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City council approves housing strategy plan and creates Urban Renewal Agency

PMG PHOTO: ANNA DEL SAVIO - The Scappoose city council unanimously approved the creation of an Urban Renewal Agency on Monday, July 15. The council first heard a motion to establish the agency in May.The Scappoose city council approved the creation of an urban renewal agency this week. Creating the agency is the next step toward adopting an urban renewal plan, which would allocate property taxes to development projects in the city.

The goal of the urban renewal plan, if approved, is to funnel monies collected through tax increment financing, the main operating tool of urban renewal districts, toward infrastructure projects in the city.

During the meeting, the city council also formally adopted the Housing Strategy Implementation Plan, which was developed through a grant from the Oregon Department of Land Conservation and Development. The Portland-based consulting group ECONorthwest created the plan using grant funds, but the available money only took the city partway. With the current plan, the city has a list of possible tools for improving housing availability.

Adopting the plan does not mean any of the projects will take place. City Planner Laurie Oliver said she had hoped the city would be "at a place where we're adopting an ordinance right now."

"I'm grateful that we got the grant funding, but the budgeted amount for them [ECONorthwest] was very limited and their time was very limited, so we did what we could and there's money in the budget to take the next step," Oliver said.

Funding set aside in the city's budget will allow Oliver to complete the next phase of the plan. The $25,000 will go toward the next steps defined for the tools listed in the current plan.

One key tool noted in the report is the use of an urban renewal plan, which could provide funding or financial incentives for housing and mixed-use development in the city's downtown area. A technical advisory committee recommended that urban renewal and a local tax exemption for nonprofit affordable housing be implemented soon.

ECONorthwest and the committee determined that a number of other tools could be useful in the future to assist with development. Those include using money from the enterprise zone betterment fund to support workforce housing, levying a 1% construction excise tax on new commercial and industrial development projects, creating property tax exemptions for new housing development, or making the permitting process easier for new developments.

Though the housing strategy implementation plan and urban renewal plan overlap in some areas, the plans are separate.

The urban renewal reports and plans provided to city council so far have been preliminary drafts provided for feedback. The final plan will be prepared by Elaine Howard, a consultant specializing in urban renewal.

Cities and counties use urban renewal as a tool to generate money in an area that is deemed "blighted" — a term defined by state law as being underdeveloped or underutilized. Urban renewal plans, which outline specific areas and boundaries, use tax-increment financing to generate money. With tax-increment financing, properties within the urban renewal area have their assessed property value frozen during the life of the urban renewal agency. As the property value of the land increases, taxes generated above the frozen rate go toward the urban renewal district.

That means that overlapping jurisdictions — including the Port of Columbia County, library, the Columbia 911 Communication District, and others — would see their property tax revenue remain static within the urban renewal zone.

Overlapping tax districts could be cut off from more than $41 million in tax revenue by the end of the 30-year plan, according to projections from ECONorthwest. More than $17 million of that would be taken from the Scappoose school district, but state funds would make up that loss.

Urban renewal "isn't going to change anything for the school district, it's going to change where it (the money) comes from," explained Scappoose School District Business Manager Mitch Neilson.

The largest portion of funds from urban renewal, close to $8 million, would go toward water and sewer improvements, if the final plan follows the committee's recommendations. More than $10 million would go toward sidewalks and bike routes, trails, East Columbia Avenue, and other transportation projects.

The recommended affordable housing incentives in the housing plan aren't in the urban renewal draft, but that could still change.

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