Does renting a space at a discount equate to bribery? The NAACP's space at Lloyd Center, negotiated by Jo Ann Hardesty

I'm really surprised to see the news making circles around Gonzalez's discounted rent.

Hello readers - I guess this just might become a tradition where I start my post with an apology for not posting more often. There’s no lack of things to write about, in fact I’m likely dealing with the opposite issue: the daunting variety of things I ought to be writing about because everything in our city is just so goddamn dumb. It’s like everything I read these days is in a dichotomy of either apocalyptic tone or infantilizing to brain-dead readers. If I wanted to take up the crusade of penning articles regularly, it would be a full time job, and I don’t want that job.

Backstory

Two days ago City Commissioner candidate Rene Gonzalez received a letter saying his campaign must pay a hefty fine of $77,000 for failing to report unusually low rent. And who was behind this dastardly ploy? None other than the Arch Nemesis of all positivity: Jordan Schnitzer! (♫dun dun dunnnn!♫) Yes, evil-villain Jordan Schnitzer wanted to secretly gain favoritism to other evil-villain Rene Gonzalez by charging only $250/month for downtown office space which the city insists ought to cost $6,900 per month. Yes, everyone, sharpen those pitch forks!

How did the city get this number? The letter simply states “Exhibit F: Online advertisement” so I’m guessing these lazy bastards googled it, found a site like Colliers.com with a property listing that says $26/SF USD and did the math on 3,185 square feet, which comes out to $82,810 annually or $6,900/monthly.

Jordan Schnitzer has since weighed in that he’s had nothing to do with this, being quoted in the Business Journal:

Asked who negotiated the lease, Schnitzer said he thought it was the regional management team. "I frankly don't know what was signed or not signed," he said.

…

To the question of making this kind of deal available to the general public, Schnitzer said if another candidate had come along whose views aligned with his, he would have offered them the space, "or if some nonprofit had come and offered to take over the space."

"Remember, there's still a for lease sign on the space," he said. "The agreement was if at any time, we had a prospect for the space, we'd give them, you know, a week's notice. So there was no downside for us."

Yeah, that all sounds pretty reasonable.

This is what happens in real estate all the time. Yet there was all sorts of moral panic about this, the “We got you now Rene Gonzalez!” moments. This is hardly an October Surprise, but instead a dirty trick used by the political class all the time leading up to an election. So anyways, to let their air out of the bubble a little bit, I thought I’d reference another City Commissioner and their dealings with real estate.

Does renting a space at a discount equate to bribery? The NAACP's space at Lloyd Center, negotiated by Jo Ann Hardesty

I'm really surprised to see the news making circles around Gonzalez's discounted rent.

For one, it's important to realize that discounting rent to absurdly low prices has been a tactic used for nearly a decade in Portland to encourage more open store fronts. This is exactly why the Portland Business Alliance endorses the Pop-Up Business program. It's been long known that a occupied ground-floor space provides economic value to the entire building and the entire neighborhood. This philosophy is explicitly in the city's policy, which is why our Mixed Use zoning developments often require ground-floor retail.

If this is really so condemnable, so much evidence of a quid pro quo, one might ask about if the same sort of deal may have been struck with Jo Ann Hardesty when she was steering the helm at the NAACP. It's important to note that Hardesty did leave her position at the NAACP when she announced her intention to run for city council, but Hardesty was the person who found and negotiated the deal to establish an NAACP office at Lloyd Center. Quoting NAACP President Sharon Gary Smith (google transcript):

the tenancy started as i think when lloyd's center's previous manager [Bob Dye] who i knew and met and who has moved to managing a mall in texas they i think wanted to kind of at that place where tenants were leaving when nordstrom's left which was a major blow they were probably looking to kind of upgrade the image and create presence and so it was a negotiated uh relationship with former former president joanne hardesty who's now our city commissioner one of our city commissioners and so it's been about five years we came into it.

This was a great benefit for both parties, as Willy Weak noted, "Lloyd Center isn't far from the Albina neighborhood, once the heart of black Portland—before white gentrifiers drove many African Americans out. Despite that displacement, Lloyd Center remained a promenade where young people of color could meet. It's no accident the Portland branch of the NAACP relocated its headquarters to a second-floor storefront next to now-shuttered Marshall's."

Meanwhile, Pamplin Media Group's editorial board (cached version) called the location "perfect" and noted terms of the agreement:

The volunteer-run civil rights group was lured in with an offer of four months of free rent by mall manager Bob Dye,

Now there's a bit of a misunderstanding here, where Pamplin may have gotten the story wrong - Pamplin claims that Bob Dye contacted E.D. Mondaine, but he wasn't the president of the NAACP at the time, and Sharon Gary Smith's account contradicts this. In another article Pamplin writes "Mondaine and Dye were already in talks, about something else." It's also worth noting that Portland Observer also claims it was Mondaine, "As the former vice president of the organization, Modainé had been searching for a physical office for the group when Lloyd Center General Manager Bob Dye offered a space in the shopping center on the second floor, next to Marshall’s." Was it Mondaine, or was it Hardesty who negotiated this deal? Since Hardesty was the President at the time, she surely was involved or at least aware of the deal.

I personally don't find it very likely that Mondaine was the negotiator. When it got closer to the end of his tenure tough questions started being asked, as as Pamplin reported (cached) he "estimated [NAACP work] occupied 12 hours per week of his time, according to 2018 records filed with the state by NAACP Portland Chapter 1120B." During his tenure he struggled to be effective at anything. Mondaine was later replaced as president, cause he was sexually abusing young men, also stealing money from his church's nonprofit, threatening people, and etc etc. Really not all that surprising, given the former presidents of the NAACP include people like Roy Jay, and Robert Larry, or Audrey Terrell. That's on top of Jo Ann Hardesty who took $13,000 out of the coffers to pay her rent (and was also fired from the organization in 2002).

We can look at public records and discover financial insights - like that the NAACP Portland claims to have $0 expenses. It would be real easy to pull up an IRS 990, or other public records which ought to detail predictable expenses like Rent, but Portland's NAACP chapter doesn't seem to be filing these sort of things, or accurate statements to the Oregon Secretary of State. When news about Mondaine and his financial improprieties was released, Pamplin covered this story and noted (cached):

James Posey, who once served as chapter vice president, raised questions about a lack of recordkeeping and the cost of renting the NAACP's marquee office space.

In other words, the terms are not being disclosed.

But, I don't think this is really a story at all.

Real Estate businesses cut steep discounts ALL THE GODDAMN TIME especially when they're struggling to find occupancy. Bob Dye gave 4 months for free the NAACP and no one batted an eye, probably gave the NAACP an absurdly discounted rate, too.

This entire idea that Gonzalez got a discount and that's quid pro quo then opens up the question if Jo Ann Hardesty negotiated with Bob Dye and that may have been quid pro quo.

Are you wondering what quid pro quo Bob Dye may have been seeking? That's pretty straightforward: influence in the pending Lloyd Center EcoDistrict decision by the City of Portland. Guess who appears in these documents? A clear desire for inclusivity by collaborating with the Urban League, The Latino Network, and the Portland NAACP. Hundreds of millions of dollars in funding on the line if Lloyd Center can get the City of Portland to endorse the Lloyd EcoDistrict idea which would directly benefit the mall. Funny thing happened - the former President of the NAACP and the former President of the Latino Network both sit on City Council today.

Again, I'm not saying this is some giant scandal. Gonzalez's thing isn't a scandal, nor is Hardesty's NAACP getting office space at Lloyd Center. It's just that if you want to pretend there's a scandal, pretend there's shady dealings, well all the links are right there.

//fin

Afterthoughts: several people pointed out “But that’s different!” And yes, it’s obviously different. And it’s true that a big difference is that Gonzalez was running a campaign and opted for a specific program that comes with these rules. I’m just reminding people about facts from Portland’s history not declaring “This is identical!”

One bit of shitfuckery that comes along with these rules is that they do change. This is actually the heart of where a lot of violations happen or have happened, and the next thing you know one candidate is being told they couldn’t accept this, that, or another thing. Gonzalez was reporting all of this to the Elections Division, it’s not like he was trying to hide anything or that the Elections Division was like “OMG, how are you only paying $750 for rent when your competitor is paying $7,500.00 a month?” (We can all be assured, comparative analysis was likely not done for other candidates.)

Also, did no one point out of the City’s Election Division that retail rate and actual leased rate tend to be different? The rate one pays for commercial real estate is dependent upon how long you lease a space for, generally speaking. Taking the advertised rate at face value is just fucking stupid and a waste of the public’s time.

Gonzalez is likely to appeal this, and it will get thrown out. That’s what always happens in this mud flinging. The letter even says “If you can provide evidence that Schnitzer Property Management has offered members of the general public (to whom no special favor was being granted) discounted rent in similar circumstances to yours, I would be happy to review the evidence and, if appropriate, reduce the amount of the penalty.” And if we take Jordan Schnitzer at his word, that’s what he’s already said would be the case.

There’s also a public assumption worth addressing that Schnitzer would get quid pro quo favors out of subsidized rent. Yeah, sure, that’s possible. There’s like dozens upon dozens of overt acts of quid pro quo the media actively buries and the public doesn’t give a FLYING FUCK about - but, ok - is there a guarantee of favors? Nah, not even a small risk. Review Ted Wheeler’s relationships to his biggest supporters. Jordan Schnitzer and Ted Wheeler used to be friends, too. Same with Deborah Kafoury and Jordan Schnitzer. Then what happened? Our political class knows they’re not in debt to their donors.