Urban renewal district plan may go to the voters
On two occasions over the past 40 years the Newberg City Council has created an urban renewal district. Each time adoption of the URD was referred to the city's voters, who defeated the city's plans outright.
The city is hoping third time's the charm.
After a yearslong process, the Newberg City Council adopted creation of an URD in mid-April and, again, the controversial tax funding mechanism is under attack.
But the man responsible for leading the charge to rescind the first two URDs, Joe Brugato, has passed on, leaving another Newberg resident to take up the charge. His name is William Rosacker and he views creation of a URD as a giveaway to a multibillion-dollar company.
"I never worked at the mill but know many of you," Rosacker said in a recent Facebook post. "The mill is gone but the stink still goes on. Newberg wants to take taxpayer funds to assist the looters in making a fortune. I am trying to fight back with a referendum petition to put it on the ballot."
The "looters" Rosacker is referring to is the CDC Corp., the company that purchased the defunct paper mill on Wynooski Street from WestRock several years ago. Rosacker claims that the URD would create infrastructure in and around the waterfront that would make CDC's land more valuable. The company has for the past two years been demolishing the massive mill and will soon undertake environmental cleanup of the land, which has been home to first lumber and then paper mills for more than a century.
On April 19, Rosacker filed the necessary paperwork with the city to be named chief petitioner and begin gathering signatures to refer formation of a URD to the voters. He must gather the signatures of 1,610 registered voters by May 18 in order to place the referendum on the November general election ballot.
In addition to soliciting signatures directly, Rosacker has set up a system where people can download a petition from his website Choice for Newberg, sign it and deliver it to Aero Lock and Key in the parking lot at the Newberg Fred Meyer store.
The response to the petition so far has been favorable, Rosacker said.
"People are generally tired of politics," he added. "When asked directly to sign the petition, about 90% of people sign it. The current council is not experienced or stable. I think the citizens should weigh in."
The longtime Newberg resident said he has been watching the city at it progressed through the process of forming a URD but did not volunteer to serve on the committee and effect change there.
"I attended Zoom meetings without comment," he said. "I listen to many meetings after the fact."
City officials said the effort to create an urban renewal district actually began in 2015, the council formed the Ad Hoc Urban Renewal Advisory Committee in 2020 to gather information from prior URD efforts and community discussions, and the city prominently displayed on its website information on how the URD would affect its Downtown Improvement Plan, Strategic Tourism Plan, Riverfront Master Plan, Community Visioning program and mesh with its infrastructure plan.
"All ad hoc committee meetings were public meetings open to public participation for input and feedback," city officials said.
No one attended the many meetings.
"Eighteen public meetings without comment," John Bridges, chairman of the Urban Renewal Citizens Advisory Committee, said in an email. "Also, at each taxing district at least twice without objection."
In his view, Rosacker says development of the mill portion of the URD should be undertaken by the CDC as "they are good at it and they don't need the city involved, nor any money until they have a proposal."
A boardwalk aspect of the URD should be developed by the Chehalem Park and Recreation District, he said, adding "they have a huge tax base, and if it is a priority (they) could do it."
Rosacker blamed the city's desire to form a URD on the high cost of developing land in Newberg.
"The commercial properties would have been updated by now if the cost of doing business in Newberg was reasonable," he said. "I am a contractor, (system development charges) are ridiculously expensive here. I looked into starting a breakfast burrito cart .... SDC's would be $34,000!"
Bridges commented that misperceptions and misinformation continue to follow the URD despite the outreach to the public.
What particular misinformation?
"That it is a $125 million tax," he said. "That voters were not listened to ... That someone said voters are too dumb to understand."
Bridges took particular umbrage at the notion that the city didn't refer the URD plan to the voters because it was too complicated for them to understand.
"No, in my opinion, they just did what the voters elected them to do," he said. "No different than budgeting work that the council does."
Over the past four years the city has gone through myriad steps toward formation of a URD, including creating the Ad Hoc Urban Renewal Citizens Advisory Committee, which wrote a feasibility study on the plan. In a 351-page document presented before the City Council on April 18, staff explained the process by which the city came to the point of requesting that the council approve an urban renewal plan. The council approved the ordinance.
The impetus for creation of an urban renewal program was identified as a potential economic development tool by a number of agencies, including the Newberg Economic Development Strategy, Newberg Downtown Improvement Plan and A NewBERG Community Vision, as well as the city's riverfront master plan and housing needs analysis.
What is an urban renewal district?
An urban renewal district is an economic development tool that helps cities revitalize parts of town using something called tax increment financing, Community Development Director Doug Rux explained. He stressed that tax increment financing does not mean property owners will incur an additional tax, but rather that a portion of future proceeds from property taxes on land within the urban renewal area are redirected to the city for revitalization efforts.
"It is a redistribution of taxes that are already being paid to the taxing districts," he said. "The taxes that are redistributed go to the urban renewal agency to perform the improvements listed in the urban renewal plan."
The amount of property tax collections going to each agency in the urban renewal district — such as the city, local school districts and Tualatin Valley Fire & Rescue — are frozen at their existing level. Any taxes collected above that base are used to pay for urban renewal.
City officials stress that the decrease in tax proceeds taxing districts will experience can be partially or wholly offset by the property taxes paid on new construction in the area, of which there has been a great deal over the past two years.
The city's new attempt at urban renewal is centered on three areas that total approximately 540 acres and includes the downtown area, stretches of Blaine and River streets and the confines of the city's riverfront master plan that have been identified as "blighted" by the city.
Projects that could be undertaken range from streetscape and storefront improvements to rehabilitation of existing buildings and working with developers on improving properties. URD money also could be put toward construction or improvement of streets, sidewalks, utilities and parks.
What constitutes 'blight?'
Oregon law states that blighted areas are designated as such "by reason of deterioration, faulty planning, inadequate or improper facilities, deleterious land use or the existence of unsafe structures, or any combination of these factors, are detrimental to the safety, health or welfare of the community."
Blight can take the form of areas that have fallen into disrepair, are overcrowded, have inadequate transportation systems, be prone to flooding, have experienced decreased property values, are economically dislocated and house defective or poor quality construction, among other descriptions.
In arguing against formation of URDs the first two times, Brugato said the city designated areas as blighted that were not but were included because they would soon be developed and, therefore, would generate increased tax proceeds for the city.
'Consult and confer'
Under state law, the city was required to forward its urban renewal plan to all the taxing districts that would be affected by it, including the Chehalem Park and Recreation District, Newberg School District, Portland Community College, Yamhill County, Yamhill Soil and Water Conservation District, Tualatin Valley Fire & Rescue, Willamette Education Service District and Yamhill County Extension Service. The city also offered to do presentations before the boards of directors of the various districts.
The WESD and PCC declined presentations. The YSWCD said it had concerns about a loss of revenue under the URD plan and urged the city to find an alternative funding source for improvements. The YSWCD stands to lose about $355,000 in proceeds over the 30-year life of the URD, but city officials advised that development outside the URD would likely backfill that amount.
Bridges added that four of the taxing districts had representatives on the Urban Renewal Citizens Advisory Committee.
The council adopted an ordinance approving an urban renewal plan and it went into effect in mid-May, the county has recorded it and now it will be sent to the Newberg Urban Renewal Agency, as is required under state law.
Even though the plan has been implemented, revenue will not begin to flow to the city until the fall when taxes are assessed by the county. In the meantime, a budget will need to be prepared for fiscal year 2023-24 to recognize revenue received and expenditures meted.
"It would receive a portion of the taxes the assessor collects this fall," Bridges said. "It is not a new tax, just dividing up what is already in existence. In the early years, the sum divided off is small so the implementation would be small."
Bridges said it will be one to five years before residents will see any improvements within the boundary of the URD that contains hundreds of tax lots between downtown and the riverfront.
But first, sufficient money must accrue in order to undertake projects.
"The Urban Renewal Report that accompanies the Urban Renewal Plan has projections on when projects can occur based on tax increment revenue collection," the city said in the release. "Projects do not start immediately as revenue needs to be generated to sell urban renewal bonds for project construction."
County's involvement in the process
Because the URD initially included a small portion of land outside the city limits, the city approached the Yamhill County Board of Commissioner for its blessing in July 2021. Instead, the city got an earful from Commissioner Lindsay Berschauer, who led the charge to pass a resolution approving the plan with the caveat that the plan be referred to the voters. The city passed a resolution the following month to send the question to the voters in November, but then rescinded that resolution later in the month after conferring with counsel.
Instead of sending the plan to the voters, the council adjusted the boundaries of the URD to exclude property outside the city limits, eliminating the need for approval by the county.
"The charter does not require a public vote to approve an urban renewal plan," the city said, adding that it's unnecessary as state laws are in place to refer the plan to the voters if they choose.
Selling bonds for construction?
City officials countered Rosacker's insistence that the city was taking on huge loans to fund projects within the URD.
"Urban renewal uses cash on hand from tax increment revenues or sells urban renewal bonds to finance projects listed in the urban renewal plan. There are no loans to the city. …," it said in the release. "The projects constructed by the urban renewal program are listed in the urban renewal plan and generated revenue cannot be spent outside of the urban renewal district boundary."
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