Council votes 4-3 on plan; final meeting will be Dec. 18

The Lake Oswego City Council has tentatively approved a $43.2 million urban renewal plan for the Foothills district, lining up the final vote necessary to advance the redevelopment of the 58-acre, largely industrial area between State Street and the Willamette River.

The plan authorizes the use of urban renewal funding for about 20 projects intended to attract private investment and spur redevelopment, ultimately bringing a mix of retail, housing and commercial spaces to the area.

The council voted 4-3 in favor of it on Tuesday, scheduling a final meeting on the topic for Dec. 18.

“I think it’s a fantastic opportunity for our city and at a very low cost,” Councilor Donna Jordan said. “Without this plan and this framework and urban renewal district, I’m not sure where else we would be going as a city.”

The city would have to find money to front a $6.9 million loan to get the work started, but that would be paid back by new tax revenue generated in the district. Officials anticipate the city’s investment will generate huge returns, boosting property tax revenue collected in the area from about $12 million in 2013 to about $575 million at the end of the district’s 22-year lifespan.

Economic Development Manager Jane Blackstone described the proposed projects as “very basic infrastructure projects that really set the stage for private development to occur.”

They include relocated sewer and stormwater mains, landscaping enhancements and transportation upgrades, such as a “northern portal” into the district via a new intersection, reconstruction of Foothills Road and the extension of B Avenue across State Street from downtown. In addition, a large staircase would lead toward a new public plaza by Foothills Park.

The plan also provides for $8.8 million in assistance to developers working to build affordable housing, and it would pay to reimburse the city’s general fund for about $1 million spent on planning to date.

“Many of these projects involve partnerships with private parties and other supplemental sources that come from development-derived revenues,” Blackstone said.

A new project on the list involves floodplain mitigation. Lake Oswego no longer plans to seek an exemption from Metro’s balanced cut and fill requirements, which require mitigation for filling in a floodplain. That project will likely take place in the Tryon Cove area, but the details have yet to be worked out.

Blackstone said any public investment would be contingent on private commitments.

About a dozen people testified at the public hearing on Tuesday, with a majority voicing support for the urban renewal plan.

Rob LeChevallier, a local attorney and resident, said some public participation is necessary to pay for infrastructure work and attract private investment in Foothills.

“If that area were easy to develop it would have been developed in the last 20 years,” he said.

Most of the public funding would come from tax increment financing, or TIF, which is based on the difference between an area’s assessed value before redevelopment and its value after public improvements are made.

Foregoing property tax growth will cost the city’s general fund $1,474 to about $3,000 annually over the first few years of the plan, LeChevallier noted, adding: “I suspect it costs more to hold this meeting tonight.”

“It’s really a situation where growth will pay for itself,” he said.

Chuck O’Leary, chief executive of the Lake Oswego Chamber of Commerce, said business owners support the plan because it will provide more money for public schools and parks, additional housing choices for an aging population and for young families who want to move here, and support for the business community.

“We believe this plan before you is the very best to date,” O’Leary said.

Dave Luck pressed the council to slow down the approval process and look at the project “through the eyes of the taxpayers of the city.”

Peter Sweet said the council should wait to approve the plan until the updated comprehensive plan is in place. Affordable housing will be addressed in the comprehensive plan, now undergoing revisions, once it’s finished.

Mayor Jack Hoffman and councilors Jordan, Sally Moncrieff and Bill Tierney voted in favor of the urban renewal plan, while councilors Jeff Gudman, Mike Kehoe and Mary Olson were opposed.

Hoffman stressed that Tuesday’s vote was focused only on financing. The council approved the overall development framework and necessary code and comprehensive plan changes at previous meetings.

“No one has testified to say it doesn’t make sense as a financing mechanism for this to go forward,” he said.

Those who voted against moving ahead with the urban renewal plan had also objected to the council’s July approval of the Foothills framework plan, the document outlining proposed projects and long-term land use in the district.

“It is premature, at best, to be going forward with the urban renewal district,” Gudman said.

Olson took issue with the possibility of using mitigation credits the city banked from past parks projects to alleviate private developments’ impact on the floodplain. She also raised questions about development density and said she objected to allowing nine-story-tall buildings and 100 percent lot coverage in the area.

Kehoe agreed.

“This significantly changes the character of the community,” he said. “While this is an area that is ripe to get developed and we’ve put some things in place for it, I’m not in support of this moving forward.”

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