Portland State University says it needs to get its “financial house in order”

Portland State University has many serious challenges. But one of them isn’t a shortage of real estate development opportunities. The university’s biggest problems are its finances, enrollment and misplaced priorities.

Two years ago, PSU President Ann Cudd said to concerned students and faculty: “In order to regain our footing and begin to grow enrollment again, we must get our financial house in order.” That was when PSU was facing an $18 million budget gap. 

Now, its shortfall has grown to $35 million while enrollment has fallen 23% the past six years. The university is eliminating two academic departments, reducing six others and cutting dozens of positions as it attempts to stabilize its finances.

Yet while PSU leadership is cutting budgets and dismantling parts of its academic mission, they are also investing substantial time, energy and money lobbying city and state elected officials to help them fund and build a new performing arts and entertainment complex at a price that’s approaching $850 million. 

This expensive idea requires the City of Portland to not only move its Broadway theater to the south end of PSU’s campus, but also to build an additional 1,200-seat theater, a parking garage and publicly subsidized hotel. Never mind that PSU currently operates a failing hotel on the same piece of property and existing Portland hotels continue to face crisis-level occupancy rates.

This raises a fundamental question: Why is a financially struggling public university with declining enrollment trying to get into the real-estate and theater business, while using city and state credit cards to pay for it?

Concerns about all this are coming from inside the PSU community.

Professor Ramin Farahmandpur testified against the City resolution advancing the project, noting that PSU is pursuing a major building project while declaring a fiscal emergency.

A PSU student, testifying under the alias John Doe because he said he feared retaliation, questioned what the project would mean for the university’s limited institutional capacity. He warned that a development of this magnitude would consume staff time, leadership attention and PSU Foundation fundraising capacity that could otherwise support scholarships, research, faculty and existing facilities.

Portland voters are even more skeptical. In a 2024 DHM Research survey, 69 percent said PSU should focus on protecting existing programs and students rather than pursuing a new performing arts complex, while 73 percent said PSU should focus on its core mission of educating students rather than getting into the entertainment business.

If PSU wants to build a new theater to advance its arts programs, it should bear the financial risk and responsibility, not entangle city taxpayers in sharing the burden and require Portland to move its Broadway theater away from its established downtown location across from the iconic Keller Fountain. 

There is a better path, the Keller Affordable Fix. Instead of a billion-dollar vision the city cannot  afford and PSU is in no financial position to anchor, the city should invest $10 million to $15 million over the next several years to address deferred maintenance and keep the Keller operating successfully for the next decade.

And it allows PSU to prioritize getting its financial house in order rather than getting into the real estate, entertainment, parking garage and hotel businesses.

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