Former mayor: Oregon City needs end point on urban renewal
Forty years and $60 million of Oregon City Urban Renewal Agency spending, and what do we have to show for the OCURA's time and public money?
A city hall, a train station, repairs at the old library, the fire station, street repairs and a Main Street "streetscape" (twice) are good public ventures, but they are public properties not paying any property taxes. Isn't OCURA's main goal to increase the city tax base? We are told we'll get our money back later from increased property tax values. Isn't that the concept of urban renewal (UR)?
How then did we make out with taxpaying private properties? OCURA granted $120,000 to remodel the 505 Tavern building on Main into a coffee shop and bookstore, contributed funds to infrastructure around the new apartment complex in the Cove area and "granted" a few new "storefronts" on Main Street. Oh, yes, OCURA funded a wine bar and eatery inside a furniture store on Main (cost $75,000).
When will we get a return on the millions of tax dollars spent, you ask? None of the property tax values accumulated, nor any of the $3 million held by OCURA in a special account, will be redistributed to local governments until the UR plan is closed. It's not necessary to close the Urban Renewal Agency, just the UR plan area. If the plan were closed today, overlapping governments (Clackamas Fire, the city of Oregon City, the county library district, Oregon City School District and more) would get more than $200 million in property tax value income and a share in the cash to boost their general budgets.
How did we get here? UR, as a financing technique, was created in California. The aim was to promote affordable housing and economic projects using federal money and local property taxes. "Free money" was the popular cry until several years ago, when California's governor and legislature did away with the "gold rush" UR program. They recognized that UR was sucking the life out of many cities.
Oregon Legislature leaders -- looking for solutions to a housing shortage, mainly in the Portland metro are -- picked up on the California plan, and in 1958 asked voters to amend the state constitution by establishing a new financing plan for local governments.
A legislative committee explanation said: "There are many substandard neighborhoods in cities where costs of public services such as police, health, fire protection and welfare are far greater than the taxes paid on property located within these neighborhoods. This places a heavy tax burden on the community as a whole. Redevelopment has been found to be the only practical method of restoring these rundown and substandard districts."
Redevelopment costs would be paid from increased tax values created. Financing would be two-thirds federal grants and one-third city bonds. No new taxes! The 1958 measure failed. The measure was back on the 1960 ballot and passed with a substantial majority.
Chapter IX of the Constitution was amended to include section 1c authorizing a financing scheme for projects: Use increased land values to pay the cost of bonded indebtedness.
The Oregon City Commission, fearing downtown land values would fall as Clackamas County moved its operation up on the hill, passed an ordinance in 1980 authorizing the creation of a URA as per ORS 457.
Unfortunately, in the early 1980s, federal funding for cities dried up. In the 1990s, a citizen-sponsored tax revolt capped increases in property tax valuations to 3% a tax year, except for new buildings.
The newly formed OCURA selected 10 members and its first business was to create the Downtown/North End UR plan area. The plan, with amendments, is still in effect in 2021 after 40 years.
UR projects, in usual circumstances, are scheduled to end in 10 or 15 or 20 years. And yet here we are 40 years later with OCURA still looking for the "Midas touch" with all of "downtown" as an economic project.
What will we get if we continue the OCURA for the next 40 years? More of the same? Is it time to end or modify our downtown plan? I think so.
John Williams, a former mayor of Oregon City, runs the website urshuffle.com.
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