To invigorate development in downtown Estacada, the Urban Renewal Agency is considering purchasing vacant, dilapidated buildings from willing sellers and renovating them to attract new businesses.
At a meeting on Monday, Aug. 28, members of the Urban Renewal Agency voted to hire a consultant to write an amendment to the city's urban renewal plan that would allow for property acquisition and redevelopment. The Urban Renewal Agency will likely vote on whether to adopt the amendment at a meeting on Monday, Sept. 25.
While the city offers several grants for downtown redevelopment, including a 50 percent cost share for interior improvements and a contribution of up to 80 percent for exterior improvements, few property owners or potential building lessees are utilizing these programs. Estacada Economic Development Manager Matt Lorenzen noted that building owners might feel uncertain that making these improvements will return something for their investment, while potential lessees often have difficulty providing capital to start a business and do extensive renovations — even with grants to partially fund the work.
"It's just kind of a show stopper," Lorenzen said. "You've got owners who don't see the ROI (return on investment) and lessees who don't have the capital to invest in a property. Observing people not taking advantage of these grants, we felt it was our role to take a more proactive approach to this, in finding a willing seller to acquire the property from, get it into condition and find someone to move into it."
Rather than compete with the private redevelopment sector, Lorenzen hopes the new program will give property owners the incentive to complete additional development projects in Estacada.
"When we see the private sector developing properties downtown, we're out," he said. "We want to demonstrate a proof of concept and do it once or twice before the private investor community notices and thinks, 'Hey, we can do this, too."
If the Urban Renewal Agency votes to approve the amendment, another vote would be required before any buildings are purchased and renovated. Lorenzen noted that several building owners have expressed interest in the project, but declined to identify specific properties at this point. Additionally, the Urban Renewal Agency would have a letter of intent from a business owner that planned set up shop in the building prior to moving forward with the purchase and renovations.
The cost of the first renovation project would depend on the needs of the specific building and would be covered by Urban Renewal funds.
"We'll start with what we hope will be a small, simple project," he said. "We have those funds in cash, so we couldn't have to incur any debt. We recognize that Urban Renewal dollars are our tax dollars and so we're going to go about each project very carefully."
Once the renovations are complete, the plan is likely to sell the buildings to the new business owners rather than leasing them.
"We're not interested in holding the properties in the long term," Lorenzen said. "We're more interested in putting them on the tax roles, and as long as the agency owns them, they aren't on the tax roles."
Lorenzen believes the plan amendment will be valuable to downtown Estacada. Similar projects have been completed in Lincoln City and The Dalles.
"Hopefully it will be an opportunity for a new or growing business to have a space that works for them," he said. "Certainly it will be beneficial to downtown generally, instead of having a decaying building, to have a nice looking building with a business in it. That contributes to the quality of live for the community and creates more activity downtown."
The program would also benefit the city's tax base.
"A decaying building is not going to count toward the tax base the way a building in good repair with a higher assessed value would," Lorenzen said.
He added that the plan amendment and projects it could bring about "would put us in the driver's seat."
"Before, we're in a position where where we're more or less at the mercy of the private sector," he said. "We're not really going to see the improvements to some of these dilapidated properties until the private sector decided it was time. One property at a time (the plan will allow us to) make downtown a place that people take pride in and want to spend time."