Landon Crowell aspired to do something few black Portlanders have done: develop multifamily housing within the city. After five years and hundreds of thousands of dollars, he now has a vanishing dream and a vacant lot—where his office used to be.
“Had I known I was going to get shafted this way,” Crowell says, “I never would have demolished the place.”
Crowell has owned property at Southeast 11th Avenue and Ankeny Street for 16 years. In 2015, he embarked on a project to erect an 18-unit apartment building on his property, which once held a Victorian home.
His odyssey has now reached a conclusion: On April 9, Crowell filed an unfair housing complaint with the federal Housing and Urban Development agency alleging that Prosper Portland, the city of Portland’s economic development arm, discriminated against him because he is black.
“To me, it was implicit bias,” Crowell says. “It was like, ‘Because you are black, we don’t believe this deal will work.'”
Prosper Portland provided WW with a 14-page rebuttal to Crowell’s claim, but because the complaint is under investigation, it offered only limited comment from agency director Kimberly Branam.
“The team worked hard over a number of years to help support the development and to make the project a reality,” Branam says. “We provided direct financial assistance, letters of support, technical assistance and a number of connections to potential capital and other partners. We were disappointed to hear of his decision to step away.”
Crowell’s complaint comes at a time when Portland and cities across the country face fallout from enduring and systemic racism. In Portland, that reckoning may extend beyond the police into other city agencies. While the Portland Police Bureau has long been criticized for policies that adversely affect black citizens, so has the city’s economic development agency.
From the late 1950s through the 1980s, Prosper Portland, then called the Portland Development Commission, spearheaded “urban renewal” in the city’s historically black neighborhoods, razing homes and businesses, and paving the way for widespread gentrification.
Under Branam’s leadership, the agency has set out to correct historical inequities.
“We make racial equity the foundation of our community and economic development work,” the agency states on its website. “We hold ourselves accountable to Portland’s communities of color and others our work has negatively impacted. While racial equity is the primary lens to focus our efforts, we understand the connection between racism and other forms of bias that lead to oppression.”
It’s going to take time to prove to critics the agency means what it says.
“In Portland, urban renewal has been a tool that has removed black and brown people from neighborhoods to make them more attractive for white people,” says City Commissioner Jo Ann Hardesty, the first black woman elected to the Portland City Council. “Prosper Portland has a horrible reputation in the community. It cannot say it has advanced equity and black businesses until very recently—after the pandemic started.”
Crowell, 52, who grew up in Portland and graduated from Benson High School, started out in the real estate business at age 18. He says he is very familiar with the impact Prosper Portland has had on the city. He says his experience shows that while the city talks a good game on equity, its practices remain discriminatory.
“It’s the same thing they’ve been doing to black people in this city for 75 years,” Crowell says. “Nothing has changed.”
Crowell has owned rental properties for decades. In 2015, he began work to convert a property he owns in inner Southeast Portland into an 18-unit apartment building. The property is located in the Central Eastside Urban Renewal Area, which meant Prosper Portland was in a position to offer development incentives.
Although Prosper rarely involves itself in residential development anymore, having ceded that side of the business to the Portland Housing Bureau, the agency nonetheless gave Crowell a $10,000 technical assistance grant in 2015 and a $93,500 pre-development loan in 2016.
“Prosper Portland made the grant and loan to the Crowells in furtherance of the agency’s goals of racial equity and of increasing minority participation in the real estate market,” the agency said in its written response to Crowell’s HUD complaint.
Crowell hired an architect and proceeded to the city’s Design Review Commission. His lot was challenging—an L-shaped parcel that wrapped around two single-family homes.
After five hearings and Crowell’s expenditure of about $200,000 in professional and legal fees, the Design Review Commission rejected his project, saying it was out of scale and aesthetically out of step with the neighborhood. Crowell appealed to the Portland City Council, which in September 2017 unanimously overturned the design review denial. He was in business, albeit with a project reduced by two apartments to 16 units.
Crowell and a group of fellow black investors put up seed money for the project. Crowell then sought a primary lender for the project and continued to work closely with Prosper for secondary financing, through what he and the agency agree were dozens of face-to-face meetings and the exchange of hundreds of emails.
By last summer, as Portland’s housing shortage worsened, Crowell was confident enough of getting a deal done that he demolished the 1904 Victorian home on the Southeast Ankeny Street property. He had been using the house as an office, but in order to finalize his building permits with the city, he had to knock it down.
What happened next is the basis for his federal complaint.
Crowell says he obtained financing from a primary lender, subject to Prosper Portland lending an additional $2 million. (Crowell and his partners were supposed to bring $190,000; private financing, he says, would raise $5.1 million more.)
Prosper Portland, in its response to the HUD complaint, says it did agree to kick in $2 million—but only if Crowell met specific conditions.
The agency says it told Crowell that his primary lender’s interest rate was too high and that his assumptions about the costs of construction and the rents he could charge were unrealistic. In other words, Prosper said Crowell’s deal didn’t pencil.
“The complainants were consistently advised by Prosper Portland lending staff and the executive director that their development project was not financially sound and that substantial cost-cutting measures were needed to make the project profitable,” Prosper’s response says.
After a series of emails and meetings in late 2019 and early 2020, Crowell says, he came to the conclusion that Prosper simply didn’t want to do business with him.
In its letter, Prosper says that wasn’t true.
“Prosper Portland was consistent and transparent in communicating the underwriting requirements for this gap loan,” the agency wrote. “Complainants’ project failed to receive financing because the project was financially infeasible, not because complainants are persons of color.”
Crowell acknowledges his development was challenging. But he says the traditional role of economic development agencies such as Prosper Portland is to provide gap financing for deals that cannot qualify for entirely private financing.
But with very few exceptions, he says, the city of Portland has only been willing to give such financing to white developers and nonprofits, neither of which help people of color build wealth.
“You have to have access to capital, and they have to give you the same opportunity as everybody else,” Crowell says. “There’s never any economic mobility for people of color. That’s why we have riots right now.”
He says city economic development efforts have failed people of color because officials have been unwilling to take the same risks for them that they’ve taken for white businesspeople.
“It’s not just black people,” Crowell adds. “How many Asian developments are there in this city? That’s why you can’t develop in Chinatown. Hispanics, same thing. Why is that?”
This story originally appeared on Willamette Week by Nigel Jaquiss on June17th, 2020