Featured Stories

Other Pamplin Media Group sites

Pleasant Valley costs come into line

Developers help narrow funding gap to more manageable number
by: David Boehmke, Phase I of Pleasant Valley, bisected by 190th Drive on the map, is closer to getting started after developers’ cost estimates nearly bridged a funding gap.

Three developers hoping to turn Pleasant Valley into the metro area's newest premier residential area have a plan of their own on how to pay for the infrastructure needed to develop Phase I of the 541-acre area.

The plan nearly bridges a $16.4 million funding gap in a previous cost-sharing agreement between Gresham and developers.

Commissioned by three major Phase I developers - Pacific Lifestyle Homes, Inc., Pacific Landmark Development and Tim Aldinger and Associates and Associates - the study retooled what private development versus what the city would pay for.

The end result: A funding gap of $250,000 to $1.5 million, said Joe Keizur, spokesman for Pacific Lifestyle Homes, Inc.

The three developers plan to build a total of 650 new homes on about 120 acres of Pleasant Valley. The land is part of 541 acres east of 182nd Avenue and north of Kelly Creek that residents voluntarily annexed into Gresham last year. Roughly 220 of those acres are considered Phase I.

But what was once a public-private development partnership has shifted toward a private partnership between developers with a public twist.

Basically, the city would kick start development by paying for a $3.5 million sewer line along Jenne Road, said Gresham's Executive Manager Alice Rouyer.

In return, the three developers - and possibly more - would front about $14 million in infrastructure costs. The money would then be reimbursed to them in the form of higher than usual system development charges: More than $20,000 per Pleasant Valley unit compared to about $8,700 for an average single-family home in already developed parts of Gresham.

'We're inches away from signing (the agreement),' Keizur said. 'I think we're really close.'

Coming full circle

The developer-commissioned study is just the latest news in a saga that spans years, dating back to 1998 when Metro Regional Government brought Pleasant Valley into the urban growth boundary.

For the past two years, developers and city officials have tried to figure out how to pay for the basic building blocks needed before houses and a trumpeted neighborhood commercial center can be built.

Here's the problem: Pleasant Valley is a rural residential area. Developing it is like building a city from scratch.

When building in an already established area, it's a matter of paying system development charges - or SDCs - to connect to already existing sewer and water lines, and the like. Pleasant Valley doesn't have that kind of infrastructure, but it's still needed before development can take shape. To top it off, money to pay for infrastructure isn't collected until building permits are issued - and permits can't be issued until the infrastructure is in place.

In 2004, Gresham estimated Phase I infrastructure costs and eventually identified an $800,000 to $1.5 million funding gap for the roughly $17 million project, Keizur said.

But when developers asked for help bridging the gap last fall, the city updated those costs add the price tag ballooned to $33.5 million, creating a $16.4 million funding gap for developers and the city to bridge.

In late January, results of the developers' study came in.

'That study almost exactly mirrors what the original costs were estimated at,' Keizur said.

Keizur said developers closed most of the $16 million gap by bearing the brunt of infrastructure costs on their privately owned property.

'If it's on my property, it's on my dime,' Keizur said. Also, by having the project be largely private, developers can avoid administrative fees that cities apply to projects, as well as prevailing-wage issues.

Rouyer also pointed out that changing Southeast 190th Drive from five to three lanes also drove costs down.

Deal yet to be finalized

Developers are still working with Gresham officials to smooth out the agreement's details. Also, Gresham city councilors and finance committee members must approve the $3.5 million sewer project as part of the city's upcoming 2007-08 budget. Even then, the city will most likely have to depend on loans or grants to pay for it.

Gresham, meanwhile, plans to continue lobbying Metro Regional Government and the state Legislature for revolving loans or other funding. Just this week, on Thursday, March 1, Metro's Joint Policy Advisory Committee on Transportation approved $600,000 in funding for Gresham's share of the 190th project, leaving Gresham to pay $225,000. Metro's council still must approve the plan.

Keizur remains cautiously optimistic, yet 'really excited that we could be close to a major infrastructure agreement that could be the first in the metro area. … There's sort of a pioneer thing here. It's kind of fun to do something that hasn't been done in the metro region yet. You're talking about a major town-center area being planned out of a metro urban growth boundary area.'

The agreement also could provide a framework for infrastructure funding in Springwater, another large chunk of land Gresham has grand plans for.

'But if this agreement gets done, I guarantee you Pleasant Valley becomes one of hottest areas for developers to be seeking land in, immediately,' Keizur said.