PORTLAND, Ore. — Two longstanding tenants renting commercial space from the city of Portland in Northeast Portland said they are seeing a large uptick in rent.

The city of Portland started the Walnut Park and North Precinct Retail Project 29 years ago, with the hope of turning an old Fred Meyer store on Martin Luther King Boulevard and Northeast Killingsworth into a commercial center, sharing the building with the Portland Police Bureau. This opened up more opportunities for new small minority-owned businesses.

Jerome Polk is the owner of JP's Custom Framing and Gallery and one of the tenants. He says his rent recently went up from $1,200 to $1,800 a month.

Originally, 14 out of the 18 shops were owned by people of color. Polk said most of the other original owners left due to rising rent.

"All of those businesses that have gone; now, the police have occupied those spots," he said.

Polk believes the rise in rent defeats the goal of the initiative. 

"I want the city to be honest with us as far as what is the ultimate plan is," said Polk. "I need to be on the lookout for myself and secure a place for my business to continue."

Jaiwhan Woo owns Walnut Park Cleaners and Coin Laundry. He's been running businesses in Northeast Portland since the 80s. He said recently, his rent jumped from $2,900 to $3,500 a month.

"Prices are getting out of control," said Woo. "Rent, especially, it's hard to have a business around here — so owners are moving way out to somewhere where they can handle it."

Woo hopes the city can see the importance of their businesses, and said many of the shops carry items you can't get anywhere else in Portland.

"We need to help out businesses," Woo stressed. "This is how we thrive in our community, so we need Black people to have business here."

City of Portland's response to reported tenant rent hikes

KGW reached out to the city of Portland regarding the reported rent hikes from the tenants. The city got back to KGW in a statement after the story aired Thursday afternoon. 

In the statement, the city said that JP's Framing and Gallery lease charges increased in Nov. 2023 by $260 per month — going from $1,315 to $1,575 per month — and before 2023, the rent had not been increased in over 15 years. 

Regarding the reported rent hike for Walnut Park Cleaners and Coin Laundry, the city said rent increased in July 2023 by $87 per month, going from $2,900 to $2,987 per month. Before 2023, rent had not been increased in five years, the city said.

The city said it has informed tenants that the overall future use of the Walnut Park facility is being evaluated and could change — though no plans have been made.

They also mentioned that they have spoken with JP's Framing and Gallery on multiple occasions and explained that there are no specific changes being made for the use of Walnut Park yet, and they will communicate any updates right away should something change. They said a month-to-month lease allows tenants to do what is best for them with all the information that is currently available.

KGW followed up with the city for further clarification regarding rental hikes in 2024. The city responded. saying there have not been any rental increases since 2023. It's unclear where the discrepancies between the city's records and what both Woo and Polk have claimed come in.

The city of Portland also provided an update below on the status of Walnut Park and the North Precinct, which reads:

"The Walnut Park/North Precinct Development Project began with vision more than 30 years ago, aiming to improve public safety and revitalize the Northeast Portland Walnut Park neighborhood. Development of Portland Police Bureau’s North Precinct and attached commercial spaces at a former Fred Meyer location were an essential first step and instrumental to the vision.

"We’re grateful for our tenants at the Walnut Park/North Precinct location for their commitment to Walnut Park over the last three decades.

"Retail tenants—like JP’s Framing and Walnut Park Cleaners—have experienced very few rent increases for the duration of their tenancy, but for City facilities occupied by private market tenants, the City has always reserved the right to increase annual rent; such provisions underpin the City’s standard commercial leases.

"Overall, the City is thoughtfully modernizing the way we manage facilities, including assessing and making minor but appropriate adjustments to private commercial tenant rents and more directly managing tenants that are not in compliance with their leases. We’re also assessing the overall mix of properties in our real estate portfolio and developing a strategy to address our overarching capital deficit, which is nearly $500 million. As a result, we are not issuing new long-term leases for some commercial spaces, as we want to maintain our options as we consider how to best reposition the City’s real estate portfolio.

"All City facilities, including Walnut Park, require routine operational and capital maintenance. Operational maintenance includes things like cleaning, pest control, landscaping, and minor repairs. Capital maintenance includes things like reroofing, fire and life safety system upgrades, HVAC system replacements, lighting system upgrades, and exterior painting. To keep up with a facility’s operational and capital requirements, facility owners—the City of Portland in this case—must have adequate, sustained funding for those investments. Commercial market rent increases are necessary for sustainable operational and capital investments.

"Recently, we concluded that Walnut Park commercial tenants were being underserved in terms of exterior maintenance and capital investment, which in turn was likely impacting the commercial appeal of the businesses in the retail storefronts. As a result, we implemented an exterior janitorial program for the site and are changing our landscaping contractor to improve the commercial appeal of the area. In Spring 2023, we also invested $210,000 to rehabilitate the exterior of the building (paint, lighting upgrades, and awning replacement)."