Rep. Richardson's Newsletter
June 3, 2011

Oregon's Unsustainable Sustainability

The legislative session is drawing to a close, and we must decide how much additional debt the state should incur in 2011-13.

In addition to the $482 million in tax and lottery debt, there are also requests for additional bonding authority for another $600 million in “pass-through” borrowing, primarily for the Oregon University System. This type of bonding comes with the promise that the borrowers will make the 20-30 years of payments, if the State will provide the bonding authority. Essentially, the State (and we taxpayers) will be co-signing on another $600 million of long-term debt. When considering the cost of each project to be bonded, interest expenses should be added in order to calculate the “true cost” of the initial bonding sale. Generally, for a 20 year bond, the face amount should be increased by 55% to determine the true cost of the debt; and a 30 year bond will require an additional 85% of the face amount to determine its true cost.

I understand that sometimes long-term bonding is necessary to construct, remodel or replace necessary facilities. But, as one of the Co-Chairs of the Ways & Means Committee, I take seriously my responsibility to look carefully into bonding requests. Whether the State or an Oregon university is responsible to make the payments—one way or another—it is the Oregon taxpayers who pay the bills.

For today’s newsletter, I selected the “Oregon Sustainability Center,” listed on the 2011-13 bonding project request sheet as a $75 million bonding project. Let’s take a look and see what the Legislature is being asked to finance.

 (Click here)

With our limited time and space, we can get a description of the Oregon Sustainability Center from a few news articles written about it.

“The center will be built near the Portland State University campus at Southwest Fourth Avenue and Montgomery Street. The Portland Development Commission, the Oregon University System, the city’s Bureau of Development Services and a number of green-focused nonprofits all will be tenants of the planned living building, which will feature solar panels, systems to filter and reuse waste water and systems to capture and use rain water.” (Click here.)


“We are attempting to create one of the most advanced buildings on the planet,” says Rob Bennett, director of the Portland Sustainability Institute. ****

“The building…will include many unusual features, such as a 200,000-gallon tank to capture every drop of rain that falls on the roof and a geothermal heating and cooling system that will tap into the earth’s free energy. ****

“For a model to be sustainable, it has to be not only ecologically sustainable but economically sustainable,” adds Will Macht, a real estate developer and professor at Portland State University. “This project is not economically sustainable, and that is the simple truth.” (Click here. )


“Its designers plan to incorporate innovative water and energy systems, collecting and reusing storm water from the building's roof. Altogether, the office and retail building would boast a zero carbon footprint. ****

"When we think about buildings, the best way to get immediate results for sustainability is weatherization. That's not sexy, but it's better bang for the buck," says Arambula.

“High-profile architecture critic and blogger Brian Libby has a similar reaction to the project: Love the innovation, but the city should consider finding a cheaper option for building a sustainability center, like renovating an existing landmark building rather than pouring funds into a new one.” (Click here)


“Packed with offices and retail, the Oregon Sustainability Center (OSC) will generate as much energy as it produces and reuse every drop of water that flows through its taps (and, yes, even its toilets). A marvel of modern, green design, the center will inspire builders internationally to look to Portland as a beacon of innovative design.

“But is spending more than $60 million in public funds on a new, experimental construction project actually, well, sustainable? ****

“In addition to a gleaming skin of photovoltaic cells, the building will include its own geothermal wells, dug onsite, and a 200,000-gallon cistern for collecting rainwater. Project backers aim to have it meet an international Living Building Challenge, recognizing buildings that have net-zero energy and water use, and are toxin free. ***

“Rerouting the streetcar alone will cost $4 million….

"We want this to be a replicable model for private industry….

“Architect Rick Potestio … says … there's a huge argument for restoring an old building for the center.

"Reuse, renovate, restore are the most sustainable strategies you can take," says Potestio.

"Starting from scratch when you have a couple of wonderful options of existing buildings is unsustainable," agrees Editor Brian Libby, who points to the US Custom House on NW 8th as a notably vacant building. "I don't understand why an existing building couldn't have been incorporated into the living building prototype." (Click here)

There we have it. The proposed Oregon Sustainability Center (OSC) was originally priced out at $69 million and now has been redesigned with a price tag of $65 million (including $4 million to move streetcar tracks from the street to the middle of the building).

The OSC is to be a new eight story state-of-the-art building that will have a “zero carbon footprint.” Thus, it will be designed to use only the electricity it creates from solar panels (in Portland, not Phoenix), and will gather rain water for drinking, irrigation and toilets, then recycle it.

Although the newspaper put the new price tag at $65 million, the bonding request remains at $75 million.

Even if the bonding request were to be $65 million, at 5% for 30 years the payment would be approximately $350,000 per month. Assuming all of the 130,000 square foot center were occupied, the rent, just to cover the construction price would be $2.70 per foot per month. When common space and the total costs of tenancy are added, the cost per square foot will be astronomical.

Who can afford such expensive office space? We can—or at least those of us who pay taxes, tuition or otherwise contribute to our public projects. Portland State University will occupy 40,000 square feet after the OSC is built; most of the balance will likely be occupied by the Oregon University System and City of Portland.

So there we have it. The “go green” advocates tout the Oregon Sustainability Center as Portland’s flagship “sustainability” project. In reality, the OSC will be designed to be environmentally sustainable, yet the price tag is so high that it simply cannot “pencil out.” This “sustainability” project is economically unsustainable.

In conclusion, the Oregon University System is asking for $75 million of long-term bonding authority to build a unique and unsustainable monument to “sustainability.” And, who gets to pay the bill?   You know the answer.


Dennis Richardson
State Representative

Oregon Transformation: In addition to his service in the Legislature, Dennis Richardson is the Co-Chair of Oregon Transformation, which brings to Oregon citizens information and opportunities to bring about lasting budget and regulatory reforms that will ensure a robust and growing private sector. To find out more, visit the website:

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