Bloomberg last week posted a fascinating story that traces how a Clinton-era tax break program—New Markets, meant to funnel development and jobs into poverty-stricken census tracts—has instead been hijacked by large companies looking to put up high-end projects in fancy neighborhoods.

And while Bloomberg's story mostly focuses on a ritzy hotel in my hometown Chicago, and how that project brought Prudential Insurance millions in tax breaks, it also spends a few hundred more words delving into similar projects here in good ol' Portland.

One of them is the Nines, the financially troubled (at times) hotel above the old Meier & Frank department store.

Prudential has used the New Markets program to finance two luxury hotels. Along with the Blackstone, the company in 2008 helped build the Nines in Portland, Oregon, bringing the firm $27.3 million in tax credits, according to Portland records. A Travel & Leisure magazine guide ranked the Nines 25th among North American hotels in 2010.

Or maybe you've seen a show at the Armory? That used New Markets money, too. Last year, the Portland Development Commission agreed to line up another set of tax breaks for renovations to Old Town's Oregon College of Oriental Medicine. Update 6:15 PM: A tipster pointed me to this article on New Markets, written by the O's Ryan Frank back in 2006. The O's online archive apparently is a bit spotty when searching back that far.

Hardly seems to fit the program's basic eligibility requirements. Among them, entities must "demonstrate a primary a mission of serving, or providing investment capital for, low-income communities or low-income persons."

Here's more about the deal to turn the Armory into the Gerding Theater. Shelly Lorenzen's quote is pretty good.

In Portland, Oregon, Goldman and U.S. Bancorp partnered with city government on another cultural development helped by New Markets. In 2004, the Portland Development Commission was advocating conversion of a historic armory into a nonprofit theater, and the project caught Goldman’s eye, according to city records.

The armory, which housed horses and cannons in the 19th century, sat in the city’s Pearl District, a former industrial area enjoying a resurgence with upscale stores and housing. The tract qualified with a 41 percent individual poverty rate because it included one poor neighborhood on its fringe. The family poverty rate was 11 percent.

Goldman arranged $28 million in New Markets financing for the theater. U.S. Bancorp put $8.4 million into construction and loaned an additional $11 million. That allowed it to win $10.9 million in tax credits, city records show.

Goldman will collect a fee of $1.4 million for tracking finances for the government, according to Goldman spokesman Cohen.

The 599-seat Gerding Theater opened in 2006. The League of Women Voters in Portland assails the use of federal tax subsidies.

“It’s ludicrous,” says Shelley Lorenzen, a former League of Women Voters board member who has studied Portland urban renewal. “The area has become kind of the hottest real-estate market in town, with the best restaurants, art galleries and very high-end condos.”