Vote aims to tear down barriers to revitalizating city

by: TIMES FILE PHOTO - A measure on this Novembers ballot will ask voters to change the city's charter to help its downtown urban renewal district. This fall, voters will have the final say on the fate of downtown Tigard.

The city has been working for years to revitalize the long-struggling downtown core, which stretches from Southwest Main Street to Hall Boulevard. But, city officials say those plans are hampered unless voters approve a plan to update Tigard’s charter.

The city has a lot of plans for downtown, including buying and redeveloping some buildings on Main Street, installing a public plaza and starting a major road reconstruction project next summer. But those plans are in jeopardy because of a discrepancy between the city’s charter and it’s urban renewal plan.

The City Council approved putting a measure before voters last week that would ammend a small but vital part of the charter, which is needed to bring the city in line with 21st century tax codes and comply with state law.

“We are at the point where we are considering some redevelopment projects through property acquisition and redevelopment, but looking at private financing to sell bonds, it turns out we are not going to be able to do that,” said Kenny Asher, Tigard’s community development director. “And it’s because of out-dated language in the city’s charter.”

The problem, Asher said, are two passages in the charter, which state voters must approve any changes to the urban renewal plans if those changes “would or could involve the levying of a tax” on properties outside the urban renewal area.

That conflicts with state law, which was drastically changed after the passage of Measure 5 and Measure 50 in the 1990s, and is a sticking point if the city wants to go out for bonds, said Asher.

Cities often go out for bonds in order to help pay for urban renewal projects, Asher said. But under the charter, the city would not be able to seek bonds, since those bonds could impact properties outside the downtown core.

"Because of the way tax laws have changed, that language is too broad,” Asher said. “Tax-increment collections already affect taxes outside the district as a matter of course. They do in Tigard and other places around the state already. That’s the way tax assessment works.”

What is urban renewal?

Tigard Community Development Director Kenny Asher“The city’s downtown has struggled for years, so in 2006, voters created an urban renewal district.

The city essentially froze the assessed value of properties downtown. Property owners don’t pay any more property tax, but government agencies such as schools, the city and Washington County send the difference between the frozen value and current respective tax rates to redevelop the urban renewal district.

The district’s total allowed indebtedness is $22 million. The district will dissolve when all projects are completed and the debt of the district are repaid, expected in 2026.

The solution

To fix the problem, the city wants to amend the charter to read that urban renewal projects will go before voters when the plan actually calls for imposing additional property taxes outside the urban renewal area.

It’s a small change, Asher said, but it makes all the difference.

The change would bring the charter in line with state law, Asher said, and allow the urban renewal plan to be run the way voters intended when it was first established.

More importantly, it would allow the city to add projects to the urban renewal plan and allow the city to go out for bonds and other private financing to help pay for larger projects.

“The way Tigard’s charter is now written doesn’t allow the city to seek private financing for projects where we would have a private partner to help with redevelopment,” said City Manager Marty Wine. “In order to realize the redevelopment vision for the downtown, we need to be able to work with private partners and use our bonded indebtedness and private financing to deliver projects in the plan that are not just public investments.Voters would still have power over any new urban renewal plans, and the measure won’t alter the district’s boundaries or its maximum indebtness, Asher said.

“We want to implement what the plan says it can do,” Asher said. “We don’t want to change any of the powers of the voters. This was the plan approved by voters in 2006.”

Should voters reject the charter amendment, redevelopment plans would have to be drastically scaled down.

“Everything would be impacted,” Asher said. “The financial plan for the (urban renewal) district would be hobbled.”

Asher said urban renewal districts work on what he calls a “virtuous circle.” Projects bring investments to the district, which in turn attract more investment over time.

“The vitality you are breathing into the area brings more investment,” he said.

Without the measure, the urban renewal plan wouldn’t be able to do much, Asher said.

“We could probably do some infrastructure projects on a smaller scale, year by year,” he said. “But we wouldn’t help with redevelopment because we would not be able to take on land-use projects. This plan would be handicapped.”

Ultimately, Asher said, the measure is something voters shouldn’t be too concerned about.

“It’s housekeeping,” Asher said. “But it’s housekeeping the city can’t take care of on its own. It needs the voters to help take care of it.”

The measure will go before voters in the Nov. 5 special election.

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