A 4-2 vote sinks efforts to use public money on the proposal

The Lake Oswego City Council has terminated the Foothills urban renewal area, reversing course on the planned financing plan approved by the last council in December.

In a 4-2 vote on Tuesday, following several hours of public testimony and discussion, the council dissolved the urban renewal plan.

Mayor Kent Studebaker couldn’t attend the meeting — he’s in Texas supporting his family following his son-in-law’s death. Studebaker was elected after campaigning against the urban renewal area, said Council President Mike Kehoe, who led the meeting in the mayor’s absence.

“The citizens voted; they made a decision,” Kehoe said. “They’d like to see private developers forge ahead.”

For his own part, Kehoe said, “I’ll support development down there, but I won’t support urban renewal.” He called urban renewal “the entrée to building those nine-story buildings” envisioned in the Foothills framework plan.

The council’s vote does not affect the Foothills framework plan, a separate document that lays out the vision and planned projects for a mixed-use neighborhood of retail, office and residential buildings in the industrial area between State Street and the Willamette River. That plan remains in place.

But some people questioned whether anyone will be able to implement it without relying on urban renewal.

The urban renewal plan was a list of public projects intended to spur private redevelopment efforts. The projects were supposed to be paid for by growth in property tax revenues within the VERN UYETAKE - This building, off Foothills Road, sits in the mostly industrial area between State Street and the Willamette River. Officials hope to transform Foothills into a new mixed-use neighborhood.

More than 75 people packed council chambers for the discussion Tuesday, and dozens of residents spoke on both sides of the issue.

Repeal supporters oppose urban renewal

About 18 people supported the council’s proposal to terminate the urban renewal district. Another two people submitted written testimony calling for the urban renewal plan’s repeal.

Timothy Keenan opined that urban renewal, with financing based on “a future promise,” has failed in states such as California. He urged the council to avoid making a similar mistake.

“Let private money make it successful,” he said. “The city does not need any more debt or financial risk.”

Lisa Vopel said she also disagrees with the use of urban renewal as a financing tool.

“Urban renewal is supposed to be for blighted areas, it’s supposed to be a catalyst to kick-start development,” Vopel said. “As far as I can see, it just begets the need for more urban renewal.”

Specifically, she said, she doesn’t want tax increment to fund façade grants for businesses in the area or flowers and landscaping: “To me it’s like getting a second mortgage on your house and buying annuals.”

Janine Dunphy took issue with claims that Foothills could offer housing options for aging residents looking to downsize.

“When we talk about aging in place, what we’re talking about is single-level homes, master suites on the main level, remodeling our homes” — not moving into apartments or condos, she said. “More than anything we are discussing whether we will be able to afford living in Lake Oswego.”

Jim Bolland of the Lake Oswego Neighborhood Action Coalition said officials also are wrong to believe that Foothills will support new families moving to Lake Oswego, citing a demographic study commissioned by the Lake Oswego School Board.

That study found that because of the timeframe of the commissioned analysis — looking at student enrollment projections through the 2022-23 school year — development in Foothills didn’t have much impact on the data. That’s because new residential development in Foothills isn’t anticipated to start until 2017, with most new of the new homes being completed there by about 2025.

Former councilor Mary Olson said taxpayers shouldn’t be saddled with risk for the benefit of private property owners and developers.

“If you choose to invest in property in a floodplain next to a sewage treatment plant, is it your neighbor’s responsibility to mitigate those problems for you so you can turn a profit?” Olson asked. She said the city has higher priorities than paying a $6.9 million loan needed for gap financing.

Some residents also raised concerns with possible buildings heights and the density of development on individual lots, although those elements, part of the framework plan, weren’t technically up for discussion.

Others advocate partnerships

On the other side, at least 15 people signed up to speak in favor of keeping the urban renewal plan and urged the council to not repeal it. About a dozen others who didn’t speak Tuesday submitted written testimony urging the council to keep the urban renewal plan in place.

Richard Reamer participated on the 14-member citizen advisory committee that met for more than a year to help craft the Foothills plans. Reamer said any suggestion that the group disagreed with using urban renewal as a financing tool was “dead wrong” and took information out of context.

“The group did not disown the financial plan; the group simply said we are not financial experts,” Reamer said. “But we completely concurred with the financial plan that was presented.”

He also criticized councilors for not waiting to make a decision on the repeal.

“You’ve been in office hardly a month,” he said. “This effort has been going on four years.”

Michael Buck, a Lake Grove business owner, said the council should consider the opportunity for more property tax revenue in Foothills.

“Without urban renewal, the toolbox for feasible implementation goes away,” he said.

Rob Fallow was among owners of industrial property in Foothills who partnered with the city over the past few years, although efforts to redevelop the area began much earlier. He said the framework plan has received support from the chamber of commerce, from businesses, from the school district and from the surrounding neighborhoods. The framework includes both public and private projects, and it relies on an urban renewal area for financing.

“Repealing the URA will leave you without the opportunity to finance these projects,” Fallow said.

Developers Randy Tyler and Ed Darrow said they don’t have a stake in the Foothills plans, but they did work on Oswego Pointe, built along Foothills Road where the old Portland Cement plant sat about 25 years ago. That project, along with adjacent condos, relied on public-private partnerships.

They said developers typically have to commit anywhere from $1.5 million to $7 million after deciding a project has no fatal flaws, and Foothills’ geographic constraints and lack of infrastructure are typically considered flaws.

“A developer sometimes needs support,” they said. “It’s really to get the playing field level. That’s what you need to do in the Foothills area.”

Others said the city can’t kill the Foothills urban renewal plan without thwarting efforts to provide more affordable housing in Lake Oswego.

Council declines to wait

Councilor Jon Gustafson called for the council to table the discussion indefinitely, or at least until after its public forum planned for next week.

“Waiting until after the forum doesn’t seem like a bad idea,” he said. “I don’t think it would leave us on an aimless course. The decision will always be ours.”

The motion failed 4-2, with only Gustafson and Councilor Donna Jordan supporting it.

Council President Mike Kehoe and Councilors Karen Bowerman, Jeff Gudman and Skip O’Neill voted in favor of repealing the Foothills urban renewal plan.

Gudman, who initially proposed terminating the urban renewal area, said he still supports the overall vision for redeveloping Foothills.

He also disputed any assertions about population and development density being pushed into surrounding neighborhoods if Foothills doesn’t redevelop as planned, and he supported testimony highlighting potential benefits to the school district.

“The tax base in the Foothills area is so small that the impact to Lake Oswego and the state school fund is minimal,” Gudman said. “The construction excise tax does have an immediate benefit.”

Still, he didn’t see any reason to wait on repealing the urban renewal plan. He said he’d like city staff to analyze whether the existing downtown urban renewal district might instead be expanded into Foothills so some public projects could be funded.

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