings at meetings and an events calendar.” 

“When public funds and/or public lands are involved in development projects like Made in Old Town (MiOT), it is best practice to engage neighboring institutions and stakeholders to ensure transparency and collaboration, we look forward to an opportunity to do this.”

For all the criticism and questions over whether Prosper Portland has made sound decisions in lending to Old Town developers, the agency says something’s got to give, or the city and county will continue to lose property tax revenue. 

“We don't have a lot of folks looking to invest and looking to reactivate Old Town,” Prosper Portland’s leaders say.

Whether Made in Old Town and the forthcoming office-to-residential conversions can fill the missing quotient and help recharge the neighborhood’s tax valuation remains to be seen. As far as Prosper Portland is concerned, the projects’ key players are betting on Old Town’s future when no one else will.