Wilsonville begins to strategize how to fund hefty Town Center redevelopment price-tag
The infrastructure improvements the city of Wilsonville has planned for its project to revitalize the Town Center commercial district exceed $80 million in costs, necessitating the local government think creatively to fund this effort.
To do that, the city is starting the process of creating an investment strategy while also updating its plan for urban renewal — the latter being one of the primary ways local governments pay for large-scale redevelopment. Senior Planner Kimberly Rybold said during a Wednesday, May 11, Wilsonville Planning Commission meeting that traditional funding sources like system development charges — one-time fees developers pay the city during construction projects — aren't enough to cover more ambitious efforts.
"We're going to need those (urban renewal) to be that catalyst to kickstart the project. I have a hard time envisioning Town Center coming to fruition without those being in place," Planning Commissioner Ron Heberlein said during the meeting
Urban renewal takes the taxes associated with increases in property values within a designated area and uses the money to pay for public projects. In the case of Town Center, the city wants to morph a car-focused district with considerable space for parking lots into a more attractive destination for bicycles and pedestrians that would be complemented by mixed-used buildings for housing and boutique shops. A project to build a bicycle and pedestrian bridge across the I-5 freeway into Town Center is one of the most expensive projects ($10.8 million) the city has slated, while stormwater improvements are projected to cost over $26 million.
"That's a huge number," Planning Commissioner Andrew Karr said about the costs associated with Town Center redevelopment at the meeting. "I'm very interested to see that funding breakdown and how you see this funding come to fruition."
The city has used urban renewal frequently in recent decades — more than most other cities — to catalyze redevelopment. Wilsonville recently started a program providing incentives to businesses that commit to invest heavily in new operations in town, with an urban renewal district in the nascent Coffee Creek industrial area. More significantly, the city used urban renewal to spur development in the Villebois neighborhood (former Mayor Tim Knapp previously told the Spokesman that Villebois would not exist without urban renewal) and on the east side of town. Property values rose considerably following the creation of those districts.
Matt Lorenzen, the city's economic development manager, explained that municipalities can use urban renewal in areas that are considered to be "blighted." However, he added, the term's statutory definition is vaguely described, leading jurisdictions with the latitude to use it in various ways.
Generally, Lorenzen said that urban renewal is designated for "property within a defined area within a jurisdiction that is essentially underperforming in its ability to contribute to the tax base."
Urban renewal takes a cut from the tax revenue of adjoining districts like Tualatin Valley Fire & Rescue and Clackamas County, though Lorenzen said school districts are protected from tax revenue losses from urban renewal. Those tax districts — which have to sign off on urban renewal before a district goes into effect — can theoretically benefit in the long run if property values have increased considerably by the time the district is closed, Lorenzen added.
While Karr mentioned that there has at times been backlash to urban renewal, Lorenzen said there currently isn't momentum at the state level to regulate it further or get rid of it.
Planning Commissioners expressed support for the use of urban renewal, particularly in the way the city has used it in the past.
"I have been a proponent of urban renewal in the way the city of Wilsonville has done it, especially because I think it has been very well managed and both of the ones that are nearing completing have been highly successful and resulted in incredible projects to make this city what it is today — to allow it to have grown to the size of the city we are without too much pain involved in the process," Karr said.
The city recently created a task force that will help guide the future direction of the use of urban renewal in the city, though that decision will ultimately be up to Wilsonville City Council. The task force is scheduled to meet next on Monday, May 23.
"The belief (among the task force) at this point is that urban renewal is a great candidate for filling funding gaps and catalyzing new development within the Town Center area that's aligned with the vision of the Town Center Plan," Lorenzen said.
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