Scott Swanson
City Council members agreed to look into the possibility of urban renewal as a means of improving blighted areas of town after a workshop on the topic held Tuesday, Nov. 24, prior to their regular meeting.
City Manager Craig Martin said the workshop’s purpose was “to start a conversation” about the possibility of forming such a district, noting “it would be another tool in our economic development toolbox.”
Elaine Howard, who is “renowned for her work across the state in urban renewal,” according to Martin, spent nearly an hour giving the council and about a dozen city staff and interested community members “Urban Renewal 101,” going over the basics of the taxing districts that allow property tax revenues to be focused on a specific project, usually to address blighted conditions. Howard has worked with many cities in Oregon to develop urban renewal districts.
Following her presentation, council members instructed city staff to return on Dec. 8 with information regarding the potential costs and scope of implementing such a plan in Sweet Home.
Urban renewal districts must target blight, which, Howard said, is defined in state law. Blight can include property that is under-developed, in poor condition, or lacking infrastructure – streets, communications, utilities, structures, etc. needed for a community to function.
To form a district, the county tax assessor determines the total taxable assessed value of the property within the proposed district. That value is then “frozen” for local taxing districts and when property values increase, increased tax revenue, instead of going to those other districts, goes to the urban renewal district over a period of time that, Howard said, usually extends 20 to 25 years. Urban renewal districts do not directly raise taxes for property owners, but as property values increase, tax bills will as well.
Basically, she said, an urban renewal district simply redistributes the property tax money paid by city property owners. The percentage of taxes generated by the “frozen” properties in the district, as compared to the total property tax from the city as a whole, is calculated, and when values of those “frozen” properties increase, any additional tax monies go to the urban renewal project.
Howard said that although the flow of tax revenue to urban renewal districts is usually not large for the first few years, cities sometimes will front the money for projects from their general funds or will use private money, reimbursing developers or investors after the revenue begins flowing.
Urban renewal districts can be an incentive for developers and often generate income in ways that weren’t necessarily anticipated when they were established.
She noted that Sweet Home has looked at urban renewal before, including consultations with her, but she said laws have changed in the field.
“The laws originally favored large cities, but now that smaller communities are getting involved, things are changing,” she said.
Other local communities, including Lebanon, Albany, Harrisburg, Coburg and Springfield, have established urban renewal districts.
Howard said that urban renewal doesn’t work for everybody, and noted that Sweet Home’s situation, requiring the city to ask voters to approve local option levies to fund police and library services, makes it unique and that urban renewal “is just one more tool in the toolbox.”
“You have compression issues most cities in the state don’t have,” she said. “You’re special.”
But, she added, not having an urban renewal district could be putting Sweet Home at a disadvantage.
“Other cities are using an extra tool that you’re not. You’re competing with other cities for employers coming into your community.”
Howard noted that urban renewal can be employed creatively to benefit properties not within the actual boundaries of the district or actual renewal projects – something that has happened in other Oregon communities.
“Parks and plazas don’t bring in tax increment, but they attract people with spinoff benefits of more economic activity,” she said, citing examples of farmers markets or patrons doing business in a downtown that has been upgraded by urban development.
“Many communities can make the statement that they’re receiving tax revenues they wouldn’t have without urban development.”
Mayor Jim Gourley said he’s concerned about the impacts on Sweet Home’s downtown if a district were located somewhere else in the city, citing Lebanon and Albany as examples.
Gourley noted, following the meeting, that this is the third time he has been through discussions on the possibility of forming an urban renewal district, the last being a decade ago.
The problem then was that other agencies – the county, Sweet Home Fire and Ambulance District, the cemetery district, Sweet Home School District, Linn-Benton Community College, and the Linn Benton Lincoln Education Service District – stood to lose too much.
“Because of compression, it took money out of the stakeholders,” he said. “So we decided it was not something we wanted to follow through with at that point. The compression was too much.”
Gourley said what he described during the meeting as “property that’s not on the tax rolls now,” along with undeveloped or under-developed properties within the city, provide possible opportunities, though he declined to say which ones he has in mind.
“We need to look at whether that area pencils out or whether another area pencils out,” he said. “We need to get the information back and that will tell us whether we can even start to look at each of those areas.”
To establish an urban renewal district, the city would need to start with a feasibility study that identifies the boundaries and projects within the proposed district and impacts on taxing jurisdictions that would be affected. It would also need to form an urban renewal agency, which often is simply the City Council, possibly with one or two extra members such as a representative of the business community or the city Planning Commission.
Roger Nyquist, chair of the County Board of Commissioners, reminded the council that “urban renewal, in the best case, creates jobs and improves lives.”
He cited Lebanon as an example, noting that urban development districts have been used there to pave the way for the construction of the Samaritan health sciences campus, for the Lowe’s distribution center, the Linn-Benton Community College advanced transportation center, and other projects.
“When the siting committee for the new Veterans Home saw that the infrastructure was shovel ready in Lebanon, it carried the day,” he said. “The other four applicant communities did not have this advantage.”
Councilor Jeff Goodwin said the council needs to look at “the whole town and see where the opportunities are.”
He said that while it would be a big step, “we’re doing nothing thus far.
“Any course, there’s going to be risks,” Goodwin said. “I think we should definitely look at it.”
Gourley, both during the meeting and afterward, said the city just needs to proceed carefully.
“A lot of people want to do things overnight, but Rome wasn’t built in a day,” he said. “We’ve got to go one step at a time on these things.”