Wheeler and Rubio Partner to Expand Business Incentive Tax Credit

As part of ongoing efforts to revitalize the central city, Portland City Council today unanimously voted to expand a business tax incentive that encourages businesses to lease office and retail space. The emergency ordinance was co-introduced by Mayor Ted Wheeler and City Commissioner Carmen Rubio.

Passed in September 2023, the Downtown Business Incentive Credit program previously limited eligibility to sub-districts that were hardest hit during the pandemic, but the boundaries will now be expanded to include the entire central city.

"Our central city continues to economically recover from the major disruptions caused by the pandemic, from public safety and livability challenges, and from the prevalence of hybrid and remote work models of many employers," Commissioner Rubio said. "This innovative program has already shown success, so today's expansion is a smart move to keep delivering investment, employment, foot traffic, and vibrancy throughout our urban core."

This first-of-its-kind program has shown early successes and demonstrates that Portland's leaders are focused on supporting employers and revitalizing our central city. To be eligible for this credit, businesses must enter into a new lease or extend a current lease for a period of four years or more, and attest to having returned workers to the office on at least a half-time basis.

The program will allow each eligible business a credit for the full amount of business license tax owed in one year up to a maximum of $250,000 per taxpayer in total benefit, taken over four subsequent years. The overall program is capped at $25 million total. By requiring eligible businesses to maintain at least 15 employees, the program will also allow smaller businesses to qualify.

"We must consider every option to continue to recover positive foot traffic, economic activity, cultural vibrancy, and revitalization in the central city," Mayor Wheeler said. "This is just the latest initiative as part of a multipronged plan that includes public safety initiatives, outreach work to house and deliver services to those in need, improvements to public rights-of-way and cleaning activities in public spaces, and investments in events and public activations that connect people from all across the city and beyond."

As of last week, the Downtown Business Incentive Credit has received 61 applications, of which 17 have been approved. These approved applications and tax credits will yield long-term leases, tenant investments, and the presence of jobs and positive foot traffic that may not exist in the absence of this program.

Some of the applications received to date were denied because the business was outside of the original eligibility area. City Council staff has directed the Revenue Bureau to reach out to those applicants to alert them to the expanded eligibility area.