Potential urban renewal dollars in play as developers seek out $40M in public funds

Developers who want to build over 1 million square feet of buildings on a former Oregon City landfill faced skeptical city commissioners during their first face-to-face public meeting this month.

City Commissioner Rocky Smith, whose experience as an elected official includes the failed Rivers shopping-mall proposal on Rossman Landfill, said there's more work ahead for the developers before they'll have a chance of receiving the commission's support.

Now called North End, the 62-acre, $350 million development is now proposed as a mixed-use project at the intersection of Interstate 205 and Highway 213. A newly proposed three-block Market Street would attempt to mimic some of the vibrant on-street uses of Oregon City's downtown.

"There's amazing elements to this (latest) project. Is this a far better project than the Rivers? Yes, but it's not perfect, not yet," Smith said. "If we approach this in the right way, it could be an urban-renewal project, and you could get more than the $40 million you're asking for, if it's right, but if it's not done in the right way, we could be in another 10 years of legal battles in this town where we'd never get a dime of urban-renewal money."

Summit Development Group has approached Clackamas County officials to discuss potential alternative funding of its proposed 524 apartment units, along with boutique and large-format retail space, through the county roads fund, lottery fund or American Rescue Plan Act dollars. Summit also has asked about an application through the county for EPA brownfields grants.

Rossman Landfill collected about 60% of municipal waste in the Metro region from the 1960s until Oregon DEQ detected contamination of groundwater in 1976 and terminated waste collection in 1983.

Former Mayor Doug Neeley, who is now a member of Oregon City's Urban Renewal Commission, favored allowing city staff to help the developer to pursue grants, but during the April 20 meeting, there wasn't a second member of the commission willing to take Neeley's motion to a vote. Neeley pointed to the possibility that if developer is successful in its pursuit of alternative funding sources, it would ultimately reduce any potential future funding request from the Urban Renewal Commission.

Neeley said the developer's request for a small amount of public funding going to city-staff assistance shouldn't be a problem.

"We won't know whether urban-renewal moneys are required until they find out whether they can get this type of (brownfield) funding," Neeley said.

City Commissioner Frank O'Donnell said he was concerned about the "future financial exposure of the city of Oregon City, and there may be some, because the trust fund doesn't pay for everything in perpetuity." Now serving as chair of the Urban Renewal Commission, O'Donnell and other commissioners wanted to hear more about the process for obtaining grants before authorizing assistance from city staffers.

Seth Henderson of Summit said he's been working on this development for over two years and his development group has spent $2.6 million on planning, engineering, due diligence and other efforts necessary to receive unanimous approval for the land-use proposal from Oregon City's Planning Commission on July 26, 2021. However, he says that the development will require $40 million in public funds, or it won't be built.

"Prior to proceeding further with the financing and permitting of this development, we need to address the significant funding shortfall, which currently forecasts this development as a negative private investment opportunity due to the restrictions surrounding construction on a landfill," Henderson wrote to commissioners.

In an interview with Pamplin Media Group, Henderson said the project has about another year to resolve its funding shortfall. In that time, the Oregon City Commission will see the turnover of at least two members, with the recent resignation of Mayor Rachel Lyles Smith and Commissioner Adam Marl's plan to not run for the election in November.

Summit Development's president expressed optimism that city commissioners would eventually support the project unanimously.

"I would hope that there are benefits from this project that each of the commissioners will see," Henderson said. "It's hard to know where you sit when the people who are judging the value of the project are constantly changing."