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Grasping 'urban renewal' key to grasping project

Complex concept governs funding for Tokola plans in downtown FG

It’s one of the great mysteries of life, right up there with where do we go when we die and why does God allow suffering: What the heck is an Urban Renewal District?

Understanding urban renewal districts is central to understanding what’s going on with Tokola Properties’ controversial proposal to develop a retail-apartment complex on the old Times-Litho site.

It’s also one of the most confusing concepts to come before the Forest Grove City Council — which might have led to the tearful, outraged statement by Councilor Victoria Lowe at the panel’s Jan. 25 meeting, where she was the only person to vote against the proposed development because, as she put it, she opposed using “public money for private investment.”

And that led to a bit of candid criticism by one of her peers.

“Victoria Lowe still does not understand urban renewal as well as some of the other councilors,” Councilor Richard Kidd said recently when asked about Lowe’s opposition.Victoria Lowe

Even Lowe, who actually voted in 2014 to create the urban renewal district, seemed to waver on her opposition during a Monday interview. “Maybe I don’t understand it,” she said. “This is a lot more complicated than people realize.”

That’s exactly why city officials are holding a free Urban Renewal 101 open house this coming Thursday, Feb. 11, and another one a week later, Feb. 18.

“We knew we needed to do something to explain urban renewal to the public due to the complexity of the issue,” said Financial Director Paul Downey, who will help explain how Forest Grove’s urban renewal district works.

Spoiler alert: The News-Times has decided to take a whack at explaining it right here.

In 2014, the Forest Grove City Council voted unanimously to establish a 20-year Urban Renewal District in order to revitalize the city’s business corridor, which runs roughly along 19th and Pacific avenues from the downtown area around B Street on the west to just beyond Quince Street on the east. The district’s boundary matches that basic area.

The businesses within the district are the ones that benefit from urban renewal projects. In addition, their tax increases are what determine how much money can be spent on those projects.

It’s important to understand right up front that the urban renewal district does not cause any resident or business to pay any more tax money than they normally would. When people’s taxes rise annually as usual, no extra “urban renewal” taxes are added in.

So where does the urban renewal money come from and how is it calculated?Richard Kidd

It equals the amount of annual tax increases on all the buildings inside the urban renewal district since 2014, when the district was created.

At that point, the city “froze” the amount of tax money being paid by all the homes or businesses inside the district. In this case, “freezing” doesn’t mean a business’s taxes stop increasing. It means that the base, “frozen” amount is what keeps going to the city and county, while the money from every tax increase for the next 20 years goes toward urban renewal projects.

What about the school district, which would normally get all that tax money now going to urban renewal projects? Those costs are covered by a special, statewide school fund specifically created for such urban renewal situations.

The theory behind an urban renewal district is that over 20 years, urban renewal projects will improve the economy and raise property values within the district, which will in turn raise more tax money to be used for urban renewal projects, in an upward spiral.

“Urban renewal is a great tool to allow a city to improve its infrastructure,” Kidd said. “The city does need to be revitalized. Something could happen to all kinds of properties within the urban renewal district. Tokola is just one.”

As Forest Grove resident Todd Kelley said at the Jan. 25 meeting, the time for revitalization is now. “And if not now, when?”