Timeline could establish district this summer

Forest Grove city councilors took the first official step Monday toward a low- to no-risk program that could bring in hundreds of thousands of dollars of new revenue to help revitalize the city.

They held a public hearing related to a potential urban-renewal program.

The council has spent a long time learning about urban-renewal districts, said Councilor Elena Uhing. “Staff has been really good about every time there was another layer of questions to come back with that information.”

According to a previous staff report from Senior Planner James Riordan, more than 75 cities and counties in Oregon have successfully used urban-renewal districts, while “failures” are few and amount to little more than a district simply not meeting expectations.

In Forest Grove, the proposed district would cover about 6.6 percent of the city’s total land mass, running along parts of 19th, Pacific and 21st avenues, from C and B streets on the west to a few “blocks” east of Highway 47.

For a set period of time (usually about 20 years), urban-renewal districts freeze the amount of basic property taxes going to a city’s general fund from the properties inside the district. But as the assessed value of those properties increases, the corresponding incremental tax increases go toward improvements within the district.

Ideally, by the time the program ends, those improvements have greatly increased the assessed value of properties within the district, so as the city begins collecting the full amount of property tax revenue again, that amount is higher overall than it would have been without the program.

The self-funded program would take no money from any local-option levies. And all property taxes collected today, whether from the levy or the permanent tax base, would continue to go to the city’s general fund, with or without the urban-renewal district.

While the program wouldn’t raise property owners’ tax rates, their actual tax payments would naturally increase in connection with their property’s increasing value — but only for those who redevelop.

Property owners could choose to opt out of the program and those would see little to no increase.

The district could help spark development by funding public amenities such as a town-center plaza or by offsetting the system-development charges that accompany (and sometimes discourage) development.

An urban renewal district might help lure developers to the Times-Litho site owned by the city, where a mixed-use development could increase the current assessed value of $800,000 more than tenfold, to $10.6 million, according to a hypothetical example prepared by Riordan.

The pluses for urban renewal districts include its flexibility and local control. At any time, the city council could stop the program, Riordan said.

And the additional tax revenue from any increases in property values by that time would probably offset the foregone revenue during that period, said Community Development Director Jon Holan.

An open house on the proposal two years ago, Holan said, brought supportive comments from property owners, especially after they learned an urban renewal district would not mean new taxes.

Councilor Ron Thompson said he saw urban renewal bring in a “big payoff” with a marina project in Waldport.

With the city council acting as the city’s “urban renewal agency,” there would be no new bureaucracy or staffing.

After Monday’s hearing and a reading of the proposed ordinance, city councilors could approve the creation of an urban renewal agency at their April 28 meeting.

“The next step will be getting input from our potential redevelopment sites,” Uhing said.

An urban-renewal district proposal would go before the city’s planning commission, then come back to the city council sometime this summer and ideally, Riordan said, be approved before Washington County assessors begin their annual reassessment of property values.

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