Wood Village considers $3.5 million in Urban Renewal bonds
At its meeting tonight, Tuesday, Jan. 28, the Wood Village City Council will consider authorizing $3.5 million in bonds to cover several high-profile Urban Renewal projects in progress as well as the forthcoming construction of a new City Hall building at Donald L. Robertson Park.
Authorizing the sale of the full-faith-and-credit bonds will fund or reimburse expenses already incurred in the following projects:
- City Hall construction: $1.65 million
- Arata Road fencing: $390,000
- Underground power lines along Halsey Street: $600,000, and
- Utility relocation and easements for the former City Hall property at 228th Avenue and Halsey Street, which a private developer is currently transforming into a substantial mixed-use project: $633,631.
If the council approves the bond sale, the city's Urban Renewal Agency will have to spend proceeds within three years, after which it will have five years of revenue — estimated around $200,000 — for other projects, barring further private development.
As City Manager Greg Dirks explained, Urban Renewal Agency projects like these are required to be funded through a debt-based mechanism.
"We're taking on debt to do these projects. It involves a bond of some kind, typically," he said. "It's a hard thing for people to grasp right away, the fact that Urban Renewal agencies have to operate out of debt."
Successful development within Urban Renewal boundaries, such as the Riverwood South housing project in Wood Village Town Center and a seven-unit townhouse/condo project on a formerly vacant Halsey Street lot, generates property tax revenue and allows the UR agency to take on a certain level of debt.
Dirks said city Finance Director Seth Reeser likened the "full faith and credit" bond arrangement to the city of Wood Village — in a "parental" role — co-signing a loan to the "teenager" — in this case the Urban Renewal Agency — to whom a bank would not typically lend money without some backing from a proven entity.
"The city takes out the debt in city's name, and the UR agency, through an agreement with the city, takes on that debt (and uses) tax-increment financing to take it back."
The tax-increment mechanism allows local governments to set aside property taxes generated from new businesses and development in a specific district to pay for the area's infrastructure needs.
The bond plan resulted from a Jan. 16 discussion at a joint meeting of the UR Agency and Wood Village City Council.
Aspects of the projects that would be financed through the bond plan have been in progress for months, with the exception of City Hall construction. The proposed 10,000 square-foot building, whose cost is not to exceed $7 million, is set to occupy an approximately 1-acre parcel in the northwestern corner of Donald L. Robertson Park on Northeast Halsey Street. With tweaks to the structure's original design underway, ground will likely be broken by spring.
Work is well underway on an extensive upgrade of Arata Road, for which $390,000 of bond funding would go toward decorative fencing along the thoroughfare. Utility relocation at the old city hall parcel, at a cost of $633,631, has been completed for the mixed residential and commercial project there. The city and Portland General Electric are in the preliminary design stage for relocating power lines underground on Halsey Street, with the project likely to be completed in 18 to 24 months.
Dirks said the bond sale funding plan has generated "a bit of excitement and understandably a bit of anxiousness," as the city has been debt free for more than a decade.
"But with targeted investments into quality projects, we hope we kick off and spur additional development and continue to create a high-quality community for all," Dirks said.
Also on Tuesday, the City Council will consider a resolution regarding the purchase of a 4.6-acre parcel from the Confederated Tribes of Grand Ronde. Purchased for $407,000, the land at Wood Village Boulevard and Arata Road is intended for a nature park to mitigate property consumed by City Hall at Donald L. Robertson Park.
"It will be a nice little amenity for those who live in the city around that area," Dirks said, noting a timeline to develop the park hasn't been finalized. "Our partners in the Grand Ronde tribe have been great in completing this (transaction). It's been a great partnership."
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