An ambitious project to transform a portion of Old Town into a shoe manufacturing campus will receive the remaining $800,000 in state funds it was promised last year by the Oregon Legislature, after Gov. Tina Kotek called for greater scrutiny of its financial viability last month.
Here’s what happened, and why the release of the remaining funds is significant.
WHY WAS THE FUNDING IN JEOPARDY?
In the spring of 2024, the Legislature approved a $2 million grant to Made in Old Town, an ambitious plan for a nine-building shoe manufacturing hub and innovation center in Portland’s toughest neighborhood.
The project is led by a group of men, some of whom are executives from the footwear industry.
Gov. Kotek publicly considered vetoing the bill but agreed not to after reaching a deal with the project’s principals in which they would receive the first $1.2 million from the state immediately but would get the remaining $800,000 only after they furnished proof of matching funds.
(Those close to the matter say the governor expected Made in Old Town to raise the matching funds from private equity, not other public sources.)
Then, earlier this year, the board of Prosper Portland, the city’s economic development agency, unanimously approved a $7 million loan for Made in Old Town.
The loan flouted the city’s own risk guidelines, giving substantial funds to a project that had no track record and intended to use the loan to buy two buildings for $3.6 million more than they’d been appraised for.
Prosper defends its loan to Made in Old Town, saying it’s the agency’s job to fund high-risk projects that have a hard time obtaining backing from traditional lenders.
The project’s principals told WW they intended to use the Prosper loan—all public dollars—as the matching funds to get the remaining $800,000 from the state.
Basically, they were leveraging public funds from one government to unlock public funds from another government.
Kotek was unhappy with that.
At the time, her spokeswoman Elisabeth Shepard said in a statement to WW: “The governor expects recipients of taxpayer dollars to come to the state in good faith with viable projects that bring direct benefits to the public and to meet the conditions set by the state in order to authorize funds.
To date, this standard has not been met.”
Shepard added that Kotek “urges caution in allocating additional resources to this project” without further proof of financial viability.
Made in Old Town also listed, in an April 10, 2024, letter to the governor, “current commitments” to the project.
Among them were two grants the project had not received: $700,000 from Prosper Portland and $750,000 from the Portland Clean Energy Fund.
WHAT DID THE STATE DECIDE?
In late March, the state released the remaining $800,000 promised to Made in Old Town after receiving proof of matching funds from the project.
That proof? Lease payments of $1.4 million to be made by a tenant of the building that Made in Old Town was in the process of buying, also in late March, a purchase made possible by the $7 million loan from Prosper Portland.
The company leasing the building is Work & Co, a Brooklyn, N.Y.-based digital ad agency.
Andrea Chiapella, a spokeswoman for the Oregon Department of Administrative Services, says DAS released the money to Made in Old Town after the project provided a copy of the lease, which, according to Chiapella, has payments left totaling $1.4 million.
According to March emails between a top policy staffer for Kotek and Elias Stahl, one of Made in Old Town’s founders, the proof of future rent was sufficient to unlock the state dollars.
IS THE PROJECT SEEKING ANY FURTHER PUBLIC MONEY?
Email records show Kotek’s office did not approve releasing the grant without expressing serious reservations about how the project had unlocked the funding—especially that the project’s principals told Prosper they intended to secure an additional $4.4 million from the Legislature in 2025.
That statement by Made in Old Town is part of the reason Prosper Portland approved the $7 million loan.
“In the resolution approved by the Prosper board, it references a requirement to spend $4.4 million on tenant improvements, and the reporting references a future state grant,” wrote Vince Porter, a deputy chief of staff for Kotek, in a Feb. 24 email to Stahl.
Porter then asked whether he was correct in understanding that Prosper could repossess the buildings if Made in Old Town didn’t secure another $4.4 million.
“If it is true that this clause is part of the loan agreement,” Porter continued, “we have serious reservations about accepting the Prosper loan as proof of raising matching funds.
It’s important to note that there is not $4.4 million for this project in the governor’s recommended budget which was submitted to the Legislature in December.
We also know of no legislation in 2025 that would grant MiOT $4.4 million.”
Stahl did not address Porter’s questions in writing.
The two appeared to have had a phone conversation instead.
In a follow-up email March 3, Stahl attached proof of the lease “purchased with the Mason-Ehrman [Building] which includes $1.4 million in remaining payments.”
That email didn’t address the question of whether Prosper could repossess the building, but it did show Made in Old Town at last had a cash stream that wasn’t from taxpayers.
Stahl said the project was in need of the money, pronto.
“Our closing date is March 24, so we really appreciate the timely dispersal of the remaining $800K in state funds,” Stahl wrote.
That apparently satisfied the governor’s office.
Porter wrote back: “I believe this is sufficient for the purpose of distributing the rest of the $800K.”
It’s unclear whether Made in Old Town is still pursuing another $4.4 million from the Legislature.
While it has received the $2 million from the state and $7 million from Prosper, it never got any money from the Portland Clean Energy Fund—and was also turned down by Business Oregon and the tri-county regional government Metro.
Property records show MiOT purchased the buildings for $6.9 million on March 20.
Made in Old Town did not respond to repeated requests for comment.
image source from：https://www.wweek.com/news/2025/04/16/an-old-town-shoe-incubator-gets-remainder-of-state-funding/
