The Dealmaker from Dallas

The Dealmaker from Dallas

Norris Lozano came to Oregon from Dallas, Texas, because he and his wife liked the place. Although he’d most recently run a manufacturing company, with his legal, real estate development and venture capital background he applied for the job of general counsel at the Portland Development Commission (PDC), the region’s economic development agency. According to Lozano, after an interview, PDC’s director Don Mazzioti told him, “You’re not a lawyer, you’re a deal guy,” and gave him a job as Director of Resource Development. Without longstanding community ties or connections, Lozano was charged with finding non tax-based resources to facilitate economic development in the region.
Up to this point, the word ‘sustainability’ had never crossed his mind.

Initially, Lozano met with some key local business leaders, including the former CEO of Visa International, Ed Jensen. With help from Jensen and an advisory board of some of the region’s most successful business leaders, Lozano set up a new entity, a community investment bank called the Portland Family of Funds (PFF).

One of PFF’s funding possibilities was a U.S. Treasury Department program called New Markets Tax Credits. Application for these credits is a highly competitive process, and Lozano knew he needed an angle that leveraged Portland’s competitive advantages.

So as a relative newcomer to the region, he did his own “SWOT” analysis of the situation to assess the region’s strengths, weaknesses, opportunities, and threats.

Lozano doesn’t remember where or when the concept of sustainability first registered for him, but at some point he read the requisite “ten books you read” when the idea sparks interest. Though disappointed that these books weren’t really “thought through from a business perspective,” Lozano came away convinced that sustainable industries could be a winning economic development strategy for the region. He felt he had found Portland’s competitive advantage. Now all he had to do was figure out how to sell the concept to the Bush Treasury Department and get the tax credits.

PFF’s original request, for $250 million dollars worth of New Markets Tax Credits, was submitted in September 2002. If awarded, the credits would go toward catalyzing the building of several significant real estate development projects in distressed areas, all with LEED gold or platinum green building certification. The results from this first application? Nothing.

Undeterred, Lozano brought in former Ecotrust staffer and sustainability expert Dr. Stuart Cowan to help improve the application. On the next submission, PFF was awarded $100 million worth of credits in May 2004 during the second round of the program. During this same round, PFF also helped facilitate other entities’ bringing another $120 million worth of credits to the Portland region, for a total of $220 million worth of credits.

Few people I’ve met have the intelligence, competitiveness and hunger for the deal more than Lozano does. So how did this dealmaker from Dallas both arrive at sustainability as the key to Portland’s economic development and then sell it to the Treasury Department?

Lozano’s formula is straightforward and pretty much what they teach you during your first year in business school: to be successful you need product, expertise, and deal flow. Lozano figured out that Portland has a good product to sell when it comes to green building and sustainable industries. “People believe you when you’re from Oregon and you say you’re using the money for LEED buildings,” he told me. Next, the region has the expertise in green building and sustainable industries. “It is resident and deep here, plus, people believe it is deep here,” he says. The final piece is the rate of deal flow. That part is up to Lozano and his team, and he has assembled an incredible team – in many ways an overqualified dream team.

Lozano’s goal is to raise $1 billion into PFF’s various funds and make the entity a community investment bank that would develop green buildings and catalyze the creation of triple-bottom-line businesses throughout Portland. Within five years, he wants to have built eight LEED platinum buildings and stimulated the development of ten businesses. Also in the near future Lozano plans to work with other Northwest entities to submit a Northwest regional application for more tax credits.

Here’s the kicker: During an interview with Lozano, I asked him how many times the word ‘sustainability’ appeared in the first application for the New Markets Tax Credits. “Too many,” he said. How about the most recent, winning application, which was essentially the same? “None,” he said. (Note to self: What does that say about how we talk about this whole concept?)

Now that they have their first infusion of funds, PFF is starting to look for partners they can work with and businesses they can help. The first project moving forward is the Armory Building in the city’s Pearl District, which will be the first LEED platinum certified historic renovation in the country and will house the city’s largest theater company, Portland Center Stage.

A guy from Texas, not at all disposed to sustainability, came into town, got his lay of the land, and put together a successful, multi-million dollar economic development proposal that put sustainable industries at the center. Aside from changing my view of Texans, what Lozano has done makes me ask myself: What took us so long?

This column has been reprinted courtesy of Sustainable Industries Journal. It first appeared in the July 2004 issue of that publication.