SWEET HOME — Urban renewal districts have been quite effective in several Oregon communities — from sprucing up blighted areas to helping develop businesses and increasing local employment opportunities, City Council members were told Tuesday evening. But they aren’t for every town.
During a work session prior to the council’s regular meeting, URD consultant Elaine Howard of Portland gave the councilors an “Urban Renewal District 101” primer. It included a short video highlighting how URDs have been used around the state, plus a PowerPoint presentation that focused on how they're formed and funded.
City Manager Craig Martin said the workshop’s purpose was “to start a conversation” about the possibility of forming a local urban renewal district. “It would be another tool in our economic development toolbox,” he said.
Howard agreed that it is a tool, but added, “It doesn’t work well in all cities.”
She said Lebanon has three urban renewal districts. Others in the area are in Albany, Harrisburg, Eugene, Springfield and Coburg.
According to Howard, urban renewal districts date back to the 1940s. She said the concept is that a community sets up a boundary where projects are targeted, usually blighted areas. The taxable values of properties within those boundaries are “frozen” for a certain period of time.
But because properties within the zone are being improved, their assessed values actually go up. While the city continues to receive taxes based on the “frozen” values, the urban renewal district receives taxes based on the portion of the new values. That money funds the urban renewal district projects.
Howard said it’s important to note that some communities believe the formation of such a district will generate funding immediately, but in reality, realizing increased tax values takes several years. So, some communities set aside their list of projects until funding is available; they borrow money from the city’s General Fund to be repaid later; or they work out deals with prospective developers who would fund projects immediately in return for time payments by the city.
URDs are bound by a maximum indebtedness and size, no more than 25 percent of a community’s total area. Most districts have 20- to 25-year lifespans.
Howard added that URDs don’t always work well within Enterprise Zone designations or in communities with high tax compression rates. Sweet Home has both.
Linn County Commissioner Roger Nyquist said Lebanon is a good example of a community that has used its urban renewal districts to entice both industries and services.
“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.”
Lebanon used its URDs to develop infrastructure in several community areas, and that has led to the development of COMP-Northwest, the new Samaritan Health Sciences Campus, Lowe’s Distribution Center, Linn-Benton Community College’s advanced transportation center and more.
Nyquist suggested that before the city invests a lot of time and money into an urban renewal district proposal, staff should meet with County Assessor Dave Swartzlender and create a computer workup of how it would affect local taxes, tax compression and area taxing districts.
Councilman Jeff Goodwin said he’s interested in urban renewal districts because he's constantly asked what the city's going to do about blighted areas and attracting new jobs to town.
“I’m definitely open to the idea and would like to look at options,” he said. “It would be good to see what has worked well in other towns.”
The council plans to schedule another URD discussion meeting at a later date.