City Council Packet - 04/01/2008
City of Tigard, Oregon • 13125 SW Hall Blvd. • Tigard, OR 97223
TIGARD
TIGARD CITY COUNCIL
SPECIAL MEETING
April 1, 2008
COUNCIL MEETING WILL BE TELEVISED
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Phone: 503.639.4171 Fax: 503.684.7297 9 www.tigard-or.gov TTY Relay: 503.684.2772
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City of Tigard
Tigard Special Meeting - Agenda
TIGARD CITY COUNCIL
MEETING DATE AND TIME: April 1, 2008 - 6:30 p.m.
MEETING LOCATION: City of Tigard - Town Hall, 13125 SW Hall Blvd., Tigard, OR 97223
PUBLIC NOTICE:
Anyone wishing to speak on an agenda item should sign on the appropriate sign-up sheet(s). If no sheet is
available, ask to be recognized by the Mayor at the beginning of that agenda item. Citizen Communication
items are asked to be two minutes or less. Longer matters can be set for a future Agenda by contacting either
the Mayor or the City Manager.
Times noted are estimated; it is recommended that persons interested in testifying be present by 7:15 p.m. to
sign in on the testimony sign-in sheet. Business agenda items can be heard in any order after 7:30 p.m.
Assistive Listening Devices are available for persons with impaired hearing and should be scheduled for
Council meetings by noon on the Monday prior to the Council meeting. Please call 503-639-4171, ext. 2410
(voice) or 503-684-2772 (I'DD - Telecommunications Devices for the Deaf).
Upon request, the City will also endeavor to arrange for the following services:
• Qualified sign language interpreters for persons with speech or hearing impairments; and
• Qualified bilingual interpreters.
Since these services must be scheduled with outside service providers, it is important to allow as much lead
time as possible. Please notify the City of your need by 5:00 p.m. on the Thursday preceding the meeting by
calling: 503-639-4171, ext. 2410 (voice) or 503-684-2772 (FDD - Telecommunications Devices for the Deaf).
SEE ATTACHED AGENDA
TIGARD CITY COUNCIL AGENDA -April 1, 2008
Cityof Tigard 13125 SAX/ Hall Blvd., Tigard, OR 97223 1 503-639-4171 1 www.tigard-or.gov I Page 1 of2
City of Tigard
Tigard Special Meeting - Agenda
TIGARD CITY COUNCIL
i
MEETING DATE AND TIME: April 1, 2008 - 6:30 p.m.
MEETING LOCATION: City of Tigard - Town Hall, 13125 SW Hall Blvd., Tigard, OR 97223
6:30 PM
1. SPECIAL MEETING
1.1 Call to Order - City Council
1.2 Roll Call
1.3 Pledge of Allegiance
1.4 Council Communications & Liaison Reports
1.5 Call to Council and Staff for Non-Agenda Items
2. DISCUSSION OF TRANSPORTATION AND URBANIZATION ISSUES WITH METRO COUNCIL
PRESIDENT BRAGDON AND COUNCILORS HOSTICKA AND HARRINGTON
a. Staff Report - Community Development Department
b. Discussion on
> Unincorporated Urbanization
> Need for Redevelopment Regional and Town Centers and Transit Corridors
> Transportation
3. EXECUTIVE SESSION: The Tigard City Council may go into Executive Session. If an Executive Session
is called to order, the appropriate ORS citation will be announced identifying the applicable statute. All
discussions are confidential and those present may disclose nothing from the Session. Representatives of the
news media are allowed to attend Executive Sessions, as provided by ORS 192.660(4), but must not disclose
any information discussed. No Executive Session may be held for the purpose of taking any final action or
making any final decision. Executive Sessions are closed to the public.
8:00 PM
4. ADJOURNMENT
1\ADM\Cathy\CCA\2008\080401 special.doc
TIGARD CITY COUNCIL AGENDA - April 1, 2008
Cityof Tigard 13125 SW Hall Blvd., Tigard, OR 97223 503-639-4171 www.tigard-or.gov Page 2 oft
City of Tigard
Tigard Special Meeting - Agenda
TIGARD CITY COUNCIL
MEETING DATE AND TIME: April 1, 2008 - 6:30 p.m.
MEETING LOCATION: City of Tigard - Town Hall, 13125 SW Hall Blvd., Tigard, OR 97223
d#
PUBLIC NOTICE:
Anyone wishing to speak on an agenda item should sign on the appropriate sign-up sheet(s). If no sheet is
available, ask to be recognized by the Mayor at the beginning of that agenda item. Citizen Communication
items are asked to be two minutes or less. Longer matters can be set for a future Agenda by contacting either
the Mayor or the City Manager.
Times noted are estimated; it is recommended that persons interested in testifying be present by 7:15 p.m. to
sign in on the testimony sign-in sheet. Business agenda items can be heard in any order after 7:3012m
Assistive Listening Devices are available for persons with impaired hearing and should be scheduled for
Council meetings by noon on the Monday prior to the Council meeting. Please call 503-639-4171, ext. 2410
(voice) or 503-684-2772 (I'DD - Telecommunications Devices for the Deaf).
Upon request, the City will also endeavor to arrange for the following services:
• Qualified sign language interpreters for persons with speech or hearing impairments; and
• Qualified bilingual interpreters.
Since these services must be scheduled with outside service providers, it is important to allow as much lead
time as possible. Please notify the City of your need by 5:00 p.m. on the Thursday preceding the meeting by
calling: 503-639-4171, ext. 2410 (voice) or 503-684-2772 (TDD - Telecommunications Devices for the Deaf).
SEE ATTACHED AGENDA
TIGARD CITY COUNCIL AGENDA - April 1, 2008
City of Tigard 13125 SW Hall Blvd., Tigard, OR 97223 503-639-4171 www.tigard-or.gov Page 1 of2
City of Tigard
Tigard Special Meeting - Agenda
TIGARD CITY COUNCIL
MEETING DATE AND TIME: April 1, 2008 - 6:30 p.m.
MEETING LOCATION: City of Tigard - Town Hall, 13125 SW Hall Blvd., Tigard, OR 97223
6:30 I'M
1. SPECIAL MEETING
1.1 Call to Order - City Council
1.2 Roll Call
1.3 Pledge of Allegiance
1.4 Council Communications & Liaison Reports
1.5 Call to Council and Staff for Non-Agenda Items
2. DISCUSSION OF TRANSPORTATION AND URBANIZATION ISSUES WITH METRO COUNCIL
PRESIDENT BRAGDON AND COUNCILORS HOSTICKA AND HARRINGTON
a. Staff Report - Community Development Department
b. Discussion on
> Unincorporated Urbanization
> Need for Redevelopment Regional and Town Centers and Transit Corridors
> Transportation
3. EXECUTIVE SESSION: The Tigard City Council may go into Executive Session. If an Executive Session
is called to order, the appropriate ORS citation will be announced identifying the applicable statute. All
discussions are confidential and those present may disclose nothing from the Session. Representatives of the
news media are allowed to attend Executive Sessions, as provided by ORS 192.660(4), but must not disclose
any information discussed. No Executive Session may be held for the purpose of taking any final action or
making any final decision. Executive Sessions are closed to the public.
4. ADJOURNMENT
1:\ADM\Cathy\CCA0008\080401 special.doc
TIGARD CITY COUNCIL AGENDA - April 1, 2008
City of Tigard 13125 SW Hall Blvd., Tigard, OR 97223 503-639-4171 www.tigard-or.gov Page 2 of2
,a
.6
City of Tigard
Tigard Special Meeting - Agenda
TIGARD CITY COUNCIL
MEETING DATE AND TIME: April 1, 2008 - 6:30 p.m.
MEETING LOCATION: City of Tigard - Town Hall, 13125 SW Hall Blvd., Tigard, OR 97223
PUBLIC NOTICE:
Anyone wishing to speak on an agenda item should sign on the appropriate sign-up sheet(s). If no sheet is
available, ask to be recognized by the Mayor at the beginning of that agenda item. Citizen Communication
items are asked to be two minutes or less. Longer matters can be set for a future Agenda by contacting either
the Mayor or the City Manager.
Times noted are estimated; it is recommended that persons interested in testifying be present by 7:15 p.m. to
sign in on the testimony sign-in sheet. Business agenda items can be heard in any order after 7:30 p.m.
Assistive Listening Devices are available for persons with impaired hearing and should be scheduled for
Council meetings by noon on the Monday prior to the Council meeting. Please call 503-639-4171, ext. 2410
(voice) or 503-684-2772 (TDD - Telecommunications Devices for the Deaf).
Upon request, the City will also endeavor to arrange for the following services:
• Qualified sign language interpreters for persons with speech or hearing impairments; and
• Qualified bilingual interpreters.
Since these services must be scheduled with outside service providers, it is important to allow as much lead
time as possible. Please notify the City of your need by 5:00 p.m. on the Thursday preceding the meeting by
calling: 503-639-4171, ext. 2410 (voice) or 503-684-2772 (TDD - Telecommunications Devices for the Deaf).
SEE ATTACHED AGENDA
TIGARD CITY COUNCIL AGENDA - A rill, 2008
Cityof Tigard 13125 SW Hall Blvd., Tigard, OR 97223 503-639-4171 www.tigard-or.gov Page 1 oft
City of Tigard
Tigard Special Meeting - Agenda
TIGARD CITY COUNCIL
MEETING DATE AND TIME: April 1, 2008 - 6:30 p.m.
MEETING LOCATION: City of Tigard - Town Hall, 13125 SW Hall Blvd., Tigard, OR 97223
630 PM
1. SPECIAL MEETING
1.1 Call to Order - City Council
1.2 Roll Call
1.3 Pledge of Allegiance
1.4 Council Communications & Liaison Reports
1.5 Call to Council and Staff for Non-Agenda Items
2. DISCUSSION OF TRANSPORTATION AND URBANIZATION ISSUES WITH METRO COUNCIL
PRESIDENT BRAGDON AND COUNCILORS HOSTICKA AND HARRINGTON
a. Staff Report - Community Development Department
b. Discussion on
> Unincorporated Urbanization
> Need for Redevelopment Regional and Town Centers and Transit Corridors
> Transportation
3. EXECUTIVE SESSION: The Tigard City Council may go into Executive Session. If an Executive Session
is called to order, the appropriate ORS citation will be announced identifying the applicable statute. All
discussions are confidential and those present may disclose nothing from the Session. Representatives of the
news media are allowed to attend Executive Sessions, as provided by ORS 192.660(4), but must not disclose
any information discussed. No Executive Session may be held for the purpose of taking any final action or
making any final decision. Executive Sessions are closed to the public.
4. ADJOURNMENT
11ADM\Cathy\CCA\2008\080401 special.doc
TIGARD CITY COUNCIL AGENDA - Apri11, 2008
Cityof Tigard 13125 SW Hall Blvd., Tigard, OR 97223 503-639-4171 www.tigard-or.gov Page 2 of2
Agenda Item No. ' l
Meeting of
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City of Tigard
Tigard Special Meeting - Minutes
TIGARD CITY COUNCIL
MEETING DATE AND TIME: April 1, 2008 - 6:30 p.m.
MEETING LOCATION: City of Tigard - Town Hall, 13125 SW Hall Blvd., Tigard, OR 97223
6:30 PM
1. SPECIAL MEETING
Tigard City Council Present: Mayor Dirksen, Councilor Sherwood, Councilor Woodruff,
Councilor Buehner and Councilor Wilson
Tigard Staff Present: Assistant City Manager Newton, Assistant Community Development
Director Bunch, Assistant Planner McCarthy, Associate Planner Roberts, Principal
Planner Nachbar and Deputy Recorder Krager -
Metro Council Present: Council President Bragdon, Councilor Hosticka, and Councilor Harrington
Metro Staff Present: Policy Analyst Ray and Planner McArthur
Mayor Dirksen called the meeting to order and thanked the guests from Metro for attending. He said staff
prepared an agenda with three items but welcomed additional topics. Council President Bragdon suggested
discussing the local share on the ballot measure and the grant program for natural areas.
2. DISCUSSION OF TRANSPORTATION AND URBANIZATION ISSUES WITH METRO COUNCIL
PRESIDENT BRAGDON AND COUNCILORS HOSTICKA AND HARRINGTON
Mayor Dirksen opened the discussion on urbanization in unincorporated areas. He said at a recent MPAC
meeting he requested an amendment to the Great Communities Resolution be considered which says that new
urban areas should be planned and developed within the confines of municipal governments. Metro Councilor
Harrington noted that it passed unanimously.
Councilor Sherwood commented on unincorporated Metzger and suggested it would be more suitable for
Washington County's urban renewal efforts than the Bethany area.
Council President Bragdon said trends show that areas without municipal governance decline. He said the hard
part for citizens is connecting the dots about the source of services. He recalled attending an open house
meeting two years ago in Bethany where the services people said they wanted were libraries, better police
coverage and code enforcement, which sounded a lot to him like city services.
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Councilor Hosticka said conditioning new areas has strong support from Metro Council. He said the difficulty
is what to do with areas already inside the Urban Growth Boundary and this will be discussed at the upcoming
urbanization forum.
Metro Council President Bragdon asked, "Don't you also have to activate the citizens and taxpayers of a city,
because there is a cross-subsidy going on that is not fair to them?" He said it is not just about government and
mentioned the recent press coverage of issues between Beaverton and Nike which the press made into a
"government vs. the people" issue. He said it was really a fiscal matter, people in one area subsidizing people in
another, with perhaps neither realizing it.
Councilor Buehner gave an example of the Washington County Sheriff's East Precinct office, located on the
west side of Beaverton. She said those officers need to drive five miles through Beaverton or Tigard to get to
West Slope, Raleigh Hills or Metzger. She said the Enhanced Sheriff's Patrols are not bringing the level of
police service up to what it is in the cities and in general, the cities are picking up the difference.
Mayor Dirksen said the studies have been done; the issue is getting someone to do something about it. He said
the state needs to get involved and get counties to say they are either not going to provide urban services or
they are going to become urban service providers. Metro Councilor Harrington said she was aware of the
studies but noted there were credibility concerns.
Councilor Wilson said people know what the services are; they just don't know how they are paid for. He
noted that some people don't even know.whether they are living within the city limits. Mayor Dirksen said the
City gets letters from people saying they live in the unincorporated area and know they don't pay for parks or
the library but can use them anyway - so why would they want to annex and start paying for things?
Council President Bragdon asked about city residents that are paying for these services, saying "When will they
rise up and demand that it changes?" Councilor Wilson said, "Those of us who are paying for the services for
everyone are eventually going to say, `Enough is enough.' but I don't know if we can legally refuse to send a
police officer or fix a water line break."
Councilor Woodruff said if it costs more people are going to choose not to join a city or create their own. He
said you can appeal to the fairness issue but people make decisions based on cost. Councilor Wilson said,
"People will however, vote themselves services that they want. As a practical matter it may be easier to form
special districts to provide those services that are not technically the City's. If it was financially neutral maybe
people wouldn't oppose annexation."
Metro Councilor Harrington said she doesn't see a solution yet. She said some residents of her district live in
the Bethany area and want services such as parks. But she said they want to know, "What would I get out of it
now?" rather than thinking about the services they may need as they and their children get older. She said she is
trying to educate citizens that there are services above the basic ones they currently receive.
Assistant Community Development Director Bunch said his research showed that it takes decades to begin to
resolve the issue. He said southern California experienced significant problems because of the growth of
unincorporated areas. They found that as these areas develop they detract from the quality of life and the ability
of existing cities to function well. He said they started legislation to deal with large unincorporated islands
inside municipalities, particularly in Santa Clara County.
Mr. Bunch said Washington County needs to stop urbanizing unincorporated areas and stabilize the degree of
services received by the unicorportated areas. He said the Counties have to realize the significant fiscal
challenges of providing these municipal-level services. Mr. Bunch said to resolve the issue the state, counties,
TIGARD CITY COUNCIL MINUTES - April 1, 2008
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Metro and cities need to address some of the annexation statutes, especially near the Portland area. He said
eventually addressing the annexation abilities of the cities will also be important to achieve the Metro 2040 goals
and objectives.
Mayor Dirksen noted that King County has made improvements in the last ten years to achieve more stability
in the county governance and large unincorporated areas are now choosing to become part of cities. In
response to a question from Mayor Dirksen• about what was different about their processes or requirements,
Mr. Bunch mentioned four things:
• King County realized that they could not continue to provide municipal level services.
• Cities were willing to participate
• Growth Management Act
• Equalization of sales taxes
Metro Councilor Hosticka asked if the tax equalization was in the nature of revenue sharing. Mr. Bunch said he
thought it was a regional or county-wide sales tax administered through the state and utilized to provide service
enhancements over time. He said financing is one of the challenges for this area: He asked how
unincorporated areas such as Metzger and Aloha can get services appropriate to their level of needs once they
do come into cities. And if they don't, how can they be stabilized to prevent further decline?
In reponse to a question from Councilor Buehner, Metro Council President Bragdon said the percentage of
Multnomah County that is still unincorportated is very small, only 2-3% in terms of population.
Mayor Dirksen asked theMetro officials to do what they can to help with this issue and exert influence at the
state and county levels. Metro Council President Bragdon said there was a strong feeling among the Council
that future expansion areas should be conditioned.
Metro Councilor Hosticka suggested a discussion on using a regional infrastructure pool. He said this was
originally designed to encourage infrastructure in Centers but it might help provide money for underserved or
blighted unincorporated areas. He gave two examples of how Metro has used regional revenue raising capacity
to assist with issues on a local level - the Open Spaces bond levy local share, and the construction excise tax,
which is levied regionally but distributed to jurisdictions based upon their planning needs. He also suggested a
regional Systems Development Charge, saying, "You've got a huge revenue raising capacity in the entire region
and a case could be made that these are regional issues."
Council President Bragdon said there used to be a bias, heavily financed by the federal government, towards
building new things, which created many of the roads and infrastructure systems we are now struggling to
maintain. He said the legislature makes urban renewal harder to do and the current types of infrastructure are
not very well served by the traditional funding mechanisms.
Councilor Buehner said she was concerned about the State preempting local taxes. Metro Council President
Bragdon said it is crucial for legislators to understand the importance of local government
Metro Councilor Hosticka said there is a recognization at the state level that there is a huge subsidy from the
urban areas to the rural areas of the state. He said Metro worked very hard in the last legislative session to
create a metropolitan agenda which we all need to keep working on. He said the challenge in approaching the
legislature is to work together towards the same agenda and stop fighting among ourselves.
Councilor Sherwood asked, "What would you like to see us do?
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Metro Councilor Hosticka said the Washington County Urbanization Forum is a good place to start working on
a common legislative agenda and Clackamas County is talking about doing the same thing.
Councilor Sherwood mentioned that other councilors are taking on more of the Mayor's duties so he can attend
more meetings and make sure the City of Tigard is represented at the table. Metro Council President Bragdon
said that is very effective.
Assistant Community Development Director Bunch remarked that the County said in its Washington County
2000 Plan that it was not an urban services provider. They reiterated this in several updates to the Plan. Yet a
population the size of Corvallis (55,000) has been accommodated in unincorporated Washington County. He
said there is a need for mayors and county commissioners to sit around a table without the special interests and
come to an agreement about common legislative issues. Metro Council President Bragdon said this is a
leadership opportunity for the mayors.
Metro Council President Bragdon mentioned that other jurisdictions are also working on fiscal challenges to
implement their design vision for their downtown areas. He said Metro partnered with the American
Association of Architects and others at the United States Conference of Mayors to put together a two-day
Design Problems Seminar and said that was something Metro can provide.
Mayor Dirksen said in most cases the issue in the City of Tigard is not what do we want to do, it's how to pay
for it. Metro Councilor Hosticka said from Metro's perspective at the regional level, development is subsidized
everywhere and we're trying to get some good data to look at comparative subsidies. He said his intuitive guess
is that you get more dollars for centers as opposed to development along the edge. He said there is not a
regional investment pool yet, although there is transit-oriented development program and MTIP funding. He
said he felt there was better return on investment in centers rather than on the edges.
Mayor Dirksen agreed, saying there would be a better return on the infrastructure dollars but then you run up
against the problem where it is more expensive for private developers to redevelop existing centers than build
in greenfields.
Councilor Sherwood said that their trip to Port Moody was successful in that members of the City Center
Advisory Committee and Council both got to view what was being done successfully there. Mayor Dirksen
said his goal was to have everyone get the same mental picture, pleasant, aesthetic, higher-density development
that still maintains a smaller-community feel.
Councilor Buchner noted that most of the parking in Port Moody was underground. Mayor Dirksen noted that
circulation is a problem in Tigard's downtown and the railroad will not let the City make more at-grade
crossings. He described an idea to take the Ash Avenue extension off grade under the commuter railroad
station and put in another layer of parking, such as at the Salem Capital Mall. He said it would be served by the
street without having to construct ramps. He said there were several possible sources of funding such as
transit, Tri-Met, urban renewal, and streets.
Metro Council President Bragdon said structured parking is a great answer. He said the lack of parking is a
major issue in many cities. He asked, "What if we expended money on structured parking instead of
highways?"
Councilor Wilson said there is plenty of private sector money but there must be a return on the investment.
Assistant Community Development Director Bunch said Tigard has just completed a Highway 99W Corridor
Improvement and Management Plan. He related a conversation with a developer who wanted to place a 9-12
story building in the Tigard Triangle and praised Tigard's macro transportation advantages. When Mr. Bunch
TIGARD CITY COUNCIL MINUTES - April 12 2008
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explained that the floor area ratio there was .4 instead of the 1.2 - 1.4 floor area ratio due to the limited capacity
of the state freeway system and highway 99W, he said Tigard had "macro transportation problems as well." So
we have both advantages and problems. He said Tigard has come to the conclusion that the best hope for the
downtown is light rail and effective transit. He said Tigard has limited capacity on 99W even if the lanes are
widened because latent capaticity will use it up. Light Rail or some other kind of transit improvement is
essential.
Mayor Dirksen said the obvious choice for the next phase of light rail is extending it to Tigard where it can
serve 70,000 people, or 100,000 if extended to Sherwood.
Metro Council Hosticka said Metro is undertaking a high-capacity transportation study.
In response to a question from Metro Councilor Harrington about. the number of bus lines that run through
Tigard, Councilor Sherwood said there are four.
Councilor Buchner said she gave TriMet General Manager Hanson of a tour of Tigard showing him the new
growth that has occurred and the lack of bus service. She said he was not aware of the growth and density.
Councilor Wilson also mentioned that the densification of the edge - "the urban crust." He mentioned the area
between Scholls Ferry and Barrows Road, which has tremendous growth but no bus service.
Assistant Community Development Director Bunch noted that Tigard has some of the highest traffic volumes
in the state. Mayor Dirksen showed a map of 99W as it bisects Tigard noting that traffic is almost a barrier to
commercial customers along 99W rather than a conduit. He said the City will be looking at changing the
zoning in some areas to high-density residential from commercial, which could be moved to the center and off
the corridor.
Mayor Dirksen handed out Tigard Traffic Volume Factoid Cards that were prepared by planning staff.
Metro Councilor Hosticka asked, "Since we probably cannot build our way out of congestion and fuel prices
are probably not going to go down, at what point do you have to start collapsing people's driving and provide a
fuller range of services closer to where they live?"
Assistant Community Development Director Bunch said the current traffic congestion is the contraining factor
to developing the Tigard Triangle.
Metro Council President Bragdon said the solution to the transportation issues will be hundreds of little things.
Mayor Dirksen said he recognizes that ODOT is great at doing big projects such as state highways but Tigard
doesn't need big projects. He said, "Maybe ODOT shouldn't be doing this planning."
Metro Councilor Hosticka asked how the Tigard Council avoided a referendum when the gas tax was passed.
The Councilors noted:
• Tigard citizens know that Highway 99W is a blighted area and they want the interesection fixed.
• Council was comfortable putting in a gas tax because they knew it could be referred.
• The gas tax contains a sunset clause and there is a specific project identified.
• The City didn't have time for a referendum because it made sense to fix some of the problems
with the Greenburg/99W intersection while work is being done to improve the nearby
Hall/99W intersection.
Mayor Dirksen said both a referral and initiative failed to get enough signatures. Metro Councilor Hosticka
noted that often elected bodies are afraid of the citizens so they refer it on their own. Councilor Buchner
TIGARD CITY COUNCIL MINUTES - April 1, 2008
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said, "It came from a citizen commission." Councilior Wilson said surveys show residents say this is
Tigard's worst problem.
3. OPEN SPACES BALLOT MEASURE AND LOCAL SHARE
Councilor Sherwood asked the Metro representatives if they were aware that Tigard wants to finish the
Fanno Creek Trail this year. Council said Tigard's local share of the regional parks levy was going towards
that goal.
Metro Council President Bragdon said Oregon is in a good position as the federal reauthorization for
transportation is upcoming. He said there was a big shift that may make more dollars available for trails and
non-motorized forms of transportation. He said Oregon's legislators are asking for a package to present to
the Country as a model and Metro will prepare a coherent package by the end of 2008.
Metro staff brought a brochure on the Nature in Neighborhoods Capital Grants Program. A copy of this is
in the City Recorder's Office. Metro Councilor Hosticka said Metro is not only interested in trails but also
in the acquisition of property along the trails because linking them is important. Councilor Buchner
mentioned a problem with a small piece of trail property owned by an unwilling seller. Metro Policy Analyst
Ray said an agency cannot use condemnation using local share funds as it is against Metro's Code.
Metro Council President Bragdon handed out copies of the Community Investment Toolkit - Volume 1, a
copy of which is in the City Recorder's Office.
Metro President Bragdon said he liked the format of this meeting with the Tigard City Council. Mayor
Dirksen said he'd be happy to meet with them again at their convenience.
4. Mayor Dirksen adjourned the meeting at 8:27 p.m.
~7~
Carol A. Krager, Deputy City RecordO
Attest:
11,-,7_ Z,_6c
Mayor, ity,oCTigard
Date: l ~/A ?e0
1\ADM\Cathy\CCM\2008\080401 doc
TIGARD CITY COUNCIL MINUTES - April 1, 2008
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City of Tigard, Oregon
Affidavit of Posting
In the Matter of the Notification of the April 1, 2008 Special Meeting of the City Council
STATE OF OREGON )
County of Washington ) ss.
City of T: d )
I, Inm being first duly sworn (or affirmed), by oath (or
affirmation), depose and say:
That I posted in
➢ Tigard City Hall, 13125 SW Hall Boulevard, Tigard, Oregon
➢ Tigard Public Library 13500 SW Hall Boulevard, Tigard, Oregon
➢ Tigard Permit Center, 13125 SW Hall Boulevard, Tigard, Oregon
A copy of said Notification of the Special Meeting of the Tigard City Council on April 1, 2008, and
a copy of said Notice being hereto attached and by reference made a part hereof, on the day of
~4 &J4 CA , 2008.
Signature of Person who Performed Notification
Subscribed and sworn (or affirmed) before me this ~ day of LI K47 , 2008.
OFFICIAL SEAL 01
JILL M BYARS
NOTARY PUBLIC-OREGON
COMMISSION NO. 381793 Signature of Notary Pu c for Oregon
MY COMMISSION EXPIRES JUNE 14, 2008
TIGARD CITY COUNCIL
SPECIAL MEETING N
6:30 P.IAI.
APRIL, 1, 2008
TIGARD CITY I I ALL
13125 .SW HALL BLVD:
TTGARD.OR 97223'
NOTICE OF SPECIAL MEETING
The Tigard City Council will have before it on the April 1, 2008
Meeting Agenda the following item for consideration:
DISCUSSION OF TRANSPORTATION AND URBANIZATION ISSUES WITH
METRO COUNCIL PRESIDENT BRAGDON AND
COUNCILORS HOSTICKA AND HARRINGTON
Please forward to:
❑ Newsroom, The Tigard Times (Fax No. 503-546-0724)
❑ Newsroom, The Oregonian (Fax No. 503-968-6061)
❑ Editor, The Regal Courier (editor@theregalcourier.com)
For further information, please contact Deputy City Recorder Carol Krager by calling 503-639-4171, ext. 2419.
Deputy ity Recorder
~0~5~: oZ~~
Date:
Post: Tigard City Hall
Tigard Permit Center
Tigard Public Library
City Council
City of Tigard, Oregon
Affidavit of Notification
The Tigard City Council will have before it on the April 1, 2008,
Special Meeting Agenda the following item for consideration:
DISCUSSION OF TRANSPORTATION AND URBANIZATION ISSUES WITH
METRO COUNCIL PRESIDENT BRAGDON AND
COUNCILORS HOSTICKA AND HARRINGTON
STATE OF OREGON )
County of Washington) ss.
City of Tigard )
A- - K k4 6,e5X , being first duly sworn (or affirmed), by oath (or
affirmation), depose and say:
That I notified the following people/ organizations by fax :
Newsroom, The Oregonian
Newsroom, Tigard Times
and the following people/organizations by e-mail:
Editor, The Regal Courier (editor@theregalcourier.com)
A copy of said Notice being hereto attached and by reference made a part hereof, on the a 7
day of , 2009'
Signature o Person who Performed N fication
Subscribed and sworn mil) before me this day of MG Vol , 2007.
OFFICIAL SEAL
°i JILL UAA BYARS
• NOTARY PUBLIC-OREGON Signature of Notary Pub c for Oregon
COMMISSION NO. 381793
MY COMMISSION EXPIRES JUNE 14, 2008
TTC'1.kRD CI n c()1NCIL ~I
~1'ECLr L MEE1 I NI(-,
6:30 P.', i.
APRIL 1, 20
TIGARD CITY HALL
1 ;125 SW i-L,\-LL BLVD.
lGill D OR 97223
NOTICE OF SPECIAL MEETING
The Tigard City Council will have before it on the April 1, 2008
Meeting Agenda the following item for consideration:
DISCUSSION OF TRANSPORTATION AND URBANIZATION ISSUES WITH
METRO COUNCIL PRESIDENT BRAGDON AND
COUNCILORS HOSTICKA AND 1 ARRINGTON
Please forward to:
❑ Newsroom, The Tigard Times (Fax No. 503-546-0724)
❑ Newsroom, The Oregonian (Fax No. 503-968-6061)
❑ Editor, The Regal Courier (editor@theregalcourier.com)
For further information, please contact Deputy City Recorder Carol Krager by calling 503-639-4171, ext. 2419.
Deputy ity Recorder
Date: - a ~ doy
Post: Tigard City Hall
Tigard Permit Center
Tigard Public Library
03/26/2008 13:36 FAX 503 639 1471 CITY OF TIGARD Q001
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• TX REPORT *ss
TRANSMISSION OK
TX/RX NO 0074
CONNECTION TEL 503 968 6061
SUBADDRESS
CONNECTION ID OREGONIAN
ST. TIME 03/26 13:36
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RESULT OK
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NOTICE OF SPECIAL MEETING
The Tigard City Council will have before it on the April 1, 2008
Meeting Agenda the following item for consideration:
DISCUSSION OF TRANSPORTATION AND URBANIZATION ISSUES WITH
METRO COUNCIL PRESIDENT BRAGDON AND
COUNCILORS HOSTICKA AND HARRINGTON
Please forward to:
❑ Newsroom, The Tigard Times (Fax No. 503-546-0724)
❑ Newsroom, The Oregonian (Fax No. 503-968-6061)
❑ Editor, The Regal Courier (editor@theregalcourier.com)
For further information, please contact Deputy City Recorder Carol Krager by calling 503-639-4171, ext. 2419.
NOTICE OF SPECIAL MEETING
The Tigard City Council will have before it on the April 1, 2008
Meeting Agenda the following item for consideration:
DISCUSSION OF TRANSPORTATION AND URBANIZATION ISSUES WITH
METRO COUNCIL PRESIDENT BRAGDON AND
COUNCILORS HOSTICKA AND HARRINGTON
Please forward to:
❑ Newsroom, The Tigard Times (Fax No. 503-546-0724)
❑ Newsroom, The Oregonian (Fax No. 503-968-6061)
❑ Editor, The Regal Courier (editor@theregalcourier.com)
For further information, please contact Deputy City Recorder Carol Krager by calling 503-639-4171, ext. 2419.
Deputy qty Recorder
Date:
Post: Tigard City Hall
Tigard Permit Center
Tigard Public Library
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Carol'Krager
From: Carol Krager
Sent: Wednesday, March 26, 2008 2:41 PM
To: 'Editor@theregalcourier.com'
Subject: Attached is a Special Meeting Notice
Attachments: Carol Krager.vcf; Tigard City Council Special Meeting on April 1, 2008.pdf
The Tigard City Council is meeting with Metro Council President Bragdon and Councilors Hosticka and Harrington on
April 1, 2008. The Notice is attached.
City of Tigard
_ Carol Krager
Deputy City Recorder
13125 SW Hall Blvd.
Tigard., OR 97223
(503) 718-2419
i
carolkr@tigard-or.gov
1
Agenda Item #
Meeting Date April 1. 2008
COUNCIL AGENDA ITEM SUMMARY
City Of Tigard, Oregon
Issue/Agenda Title City Council Discussion of Transportation and Urbanization Issues with Metro Council
President Bragdon and Councilors Harrington and Hosticka
T-C to
Prepared By: Ron Bunch Dept Head Approval: City Mgr Approval:
ISSUE BEFORE THE COUNCIL
The City Council has requested a meeting with the Metro Councilors to discuss urbanization, redevelopment and
transportation and other issues that may arise.
STAFF RECOMMENDATION
Staff recommends that Council discuss these issues with Metro Council and identify ways the two agencies can
cooperate to achieve mutual objectives, such as preventing future unincorporated urbanization.
KEY FACTS AND INFORMATION SUMMARY
Over the past several months, staff and City Councilors have been involved in growth management discussions with
other jurisdictions: Metro, ODOT, and Washington County. From these discussions, and Tigard's experience, three
broad concerns/ issues have developed. They are 1) governance and fiscal impacts of unincorporated urbanization; 2)
redevelopment needs of transit corridors and regional/town centers; and 3) transportation issues - particularly the need
for improved transit. The appended memorandum (Attachment 1), from staff, discusses these issues in detail and offers
suggestions as to how Tigard, Metro, and other agencies and jurisdictions can cooperate to address /resolve them.
OTHER ALTERNATIVES CONSIDERED
The City Council may wish to bring up other issues as appropriate.
CITY COUNCIL GOALS
Goal 1: Pursue opportunities to reduce traffic congestion in Tigard.
■ Explore light rail on 99W.
■ Continue state and regional advocacy for transportation improvements in Tigard.
Goal 3: Implement the Downtown Urban Renewal Plan.
ATTACHMENT LIST
Attachment 1: Ron Bunch memorandum dated 3-18-08 re: joint Meeting with Metro Councilors
FISCAL NOTES
N/A
1:\ADM\Packet'08\118114111 \4-1-118 AIS City Council Discussion of Transportation and Urbanization Issues.doc
ATTACHMENT 1
44
MEMORANDUM
A 0
TO: Mayor Craig Dirksen and Members of the City Council
FROM: Ron Bunch, Assistant Community Development Director
RE: Joint Meeting with Metro Councilors
DATE: March 18, 2008
INTRODUCTION t
The following provides additional detail on topics Council has identified for discussion with Metro
Councilors, Bragdon, Harrington, and Hosticka at its April 1, 2008 meeting. These topics are
urbanization, redevelopment of transit corridors and regional/town centers, and transportation issues,
particularly the need for improved transit.
BACKGROUND DISCUSSION
Over the past several months, staff and City Councilors have been involved in discussions regarding
urbanization and transportation issues with other jurisdictions: Metro, ODOT and Washington County.
From these discussions, and Tigard's experience, three broad concerns/ issues have developed. They
are 1) governance and fiscal impacts of unincorporated urbanization; 2) redevelopment needs of transit
corridors and regional/town centers; and 3) transportation issues, particularly the need for improved
transit. These issues are summarized as follows:
Unincorporated Urbanization: In Tigard's case, unincorporated urbanization has resulted in direct
negative impacts to the City. Washington County has allowed urban development to occur within the
City's designated Urban Planning Area (UPA) for many years, to the extent that the City is now
physically separated from Urban Growth Areas 63 and 64. Because the County has now taken on
concept planning for these areas, it appears that the practice will continue. Tigard is concerned that the
result will be, as Mayor Dirksen stated in his January 15, 2008 letter to Mayor Alice Norris, Metro Policy
Advisory Committee (MPAC) Chair, "an undermining of the position of cities as the best building
blocks of an efficient, stable, and compact urban region." In addition, at the Mayor's urging, MPAC has
recognized that unincorporated urbanization may be of regional concern, and at its March 12, 2008
meeting voted to consider it as one of its 2008 work program items.
There are two parts to this issue. The first and easiest problem to solve is the future prospect that
Urban Growth Boundary expansions will result in more unincorporated urban development. This
matter can be partially addressed by Metro using its legislative authority to adopt "Functional Plan"
1:\LRPLN\Council Materials\2008\4-1-08 ATTACH 1 City Council Discussion of Transportation and Urbanization Issues.doc q
requirements that new UGB expansions must be concept planned under the auspices of a City, and
urbanized within municipal boundaries. However, dealing with recently approved urban growth areas
now being concept planned, such as areas 63 and 64, is harder. Staff recommends that the City request
that it, Metro, Washington County, and others have discussions to determine if there are circumstances
under which municipal governance could be provided to these areas.
The second, and more difficult, question is "How to assure a positive future for existing unincorporated
urban areas?" All cities in the Metro region have a stake in this issue. Washington County is not a
municipal services provider, even though it has more than 205,000 urban residents. Without adequate
urban services, amenities, and employment opportunities, two obvious things happen to urban
unincorporated areas. First, residents of these areas come to depend on adjacent cities for many
important urban services and opportunities; second, the quality of life of underserved neighborhoods
decline.
Confronting this question is important, whether or not these areas ever become part of cities. In most
instances throughout the region, redevelopment of these areas into compact and efficient urban areas
will depend on the availability and quality of services. In as much as the region has a long-term plan to
address urban expansion at the UGB's edge, it should also focus on the quality of urban life within
underserved urban areas already within the boundary.
The Need for Redevelopment Regional and Town Centers and Transit Corridors: Tigard and Metro
have opportunities to work together to achieve mutual urban growth management and development
objectives. Washington Square and Tigard's Downtown are Metro designated regional and town centers
respectively. Highway 99W is designated as a Transit Corridor. Staff recommends that Council express
to the Metro Council that it is in both Tigard's, and the Region's, long term interest to promote more
intense, compact, urban development in Tigard's centers and within the Highway 99W Corridor.
Essential to achievement of the City's redevelopment goals is support that Metro, TriMet, and the State
can provide in terms of infrastructure planning and funding. Particularly important to redevelopment
of Tigard's Centers and the Highway 99W Corridor are access, capacity, and management
improvements on the state highways and interstate freeway that serves these areas. However, it is
recognized the future of more intense urban development is also dependent upon public investment in
transit along Highway 99W/Barbur Blvd.
The City can also benefit from working directly with Metro staff. Its Transit Oriented Development
(TOD) program can provide technical assistance, developer contacts, and possibly direct funding and
financial incentives toward redevelopment projects in the Downtown and elsewhere. In addition,
Metro's High Capacity Transit Study will soon be underway. City Involvement in this effort is
important to position Highway 99W for future transit improvements.
Transportation: As with redevelopment issues, Tigard and Metro have opportunities to work
collaboratively to address local and regional transportation needs. Congestion on Interstate 5, State
Highway 217, and Highway 99W affects Tigard's livability, and potentially its economic prosperity.
Solutions to these problems cost many millions of dollars. However, they are needed to provide
interstate and intraregional travel essential for the region's collective economic well-being. Staff
recommends that Council request that Metro Council provide advice on how to best promote
improvements to these key regional facilities.
I:\LRPI..N\Council Materials\2008\4-1-08 ATTACH 1 City Council Discussion of Transportation and Urbanization Issues.doc 2
Viable transit alternatives are essential to Tigard's redevelopment objectives. The recently completed
Tigard 99W Corridor Study emphasizes that high capacity transit service is the best long-term
transportation option within the Highway 99W corridor. Staff recommends that Council express the
City's desire to work with Metro, Oregon Department of Transportation (ODOT), TriMet, and others
to make light rail a reality on Highway 99W. In the interim, the City should seek agency assistance and
cooperation to implement its Highway 99W Corridor plan and develop land use planning alternatives
that would support light rail.
1:\I..RPI.N\Council Mater Ws\2008\4-I-08 NITACH I City Council Discussion of Transportation and Urbanization Issues.doc 3
142 .
MEMORANDUM
TO: Craig Prosser, City Manager
FROM: Ron Bunch, Assistant Community Development Director
RE: Discussion Topics - Unincorporated Urban Development
DATE: March 20, 2008
INTRODUCTION
The following lists relevant discussion points that staff and others have raised regarding
unincorporated urban development. They have been arranged in three parts, Issue Context,
Consequences of Unincorporated Development, and Recommended Actions.
BACKGROUND / DISCUSSION
Issue Context
■ In 1980, the County declared in its "Washington County 2000 Plan" that it is not an
urban service provider. Over the years, the County has restated this position through
updates to the 2000 Plan and other "visioning/planning" efforts.
■ However, in the past 25 years, numerous city/county plans, agreements, and initiatives
promoting urban development within cities have failed to stem unincorporated urban
growth. For example, the unincorporated population grew from approximately 149,990
in 1990 to 205,100 in 2007. Forty percent of the county's total population is in its
unincorporated area.
■ From another perspective, a population larger than the City of Corvallis, Oregon
(55,000) has been accommodated during the last 18 years in unincorporated Washington
County.
■ County governments are not designed to be municipal governance and urban service
providers. They are best at providing regional level services and undertaking roles
assigned to them by the state. The County does not have the capabilities to generate
Q\Documents and Setting%\cathy\Loeal Settingswemporary Internet Ides\Content.Outlook\34URMPLM\Memo 3-20-08 topics unincorporated 1
developmentZdoc
resources to sustain municipal level services to its unincorporated urban areas. This
problem will grow worse over time.
■ Ultimately, municipal governance should be provided to these areas. It is not equitable
for cities to subsidize provision of municipal level services outside their boundaries. This
includes any consideration of reallocating revenue sources currently depended on by
existing cities and the use of urban renewal to finance infrastructure to Metro designated
unincorporated urban growth areas.
Consequences of Unincorporated Development
■ Unincorporated urban areas result in efficient and fragmented patchworks of public and
governance services.
■ Unincorporated development undermines the position of the region' s cities as the best
building blocks of an efficient, stable, and compact urban region.
■ Cities often bear inequitable/non-assignable costs imposed by underserved,
unincorporated, urban areas when their residents use city services such as parks, libraries,
transportation, public safety, etc.
■ Tigard's experience is that, once established, unincorporated urban lands tend to be self-
perpetuating and can block cities' ability to plan for, and urbanize, new Urban Growth
Boundary (UGB) areas that logically should be within municipal boundaries.
■ Unincorporated urban lands may not be sustainable as cities adjust to new energy and
transportation realities.
■ There are many national and local examples of unincorporated urban areas lagging
behind their city counterparts in important livability metrics, such as availability of
services, access to jobs, lagging property values, public safety, housing quality, etc.
■ Continuation of current urbanization practices will undermine the region's ability to
achieve its transportation and growth management objectives.
Recommended Actions
■ Action needs to be taken to prevent future unincorporated development and address
how to best manage that which has already occurred. This cannot just be a Washington
County / cities agreement. Unincorporated urban development is a regional issue and
solutions need to occur at the local, regional, and state levels.
CADoeuments and Settings\cathy\Load Settings\Tetnporary Internet 1--iles\Content.Outlook\34UItMPLM\Memo 3-20-08 topics unincorporated 2
development1doc
■ Failure of past local intergovernmental efforts to address the problem shows that
constructive, lasting, solutions may be beyond the capability of Washington County and
its cities. Merely talking about the issue and entering into City/County joint
resolutions /agreements is no longer adequate.
■ Urban unincorporated development is not unique to the Portland Metropolitan region.
Many areas throughout the nation are confronting the same issues such as King County,
Washington. The region should learn from the experience of others.
■ The County Urbanization Forum should be designed to achieve results. This will require
the County Board to work with the cities, Metro, and involve the state, to design a
process to achieve agreement on realistic strategies.
■ Resolving the unincorporated urban development issue will require legislative action on
the part of local governments, Metro, and the state. For example, the state's annexation
statutes may need to be revised to recognize that urban development and planning needs
of the Portland Metropolitan Region are different from other parts of the state. In
addition, amendments to the Metro Functional Plan and local ordinances will be
required.
■ It is necessary for the County to work with its cities, Metro, and the state to: 1) ensure all
future urban development occurs within cities, including that which is now being
concept planned; and 2) develop a long-term strategy to address the service and livability
needs of existing unincorporated areas.
■ Some progress has already occurred. Unincorporated urbanization has attracted Metro's
attention. The Metro Policy Advisory Committee has voted to consider this as one of its
2008 work program issues. MPAC has also voted to recommend to Metro Council that
future regional performance objectives require new urban development to occur within
municipal boundaries.
CADoeuments and Settings\cathy\Loeal Settings\'rempomry Internet Files\Content.Outlook\34URMI'LNI\Mcmo 3-20-08 topics unincorporated 2
dcvclopmcnt2.doc 3
ti
J~~❑ Hwy. 99W in Tigard. Between On Hwy. 217 in Tigard, between
s` ❑ 68th Pkwy. and I-5, this highway s ` Hwy. 99W and Greenburg Road,
carries 53,800 vehicles per day, more than the daily traffic volume is 29,100 vehicles
any other arterial state highway in Oregon. per through lane. The highest per through
This is also more than any freeway in lane volume in Oregon is on 1-5 between
Oregon outside the Willamette Valley. I-84 and the Fremont Bridge.
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Traffic Volume Factoids
Based on ODOT's most recent Transportation Volume Tables:
Question: Where is the highest traffic volume on Interstate 5 in Oregon?
Answer: South of Hwy 217, abutting Tigard, I-5 carries 155,800 vehicles per day.
Question: Where is the highest traffic volume on Highway 217?
Answer: Between Hwy 99W and Greenburg Road in Tigard, the daily volume is
116,400 vehicles.
Question: Where is the second highest traffic volume per through lane in Oregon?
Answer: On Hwy 217 in Tigard, between Hwy 99W and Greenburg Road, the daily
traffic volume is 29,100 vehicles per through lane. The highest per
through lane volume in Oregon is on I-5 between I-84 and the
Fremont Bridge.
Question: What is the busiest 5-lane arterial (with cross streets and private accesses)
state highway in Oregon?
Answer: Hwy 99W in Tigard. Between 68`h Pkwy and I-5, this highway carries
53,800 vehicles per day, more than any other arterial state highway in
Oregon. This is also more than any freeway in Oregon outside the
Willamette Valley.
Question: In Washington County's most recent traffic volume data, where was the
highest volume measured?
Answer: On Scholls Ferry Road west of Nimbus Ave, along the city limits of
Tigard, where 39,100 vehicles per day were counted.
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Traffic Volumes in Tigard
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In November 2006 voters approved a $227.4 Match criteria Key Threshold Criteria
million bond measure that protects natural areas The applicant must match grant funds with outside o "Re-nature" neighborhoods by increasing the
throughout this region, safeguarding water funding or in-kind services equivalent to twice the presence and function of ecological processes.
grant request.
quality, preserving fish and wildlife habitat, and o "Re-green" urban neighborhoods to enrich
maintaining the area's quality of life. To inspire Begin the application process peoples' experience of nature and help
with a letter of inquiry strengthen a physical connection to the
innovative ways to enhance ecological functions region's ecology.
A letter of inquiry" is an essential first step in the
and increase the presence of nature where people application process. A clearly written letter will o Demonstrate multiple benefits for people
live and work, $15 million of these bond funds help Metro staff understand how well a proposed and natural systems.
were directed to a new capital rants project matches the key criteria of the grant
g program. Demonstrate cost-efficient ecological
program. There are no deadlines for submission. design solutions.
The Nature in Neighborhoods capital grants See program handbook for instructions and forms.
program will fund projects that purchase land o Increase the region's fish and wildlife inventory.
Completing the application process
(or easements) for public ownership or fund o Restore and/or improve habitats of concern.
Metro staff will evaluate letters of inquiry and invite
capital improvements'on publicly owned land. full applications if key criteria are met. The Metro ° Provide universal access to the public.
Council's grant review committee will evaluate these
Who can apply? applications at least once yearly. To assist in your
Neighborhoods and community groups, non- project planning, check the website for upcoming The program handbook has more detailed
profit organizations, schools, cities, counties review dates. information about the key criteria as well
and public park providers are invited to apply.
How will applications be evaluated? as supplemental criteria and project success
Project eligibility Metro staff will screen full applications, conduct factors. The handbook and application materi-
Projects must either purchase land or make site visits and present the proposals to the grant als are available by visiting Metro's website
improvements to real property that result in a review committee. The committee will make at www.metro-region.org/capitaigrants.
capital asset with a life of at least 20 years and award recommendations to the Metro Council,
with a total value of at least $50,000. See the which will make all final grant awards.
program handbook for more information.
JA
"l
Capital Grants
C:F
x ss Program
C.BRUCIFORSUR
As the Portland metropolitan region Stay informed about the T t
expands, the pressure of increased Nature in Neighborhoods s . }
development threatens the quality capital grants program
1 £ ' ` ±t
of our water and the sustainability by joining the mailing list.
i
of fish and wildlife habitat.
For more information:
How can our region achieve ; i (503) 797-7 545
a balance between development naturalareas@metro-region.org
and conservation. www.metro-re9ion.or9/ca Pitalg rants = t
What are the best ways to improve
ecological functions within these.
growing urban areas?
How can existing neighborhoods
increase the presence of nature? I r> r °
The Metro Council is seeking M E T R O
creative answers to these questions
- i 600 NE Grand Ave. through the Nature in Neighborhoods Portland, OR 97232-2736 r r" ~,r U t
www.metro-region.org,
capital grants program.
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DRAFT "Road Map" for Makien'g the Greatest Place 2007 2011
2007 2008 2009 2010 2011
Engage, Identify Tools and Prioritize Investments Approve Methodology/Seek Agreements Apply/Evaluate Decisions Future
Focus: centers, corridors and employment areas Focus: urban and rural reserves Focus: urban performance
WINTER SPRING SUMMER FALL WINTER SPRING SUMMER FALL SPRING FALL M Metro Council decision
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main streets Share investment Continue
Stimulate development scenarios engagement and
Regional
Inspire and engage partners technical assistance
agreement ,
along corridors Assess needs Target prioritizing Regional
Ongoing
® Redevelop brownfields agreement Update local
Identify financial resources opportunity
on level of policies and plans public o Provide housing choices Provide technical assistance areas and
, recalibrating actions
investment
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k to flourish Define Explore public investment
expectations
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and estimate relative
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framework plan
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Systems analysis
Federal Federal Begin local update
w~ . Focus groups/recommendations . Air quality conformity
implementation
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and assistance
Road Map 6 subject to change. 1/10/08
I
Key Milestones for Designating Urban and Rural Reserves
work in progress 2008 2009 2010
Identifying and analyzing options for urban and rural reserves study areas : Final analysis and decisions on urban and rural reserves Future
decisons
WINTER SPRING SUMMER FALL WINTER SPRING SUMMER FALL
Input , Input from Investment track
• Regional infrastructure analysis
Reserves
Steering • Economic, employment and housing
- needs and trends ✓ Input to Investment track
Committee 11 • Local aspirations for centers and
established ,
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A 1 n endorsed
7~• [~OII~Gx 1
study areas • finance}
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nput from Investment track w agreements
esignate
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rural
F, reserves
[CDC Briefing
G~¢ [LCDC Briefing ~
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LCDC
Legend to 1
. Milestone/Decision - ; _
tj -:*I Preliminary recommendation Input from Regional Transportation track Input to Transportation track
• RTP update
Analysis work
Public input
Conceptual planning
C&ACKAMAS MUUNONAN
c oL."rr _{OUNTY- p•t R METRO 07389jg Draft 1, 1220/07
I
WINTER 2008
Metro Council
r Metro region cities ~ mil 1, ~lJGg z1ole' MAKING THE r
President Beaverton
~31lG~jh
David Bragdon ABOUT METRO Cornelius Damascus
0
503-797-1889 Durham
Rod Park Steward of our region's future Fairview
Forest
District 1
503-797-1547 The Portland region is a great and performing arts. Today manage Metro operations. The Gladstone
place to live, work and play. Metro is increasingly viewed as COO oversees more than 650 Gresham
Valley
Carlotta Collette Nurturing this livability is a a regional resource, problem full-time and 1,000 part-time Happy
PLACE
District 2 constant quest. Metro plays a solver and leader- an asset to employees, from economists to Hillsboro
503-797-1887 unique and leading role in that the region's quality of life and park rangers, cartographers to Johnson effort. ability to compete in the global zookeepers. King City
Carl ct ka economy. Lake Oswego Focus on urban and rural reserves
District 3 3 Regional responsibilities Fiscal accountability Maywood Park
503 7971549
For three decades, Metro has Metro's scope About half of Metro's operating Milwaukie MESSAGE FROM COUNCILOR KATHRYN HARRINGTON Kathryn Harrington
ryprovided regionwitle planning Metro serves nearly 1.4 million revenues come from user fees Oregon ~ We live in a special place. We have vibrant communities and
District 4 and coordination to manage people in an area of 463 square and charges for the use of Metro Rivergrove town centers interwoven with beautiful natural areas that
503- 797-1553 growth, infrastructure, and miles, which includes the facilities or for services such as Sherwood enable wildlife to thrive and provide us with extraordinary
development issues that cross urban portions of Clackamas, garbage disposal. Other revenues
Rex Burkholder jurisdictional boundaries. Multnomah and Washington include 'grants, intergovernmental Tigard recreational activities close to home. And we have a diverse Troutdale District 5 From the outset, Metro has counties along with Portland and funds and a small amount of agricultural community that plays an important role in our
503-797-1546
property tax revenues, mainly Tualatin region's economy.
managed the region's urban 24 other cities.
Robert Liberty growth boundary, transportation for voter-approved bond issues. West Linn
The Metro Council is the
planning and waste disposal, as Sound fiscal management has Wilsonville
This did not happen b chance. For more than 30 ears, as this region has grown
District 6 well as the Oregon Zoo. only directly elected regional earned Metro a superior credit Wood Village by y 503-797.1552 governing body in the United , which translates to better by more than a million people, we've made conscious decisions to reinvest in our
rating
In the 1990s, Metro's States, making it both visible existing communities, protect nature, use land more efficiently and minimize
Metro region counties
Auditor responsibilities grew to and accountable. The Council Q value for the public's money. Clackamas County the impact of new development on farm and forest land while accommodating
Suzanne Flynn encompass waste recycling, President is elected regionwitle Multnomah County population growth and welcoming the economic opportunities it offers.
503-797-1891 preservation of natural areas, and six councilors are elected ---Wash -C-aunty
long-range planning, habitat by district for four-year terms in
600 NE Grand Avenue restoration and management of nonpartisan races. The Council Although our efforts to manage our land and natural
Portland, OR 91232 ' '
lp"The n
venues for conventions, exhibits appoints a chief operating officer resources more efficiently have made us a national model new
to carry out its policies and for other metropolitan regions to emulate, the current urban and rural
process for making urban growth management reserves are seen
rr _I decisions has also been highly contentious. It has as an alternative to
CARLOTTA COLLETTE JOINS METRO COUNCIL I' offered no predictability or certainty for the the existing growth
I ;I,i I protection of valuable rural lands, and it has not management systern,
On Nov. 6 the Metro Council unanimously appointed Carlotta Collette as Metro considered a variety of factors for accommodating based which is on
Councilor for District 2. Collette replaces Brian Newman, who resigned on Oct. 6 to growth in ways that strengthen local communities. rrandatory though
j take a new job at Oregon Health and Science University. It also does not weigh the costs of new arbitrary
M E T R O development in expansion areas against those for expansions of the urban growth boundary onto
somewhat Collette served on the Milwaukie City Council from 2005-2007 and currently serves
redevelopment of existing downtowns and main
on the Clackamas Community College Board of Education. Collette has managed streets within the current urban growth boundary. farms and forestlands." L The Oregonian,
her own communications consulting business and worked for 14 years on the staff of the Northwest Power Planning Council. Continued on page2 Reserves' alter •
use talks,"
Until her appointment to the Metro Council, Collette co-chaired the Clackamas 2,2008
County Coordinating Committee where she worked across jurisdictional
boundaries to build cooperation on transportation and land use priorities while
promoting economic, social and environmental sustainability.
.~515-1
; f
Collette's appointment will last until Jan. 5, 2009. An election.will be held on May
Published Jan. 2008
Printed on recycled paper. 20 to elect a candidate to serve out the last two years of Newman's four-year term,
08018il from January 2009 to January 2011.
Workin to develop. coltaborative
{
solutions to regional o- -
y
Reserves continued
°t~=~~~', '~ntiln .1l AIL' lLrG~rUTr
For these reasons, the 2007 Oregon State Legislature gave Metro and the three counties of our region " .
o o "
new tools with which to better manage urban DD (3 1 Integrating Habitats
C
growth. Along with Washington County Chair Tom - A design award event. '
Brian, Clackamas County Commissioner Martha REGIONAL TRANSPORTATION PLAN 6 to 8:30 p.m. J Schrader and Multnomah County Commissioner Jeff The Metro Council's comprehensive Tuesday, Feb. 26, 2008
Cogen, I have the privilege of leading a regional initiative to update the region's long-range On Dec. 13, the Metro Council and the Joint Fields Ballroom
Reserves Steering Committee that will study and Policy Advisory Committee on Transportation Portland Art Museum
designate areas outside the current urban growth plan is moving forward on four tracks: adopted the federal component of the 2035
boundary that are suitable for housing and job 1 Regional Transportation Plan (RTP).
growth over the next 40 to 50 years (urban reserves) O INVESTMENTS Integrating Habitats is a premier international design
as well as areas that should be preserved and The RTP is the long-term blueprint that guides investments competition aimed at generating innovative development
protected for agricultural and natural resource O URBAN AND RURAL RESERVES in the region's transportation system for all forms of travel i ideas and site designs that protect and enhance
purposes for a similar period (rural reserves). - motor vehicle, transit, bicycle and pedestrian - and the water quality, as well as fish and wildlife habitats. For
O PERFORMANCE-BASED GROWTH MANAGEMENT movement of freight. It is updated every four years to more information visit www.metro-region.orgl
Our goal throughout this effort will be to more comply with state and federal regulations and address integratinghabitats
changing demographic, financial, travel and economic
predictably facilitate growth in areas that are better ® REGIONAL TRANSPORTATION_ PLAN trends.
- -
suited to accommodate it while providing more
significant protection for the farmland, forestland INVESTMENTS
wvvvv.metro-region.org/greatestplace The federal component of the RTP represents a list of
and natural areas that define this region. This will
be a highly collaborative process that engages investments that matches the amount of revenue expected Regional infrastructure analysis
to be available between 2008 and 2035 (approximately
many stakeholders, including representatives of $9.07 billion). Although public agencies throughout As the region's population grows, one of the challenges to
local cities, neighboring communities, business the region have identified more than $16 billion in
groups; developers, farmers, land use advocates, successful implementation of the 2040 Growth Concept is the
transportation needs, federal law requires that such plans development and maintenance of critical infrastructure neces-
environmental organizations and members of the Community Investment be based on reasonably expected revenues that will be sary to build and enhance communities. Sidewalks, streets,
public in the identification, study and designation of Toolkit: Financial Incentives available for transportation uses. As a result, this phase sewers, schools and parks don't just appear when an urban
these reserve areas. Finarictal guide of the RTP does not attempt to address all transportation growth boundary expands or a community redevelops to
1hCentives The financial incentives guide, needs. accommodate more people or jobs. They result from careful
Metro and the three counties will the first of a three-volume series, planning and strategic investments of both public and private
coordinate public outreach efforts highlights local success stories and The focus of the RTP update process now shifts to the state resources that support the development of vibrant commu-
and will be seeking your input demonstrates how innovative policy component of the plan, where Metro and other public nities. Infrastructure that already exists in more established
o` and guidance as we help shape and financing tools are achieving agencies will pursue innovative and stable transportation communities must also be maintained and replaced over time
For'upd en this region for the next 50 funding sources so that the region can afford many to meet the demands of current and future residents.
events, activities and years. More information results around the region. To receive identified but unmet maintenance and expansion needs.
about this effort can be a copy of the guide, call Susan The state component will also develop strategies that link
- , Metro is working with local governments, service providers
Patterson Sale at 503-797-1735.
to pacgdpate,,*Mtact found online at www.metro- land-use plans and transportation projects in order to and the private sector to identify and address specific chal-
Ken9Wat region.org/reserves. I hope achieve maximum efficiency from both. It will also support lenges related to financing and developing public infrastruc-
t5f~8 you will get involved with the region's desired economic and environmental outcomes. ture so that great communities can continue to grow and
raykOpootr4dstorars, and stay informed about this thrive throughout the region. For more information, visit
important work. The final plan is expected to be completed by fall 2008. For www.metro-region.org/infrastructure.
more information on the RTP, visit www.metro-region.
org/rtp
www.metro-region.org/greatestplace
~ Gov ~
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r
' COMMUNITY
INVESTMENT anci I
0 'TOOLKIT Fin MENT TOOLS
0 COMMUNITY INVEST
• VOLUME 7 .
0 F Inc ntiv s
i
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• Regional choices
• for how we grow
•
l.n 1995 citizens of the region developed Metro's 2040 Growth Concept, a vision for how
• the region grows that is based on a set of shared community values identified through
• an extensive public process. These values have been reconfirmed over the years through
• public opinion research. The vision of the 2040 Growth Concept is to establish complete
communities that include:
2 safe and stable neighborhoods for families
® compact development that uses both land and money more efficiently
0 ® a healthy economy that generates jobs and business opportunities
0 ® protection of farms, forests, rivers, streams and natural areas
0 B a balanced transportation system to move people and goods
0 ® and housing for people of all incomes in every community.
Financial incentives: preface : i
• June 2007
Since Metro adopted the 2040 Growth Concept in 1995, updated population forecasts •
predict the region will grow even more rapidly than initially expected, bringing new
opportunities as well as new challenges. More people and the accompanying needs for •
land to provide jobs and housing place a premium on the efficient use and redevelop- •
ment of urban land. Rising costs for public facilities and services further highlight the
need for efficient use and reuse of the limited supply of land that already has access to
urban services, including roads, sewers, transit, and schools. An additional consideration •
is the aging of our population; as people get older, they often seek higher-density housing •
within walking distance of transit, retail areas, and medical facilities. Metro's New Look
at Regional Choices is an effort to identify what we've been doing well in the region to
achieve the vision of the 2040 Growth Concept, capitalize on our successes, and focus •
our efforts where we need to do better. •
> Policy framework •
In 2006, the Metro Council and regional leaders developed a policy framework com-
posed of six integrated elements that are intended to accelerate the achievement of
the benefits envisioned in the 2040 Growth Concept. The policy elements are guided •
by principles stating that all regional growth and investment decisions should rein- •
force and support growth in centers, corridors and employment areas; that decisions
to expand the boundary will balance urban needs with protection of agricultural and
important natural areas; and that a collaborative approach is crucial to the successful •
implementation of the 2040 Growth Concept.
The six policy elements are: .
1. Focus fiscal resources and taxation tools to stimulate development in centers, •
corridors and employment areas
2. Coordinate growth with neighboring communities •
3. Base urban growth boundary expansion decisions on urban performance •
4. Designate and plan urban reserves
5. Designate areas that shall not be urbanized •
6. Prioritize and invest in transportation improvements that support efficient •
development and strengthen the economy
> Investing in our communities •
The first policy element is to focus efforts to stimulate investment in existing commu-
nities. A key component of investing in our communities is to develop strategies, part- •
nerships, and tools to best use the land in centers, along corridors, and in employment •
and industrial areas. There are many examples of successful public investment that has
stimulated private development within the region and in our neighboring cities, includ-
ing several communities around light rail stations, Lake Oswego's downtown, and the •
South Waterfront area in Portland to name just a few. •
ii : Financial incentives: preface
June 2007 •
• REGION ; _ - L E G E N D
2~ 1 i CaJ
IN
=-a Co
Z C3
=Z: V
• b i - 6D Q
• L E G E N D 0
• Ile4opMU Repim C~i
•
•
More than one million additional people are expected to live in the metro region by
2040. Accommodating such growth while maintaining the quality of life residents
expect will require substantial investment from the public and private sectors. Regional
leaders have emphasized the importance of maximizing the land development potential
• in existing communities to help balance urban land needs with the importance of pre-
serving land for the agricultural economy and retaining natural features.
The 2040 vision calls for growth to be concentrated in nearly 40 regional and town
• centers, along transit corridors, and in employment and industrial areas as an impor-
tant strategy to maintain livable communities and support a strong economy. The ben-
efits of developing in centers and along corridors include greater transportation choices,
better air quality, and more effective targeting and coordination of public investments.
• Mixed-use centers also maintain consistently high property values, create a sense of
• community, and attract new businesses. Promoting redevelopment and well-designed
residential development along major transportation corridors, which typically have
• good transit access and are often developed in low-density commercial uses, can pro'
• vide similar benefits.
Financial incentives: preface : iii
• June 2007
•
•
However, higher intensity urban development with the amenities that allow for an •
enhanced quality of life and redevelopment of underused urban land sometimes •
requires a higher initial investment than traditional greenfield and suburban develop- •
ment. Creative solutions are needed to help cities work with developers and lenders to
achieve the types of development that enhance our communities as the region grows. •
•
• -Exploring policy choices for public investment •
To better understand how public investment can encourage the efficient use of land,
Metro has explored scenarios using MetroScope, a simulation model for testing plan- •
ning policies in the urban land marketplace. These scenarios described the effect of •
targeting public investment in specific locations and compare low, medium, and high
levels of public investment in mixed-use areas throughout the region between today •
and 2035. The results were evaluated to determine how much investment is needed to •
attract enough households and jobs to make these communities vital and self-sustain- •
ing. Investment is defined as reducing the construction costs in targeted areas - this can
be accomplished through a variety of development incentives. Potential tools include •
financial incentives, changes to local codes, and design standards that reduce devel-
opmentcosts. This toolkit provides examples of local successes using these tools and •
includes resources to help focus investment in our communities.
•
Comparing the results of the low, medium, and high investment scenarios indicate that •
the provision of public investment in targeted areas is likely to be an effective tool to
spark private investment and therefore achieve the benefits envisioned in the 2040 •
Growth Concept. The low investment scenario presumes that local resources will not •
continue to be targeted to spur private investments in these areas. The medium invest- •
ment scenario assumes that local governments in the region will continue investing
public resources at the current level of effort. The high investment scenario represents a •
significant increase in public investments across the region to accelerate the implemen-
tation of the 2040 vision. Therefore, local decisions to build on current successes and
expand the use of public resources to invest in our communities will shape the future of •
the metro region. •
•
The analysis concludes that more investment could double the amount of •
housing developed in centers, while reduced investment in the region's centers •
pushes more jobs and housing out to our neighboring communities, increasing •
congestion and pressure on the transportation system. •
Ad , - •
•
iv : Financial incentives: preface •
June 2007 •
Toolkit for investing in our communities
• Metro's New Look at Regional Choices seeks to identify proven strategies and tools
• that can be used to stimulate investment in the region's centers, corridors, employment,
and industrial areas to implement the 2040 Growth Concept. The strategies address:
3 financial incentives
3 local zoning and building codes
3 urban design
• (3 employment and industrial areas.
The toolkit provides local governments, developers, nonprofit organizations, property
owners, and investors with important information, considerations, and local perspec-
tives for the various investment tools in the region. Highlighting the region's success
• stories, the toolkit demonstrates how these strategies are achieving results and serves
as a guide for future investors. With technical assistance from Metro consultants, this
toolkit will help these investors build vibrant downtowns and main streets and create
• places for businesses to flourish.
The toolkit was developed through extensive research and collaboration with repre-
sentatives from local governments, nonprofit organizations, and stakeholder groups,
• as well as developers, investors, and citizens through advisory committees and public
forums such as the Regional Forum held in June 2006.
• Achieving the benefits envisioned in the 2040 Growth Concept relies on initiative by
local leaders and governments. Metro and its partners will continue to build aware-
ness of innovative and successful development strategies and work to provide techni-
cal assistance to local leaders and practitioners. Metro's technical assistance will help
• facilitate the use of new and existing fiscal tools and resources, modify local policies,
and broaden public awareness of these tools and policies and the potential benefits
they bring for local community development. The toolkit is an integral component that
• complements this technical assistance. The toolkit supplies information and resources
• to help local communities achieve the benefits.envisioned in the 2040 Growth Concept
in a way that best fits their community needs.
• - . i. y (~~I 0
71
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• ' I' ~ P
•
Financial incentives: preface : v
• June 2007
~OG~~Jf~QOaO Table of contents
0(7t QQf~40dC~4
• ~o o ~~114
• Page
►Financial incentives: Tools for investing in our communities 3
• ►Tools in the toolkit:
• How can we stimulate mixed-use development and additional housing
in centers and corridors and near transit areas?
• Vertical Housing Partial abatement program for developers meet- 9
Program ing specific state design standards, which requires
• little local management and provides additional
• incentives for affordable housing
Transit-Oriented Tax Locally-tailored tax exemption program that can 17
• Exemption also promote other local development goals and
• public benefits
• How can we help stimulate the redevelopment of underutilized or
0 blighted property?
Brownfields Programs and resources to assess, clean up and 25
Assessment and reuse underutilized sites with perceived or actual
• Cleanup Funds environmental contamination
Urban Renewal Redevelopment program that initiates 37
infrastructure improvements and stimulates private
• investment in targeted areas
• How can we finance infrastructure improvements and development
patterns needed to achieve 2040?
0
• Improvement Small funding districts for infrastructure 51
Districts improvements, maintenance and marketing
programs that stimulate additional private
• investment
Impact-based System Development fees that encourage sustainable 61
Development development patterns and pay for the
• Charges infrastructure needed to implement 2040
Financial incentives: table of contents
• June 2007
•
•
•
•
Z~A
• Oia
• ~ Lary
•
•
•
• Financial incentives:
• tools or investing in our communities
• Financial incentives are mechanisms to help achieve healthy communities
• throughout the region by reducing development costs for smart growth
• projects and stimulating the types of development desired and appropriate
• for different areas. Specific financial incentives, when used in the region's
• centers, corridors and employment areas, can encourage investments that
• help reach a balance between jobs and housing, create unique blends of
• urban amenities, and reduce transportation trips.
•
•
•
• Financial incentives: introduction : 3
• June 2007
Mixed-use, pedestrian-oriented development projects built around special places typi-
cally require a much higher up front cost, resulting in a higher risk to investors and
developers regardless of impressive mid- and long-term returns. Thus, financial incen-
tives can bridge the gap between traditional financing levels and the costs of building •
higher quality, more sustainable projects and make these desired developments pos-
sible in the region's centers and corridors.
Historically, federal funding programs have provided most of the financial resources •
for local community and economic development efforts. Current use of federal fund-
ing programs in the region such as Community Development Block Grants, Low
Income Housing Tax Credits, and New Market Tax Credits can help achieve 2040 •
objectives. However, in the case of most federal funding programs, policy objectives •
and funding levels are set at the national level and then administered by state, county,
or local agencies. Thus the local community does not determine the amount of avail- •
able financial resources or programmatic guidelines. In addition, most federal fund- •
ing programs help stimulate investment in low-income and underserved communities,
and therefore, are available to a limited number of communities in the metro region.
These limitations, combined with an overall decrease in funding for these federal •
programs, present cities and counties with the need to find new sources of revenue to
fund local community development activities. Several financial incentives exist in the •
region that can promote opportunities for efficient land use and investment in 2040 •
centers, corridors, and employment areas. Oregon's Vertical Housing Program, Ore-
gon's Transit-Oriented Tax Exemption, brownfields assessment and cleanup funds,
urban renewal and tax increment financing, local improvement districts, economic •
improvement districts, business improvement districts, impact-based system devel-
opment charges, and enterprise zones are all financial incentives used to stimulate
investment in the region's centers, corridors, industrial and employment areas. Many
of these also promote housing choices for all citizens of the region. •
Many cities and counties in the region are currently using financial incentives suc-
cessfully as a method of encouraging development in specific locations. Tile follow- •
ing map depicts some of the financial incentives currently used by local cities and •
counties. Not all of the financial incentives used by local jurisdictions appear on the
map. The tools depicted on the map relate to specific geographic areas, districts, or
- .~-ter - •
{I /
■~A~~C■~Illgt~j~ A •
■ - it E ~ ~
CENTRAL POINT
I' •
4 : Financial incentives: introduction
June 2007 •
• zones within a city or county as opposed to being a site-specific or regionwide tool.
The investment tools represented on the map include: the Vertical Housing Program,
• Transit-Oriented Tax Exemption programs, urban renewal areas, and improvement
• districts as well as enterprise zones, an important financial incentive in employment
and industrial areas, which is discussed in further detail in the section of this guide
that focuses on strategies for employment and industrial lands.
• The financial incentives section of the toolkit explores and assesses the potential use
of each of these incentive programs through additional application and modification.
• It also highlights the use of each financial incentive in the region and the issues and
• considerations that arise from the use of these tools. The various cities or counties in
the metro region face different political, regulatory, and financial situations and will
need to assess which financial tool or combination of tools can best stimulate invest-
ment in their communities. Thus the following section of the toolkit also examines
• the flexibility and applicability of each of the tools to the different types of cities and
counties in the region.
• It can be complicated to develop compact, mixed-use projects, particularly due to
cost premiums to achieve vertical mixed-use in locations without existing comparable
development types. Conventional financing for these types of projects may be difficult
• to implement, and creative approaches have often been necessary to close financing
• gaps. The financial incentives described in this section of the toolkit can serve to help
close financing gaps; often several incentives need to be used in effective combinations.
• Metro houses several technical and financial assistance programs that help overcome
these financing gaps by encouraging or providing the use of financial incentives.
Metro's Transit Oriented Development and Centers implementation program has
• been providing this assistance in various communities in the region, which includes
• several of the success stories highlighted in this guide. Metro's TOD/Centers program
brings about the construction of "transit villages" and projects that concentrate a
mix of retail, housing and jobs in areas around regional light-rail systems and other
transit lines and in regional and town centers. The TOD/Centers program operates
• through a series of cooperative agreements between Metro, local jurisdictions and
private developers. Metro's TOD/Centers program staff are experienced in working
with local jurisdiction staff and developers to make complicated projects work, and
• provide both funds to purchase key properties and important technical resources.
Examples of projects that have utilized this program include North Main Village in
Milwaukie, and the Crossings and the Beranger in Gresham.
Financial incentives: introduction : 5
• June 2007
•
•
•
Through the process of developing this guide and documenting the successful use of
these financial incentives by cities and counties in the region, Metro has identified the
following recommendations to increase investment in our communities and accelerate .
implementation of the 2040 Growth Concept: •
E3 Continue using these incentives to encourage dense, mixed-use housing and
employment opportunities. •
El Increase the use of these programs in our centers, corridors, and employment areas
making local policy changes where needed in order to maximize the effective use of •
these tools. •
13 Consider collaborating with other local jurisdictions, stakeholders, and organi-
zations to explore state legislative changes to make these tools work even better, •
particularly in the following areas: •
Vertical Housing Program: Explore ways to prevent special taxing districts from •
opting out of a Vertical Housing Development Zone after the zone is established.
Urban Renewal and Tax Increment Financing (TIF): Modify the financing structure •
to provide some increase in fiscal return to local taxing districts prior to the expira-
tion of the urban renewal area (e.g. rate of inflation, the increment increase on the •
land value, a kickback after set time periods) or expand the allowed costs under TIF •
to cover non-construction related items (e.g. fire trucks) in order to reduce opposi-
tion from local taxing districts, and create additional TIF authorities in order to use •
TIF separately from Urban Renewal. •
Local Improvement Districts: Expand what services and improvements the assess-
ment fees can recover and also reduce the financial risks to local jurisdictions by •
clarifying the long-term liability and by tying the upfront costs to property owners. •
•
•
•
•
•
rr a •
6 : Financial incentives: introduction •
June 2007 •
1 i
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Vertical Housing Program
•
• Oregon's Vertical Housing Program offers a financial incentive to stimulate
• mixed-use development in centers and along corridors. It encourages developers
• to build dense, mixed-use projects in specific areas designated by local
• jurisdictions by reducing costs at the front end of the developer's investment
• through a temporary tax relief on the improvements. With immediate relief
• from a significant increase in taxes, developers can invest additional funds in
• projects that often have higher initial costs.
•
•
•
• Financial incentives: vertical housing : 9
• June 2007
Oregon's Vertical Housing Program (VHP) encourages construction or rehabilitation •
of properties in targeted areas called Vertical Housing Development Zones (VHDZs)
by providing a tax abatement opportunity for higher density, mixed-use developments •
in these areas. The VHP provides the region with a strong financial tool for spurring •
housing and mixed-use to help achieve the growth envisioned for our 2040 centers and
corridors. Developers, citizens, local jurisdictions, and the region benefit from the VHP,
which is apparent when analyzing the applicability and manageability of the program •
as well as its effects on local taxing entities and local and regional community values. •
How to use it: A local jurisdiction, or a combination of jurisdictions, may apply to •
the state for the designation of a Vertical Housing Development Zone (VHDZ). The •
state considers the proximity of light rail station areas, transit-oriented areas, and
core areas of urban centers to help determine the merits of a proposed VHDZ. Once
a VHDZ is approved, developers follow local project standards and codes, but apply •
directly to the state for the Vertical Housing tax abatement for projects within the zone. •
To be eligible, projects must:
be entirely located within an approved VHDZ •
13 be comprised of a multiple-story building, or a group of buildings, which include at •
least one multiple-story building
13 include a portion of residential and nonresidential uses
E3 construct or rehabilitate each building included in the-project
3 follow required application procedures .
3 establish the costs of all new construction and improvements .
3 calculate residential development into equalized floors' contained in the project, not •
counting parking, patio, or porch areas unless granted an exception.
---o- Abatement: All projects meeting state regulations receive the property tax abatement •
on the improvement value for a 10-year period. The number of floors constructed or •
rehabilitated for residential use in proportion to the total square footage of a project
determines the tax exemption rate the developer will receive. The rate of the abatement
ranges from 20 to 80 percent: •
3 20 percent for one floor of housing •
m 40 percent for two floors of housing
13 60 percent for three floors of housing
M 80 percent for four or more floors of housing.
►Existing use of the tool in the region: Since the state created the program •
10 years ago, it has approved four projects. The state approved most of these proj-
ects between May 2005 and October 2006. Currently in the region, only the cities of •
Gresham and Milwaukie have established Vertical Housing Development Zones. Alter- •
natively, the City of Beaverton has decided to use this investment tool on a project-by-
project basis, only pursuing a VHDZ for a project it wants to secure.
1. "Equalized Floor" means the quotient that results from the division of total square footage of •
a project (as determined by the Department) by the number of actual floors of the project that •
are at least 500 square feet per floor. Definition from OAR Chapter 813, Division 013. •
10 : Financial incentives: vertical housing
June 2007 •
• The City of Milwaukie set up a Vertical Housing Development Zone in 2002 "As Milwaukee's city
at the request of a developer that needed the abatement to make a pro- manager, I have been
posed mixed-use project in the city's downtown financially feasible. When the actively involved in the
developer first approached the city, it was unaware of the VHP. When the city creation of a vertical
• established the VHDZ, its sole intention was to secure the proposed develop- housing tax abatement
ment project. Thus, the VHDZ only encompassed the project site. zone. I believe that it is
an economic develop-
Before filing the VHDZ application, the City of Milwaukie met with special tax- ment tool that works.
ing districts (e.g. the fire district) within the proposed zone in order to explain Moreover, I believe
• the benefits of the program and relieve concerns about tax abatement. By that it is a tool that
• working with special taxing districts, the city gained their full support and can be readily used by
participation in the VHDZ. Learning that the tax abatement only applies to small jurisdictions such
improvements, is limited to a maximum of 80 percent, and lasts only I0 years as mine."
helped special taxing districts recognize that the improvements from the proj- - Mike Swanson
• ect would provide a greater benefit through an increase in overall tax revenue City Manager,
City of Milwaukie
• and may serve to attract additional development in the area. Both the city
. and the state recognize this outreach as a critical component to the success of
Milwaukie's VHDZ and an important step for other jurisdictions to take when
developing a Vertical Housing Program.
The City of Milwaukie regards the VHP as an ideal tool for smaller cities to
• provide an incentive to a developer since the tax abatement is limited and
acquiring it is very manageable. If another developer hesitates and needs the
assistance on a project, the city will consider using the VHP again and apply-
ing for another VHDZ either for the project site or to encompass a larger area
in its downtown.
• tr
North Main Village project, City of Milwaukie, September 2006
Financial incentives: vertical housing : 11
. June 2007
Vertical Keep in mind...
housing
•••>Applieability: Cities and counties can set up a VHDZ as broad as a downtown area •
or as specific as a project site. In addition, there is no limit to the number of VHDZs
"The VHP is a city or county may designate. This allows cities or counties to establish a VHDZ
superior to earlier : encompassing multiple sites in order to stimulate development in a specific area and •
tax abatement minimize staff time processing the tax abatements or to establish site specific VHDZs
programs in for each project the city or county approves of in order to prevent giving unnecessary
two ways: it is tax abatements and also to acquire additional community returns. Whether applied on •
streamlined and a project-by-project basis or through a broader VHDZ, cities and counties can use this
predictable. The tool in numerous centers and corridors to increase density and mixed-use development.
streamlined process In addition, state statutes authorize local jurisdictions to acquire property located in a
means that once the VHDZ for the purpose of developing vertical housing projects. •
city has approved •
the program, >Manageability: This financial incentive demands minimal staff resources and exper-it Is not necessary to go tise from the local jurisdiction and is relatively easy to use for both local jurisdictions •
and developers. Creating a VHDZ only requires a short, manageable application, and
through a permit i once a jurisdiction establishes a VHDZ it continues indefinitely. However, a jurisdiction •
process at the local can modify or discontinue its VHDZ at any time with a brief application to the state.
level. The program This quick, non-restrictive program is easy to manage and also helps reduce unneces- •
is predictable in that : sary tax abatements.
developers know
that if they propose i...> Taxing districts: Municipalities and local taxing districts will not receive the total
a project that meets tax revenue generated on development improvements occurring within the VHDZ •
the definitions in until the 10-year abatement period is over. This may be difficult for cities with limited •
the VHP ordinance, resources. However, the tax abatement is limited to a portion of the tax revenue gen-
they receive the erated by qualifying improvements in the VHDZ. This minimizes the reduction in tax •
abatement." revenue to special taxing districts especially in comparison to other tax abatement pro- •
-Janet Young, grams. Often, the tax revenue generated to these taxing districts is higher than the reve-
Economic Development nue generated by the current use even with the Vertical Housing tax abatement in place.
Director, •
City of Gresham
Special taxing districts can opt out of the VHDZ while the city is establishing the zone •
or at any time after it is established. This could affect the amount of the tax abatement
after it is approved for a project. This is of particular concern where special districts
provide many municipal services. Thus far, local taxing districts affected by the Vertical •
Housing Program have participated in the local VHDZ recognizing the long-term ben-
efits of increased development and overall revenue increases.
= > Community: The Vertical Housing Program does not replace or override any of the •
local building and planning regulations in the various jurisdictions, and thus it main-
tains design standards suitable for the local community. In addition, if a city or county
chooses to apply the Vertical Housing Program on a site-by-site basis, it can apply the •
tax abatement to projects developing higher quality and sustainably designed projects. •
Oregon statutes also allow cities and counties to acquire or dispose of real property
•
located in the VHDZ for the purpose of developing vertical housing projects. The juris- •
diction may sell this acquired property at real market value or, if it will prudently encour-
age the development of a vertical housing project, at a lesser value. This and the addi-
tional property tax abatement on the tax lot encourage the development of housing, •
including affordable housing units, and mixed-use development in various communities. •
12 : Financial incentives: vertical housing
June 2007 •
The City of Gresham received approval for its Vertical Housing Development "Mixed-use develop-
Zone from the state in March 2006. Gresham's VHDZ covers a large area of ment is extremely
their regional center. In the past, the City of Gresham established a transit-ori- challenging and,
• ented tax exemption program (TOTE) for a similar purpose of encouraging more coupled with high cost
. mixed-use, dense development, particularly housing, in its center. However, that penalties due to its
process included additional rules and required a public hearing process that left construction type and
developers with uncertainty about receiving the abatement. Gresham deter- potential rents or sales
mined that the VHP was a better tool for the city since public input occurs at not supporting pro
• the forefront, when the jurisdiction establishes the VHDZ and eliminates the forma gaps, it takes
• public hearing process for each development project. Thus the City of Gresham every tool available to
conducted a public process to establish the VHDZ and public input led toward reduce these gaps. Once
acceptance of the program. Now, when developers apply for the abatement, understood, the Vertical
the state guarantees approval of the abatement to qualifying projects since the Housing Program truly
• public process already approved the VHDZ. is a win/win tool for
the jurisdiction, devel-
The City of Gresham's experience with tax abatement financing resulted in oper and taxing district.
more dense and attractive developments than were possible without the abate- It facilitates the devel-
• ment. Thus, under the VHP, the city chose to establish a broad VHDZ in order opment of a project
• to send a strong signal to the development community and attract mixed-use that has a much higher
projects to this area. However, Gresham is also willing to consider other VHDZs value than what would
on a case-by-case basis elsewhere in the city. Since adopting the VHDZ, the city be developed other-
of Gresham has received several inquiries from developers regarding the VHP wise, usually offsetting
and one developer planning to locate a project in the VHDZ submitted a project the abated taxes. When
• application to the state for the abatement. the abatement ends,
a property with tip to
three to five times the
. market value of what
would have otherwise
been built, becomes
fully taxable."
- Mike Rossman,
• Peak Development, LLC,
Beranger Development
• L{t~ Project, City of Gresham
Beranger Development Project, pending approval of the VHDZ abatement, City of Gresham
Financial incentives: vertical housing : 13
• June 2007
•
i
Vertical Keep in mind...
housing
•
Housing choices: The program provides abatements for both rental and for sale •
housing. If the project includes rental units, the developer directly receives the benefit
of reduced costs over the first ten years of the project due to the partial tax abatement. •
When developing for sale housing, the tax abatement is passed on to the buyer who •
receives a partial property tax abatement over the first ten years. This reduction in costs •
to the buyer can help the developer secure quicker sale of the units. Alternatively, the
developer could consider the reduction in monthly housing costs to the buyer in deter- •
mining the sale price of the units and potentially capture some of the value of the tax •
exemption in the.final sale price. Ultimately the local community benefits from addi-
tional rental and home ownership opportunities. •
If a development project contains at least one equalized floor of low-income hous-
ing, the developer also receives a partial property tax exemption on the land value.
The developer must identify in the application whether the project contains affordable •
housing units for persons or families with 80 percent or less of the area median income •
and continue to meet that requirement for the entire period for which the vertical hous-
ing project is certified. In the region, 80 percent household median income is approxi-
mately $38,000 in annual income for a single person, which equates to $850 per month •
in housing costs. This feature of the tool is particularly effective at achieving mixed- i
income housing developments, and when used in conjunction with other incentives and
funding resources, it has the ability to improve the feasibility of projects comprising i
entirely affordable units. •
•
•
•
The City of Beaverton assessed the local applicability of the Vertical Housing •
Program. It decided not to establish a VHDZ, but rather to use the program as •
a strategic tool on a case-by-case basis. The city prefers to maintain control of
the certification process for projects the city supports and that have a distinct
reason for the tax abatement. This allows the City of Beaverton to assure the •
abatement is only given when needed to finance the project or when a public •
benefit is provided by the project (e.g. plaza, route to transit, park, etc.). It also i
allows the City of Beaverton to place additional requirements on the devel-
opment project in exchange for the tax abatement. By using this approach
with the VHP, the City of Beaverton implements this investment tool through i
a development agreement for the project and then applies for a VHDZ for the •
project site. •
•
•
•
14 : Financial incentives: vertical housing •
June 2007 •
• Putting it together
• The Vertical Housing Program is a financial incentive that can stimulate desired invest- City staff were
ments in centers and along corridors region wide. The program is particularly useful ` involved in drafting
when targeted to specific areas where the local housing market is relatively flat or in the legislation that
• local housing markets that are on the cusp of achieving sufficient rents or sale prices to created the VHP, and
• support unsubsidized multi-story mixed-use development. However, the Vertical Hous-
ing Program contains the flexibility to allow each locale within the region to designate concept. However, the
• VHDZs in an approach appropriate to reaching its own community's goals.
• lack of local control of
Cities with more resources, a strong development interest, or higher land values may approval of a property
choose to apply the program on a project-by-project basis in order to limit tax abate- tax abatement for a
• ments to only those projects that need it, provide additional community benefits, or ; project after a VHDZ
• make maximum density and preferred facilities (e.g. affordable housing or a parking is established has led
structure) feasible. The Vertical Housing Program also provides cities or counties that the city to the posi-
have limited resources an opportunity to attract investments. Each city or county in the tion that we will only
• region has the ability to apply the Vertical Housing Program in a way that is most suit- ; apply for a VHDZ for
• able for that area in order to focus density and increase investment in its centers and a project site after we
corridors. are certain the project
woUld benefit the citi-
• Tips for implementing the Vertical Housing Program at the local level: tens of Beaverton.
• 3 Analyze the housing market and community environment in the city or county and
- Hal Bergsma,
choose the most applicable approach to meet the local community's needs. Principal Planner,
3 Calculate the local ]Jur.isdiction's threshold for the tax abatement before establishing Community Development
a VHDZ. Department,
City of Beaverton
• 13 Work with special taxing districts when considering applying for a VHDZ.
• 13 Consider the goals in the city or county when pursuing a VHDZ and the option of
applying additional local requirements to achieve these goals by using the program
• on a site-by-site basis.
• 3 Set a future date to analyze the results of using the program and reconsider the
• local jurisdiction's need for using the program and the appropriate approach.
0
Financial incentives: vertical housing : 15
• June 2007
►For additional information on Oregon's Vertical Housing Program, including •
application materials, visit: •
Oregon Housing and Community Services (OHCS)
725 Summer St. NE, Suite B
Salem, OR 97301-1266 •
(503) 986-2000
http://www.ohcs.oregon.gov/OHCS/HFS_VerticalHousingProgram.shtml
•
OHCS Metro Regional Advisor's Office •
123 NE 3rd St., Suite 470
Portland, OR 97232 0
(503) 963-2289 •
http://vwvw.ohcs.oregon.gov/OHCS/DO-RegionalAdvisors.shtml •
0
i ► For more information on the use of the Vertical Housing Program •
in the region, contact:
City of Gresham
Community and Economic Development •
1333 NW Eastman Parkway •
Gresham, OR 97030
(503) 661-3000 0
http://www.ci.gresham.or.us/departments/cedd/ •
City of Milwaukie 0
Community Development
City of Milwaukie Johnson Creek Facility ,
6101 SE Johnson Creek Blvd.
Milwaukie, OR 97206 0
(503) 786-7600 •
http://wvvw.cityofmilwaukie.org/departments/cdadmin/cdadmin.htmi •
City of Beaverton
Community Development •
PO Box 4755
4755 SW Griffith Drive
Beaverton, OR 97076 •
(503) 526-2494
http://www.beavertonoregon.gov/departments/CDD/ 0
0
> For more specific details on the statutory guidelines of the VHP, 0
see Oregon Administrative Rules (OAR) Chapter 803, Division 013 at:
http:Harcweb.sos.state.or.us/rules/OARS_800/OAR_813/813_250.htmI •
0
0
0
•
16 : Financial incentives: vertical housing •
June 2007 40
•
•
•
•
• The Crossings,
• TOTE recipient, \
City of Gresham
•
• of
• Transit-Oriented Development
• Tax Exemption (TOTE)
• The Transit-Oriented Development Tax Exemption encourages the construc-
tion of transit-supportive, multiple-unit housing in urban centers in order to
• improve the balance between the residential and commercial nature of those
• areas. It seeks to ensure full-time use of urban centers as places where citizens
• of the community have an opportunity to live as well as work. Local jurisdic-
tions design the local application of the TOTE to encourage dense, mixed-use
projects in transit-oriented areas by reducing operating costs through a prop-
erty tax exemption on the improvements. With immediate relief from a signifi-
cant increase in taxes, projects become feasible and developers can invest addi-
tional funds in these developments.
• Financial incentives: TOTE : 17
• June 2007
•
The nuts and bolts
•
TOTE 7
The TOTE provides the region with a strong financial tool for spurring density, housing •
and mixed-use development to help achieve the growth envisioned for our 2040 centers
and corridors. Developers, citizens, local jurisdictions, and the region benefit from local •
TOTE programs, which is apparent when analyzing the applicability and manageability
•
of the program as well as its financial and community-based outcomes.
State law enables cities and counties to establish and design programs to attract new •
development of multiple-unit housing, and commercial and retail property, in areas •
located within a light rail station area, transit oriented area or downtown (city core)
area by means of a local property tax exemption. According to state statutes, the local
programs shall emphasize the following: •
13 the development of vacant or underutilized sites in light rail station areas, transit .
oriented areas or core areas, rather than sites where sound or rellabilitable multiple
unit housing exists •
3 the development of multiple-unit housing, with or without parking, in structures •
that may include ground level commercial space •
13 the development of multiple-unit housing, with or without parking, on sites with
existing single-story commercial structures
3 the development of multiple-unit housing, with or without parking, on existing sur-
face parking lots •
13 the preservation, construction, addition or conversion of units at rental rates or sale •
prices accessible to a broad range of the general public.
► How to use it: To use the Transit-Oriented Development Tax Exemption, cities and •
counties need to adopt, by resolution or ordinance through a public process, the pro- •
visions of ORS 307.600 to 307.637. Then, the city or county shall designate an area
within which it proposes to allow exemptions through its TOTE program, which the •
city or county may amend at a later date. In addition, a city or county with a popu-
lation of over 300,000 may apply the TOTE within a designated urban renewal or
redevelopment area. A city may designate core areas, light rail station areas, or tran-
sit-oriented areas whereas a county may designate areas as light rail station areas or •
transit-oriented areas but may not designate core areas. A county's use of the tool is not •
limited to its unincorporated areas.
3 Light rail station area means an area defined in regional or local transportation
plans to be within one-half mile radius of an existing or planned light rail station. •
3 Transit-oriented area means an area defined in regional or local transportation •
plans to be within one-quarter mile of a fixed route transit service.
Once the jurisdiction establishes a TOTE area, cities or counties shall develop an appli-
cation form as well as standards and guidelines to consider applications and make •
determinations about applying the TOTE. Applicants must apply on or before Feb. 1
the year prior to which the applicant is requesting the exemption. The city or county •
may permit the applicant to revise an application prior to making a final decision. •
The local jurisdiction has 180 days to approve or deny an application for the TOTE.
Before approving use of the TOTE for a project, a city or county must hold a public •
hearing in order to determine whether the project meets the qualifications. In addition, •
to receive the TOTE, a project needs the approval from local taxing districts represent-
.
18 : Financial incentives: TOTE
June 2007 •
•
IBM
•
•
• In the past, the City of Gresham has used the transit-oriented tax abatement.
The projects receiving the TOTE resulted in significantly more dense and
• attractive projects than would have been possible without the exemption.
•
• Receiving the tax abatement motivated the developers and helped make
• the projects feasible. The program proved successful in the City of Gresham
resulting in more dense, attractive development projects near transit such as
• Central Point and Gresham Central Apartments. Each project required a public
. hearing process to decide whether or not the developer would receive the tax
• exemption. This was a lengthy process due to political considerations in the
City of Gresham.
• Despite these complications, the city recognized the importance of the
• exemption and continued to use the program until the state implemented
• the Vertical Housing Program. The City of Gresham saw this new program
as a means to encourage similar development patterns while minimizing
• the review process experienced in Gresham with the locally controlled TOTE
• program.
•
• / : I ate' - '1'1 a ! a
ji~~al ttt
•
•
• :
e
I "1Z
• • a •
• I FF
111011 M..
• . Q _ . Q s0i Al - _ ~ .
•
• Central Point (top, left), Landmark at 8th (top, right) and The Crossings all received the
TOTE, City of Gresham
•
• Financial incentives: TOTE : 19
• June 2007
ing 51 percent or more of the total combined rate of taxation levied on the property. •
Final action upon an application by the city or county shall be in the form of an ordi-
nance or resolution approving or denying the application and the jurisdiction must pro- •
vide to the applicant, in writing, the reasons for a denial. •
► Qualifying projects: In order for a local jurisdiction to approve a project for the
TOTE, the project must meet the definition of a multiple-unit housing project: •
involves the production, rehabilitation, establishment or preservation of hous-
ing affordable to those with a defined level of household income in an agreement
between a public agency and the property owner OR
0 develops new structures, stories or other additions to existing structures as well as
structures converted in whole or in part from another use to dwelling units. •
It also needs to meet the following criteria: •
3 includes the minimum number of dwelling units as specified by the local jurisdiction
11 excludes transient accommodations, including hotels and motels •
13 integrates design elements benefiting the general public as specified by the local •
jurisdiction, such as open spaces, parks, child care facilities, and pedestrian design •
elements
13 conforms with all local plans and planning regulations applicable at the time the
TOTE application is approved •
13 meets the local jurisdiction's basic requirements for a TOTE application •
0 relates physically or functionally to and enhances the effectiveness of the light rail •
line or mass transportation system if located in a light rail station or transit ori-
ented area.
►Tax exemption: If approved, the property receives a 1.00 percent tax exemption on •
the "improvement" value for all residential areas. The exemption may also include
the parking constructed as part of the multiple-unit housing construction, addition, •
or conversion. In the case of a converted structure or additions to a structure, only •
the increase in value attributable to the addition or conversion is tax exempt. The tax
exemption applies only to the taxes levied in that jurisdiction and of those taxing dis-
tricts that agree to participate. The exemption can last for no more than 10 successive •
years. Local jurisdictions may terminate an approved Transit-Oriented Tax Exemption •
for failure to complete construction or comply with Oregon statute or local TOTE pro-
gram provisions. •
••••►Existing use of the tool in the region: Since the state authorized local juris-
dictions to establish abatement programs for transit-oriented development projects,
numerous projects have received the TOTE. Currently in the region, only the City of •
Portland has an active transit-oriented development abatement program. In the past, .
the City of Gresham used the TOTE and approved several projects to receive the
exemption. •
20 : Financial incentives: TOTE
June 2007 •
•
•
• The City of Portland created its Transit Oriented Development (TOD) tax abate- "The TOD Tax Abate-
ment in 1996 to provide the TOTE to high density housing and mixed-use ment program has
• projects located on vacant or underutilized sites along transit corridors whose been an invaluable
• design and features encourage building occupants to use public transit. The tool in our condo-
• PDC manages the TOD abatement program and sets the requirements and minicrm developments
• guidelines for projects eligible to receive the TOTE. The cost to apply in Portland in the Gateway area
is $5,000. of northeast Portland.
• Nearly 93 percent of
• Project sponsors must first demonstrate that the property tax exemption is nec- all purchasers have
• essary to make the project financially feasible. The project must also contain qualified for the tax
ten or more dwelling units. The project design must provide for a continuous abatement, and it is
• pedestrian connection to a light rail station or mass transit system, include one safe to say that nearly
• or more of several specific design features, and must provide one or more pub- all of them would
• lic benefits. have been unable to
• qualify for their loans
The Bookmark Apartments, in the Hollywood Town Center, is a mixed-use had they not had the
• development with a ground floor library branch that received the TOTE through advantage of the lower
• Portland's TOD abatement program. Other projects made feasible through Port- payment this afforded
• land's program are Russellville Commons Townhouse Apartments at Southeast them. The TOD Tax
102nd Avenue and Pine Street in a light rail station community on the aban- Abatement program
• doned Russellville School site; Gateway Towers in the Gateway Regional Center has increased our
and the Cooper Street Town Homes in the Lents Town Center. absorption rate and
• reduced our market-
Ten years after implementing the program, Portland is still committed to pro- ing costs, which has
viding tax abatements to multiple-unit housing projects in TOD areas. In allowed us to keep our
• 2006, the city renewed the TOD abatement program with revisions in order to unit prices extremely
• increase the effectiveness of the program. With additional financial and staffing affordable. The result
• resources in the City of Portland, the advantages of a locally designed program in Gateway is 138
outweigh complications experienced similar to those in Gresham. homeowners who
• _ _ would most likely still
• be renting if it were
• - not for this program."
i
• - - Gordon C. Jones,
Real Estate Developer
• ~ 111f- ~
• e
• 't; dam'; ' _ _ - ~
The Bookmark Apartments in Hollywood Town Center, City of Portland
•
• Financial incentives: TOTE : 21
• June 2007
►Loeal programs: The Transit-Oriented Tax Exemption, similar to the Vertical Hous-
ing Program, provides local tax abatement for dense, mixed-use housing. However,
with the TOTE program the jurisdiction has more control, because it establishes its
own program and guidelines and approves the abatement locally. This enables a juris-
dictionto tailor the program to the local needs. A jurisdiction may require an applicant •
to demonstrate the abatement is necessary to achieve economic feasibility for the pro'
ect and may also leverage or require the project to develop other public benefits. •
On the other hand, local control does require sufficient staff resources to develop and •
administer a local program. Taking advantage of the TOTE takes a significant amount
of staff time to understand the state TOTE guidelines and then to create the local pro- •
gram and review abatement applications. The jurisdiction can offset the financial costs
by setting an application fee with the assistance of the county assessor in an amount
sufficient to cover the cost incurred by the local government in administering the •
program. •
Even after setting up the program, the review requires a public hearing process which
adds an additional time commitment for both the jurisdiction and the developer. This •
process carries a financial risk for the developer by slowing down the development •
process and presenting uncertainty as to whether or not the applicant will receive the
abatement. The jurisdiction may also incorporate a pre-application meeting into the
application process in order to reduce the risk to developers by providing information •
up front on how to prepare successful applications. .
►Community: This tax exemption encourages the development of housing and mixed- •
use development in centers and corridors. Since the state gives programmatic control to •
the local jurisdiction, the city or county can also leverage public benefits for the needs
of the local community such as affordable housing, open space, ground floor service or
commercial use, family-oriented recreational facilities, sustainable designs, or transit •
amenities. In addition, this program does not replace or override any of the local build- •
ing and planning regulations in the various jurisdictions, and thus it maintains design
standards suitable for the local community. There is no limit to the number of TOTE •
areas a jurisdiction may designate. Therefore, a program can be tailored to the specific •
needs of a variety of locations.
= > Housing choices: The state enacted legislation to provide the TOTE in order to pro- •
mote the development of multiple-unit housing in core areas and transit areas. The •
program provides the tax exemption for both rental and for sale housing. This provides
the local community with additional rental and home ownership opportunities, particu-
larly in central areas with access to public transportation and services. •
If the project includes rental units, the developer directly receives the benefit of reduced
costs over the abatement period (maximum of 10 years) of the project. When develop- .
ing for-sale housing, the tax abatement is passed on to the buyer who receives the tax •
abatement for up to ten years or longer if it is an affordable housing unit. Combined
with the access to transit, which results in a potential reduction in personal transpor-
tation costs, the reduction in purchase price can help the developer secure quicker •
sale of the units. Alternatively, the developer could consider the reduction in monthly •
22 : Financial incentives: TOTE
June 2007 •
•
•
•
•
• housing costs to the buyer in determining the sale price of the units and potentially
capture some of the value of the tax exemption in the final sale price.
• r` _ f
• The TOTE program encourages the preservation and creation of housing that is afford-
able to all segments of the population through the use of the 100 percent tax exemp-
tion for these types of properties in a TOTE area. Furthermore, a city or county may
2-77
• designate the entire city or county as a TOTE area in order to allow this tax exemption
• for affordable housing under an agreement between the public agency and the property
owner. Likewise, the city or county may extend the duration of the TOTE for this type
• of affordable housing as long as it remains low-income housing under the agreement. 141
• This encourages a long-term supply of affordable housing units. If utilizing a TOTE for
this type of housing, state statute requires the applicant to demonstrate that the TOTE 7
is necessary to preserve or establish the low-income units. In addition, a local jurisdic-
tion may establish its own housing affordability guidelines such as requiring qualifying
• projects to include a specific percentage of affordable housing units for different house-
• hold median income ranges.
• Fiscal Impacts: The exemption provides 100 percent property abatement on the -4 }
• improvement value for the residential areas of a project rather than a partial abate-
ment. In addition, if taxing jurisdictions representing 51 percent or more of the assessed r'
• value in the county approve the project for abatement, then the entire abatement is
• still received. This is more attractive to developers than a partial abatement program Additional TOTE projects
such as Oregon's Vertical Housing Program, which reduces the abatement a developer include the Cooper Street
receives based on local taxing authorities that decide to opt out. Conversely, projects Town Homes (top), Lents
Town Center; Gateway
• requesting the TOTE may receive additional opposition from local taxing districts, Towers (center), Gateway
• because of an increase in the loss of revenue they will experience. Regional Center; and Rus-
sellville, City of
• Although local taxing districts will not gain tax revenue on project improvements dur- Portland (bottom)
• ing the temporary abatement, they will experience a significant increase in tax revenue
• after the expiration of the abatement. In most cases that increase in tax revenue would
not have occurred without the project. If the TOTE secures the project, then the tem-
porary exemption provides an integral role in increasing the livability and financial
• well being of an area. In addition, since the state gives programmatic control to the
. local jurisdiction, the city or county may require an applicant to demonstrate that the
abatement is necessary for the project to achieve economic feasibility. This ensures local
jurisdictions and taxing districts do not lose needed tax income due to giving unneces-
sary abatements.
• In cities or counties that require transit supportive features, such as Portland, these fea-
tures can raise the construction cost of a project significantly. Thus, in cities or neigh-
borhoods not located in a strong housing market, affordable housing may not be an
appropriate requirement or public benefit need whereas increasing density may be the
primary goal and program requirement in order to promote investment in transit as a
• growth management strategy in keeping with the 2040 Growth Concept.
•
•
•
•
• Financial incentives: TOTE : 23
• June 2007
One strategy for achieving the goals of the 2040 Growth Concept is to direct develop- •
ment to regional and town centers and along corridors in order to create higher-density
areas that combine housing, employment, retail, and cultural and recreational activi- •
ties in a walkable environment that is well-served by transit. The locally implemented •
TOTE program encourages this type of development, and both the City of. Gresham
and the City of Portland have experienced these results through successful use of the
TOTE program. Additional centers and corridors can benefit from using the TOTE to •
encourage local investment and achieve development patterns that support the 2040 .
Growth Concept.
Tips for implementing the TOTE at the local level: •
13 Consider implementing a program in your jurisdiction to provide a TOTE to quail- .
fying projects along main streets, frequent bus corridors, in light rail station areas,
and along future light rail corridors.
13 Carefully consider and seek advice on what guidelines and steps in the local appli-
cation process to include in the local program. •
U Assess what requirements and optional benefits the community needs and the local
market can implement in determining the guidelines of the program.
m Consider providing developers with a choice of which public benefit(s) to incorpo-
rate into the project in order to provide flexibility to the developer and to meet the .
needs at a specific project location. •
Resources
► For more specific details on the TOTE guidelines, see:
ORS Chapter .
307.600 - 307.637
http://www.leg.state.or.us/ors/307.htmi
For additional information or clarification about the Portland TOD abatement •
programs, contact:
Portland City Code •
Chapter 3.103
Portland Development Commission
(503) 823-3269
http://www.pdc.us/housing-serv/hsg-development/todguide.asp •
0
IN. For information on Gresham's past experiences, contact: •
City of Gresham •
Community and Economic Development Department
1333 NW Eastman Parkway 0
Gresham, OR 97030-3825 •
(503) 618-2504
24 : Financial incentives: TOTE •
June 2007 0
• The Oregon Convention _
Center was built on
an old brownfield site,
• City of Portland
•
•
•
•
r
•
•
•
•
• t 1
• • . 1 1
Brownfields Assessment
•
• and Cleanup Funds
• Properties with unknown environmental conditions deter communities, devel-
opers, and investors from developing these sites due to cleanup complica-
tions and added costs, leaving communities with unused and undcrutili-rcd
• properties. The region's centers, corridors and employment areas contain such
• "brownfield" sites. Through brownfields assessment and cleanup funds from
the state and the Environmental Protection Agency (EPA), cities, counties and
property owners can identify and clean up brownfield sites, leading to their
• redevelopment. Recycling brownfields within the urban growth boundary helps
• reduce sprawl and implement the 2040 vision.
• Financial incentives: brownfields : 25
• June 2007
Brownfields Keep in mind...
•
cleanup
"A brownfield site is real property, the expansion, redevelopment, or reuse of which •
may be complicated by the. presence or potential presence of a hazardous substance,
pollutant, or contaminant.."' In 1994, the EPA created the Brownfields Program to
address the nation's 600,000 abandoned or underused properties due to suspicion of •
contamination. The program took a locally based approach to implement solutions
and ensure benefits from the revitalization efforts remained in local neighborhoods. In
2002, the program expanded to incorporate technical assistance for a range of non- •
Federal brownfields stakeholders. •
The U.S. EPA's Brownfields Program focuses on four basic principles: protecting the
environment, partnering for success, stimulating the marketplace, and promoting sus- •
tainable reuse. The program empowers local brownfields programs primarily by pro- •
vid'ng grants for environmental assessment, cleanup, and job training activities. Brown-
fields programs and funds provide the region with a strong financial tool for spurring •
the redevelopment of underutilized lands for housing, mixed-use, and job creation •
opportunities in order to help achieve the growth envisioned for our centers, corridors,
and employment areas. Developers, citizens, local governments, and the region benefit
from recycling brownfields, which is apparent when analyzing the financial and com-
munity-based impacts of the program. •
> How to use it: The EPA Brownfields Program now provides funding for revolving
loan fund grants, cleanup grants, and assessment grants of which the first two require a .
20 percent cost share. .
0 Revolving Loan Fund grants: for coalitions to provide no- or low-interest grants
from a revolving loan fund to carry out cleanup activities at brownfield sites
111 Cleanup grants: for cleanup activities at a specific brownfield site .
13 Assessment grants: for site-specific or community-wide proposals that inventory, •
characterize, assess, and conduct cleanup and redevelopment planning and commu-
nity involvement related to brownfield sites
Eligible applicants in the Metro region that may apply for these grant programs •
include: a unit of local government, quasi-governmental entity that operates as an agent
of the local government, a government entity created by a state legislature, or a regional
council or group of general purpose units of local government, a redevelopment agency, •
the state or an Indian Tribe. In addition, nonprofit organizations' may apply for site- •
specific cleanup grants. Also, a coalition of a group of two or more eligible entities may
submit one revolving loan fund grant proposal under the name of the coalition. Finally, •
to receive a cleanup grant, the applicant must be the sole owner of the property that is •
the subject of its cleanup grant proposal. •
2. "Brownfields 2006 Grant I-act Shect: Metro, Portland, Olt." U.S. Environmental Protection •
Agency. May 2006.
3. "Nonprofit organization" means any corporation, trust, association, cooperative, or other •
organization that is operated mainly for scientific, education, service, charitable, or similar
purpose in the public interest; is not organized primarily for profit; and uses net proceeds to •
maintain, improve, or expand the operation of the organization. Definition from Section 4(6)
of the Federal Financial Assistance Management Improvement Act of 1999, Public Law 106- •
107, 31 USC 610:1, Note. •
26 : Financial incentives: brownfields
June 2007 •
• Since. 1996, the City of Portland has worked with businesses and communities "Successful brown-
to foster the restoration and reuse of contaminated land and promote revital- field redevelopment
ization of neighborhoods in Portland. Through public and private partnerships, achieves environmen-
• the city has cleaned up and recycled hundreds of acres of contaminated prop- tal, economic and
• erty and created thousands of jobs, while promoting brownfields redevelop- social goals all in one
• ment, pollution prevention, and greenspace protection. project. For example,
the Arciform project
In 1998, Portland received national recognition as one of sixteen Brownfield took a blighted prop-
Showcase Communities located throughout the United States. Today, the Port- erty, cleaned it up
• land Brownfield Program continues to restore properties and revitalize the city's and integrated green
neighborhoods by providing Environmental Site Assessments (ESAs) and tech- building in a manner
nical assistance on properties throughout Portland. that supported small
business. Brownfield
• The Portland Brownfield Program assisted in the redevelopment of a site at projects also have
• North Interstate Avenue and North Skidmore Street. Formerly a gas station, risks, but public pro-
this site remained a vacant lot prior to redevelopment. The Environmental Site grains such as those at
Assessment identified petroleum contamination that led to cleanup efforts, the City of Portland
• which isolated the contamination. and Metro help to
• answer the unknowns
Redevelopment of the site resulted in a new building which now houses a and make formerly
coffee shop, dance studios, office and workshop space. The developer uti- unthinkable projects
lized sustainable building practices and products during waste disposal and feasible again."
. construction. The City of Portland recognizes redevelopments such as this as -Clark Henry,
• an important component of continuing to revitalize the community along the Portland Brownfield Program,
North Interstate corridor. City of Portland
- -
0
zr h. yr
Photographs of the site at North Interstate Avenue and North Skidmore Street
before (leftt) and after (right), City of Portland
Financial incentives: brownfields : 27
• June 2007
Currently, the EPA reviews all applications on a yearly basis with grant applications •
generally due the December prior to the year for which an entity is requesting funds.
When reviewing the applications and issuing the different grants, the EPA considers •
the following factors: community need, impact on human health and the environment, •
site eligibility or selection process, effective use of existing infrastructure, community
involvement, leveraging of other funds, eligibility for funding from other sources, and
the ability to manage grants. •
Brownfields Law excludes the following three types of properties from funding eligibility:
0 facilities listed (or proposed for listing) on the National Priorities List
El facilities subject to unilateral administrative orders, court orders, administrative •
orders on consent or judicial consent decrees issues to or entered into by parties •
under the Comprehensive Environmental Response, Compensation and Liability
Act (CERCLA), commonly known as Superfund
0 facilities that are subject to the jurisdiction, custody or control, of the U.S. government. .
In addition, no part of a grant or loan from EPA may be used to pay costs at a brown- •
field site for which the recipient of the grant or loan is potentially liable. Potentially lia-
ble parties consists of current owners and operators of a facility, owners and operators .
of a facility at the time of disposal of a hazardous substance, parties that arranged for •
the treatment or disposal of hazardous substances, and parties that accepted hazardous
substances for transport to disposal or treatment facilities. •
•
•
•
f ~
•
•
•
•
A 1. 1
•
•
The South Waterfront Redevelopment project began with major environmental challenges and •
now is quickly developing into a dense, mixed-use neighborhood with residential units, public ser-
vices, riverfront amenities, a section of the Willamette Greenway and public transit connections. •
City of Portland
28 : Financial incentives: brownfields •
June 2007 •
i
•
ann
•
Mail
• Through a grant awarded by the U.S. Environmental Protection Agency (EPA), "Through this pro-
s Metro has developed a Brownfields Recycling Program to provide technical and gram, the region has
• financial assistance to local jurisdictions, landowners and other stakeholders. In an extraordinary
• collaboration with local jurisdictions and regional experts, Metro will research and opportunity to identify
• select properties for Environmental Site Assessments. the most contaminated
sites and promote their
Site selection will focus on properties that are located in communities where restoration as commu-
• a significant portion of the census tracts has a household income below the nity assets. Brownfield
• median income for the region or contain a higher percentage of minority popula- cleanup provides sig-
• tions than the regional average, are not currently served by other EPA brownfields ni ficant opportunities
programs, and have a high potential for positive economic, social, and environ- to create jobs in the
• mental impacts. Findings from these assessments will aid in the development of region by developing
• plans to move sites toward cleanup and redevelopment. industrial and mixed-
use centers, as well as
• Metro can assist local governments working with property owners and devel- affordable housing,
opers in their communities to overcome redevelopment obstacles by providing parks or open spaces."
assistance in the investigation of potentially contaminated properties, identifying - David Bragdon,
• and securing funding in the form of grants and loans, and accessing technical Metro Council President
• resources needed for site cleanup and redevelopment. Metro will also conduct
informational meetings and technical workshops with property owners, develop-
ers, local jurisdictions, regulators, and environmental experts.
•
• In providing assistance, Metro will draw on its experience with the acquisition of
• more than 8,000 acres of land for natural areas as well as the 240-acre St. Johns
Landfill, the region's primary waste disposal site for 50 years until it closed in
i 1991. Metro took over operations from the City of Portland in 1980 and assumed
• ownership in 1990. Since then, Metro has implemented a restoration program
i designed to convert the site from a liability to a community asset within the
Metro-managed Smith and Bybee Wetlands Natural Area. The program includes
• environmental protection and monitoring systems, habitat development using
• native plants, streambank repair, and planning for trails that will connect the
• site to the St. Johns neighborhood. Currently, Metro is also conducting a
• detailed site investigation to identify and remediate any remaining risks not con-
trolled by the existing program.
• St John's land- r
• fill before and
after (far right)
cleanup and
• redeveloment S,
by Metro, City
• of Portland
• i
•
•
• Financial incentives: brownfields : 29
• June 2007
However, certain liability protections also exist to protect owners and prospective pur-
chasers of contaminated properties who are not responsible for the contamination (and
not affiliated with a responsible party) and comply with certain specific conditions pro- •
vided in federal statute CERCLA b 107. In addition, the Brownfields Law clarified the •
innocent landowner defense and established liability protections for contiguous prop-
erty owners and bona fide prospective purchasers of contaminated land.
Despite these recent improvements, the federal liability protections remain quite lim-
ited. In Oregon, the Prospective Purchaser's Agreement (PPA) offers additional support
to prospective purchasers of contaminated land. The PPA is a legally binding agreement •
with Oregon's Department of Environmental Quality (DEQ), which defines and limits
the buyer's potential liability to DEQ for environmental cleanup of the property. In
return for this liability release, the purchaser must provide the state with a substantial
public benefit such as commitment to perform substantial cleanup or productive reuse •
of a vacant facility.
Both federal and state programs, despite their limitations, can be integral to the ac-
quisition, cleanup, and redevelopment of contaminated property. A PPA reduces the •
potential risk for both buyers and investors making redevelopment possible. Likewise, •
property owners or prospective purchasers of a contaminated site that qualify for one
of the federal liability protections also become eligible for funding, which can bridge a •
financing gap for a brownfield redevelopment project.
In order to qualify for any of these programs, landowners must comply with certain
obligations to take "appropriate care" after purchasing a property, and a prospective •
landowner must conduct "all appropriate inquiries" prior to purchasing a property. •
13 Appropriate care includes cooperating and not impeding with cleanup, site access, •
site information requests, and legal notice requirements; stopping any continuing
releases, preventing future releases, and preventing or limiting human and environ-
mental exposure to releases; and complying with land use controls. •
13 All appropriate inquirics is the federally mandated process of evaluating a prop- •
erty's environmental conditions and assessing potential liability for any contami-
nation. These must be conducted or updated within one year prior to the date of
acquisition of a property by an environmental professional. •
)-Existing use of the tool in the region: Currently in the region, Gresham, Portland,
Clackamas County and Metro have received EPA funds and established brownfields
programs. Individual property owners have also applied for and received federal and •
state site-specific assessment and cleanup funds to redevelop and revitalize properties. •
30 : Financial incentives: brownfields .
June 2007
r
Clackamas County received an EPA assessment grant in May 2002 and a sec-
ond in September 2006. The county's primary objective is to stimulate the
cleanup and redevelopment of brownfields in order to reuse the county's
industrial land areas. The county's goal is to collaboratively redevelop strategic
• brownfield sites and to focus on economic diversification and revitalization that
• will help the county to create more jobs, increase property values, and reduce
blight and health hazards for its citizens.
• The county used its EPA funds to host brownfields forums, reach out to indus-
trial property owners to assist them with brownfields issues, conduct environ-
mental site assessments on certain properties, and develop a remediation plan
with cleanup strategies and next steps for selected sites. Clackamas County
provided in-depth technical assistance to forty property owners, completed
• twenty-seven Phase I ESAs, and conducted seven Phase II ESAs of which six
• received "no further action" letters from the Oregon Department of Environ-
mental Quality. These sites are now an asset to the county and are ready for
reuse or redevelopment.
• Clackamas County found ten sites with redevelopment potential if cleanup
• efforts could be stimulated, six sites already in the clean up process, and four
sites with property owners willing to cover cleanup costs or uninterested in
addressing contamination issues in the near term due to the ongoing busi-
nesses located on those sites. After conducting these assessments, the county
• can now pursue grants for those sites ready for cleanup efforts and explore
incentives for private sector brownfields redevelopment.
"The EPA Pilot Assessment program has been critical to Clackamas County's
• brownfield program and successful in spurring industrial property owners to
• understand and address contamination issues on their sites. Technical assis-
tance and assessment funds are effective incentives for redevelopment. The ulti-
mate goal of the program is economic development, increased assessed values,
additional sites for traded sector industries and family wage jobs."
• - Renate Mengelberg,
• Clackamas County Business and Economic Development Services
Financial incentives: brownfields : 31
• June 2007
►Community: The redevelopment of brownfield sites provides economic, social and
environmental benefits and reinvigorates communities through the facilitation of job
growth, creation of affordable housing, parks and open spaces, elimination of health
risks, and an increase in the community's tax base. The community benefits from •
reclaiming these properties from blight and recycling them into spaces that provide
the community with an improved image, a sense of pride and an important neighbor-
hood asset. Recycling these sites also utilizes existing infrastructure and removes level- •
opment pressure from undeveloped, open land by focusing growth within the urban •
growth boundary.
However, designation of a brownfield without providing clear information about the •
site and a plan for mitigation can create a stigma for that property and the surrounding
properties. Even though there is little requirement for formal community involvement
in project planning, working with the community and property owners is essential to a •
successful brownfields program. •
►Financial: Federal and state programs provide liability assistance and funding to
assess and clean up brownfield sites. This reduces the contamination risks and financial •
burdens to potential property owners and redevelopment projects. The federal program
leveraged more than $6.5 billion in private and public funds for brownfields cleanup
and redevelopment creating approximately 25,000 new jobs. However, the application •
for these funds is extremely competitive. Less than half of applicants receive funding, •
and besides the revolving loan fund, grants do not exceed $200,000 each. Federal fund-
ing also comes with Davis-Bacon wage requirements, which can increase project costs.
In addition, certain communities struggle with the political will to address blighted
properties and the lack of additional economic incentives needed for development. •
►Local programs: The federal Brownfields Program provides states with the author- •
ity to design and implement independent cleanup programs. This allows a state to •
focus resources and tailor their local programs to address their specific situations and
concerns. As a result, Oregon could establish the Prospective Purchaser Agreement pro-
gram to provide additional liability protections and develop a cumber of financial and •
technical assistance programs under the DEQ and Oregon Economic and Community •
Development Department to more successfully facilitate the redevelopment of local
brownfield sites. Local jurisdictions and nonprofit organizations can also obtain federal
EPA funds to set up locally tailored and targeted programs that can finance the assess-
ment and clean up of brownfield sites. This offers another resource to property owners,
prospective purchasers and local communities.
The Oregon Museum •
of Science and Industry
resides on an old •
A - brownfield site cleaned
L ,F by Portland General
I ®W Electric and the Bureau of
■ ■ -1 , Environmental Services' •
+ Brownfield Program. •
City of Portland •
32 : Financial incentives: brownfields •
June 2007 •
•
•
•
• Ava Roasteria is a new coffee shop located in the City of Beaverton's town "It's been an exciting
center on the site of an abandoned gasoline station. Several years ago, addition to the down-
Oregon's Department of Environmental Quality identified the site as a town core. It serves
• brownfield needing immediate attention. The previous owners were unable as an example of
• to finance the cleanup. At the time, the state paid for the evaluation of the the kinds of projects
• contamination and installed monitors due to conern regarding groundwater urbanized areas can
contamination. utilize. I hope we see
• more of this kind of
• Interested in developing the property, NEEK Engineering signed a prospec- revitalization."'
• tive purchaser's agreement with the DEQ and worked with the previous - Rob Pochert,
property owners in order to purchase their interests in the site. The firm then Economic Development
• secured a cleanup loan with the Oregon Economic and Community Devel- Program Manager,
City of Beaverton
• opment Department, which works with property owners and DEQ to move
• brownfield projects forward.
NEEK Engineering removed four underground storage tanks and the con-
taminated soil. The firm also worked with the community to identify a
• desired future use of the building and with the city to design an innovative
project that also met local code. Neighboring properties, frustrated by the
• contaminated site for years, sent letters of gratitude and support for the
redevelopment work. NEEK Engineering also enjoys the income generated
• by the increased land values associated with moving the property from an
• abandoned gas station to an operating community business.
•
•
•
•
•
•
• Ava Roasteria, site of a previously abandoned gas station, City of
• Beaverton
•
• 4. Lent, Christina. Fresh Brew: Ava Roasteria perks up a former
• brownfield site in downtown Beaverton. The Beaverton Valley Times,
September 23, 2006.
•
• Financial incentives: brownfields : 33
• June 2007
•
r, •
Properties with unknown environmental conditions exist throughout the region. In
keeping with 2040, the region should prioritize the recycling of brownfields in order to •
reduce sprawl to surrounding farmland, forestland and natural areas and to promote •
investments, job growth, affordable housing, parks, and the elimination of health risks. •
Local jurisdictions, property owners, and developers can all benefit from recycling
brownfields and using local and federal funding programs when needed in order to •
assess, cleanup, and redevelop these sites. •
►Tips for implementing a brownfields program at the local level: •
3 Prioritize the identification and redevelopment of brownfield sites in centers, corri-
dors, and employment areas. •
E3 Apply for federal community-wide and/or site-specific assessment and/or cleanup •
funds from the EPA.
13 Develop outreach materials to inform the community of the benefits and plans for •
local brownfields initiatives. •
3 Work with local property owners to educate them and facilitate the move toward •
assessment, cleanup and redevelopment. •
3 Facilitate the connection between property owners, regulators, investors and devel-
opers in order to ease concerns and brainstorm opportunities. •
13 Seek technical and financial assistance from state, regional, and local jurisdictions •
with brownfields program experience. •
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
34 : Financial incentives: brownfields •
June 2007 •
o Qo~~OQO Resources
QOemp
• ►If you know of a property that may be contaminated or would like more infor-
mation about the Metro Brownfields Recycling Program including upcoming infor-
mational meetings, technical workshops and other resources, contact Metro's Plan-
0 ning Department at (503) 797-1839
• -For more information about local programs, eligibility, and technical support,
contact:
City of Portland
• Bureau of Environmental Services, Portland, OR 97204
• (503) 823-5863 • http://www.portlandonline.com/BES/index.cfm?c=dfaai
Clackamas County
• Business & Economic Development
• 9101 SE Sunnybrook Blvd., Clackamas, OR 97015
• (503) 353-4329 • http://www.co.clackamas.or.us/business/assist/toolbox.htm
City of Gresham
• Community and Economic Development Department
• 1333 NW Eastman Parkway, Gresham, OR 97030
(503) 661-3000
http://www.ci.gresham.or.us/departments/cedd/bia/industrial/brownfields.asp
• The State of Oregon's Brownfields Redevelopment Fund is a direct loan and grant
• program to assist municipal and non-municipal applicants with environmental actions
linked to site redevelopment that facilitates economic development or community revi-
talization. http://www.econ.state.or.us/brownfieIds.htm
• The Technical Outreach Services for Communities (TOSC) is a free program, housed
at Oregon State University, that provides assistance to communities affected by environ-
mental contamination. http://tosc.oregonstate.edu/
► More information on EPA's Brownfields Cleanup and Redevelopment Program
can be found online at http://www.epa.gov/brownfields
CERCLA §104(k) contains more detailed information on sites eligible for Brownfields
funding. http://www.epa.gov/R5Brownfields/pdf/term_and_conditions_cleanup.pdf
• Liability protection information for contiguous property owners and prospective
purchasers can be found at http://www.epa.gov/compliance/resources/policies/cleanup/
superfund/common-elem-guide.pdf
All appropriate inquiry information can be found at:
http://wv,/w.epa.gov/brownf ields/reg neg. htm
http://www.epa.gov/brownfields/aai/aai_final_factsheet.pdf
Financial incentives: brownfields : 35
• June 2007
•
•
•
•
• Tanner Springs Park in
• the Pearl District is part
of the River District
• Urban Renewal Plan,
• City of Portland,
Portland Development t`
Commission
• 1
•
•
•
•
• Urban Renewal
•
• and Tax Increment Financing
• In Oregon, urban renewal and its associated financial tool, tax increment financ-
ing (TIF), serve as a strong financial incentive to stimulate investment in targeted
areas by borrowing against the projected increase in property values in those
areas. Some of the region's centers, corridors, and employment areas suffer from
• a lack of investment due to a range of development risks that diminish confi-
dence in investment returns, making them difficult to develop. Using TIF allows
• these areas to provide a substantial source of equity to make capital improve-
ments and development projects financially viable while kick-starting private
• investments.
• Financial incentives: urban renewal : 37
• June 2007
Urban Renewal began as a federal program that offered municipalities federal loans •
and grants to redevelop communities and stimulate private investment in areas that
otherwise would remain stagnant. In 1951, the Oregon Legislature enabled legisla-
tion for local urban renewal agencies. Voters approved a constitutional amendment in ,
1960, which authorized the use of tax increment financing to increase available local •
resources to match the federal urban renewal funds. In :1979, the Oregon legislature
expanded the definition of "blighted" to make it relatively broad. This means central •
areas needing capacity improvements for their infrastructure as well as newly incor-
porated areas that are underdeveloped and lacking adequate infrastructure can both
qualify as urban renewal areas.
Through TIF, the assessed value of real property within the defined area of investment •
is frozen and the authorized agency acquires capital by issuing bonds against the future
projected increase in property taxes for that area. The bond proceeds are invested in •
improvements or projects within the area. Public and private investments in the desig-
nated area increase property values above the frozen assessment, and the tax revenue
collected on the incremental property value is then used to service the bonded debt.
Urban renewal and the use of tax increment financing provide the region with a strong •
financial tool for spurring housing and mixed-use to help achieve the growth envi-
sioned for our centers, corridors, and employment areas. Developers, citizens, local
jurisdictions, and the region benefit from urban renewal, which is apparent when ana-
lyzing the applicability and financial impacts of the program as well as its effects on .
local communities in the region.
10- How to use it: Any municipality can benefit from tax increment financing if it •
establishes an urban renewal area, adopts an urban renewal plan, and manages these
through an urban renewal agency consisting of the governing body or an independent
organization. To be eligible: •
0 the urban renewal agency must complete an eligibility and feasibility study of an
area
3 an area must be defined by "blight," which consists of deteriorated buildings or lack
of adequate infrastructure •
13 an urban renewal plan must contain goals and objectives, authorized projects, spe-
cific provisions for acquiring and disposing of land, expenditures, and a process for •
amending the plan
m projects must involve construction or improvement of streets, utilities, and other i
public uses; rehabilitation or conservation of existing buildings; acquisition and •
improvement of property; and/or resale or lease of property. •
Oregon's statutes place limitations on the use of tax increment financing. This financial •
tool is limited to use within urban renewal areas. In addition, in municipalities with •
more than 50,000 people, according to the latest state census, the total land area of
all the urban renewal areas using TIF in the municipality cannot exceed 15 percent of
the total land area of that municipality, and the total assessed value for all the urban
renewal areas using TIF in the municipality cannot exceed 15 percent of the total •
assessed value of that municipality (this excludes any increased assessed value for other
urban renewal areas). For municipalities with less than 50,000 people, according to the
38 : Financial incentives: urban renewal
June 2007 •
• The City of Sherwood formed its Urban Renewal District on August 29, 2000 "The urban renewal
in order to rejuvenate the Old Town area. The goals and objectives of the process has been
Urban Renewal plan include promoting private development and perform- critical to Sherwood
ing arts; rehabilitating the existing buildings; and improving the streets, as we have revitalized
. streetscapes, open spaces, local utilities, parking, and public facilities. In addi- our city's core. It has
tion, the plan outlined an investment strategy for telecommunications infra- not only had a huge
structure. This brought high speed Internet and free Wi-Fi hot spots into Old impact on our citizens,
Town, which resulted in a business owner developing a multi-use building, but, some of the proj-
. relocating to Old Town, and increasing the tax rolls in the area. This repre- ects made possible by
• sented the first building permit in Old Town, in over forty years. urban renewal have
had positive impacts
The City of Sherwood also worked with the school district in order to receive on the region."
• their support for the Urban Renewal area. Thus, the urban renewal plan - Ross Schultz,
included improvements for the local high school's playing fields and field City Manager,
house. Currently, the city has spent approximately $20 million of the $35 City of Sherwood
million generated through TIF on fa4ade improvements, a civic building and
library, street and utility improvements, high speed Internet hot spots, a multi-
purpose facility for a field house and office space, a turf field for the high
• school, and the demolition and remediation of a blighted building in the city's
Old Town.
~Il. d
i
}
• 1 t
•
• S
• New construction in Old Town sparked by the Urban Renewal` Internet investment
• strategy, City of Sherwood
Financial incentives: urban renewal : 39
• June 2007
•
Urban and bolts
renewal
latest state census, the total land area of all the urban renewal areas using TIF in the
municipality cannot exceed 25 percent of the total land area of that municipality, and
the total assessed value for all the urban renewal areas using TIF in the municipality
•
cannot exceed 25 percent of the total assessed value of that municipality (this excludes •
any increased assessed value for, other urban renewal areas).
Tax laws also place limitations on TIF. As a result of Measure 5 (1990), TIF is cat- •
egorized as local government taxes subject to the $10 per $1,000 real market value •
tax limit. Measure 50 (1997) limits property taxes and results in 50 to 60 percent
less revenue through TIF than under. Measure 5. As a result, existing urban renewal •
plans were grandfathcred and allowed to complete their projects without this limita-
tion. Despite a decrease in revenue due to these tax measures, especially for new urban
renewal areas, TIF remains a powerful financial tool for redevelopment projects.
► Existing use of the tool in the region: In the Metro region, 10 of 25 cities and •
Clackamas County currently have urban renewal areas in place. In addition, three
neighboring cities use urban renewal, and 11 of the 2040 centers arc located or par-
tially located within an urban renewal area. Urban renewal programs in the region
have revitalized deteriorated communities, produced catalyst projects, and completed
significant public improvements. The Portland Development Commission has received
national recognition for its ability to provide extensive public improvements such as •
Tom McCall Waterfront Park, Pioneer Place, and Union Station. Despite the successful .
use of this tool, many jurisdictions within the region are not using urban renewal at all
or to the capacity allowed by state law as shown in Table 1.
Table. 1. Use and capacity of urban renewal in the regions .
Percent Percent of Percent of Percent •
allowed in total land assessed value UR capacity
Jurisdiction UR areas in UR areas in UR areas used •
Portland 15% 14.0% 9.4% 93.5% •
Wilsonville 25% 22.1% 2.7% 88.5% •
Sherwood 25% 19.2% 9.4% 77% •
Gladstone 25% 18.1% 14.5% 72.4% •
Gresham 15% 8.1% 7.4% 53.8%
Oregon City 25% 14.2% 2.7% 69.4%
Tualatin 25% 13.9% .7% 55.5%
Unincorporated 15% 3.1% .4% 20.8%
Clackamas Co. •
Tigard 25% 2.5% not available 10.2% •
Lake Oswego 25% 2.3% 1.0% 9.1%
Troutdale 25% 1.5% not available 6.2%
5. The table shows the local jurisdictions in the region using urban renewal, the capacity (in percent) allowed •
by the state for that jurisdiction, the percentage of total land area designated within urban renewal areas
for each jurisdiction, the total percent of the jurisdiction's assessed value that is within its urban renewal •
areas, and the remaining capacity for the use of urban renewal within the jurisdiction. The capacity used is
measured by the percentage each jurisdiction is using of its total urban renewal capacity allowed in urban •
renewal areas.
•
40 : Financial incentives: urban renewal
June 2007 •
i I
turban Renewal,
Regional Capacity
by Land Area
~
ii I I?
F
! I I~
;
if
.x ,a r,, a
n
r . ra'
:i
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~3i+$i13^Yi f
i
i
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it :7nR5i41; -
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:
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i
•
•
•
•
• The City of Oregon City established its urban renewal plan in 1983 and has "Urban renewal
two urban renewal districts: the Hilltop Urban Renewal District and the Down- districts provide a
• town/North End Urban Renewal District. The plans' strategies focused on pro- creative way for cit-
• moting activities, transportation, parks and open spaces, redevelopment assis- ies to invest in their
• tance, civic improvements, infrastructure, property acquisition and planning future by using long
• and administration. The plan also established the maximum debt level for the term public finding
urban renewal areas by estimating projects costs, the increment of increased to leverage private
• value, and bonding and borrowing capacities. investment for projects
• that can transform
• Oregon City established the Hilltop District in 1989 and discontinued the area a community to a
as an Urban Renewal district in 2005. The city estimated the net assessed more livable place.
• value of the Hilltop District grew from $5 million to $65 million during this These projects often
• time period. A significant improvement in this district was the improvement include downtown
• and expansion of Beavercreek Road through TIF and funds from SDCs and redevelopment, afford-
Public Works. able housing, infra-
structure improve-
The city established the Downtown/North End Urban Renewal District in 1990 ments and economic
• in its 2040 Regional Center. Thus far, the city estimates the net assessed value development."
• of the Downtown/North End District grew from $50 million to $132 million - Dan Drentlaw,
with tax revenues increasing approximately $2.2 million. Objectives specific to Community Development
• this area include mitigating blighted conditions on an old landfill site, cultural Director,
and historical rehabilitation, and achieving 2040 Regional Center goals. The City of Oregon City
Seventh Street Corridor project provided a significant improvement to this
' district resulting in dozens of storefront improvements, additional restaurants,
and a renewed interest in Oregon City. With matching funds from the Oregon .
• Department of Transportation and the Metropolitan Transportation Improve-
ment Program, the district's next major project encompasses significant
• improvements to McLoughlin Boulevard and the Riverfront.
•
i
AA&
• QRF.GON (I~py
• i _'r
•
• Transportation improvements and historic rehabilitation completed in Oregon City's
Urban Renewal districts, City of Oregon City
•
• Financial incentives: urban renewal : 43
• June 2007
I MA AIR MIMI • •
ii
0
The map on page 39 shows regional capacity for urban renewal by land area. It depicts
what percentage each jurisdiction is using of its total urban renewal capacity by land
area. The jurisdictions represented in white use zero percent of their capacity, as they •
do not have urban renewal areas, and therefore have 100 percent of their capacity .
available, whereas the jurisdictions with the darkest shade are close to meeting their
urban renewal capacity allowed by state law.
The city and county capacity by assessed value is not depicted on the map. According •
to state law, the use of urban renewal cannot exceed the same percentage in either land
area or assessed value within a jurisdiction. In the Metro region, the percent of total •
land area in urban renewal areas exceeds the percent of total assessed value in urban •
renewal areas for every jurisdiction in the region as shown above in Table 1. Thus, at
this time, the capacity for urban renewal for each jurisdiction is measured by the dif-
ference between the total land area currently in urban renewal areas and the percent •
allowed by state law for each jurisdiction. .
Keep in mind
~i
►Fiscal impacts: By establishing an urban renewal area, local jurisdictions can use •
tools such as low-interest loans and selling land at "fair reuse value" in order to lower
redevelopment costs and stimulate activity in disinvested urban and non-urban areas.
Tax increment financing provides an immediate funding source, which can leverage
additional sources of revenue and private sector partnerships in order to complete •
important or more extensive public improvement projects. However, some communi-
ties lack the economy to gain enough of an increment to finance any consequential •
redevelopment. Alternatively, unnecessary subsidies for the private sector could occur if •
too much land is included in an urban renewal area or if the market is nearly ready to •
invest in that area.
:....D-Taxing districts: Local taxing districts, such as schools and fire departments, do •
not gain revenue from the increase in tax value for the properties located in an Urban
Renewal area until the program expires even though the urban renewal improvements 0
often add new customers that the local districts need to serve. Therefore, these taxing •
districts sometimes oppose urban renewal in their communities. jurisdictions in this •
region have resolved this opposition by including projects for the taxing districts in the
urban renewal plan. Another local solution, used by the City of Wilsonville, is to peri-
odically modify the urban renewal area boundaries to return properties back to the tax •
rolls at their total assessed value, and thus, provide the taxing districts with additional
tax revenue before the completion of the urban renewal plan.
0
Local experts and practitioners have discussed other approaches that would require •
modifications of the existing law. One solution would allow certain taxing entities to
opt out in order to get the urban renewal area approved. Another would limit the tax
increment to the improvements only, which would allow the taxing entities to capture •
revenues from the increased land value. Taxing entities could also collect the share of the
44 : Financial incentives: urban renewal
June 2007 •
•
•
•
• The City of Tualatin established its first Urban Renewal area in 1975 with the "Tualatin lacked a
adoption of the Central Urban Renewal Plan. Initially, the city adopted urban strong identity of its
• renewal to alleviate blighted conditions in the city's core caused by a manufac- own and was in danger
turing industry within the commercial district. Over the years, the city expanded of becoming simply an
• the original Central Urban Renewal area and attempted to develop a Village ordinary suburb-that
• Square during the late 1980's. The city turned to community members for input is, until a combination
and received clear direction for a pedestrian oriented downtown with a strong of circumstances and
• civic focus. vision and hard work
• led to a solution:
• The result of this engagement was the Tualatin Commons development at the the development of
heart of the Central Urban Renewal District. Tualatin Commons consists of a mix a central place, a
• of restaurants, office buildings, a hotel, townhomes and apartments, and open downtown, a civic
space surrounding a 3-acre lake. The city's plan for this area also outlines future "living room" on a
• improvements to remove blight and to further ensure the vitality of the Tualatin 19-acre site. This new
• Commons and downtown area including projects to add pedestrian crossings, city center has given
and enhance the streetscape and signage. The city's last amendment of the Tualatin a unique and
Central Urban Renewal plan occurred on May 22, 2002. positive identity. Its
• realization testifies
• Tualatin adopted a second urban renewal area in 1982, the Leveton Tax to the power of a
Increment District. The city annexed a large area of land located west of the true public-private
• existing city limits in order to provide the level of infrastructure and services partnership.116
necessary to support appropriate industrial development. The city wanted - Dave Leland, Developer
the area for a highly demanded campus-like industrial development. The
• area provided a significant opportunity for this with its single property owner,
relatively flat landscape, and accessibility within the region. The city established
an urban renewal area in order to use tax increment financing to add services
• such as sewer, water and roads to the annexed area, which was blighted,
• underdeveloped, and faced a variety of physical and economic obstacles to its
future use. The result is the Tualatin Business Campus, significant infrastructure
• investment, and an opportunity for the city to recruit businesses.
•
F
• r ` _ $ 6. Unsprawl Case Study:
• Tualatin Commons, Oregon.
Tualatin Commons, a project located in Tualatin's Urban Renewal area, City of Tualatin http://ww%v.terrain.org/un-
sprawl14
• Financial incentives: urban renewal : 45
• June 2007
Urban
i~
renewal g revenue from increased improvement values that is tied to the rate of inflation. In addi- •
tion, expanding the costs allowed under urban renewal to allow local jurisdictions to
provide items such as fire trucks and park maintenance would reduce the costs of and •
opposition from local taxing districts. Finally, a change to current law that would allow .
a pass through agreement to provide resources to the local taxing districts after a cer-
tain time period, but before the end of the urban renewal period.
)-Housing choices: Urban renewal is an effective program with the potential to help •
achieve a number of public policy objectives. Through local legislation a portion of
TIF revenue can be dedicated to a specific policy objective, including the provision of
affordable housing. The Portland Development Commission and the City of Portland, •
guided by the city's Comprehensive Plan Housing Policy, adopted policy (Ordinance •
No. 180547) that dedicates 30 percent of TIF revenue over the life of all city urban
renewal districts for the sole purpose of developing, rehabilitating and preserving hous-
ing for households with incomes below 100 percent of median family income. •
While the Portland 30 percent TIF set aside is applicable to all urban renewal districts,
proposed income guidelines under consideration as of January 2007 would allow varia-
tion between districts in the allocation of revenues to housing units serving 0 to 30 •
percent, 30 to 60 percent, and 60 to 100 percent of median family income. However,
it should be noted that the proposed income guidelines would require a minimum •
threshold expenditure on housing serving 0 to 30 percent median family income and •
cap expenditure on housing serving 60 to 100 percent median family income. Flexible
income guidelines allow for a more targeted approach that considers housing policy
objectives for each individual district.
Community: Although new urban renewal areas commonly incorporate community
involvement as an integral component to their plans, some of the first urban renewal .
programs in the country cleared large areas, demolishing entire neighborhoods, in order •
to rebuild these areas. This can still stir up fear and opposition to new urban renewal •
programs. In addition, defining an area as "blighted" can carry a negative stigma.
Furthermore, many urban renewal programs lead to and do not reduce the impacts of •
gentrification, and therefore, current residents oppose urban renewal in fear of their •
eventual displacement. In this region, some jurisdictions also have provisions in their
charters requiring voter approval for urban renewal areas or even prohibiting the use
of urban renewal due to previous community opposition. •
Some jurisdictions in the region have resolved community issues by limiting the use of
eminent domain, remaining transparent and honest through the urban renewal plan- .
ning and development processes, working with and gaining the support of the local fire •
departments and school districts, and by demonstrating the jurisdiction's current and
past planning and development successes to the local citizenry.
> > Flexibility: While tax increment financing was authorized in Oregon as an urban •
renewal financing method, many other states have enacted legislation that permits the
use of TIF as a funding mechanism for local jurisdictions to finance redevelopment in
other areas. Using TIF independently from urban renewal would enhance the flexibility •
of this tool in the region. Jurisdictions could continue to use urban renewal as a power- •
ful redevelopment tool but could also use TIF for other areas and development oppor-
46 : Financial incentives: urban renewal
June 2007 .
• tunities where it is important to remove the additional barriers associated with urban
renewal.
• Some situations in which TIF can be used outside of urban renewal include:
• * in non-blighted areas that may just need infrastructure improvements
0 in small business districts where setting up a separate urban renewal agency and
plan would be unmanageable but the area needs upfront financial assistance to
• improve the area and attract additional revenue
• 3 and in communities where urban renewal would face opposition.
• Using TIF independently also allows site specific and small TIF districts as opposed to
the traditionally large urban renewal areas.
• These small TIF districts often face less opposition from local taxing districts because-
the opportunity cost of forgone incremental tax revenue is less than-in a large urban
renewal area. Despite consisting of small areas that generate less tax increment for
• investment, many main street programs and business improvement districts have suc-
cessfully used TIF to make important streetscape, fagade, and infrastructure improve-
ments to attract and retain development, commercial tenants, and pedestrian and
consumer activities. Using TIF separately from urban renewal would allow additional
• communities in the region, particularly those in centers and along corridors, to use TIF
• to encourage additional development. In order to take advantage of this financial tool
in these situations, legislative authority would need to change state statute by adding a
• section defining redevelopment areas and enabling the use of TIF in such defined areas.
_
•
C 11,
• Tax increment financing helped fund the redevelopment of the Heritage Building (before, left and
after, right) in the Convention Center Urban Renewal Area, City of Portland, Portland Develop-
ment Commission
•
•
•
• Financial incentives: urban renewal : 47
• June 2007
~r
Urban renewal provides a powerful financial tool that can enable redevelopment proj- •
ects to improve local infrastructure, revitalize communities, and spur additional invest-
ments to the area. In this region, jurisdictions of various sizes and attributes have expe-
rienced great success from using urban renewal. .
As outlined by Tashman Johnson, LLC, most successful urban renewal plans in Oregon
are rooted in a clear vision for the area, contain a re-evaluation process, link to adopted •
community plans, provide flexibility to take risks, anticipate and resolve controversial •
issues, maintain honesty with the local citizens, and leverage other resources.7 Likewise,
projects including a mix of residential and industrial or commercial uses generate the
greatest increment and more fully revitalize a community. •
*-Tips for implementing urban renewal and tax increment financing at
the local level:
Use urban renewal and TIF in centers, corridors, and employment areas to make
important infrastructure and redevelopment projects possible or more extensive. •
® Determine the financial capability for establishing an urban renewal area/TIF •
district.
11 Calculate the estimated time needed to generate enough of a tax increment to set-
vice the debt on the first project.
3 Analyze community reception to urban renewal/TIF and resolve any issues in order •
to make urban renewal/TIF districts possible in the local jurisdiction.
0 Work with special taxing districts to alleviate their concerns and establish support
for the urban renewal area/TIF district and plans.
0 Consider setting aside a portion of the tax increment to finance public goods and .
social infrastructure such as affordable housing. •
7. Tashman Johnson, LLC (2002). Urban Renewal in Oregon: History, Case Studies, Policy •
Issues, and Latest Developments. •
48 : Financial incentives: urban renewal
June 2007 •
• The State of Michigan uses tax increment financing independently as a
• powerful financing tool for various re-investment programs. State law autho-
rizes four TIF authorities. Downtown development authorities focus on busi-
ness and main street districts. A general TIF authority is broader and focuses
on all types of urban neighborhoods. Both capture the tax increment within
• the set plan boundaries. A local development financing authority focuses on .
• employment and economic growth and captures the tax increment on each
eligible property or within certified business and technology parks, and a
brownfields authority focuses on Brownfield redevelopment zones capturing
the tax increment for each of the brownfield parcels included in the brown-
fields plan (one or more parcels). A city can set up more than one TIF author-
ity, but only one of each type. Each authority has a slightly different focus, but
the general purpose for all of them is not to reinvest in blighted areas, but to
prevent deterioration and promote economic development, revitalization and
• historic preservation in all areas.
The State of Massachusetts also uses tax increment financing separate
• from Urban Renewal through the Development Improvement Financing pro-
gram. Cities and towns are eligible to utilize this financing alternative without
• qualifying the district as blighted, substandard, or economically impaired.
A city or town first designates a development district and a corresponding
development program, which must be certified by the state. Each district must
have an implementation and financial plan for infrastructure and development
. improvements. A development district may be as small as one parcel or may
comprise up to 25 percent of a town or city's land.
• The State of Vermont established a new Tax Increment Financing District
• Program in 2006 despite a different political environment than when most TIF
programs were established in the 1970's and 1980's. The program was com-
panion legislation to their growth centers program in order to provide a new
• financial mechanism for municipalities to fund infrastructure improvements,
• such as sewer and parking, within their growth centers. The purpose is to pro-
vide revenues for improvements in the district, which will stimulate develop-
ment, employment, and economic vitality without a requirement for "blight"
in the community. Eligible communities are expected to be able to submit
• applications for TIF District designation beginning in 2007.
Financial incentives: urban renewal : 49
June 2007
•
•
•
MQba~ Resources
wmad •
For additional information on urban renewal in Oregon, and to link to addi- •
tional Urban Renewal Resources, visit: •
The Association of Oregon Redevelopment Authorities
hitp:Horurbanrenewal.org/ •
•
►For more information about local programs, visit: •
City of Portland
222 NW Fifth Ave., Portland, OR 97209 •
(503) 823-3200
http://www.pdc.us •
City of Sherwood •
22560 SW Pine Street, Sherwood, OR 97140
(503) 625-4202
http://www.ci.sherwood.or.us/index.htmi •
City of Oregon City •
P.O. Box 3040, 320 Warner Milne Road, Oregon City, OR 97045 .
(503) 657-0891 .
http://www.orcity.org/ •
*For information on programs using TIF separately from urban renewal, visit:
The Council of Development Finance agencies
http://www.cdfa.net/cdfa/cdfaweb.nsf/pages/tifstatestatutes.htmi •
State of Michigan TIF Authorities
Citizens Research Council of Michigan
Livonia Office: (734) 542-8001 • Lansing Office: (517) 485-9444 •
http://www.crcmich.org/EDSurvey/toc.html#fpta •
Massachusetts TIF Program •
http://www.mass.gov/envir/smart_growth_toolkit/pages/mod-diftif.html •
Vermont TIF District Program •
Department of Economic Development •
Vermont Economic Progress Council •
National Life Building, Drawer 20 •
Montpelier, VT 05620-0501 •
(802) 828-5256
http://www.thinkvermont.com/vepc/index.html
io-For more specific details on the statutory guidelines of urban renewal and TIF •
in Oregon, visit: •
ORS Chapter 457 at http://www,ieg.state.or.us/ors/457.html •
•
50 : Financial incentives: urban renewal •
June 2007
•
•
• The Hillsboro City
• Council approved a
LID in August 1996
• to build pedestrian
' and streetscape
improvements as well
as transit amenities
• to implement the '
vision of the
• downtown light rail _ _ - _ _ - - - -
• improvements, - - - - -
City of Hillsboro - - -r-
a •
•
•
• Improvement Districts
•
• (LIDs, BID s and EID s )
• By establishing Improvement Districts, local jurisdictions can provide
• another incentive for investment in centers, corridors and employment areas.
• Improvement districts fund integral physical and visual improvements as well
• as the activities needed to maintain these vibrant, healthy neighborhoods and
• to attract additional development, investment and public use.
•
•
•
•
. Financial incentives: improvement districts : 51
June 2007
•
Improvement districts are assessment districts in which property owners choose to •
be assessed a fee, which is collected on their behalf by the local jurisdiction in order
to finance local improvements or to promote a business area. Slight differences exist .
between Local Improvement Districts (LIDs), Economic Improvement Districts (EIDs), .
and Business Improvement Districts (BIDS).
These improvement districts provide communities with a financial tool to pay for infra- •
structure and program management activities that support the growth envisioned for •
our centers, corridors, and employment areas. Developers, citizens, local jurisdictions,
and the region benefit from the use of improvement districts, which is apparent when
analyzing the applicability and manageability of the program as well as its effects on i
local communities.
Table. 2. Improvement districts: types and attributes •
Improvement Funding Finances Approval Time Jurisdictional •
district source source period use •
Local Fee collected Infrastructure Ordinance Until Cities of Beaverton, •
Improvement from improvements or project Cornelius, Forest
District (LID) property resolution debt is Grove, Gladstone,
owners by local fully Hillsboro, Oregon •
jurisdiction paid City, Portland, Tigard
and Wood Village; •
Clackamas and •
Washington counties
Economic Assessment Non-physical City Five City of Gresham
Improvement to property revitalization council years;
District (EID) owners of programs and approval renewal
businesses projects option •
Business A fee or Non-physical City Five City of Portland •
Improvement surcharge to revitalization council years;
District (BID) the business programs and approval renewal •
owner on projects option •
the business
license •
Economic and Assessment Non-physical City Five Cities of Portland •
Business to property revitalization council years; and Milwaukie
Improvement owners and programs and approval renewal •
District a fee or a projects option
combined surcharge to •
the business
owner
52 : Financial incentives: improvement districts
June 2007 •
•
•
• _ The City of Canby has an EID, which funds the operation of Canby Business "1 ant an advocate of
Development (C B D). through assessments to commercial and industrial property Economic Improve-
owners. CBD is a nonprofit organization, started in 1994, which promotes and rnent Districts because
develops Canby's commercial and industrial areas while supporting continued they provide a stable
• revitalization efforts. The organization provides information and assistance to funding source that
• new and existing commercial and industrial businesses regarding development allows staff to work
resources and available properties, as well as providing market, promotional, for at least three to
• and technical materials and support. five years focused on
specific projects rather
• In addition, CBD works with the Canby Urban Renewal District Agency to pro- than on fundraising.
vide and implement projects such as a Commercial Market Analysis, Canby In Canby, the EID has
• Downtown/Highway 99E Design Standards Project, Redevelopment Grant Pro- been a great tool for
• gram, and the Canby Facade Improvement Program. The Facade Improvement marketing and recruit-
Program provides. matching grants for design work and zero-interest loans for ment of companies in
• construction activities. The first project assisted by the Facade Improvement Pro- the industrial park and
gram is the Canby Herald building, which is in the permit stage of development. revitalization proj-
The city's Urban Renewal program also provides funds to the CBD for the Rede- ects in the downtown,
• velopment Grant program. The program provides financing to property owners because staff can focus
• in the downtown area in order to hire an architect and create a redevelopment on marketing and
plan for that property. Last year,.the program awarded four grants. Three of development efforts
these grants have advanced into $20 million in development projects. and responding to
business inquiries."
• The EID in Canby is a great example of how partnerships between agencies and - Catherine Comer,
the collaboration of financing can result in significant developments in a commu- Executive Director,
•
nity. The City Council, the local Chamber of Commerce, and the Canby Business Canby Business Development
Development each have a role in the various projects. This combined effort of
• management and financing makes the programs feasible and successful.
• ALUMINUM TRIM
• STATUS BRONZE' SW 7034 FASCIA BAND 6 ALLEY WALL
PERFERATEDALUMWUM 'SANDSOFTWSWS10f
SCREEN CAP 6 COLLUAWS
• CLEAR ANODIZED STATUS BRONZE' SW 7034
PERFERATED ALUMINUM
EXIST SIGN BAND WRH ALUMNUM
• LINK GRAY LETTERS. CLEAR ANODIZED
EXIST B
IRON ORE
• . t EXISTING WINDOWS
fY{ i., EXISTING NEWS BOXES
4 6REUSED
• 1Y7Ir` ~9 _ ALUMINUM STOREFRONT
CLEAR ANODIZED
ry1 ~"G---K ABOVE 6 BELOW WINDOW'
• - 'SANDS OF DW-SW 0101
{ r ~n c r~-._~ _STEE --CHANNEL
STATUS BRONZE' SW 7034
SHERMN WILLIAMS PAINT TO BE USED
• COLORS AS DESIGNATED
• The Canby Herald building with renderings of the facade improvements, Canby Busi-
ness Development Facade Improvement Program, City of Canby
•
Financial incentives: improvement districts : 53
. June 2007
:••••►Loeal Improvement Districts collect fees to pay for infrastructure improvements
including new construction or the reconstruction of deteriorated facilities such as storm
and sanitary sewers, street paving, curbs, sidewalks, water lines, recreational facili-
ties, street lighting, and off-street parking. The local jurisdiction determines the cost to •
develop the improvements in order to establish the fee collected from the local property
owners. The following are characteristics of a LID:
11 State statute outlines collection guidelines for the assessments, but local govern-
ments (cities and counties) may impose additional procedural requirements. •
3 Many jurisdictions choose not to establish LIDS unless initiated by local property •
owners.
3 If a jurisdiction initiates and imposes the assessment for local improvements, own-
ers of any property charged may seek a review of the assessment.
3 If a local government reaches its taxing limits imposed by Measures 5, 47, or 50, •
the LID needs voter approval for the city to issue LID bonds for particular projects.
® Payment continues until the debt from the project is paid.
►Economic Improvement Districts are similar to Local Improvement Districts but •
are meant to fund non-physical projects as part of a revitalization program including
business retention and recruitment, planning, promotion and marketing, maintenance,
and management. It can also fund landscaping and the maintenance of public spaces as •
well as improvements in parking systems or parking enforcement. EIDs may determine •
the assessment fee in a variety of ways. Examples include basing the assessment on the
value of the property, the amount of square footage of the parcel, linear footage of the
storefront, or the assessed or market value of the building. In any year, the total assess- •
ment cannot exceed one percent of the real market value of all the real property located
within the district.
► Business Improvement Districts are similar to Economic Improvement Districts •
in what they fund as part of a revitalization program including business retention and
recruitment, planning, promotion and marketing, landscaping, parking facilities, main-
tenance, and management. The difference is that the business owner pays a fee or a sur-
charge on the business license in a BID. As with an EID, the BID can establish various
assessment criteria. Examples include the number of employees or the gross revenue of
the business. BIDs may be voluntary, meaning a business can opt out, or involuntary. •
Characteristics of Business Improvement Districts and Economic Improvement Districts •
are as follows:
3 Only commercial properties may be assessed within the district. •
® Only cities can establish a BID or EID, and the city council establishes the district. •
3 The district may continue for a maximum of five years; but it may be renewed .
indefinitely.
3 Assessed properties decide the district boundaries, assessment formula, budget, and
program. .
3 After the city council determines the amount of the assessment for each property in •
the district, property owners may object at a public hearing, and the council shall •
reconsider and may adopt, correct, or modify the proposed assessments.
® If property owners equaling more than 33 percent of the total assessment object,
the council shall not pass the district; cities can choose to lower this percentage. •
54 : Financial incentives: improvement districts
June 2007 •
• 3 A city council may choose to make the district voluntary or involuntary: voluntary
means the council will waive the fee from those property or business owners object-
ing to the assessment, and involuntary means all property or business owners are
• obligated to pay the assessment fee if the district passes; however, a new owner of
• that property may agree to the assessment later, and the council must reapportion
the assessment fees.
® Assessed property remains subject to assessment even after change of ownership.
• Another option for improvement districts is to combine an EID and a BID to provide a
more comprehensive funding mechanism for downtown revitalization projects. In addi-
tion, the existence of local improvement districts or urban renewal districts in a city
• does no affect the creation of an EID or BID.
How to use it: Typically local property and business owners benefiting from and -4...
• paying for the improvements initiate improvement districts. Then they request, or
• petition, the city to establish a funding district on their behalf. Once the city council
approves an enabling ordinance, the improvement district proposal or plan is sent to all
affected property owners. The council then conducts public hearings. If there is no sig-
nificant opposition from affected business and property owners, the council generally
. approves the improvement district. On average, passing a new improvement district can
take a minimum of 10 to 12 months.
• Steps to implement an improvement district successfully include:'
3 forming a district committee composed of local owners and representatives from
local organizations and government involved in downtown development ready to
commit the time needed to form the district
• 3 selecting the right funding mechanism for the district
• 3 working with city staff to define roles and responsibilities in the collection process
once the district passes
3 setting well-defined and achievable goals for the local owners
3 developing a district proposal, which establishes an assessment method and bud-
get, designates boundaries, outlines organization programs and funding needs, and
• accounts for political and financial realities present in the area
0 gathering support through local organizations, leaders and chamber of commerce
® administering the district program as outlined in the proposal
3 highlighting achievements, involving owners and keeping owners informed for long-
term management and district renewals.
• Existing use of the tool in the region: Several local governments in the region <
currently use LIDs. These include: Beaverton, Cornelius, Forest Grove, Gladstone, Hill-
sboro, Oregon City, Portland, Tigard, Wood Village, Clackamas County, and Washing-
ton County. In addition, Wilsonville, Lake Oswego, and Sherwood have had LIDs in
the past, but do not currently have active districts. This level of use reflects the wide-
spread knowledge of LIDS and the benefits of their use to meet specific goals especially
• in the region's downtown areas. However, far fewer EIDs and BIDS operate within the
region. The City of Portland has a BID and the City of Gresham has an EID. The City
of Portland and the City of Milwaukie both have a combined EID/BID.
• 8. Oregon Downtown Development Association (1999). The EID/BID Handbook.
Financial incentives: improvement districts : 55
• June 2007
Improvement • •
districts i •
► Fiscal impacts: Local Improvement Districts provide a source of funding for infra- •
structure improvements. LID bonds also increase the financial security for private
developers by sharing the risk of new development with the local government and
taking advantage of lower government interest rates. However, it is difficult for low- •
income areas to establish and maintain an improvement district. Nonetheless, the Lents •
neighborhood in Portland made a LID feasible by combining the property owners' con-
tribution with a TIF contribution from the local urban renewal area. The City of Canby •
also combines funds from the BID and the urban renewal area to finance some of its •
economic development programs.
LIDS can also carry a significant financial risk. The final expenses for the infrastructure •
improvements remain unknown until a design is developed. If the project turns out to •
be expensive, this can cause the LID process to fall apart. This presents a huge risk to
the party that initially put forth the money for the design process. Established LIDs •
also face the risk of property owners not being able to pay the fee in the future. The
ultimate responsibility to pay this debt falls upon the local government bond issuer.
According to state statute, assessments shall become a lien upon the property. Thus, a
transfer of the property is subject to the lien, and the local government may cause the •
real property to be sold to collect unpaid assessments after one year from the due date •
of the assessment. This process and its implications can often cause a city council to
deny a LID even if there is 100 percent support from the currently affected property
owners. •
'••••►Administrative: A city may find that managing several Local Improvement Districts
at any one time is a cumbersome process. To resolve this issue, some jurisdictions in
the region streamlined the LID process by using development agreements instead. This •
requires the developer to pay for the infrastructure improvements up-front at time of
development. If the developer is not the sole owner, then the city collects payment from
property owners as they move into the new development and returns these funds to •
the developer. The city can also incorporate the cost of staff time spent administering •
the LID into the assessment fee, which compensates the city for their work, but also
increases the cost to the owners and decreases the feasibility of the LID. •
...)-Community: LIDs provide a source of funding for much needed and deteriorated •
infrastructure, and these improvements can increase the safety and value of the neigh-
borhood. However, LIDs take strong commitment and consensus from the local prop-
0
erty owners. It is very difficult for the property owners to come to a consensus on the •
improvements, how to complete them, and how much money they are willing to spend.
In addition, this process can take months to complete. Regional representatives with
0
experience establishing improvement districts also highlight the importance for a local •
jurisdiction to work on a marketing strategy for a BID or EID with the local property
•
owners to shape the message before beginning promotion throughout the broader com-
munity. This can take a lot of one-on-one meetings with various groups to get the sup-
port needed to make these districts work. •
The voluntary EID and BID also present an important equity issue in the community.
The property owners that opt out of paying for the improvements or services still •
receive the benefits paid for by the other owners in the district because of their location.
56 : Financial incentives: improvement districts
June 2007 •
•
•
• Downtown Portland's Business Improvement District (BID), one of the old- "Downtown prop-
• est, largest and most successful BIDS in the nation, encompasses a 213-block erty owners have been
• area of downtown Portland. Businesses within this district tax themselves to focused over the last
• raise money that supplements publicly financed services for neighborhood year on public safety,
• improvement. and this reduction in
• crime shows that these
Portland's BID funds the Downtown Clean and Safe Program, which provides efforts are working.
• cleaning, security and community justice services downtown; the Downtown We have seen a very
• Retail and Marketing Program, which focuses on market research, retail advo- positive impact down-
• cacy, marketing and communication; and the Sidewalk Ambassador Program, town from our Clean
which offers information and assistance to downtown visitors. The BID has and Safe Program and
• been in place since 1988.9 our work with Mayor
Potter on public safety
• Through the Downtown Retail and issues."
• Marketing Program, Portland's BID - Sandra McDonough,
funds the annual tree lighting and President and CEO,
• provides lights for the festive holiday Portland Business Alliance
• season in downtown Portland
•
'Y K
• c X14 , ~ N7IO~An.:. _ _
WHSMA~
N
• / /
_4
• The City of Portland's Business Improvement District boundaries,
http://www.portlandalliance.com
•
• 9. Portland Business Alliance (2006). http://www.portiandalliance.com
•
•
• Financial incentives: improvement districts : 57
• June 2007
~i
Improvement districts provide an important mechanism to complete needed infra- •
infra-
structure improvements or to promote additional investment in a business area. This
is apparent by the extensive use of these districts throughout the entire metro region.
Jurisdictions of varying size and characteristics use these districts to make targeted •
investments and improvements in their local communities. The representatives from
these areas consistently expressed that improvement districts are most successful when
established for small, very localized projects due to the nature of the issues that can •
arise when establishing these districts and since this financial incentive is initiated and •
managed locally.
►Tips for implementing improvement districts at the local level: •
2 Expand the use of improvement districts in centers, corridors, and employment •
areas.
3 Market improvement districts by focusing on promoting the ideas and vision for
the area and by highlighting the different benefits, including financial advantages, of
the new investments. •
® Develop outreach and resolution strategies to work with local property owners to •
establish consensus and implement and maintain LIDS, BIDS, and EIDs.
Ij Identify sources within your jurisdiction that can provide a matching fund to the
assessment fees, especially to cover the costs associated with staff work time. •
13 Consider whether a voluntary or involuntary BID is most appropriate given the spe-
cific circumstances and try to find additional ways to resolve the equity issues that
may arise from a voluntary BID.
01 Explore less risky ways to fund the design work costs and upfront investments.
58 : Financial incentives: improvement districts
June 2007 •
Resources
dogWOM
• ► For additional information or to seek technical assistance in implementing a BID
or EID in your jurisdiction, contact
Oregon Downtown Development Association
• 161 High St. SE #236
• Salem, OR 97301
(503) 587-0574
http://www.odda.org/
• ► For more information about local programs, eligibility, and technical support,
• visit:
City of Portland
Portland Business Alliance
• 200 SW Market St., Suite 1770, Portland, OR 97201
• (503) 224-8684
• http://www.portlandalliance.com/
City of Portland
• Office of Transportation
• 1120 SW Fifth Ave., Rm 800, Portland, OR 97204
(503) 823-5185
http://www.portlandonline.com/transportation/index.cfm?c=35715
• City of Canby
• Canby Business Development
PO Box 438
253 NW Second Ave., Canby, OR 97013
• (503) 266-3720
• http://www.canbydevelopment.com/
> For more specific details on the statutory guidelines, see:
ORS Chapter 223.387-223.401 (LIDs), 223.112-223.132 (EIDs), and
• 223.141-223.161 (BIDS)
• http://www.leg.state.or.us/ors/223.htmI
Financial incentives: improvement districts : 59
• June 2007
•
•
• Bioswale at the New
Columbia housing
development controls ,
stormwater runoff,
• -
one way to reduce
stormwater system
• development charges,`
City of Portland
_ F "rte ,D 511 *
•
•
•
•
•
• Impact-based
•
• System Development Charges
•
• Creative approaches for applying System Development Charges (SDCs) can
• serve as a financial incentive for more efficient provision of facilities and services,
• to manage urban growth and reduce urban sprawl, and to encourage infill
development. Cities and counties can restructure their SDC methods and fee
• schedules to more accurately capture the costs of infrastructure development,
determine charges reflective of the impact of different development patterns, and
• promote development consistent with the 2040 Growth Concept Plan.
•
• Financial incentives: SDCs : 61
• June 2007
System Development Charges (SDCs) provide a mechanism for local governments to •
pay for infrastructure needs associated with growth without raising taxes or fees for
services. Government entities levy SDCs against developers at the time of development
to cover the additional costs to serve the new development. Oregon law allows the •
collection of SDCs for only five types of infrastructure: water, wastewater, stormwater,
transportation, and parks and recreation.
SDCs provide the most common source of funds for capital improvements in Oregon. •
However, most cities and counties assess a uniform SDC throughout the jurisdiction
without consideration for the variation in impacts related to development design or
location. This creates a disincentive for developers interested in building compact •
projects in centers and corridors that already have higher development costs. •
However, restructuring SDC fee schedules to reflect the real impact of development on
infrastructure can reduce the financial burden of developing in centers and corridors,
provide an incentive to build lower-impact projects and encourage development in •
areas with access to existing infrastructure systems.
► How to use it: Cities and counties calculate SDC fees to recover the cost of •
infrastructure needed to serve new customers and can assess these SDCs differently •
in order to meet local needs. In accordance with Oregon law, SDCs may consist of
reimbursement and improvement fees.
11 Reimbursement fees recover the costs to serve future system users with facilities •
already constructed or under construction. In determining this fee, a local
jurisdiction must consider the cost of the existing facilities, previous contributions •
and sources of financing, and the value of the unused capacity available for future •
system users.
® Improvement fees charge for the costs associated with capital improvements to be
constructed. In determining this fee, a city or county must specify in an ordinance •
or resolution the projected costs of capital improvements as identified in an •
adopted plan, which is required to increase capacity and meet the demands of new
development.
When determining the final SDC fee schedule, cities and counties can choose to charge •
one or both types of fees as well as the percentage of the costs it intends to recover
through the SDC. Some jurisdictions also choose to recover the costs of developing
their capital improvement plans (CIP) through SDCs by incorporating these planning •
expenses into the fees. Oregon statute allows SDCs to recover all costs of complying
with the statutory provisions, which require the preparation of a capital improvement
plan and development of a SDC methodology and accounting system. •
State law also requires cities and counties to provide credits against improvement
fees in the SDC if the developer constructs qualified public improvements. Local
jurisdictions may choose to use this method as an opportunity to complete a more •
extensive public improvement. In some cases a well-capitalized developer can more •
efficiently construct a public improvement by including the cost in the overall project
development budget, which in turn would limit the number of project funding sources •
and speed the pace of construction. In exchange for constructing and funding the •
public improvement the developer would receive credit toward SDC fees.
62 Financial incentives: SDCs
June 2007 •
•
•
•
•
• The City of Wilsonville recently updated its SDCs working cooperatively with "By basing SDCs
• the development community in the adoption of the amendment and the on demand and
methodology. The city established impact-based methodologies that help acquire the actual impact
• the accurate and varying costs of development projects. The methodology to infrastructure
• includes costs associated with estimated project financing as well as a revenue facilities, the city can
• credit provided for future rate payments needed to remedy existing deficiencies. offer developers an
• The city also developed a compliance charge that recovers facility planning and equitable adjustment
SDC fund accounting costs. process. The city will
• complete alternate
• Likewise, the city uses a demand system to determine SDC fees by identifying the calculations for
• different demands on facilities for various size dwelling units, number of persons specific development
per household, and type of development. Basing cost on demand also allows projects to reflect
• the city to develop alternate SDC calculations for specific developments such a project's actual
• as projects built near light rail lines and senior citizen centers, which place less demands so the fee
• demand on the road system and more demand on public transit. The city also will be fair."
• calculates and uses their transportation SDCs to cover pedestrian improvements
and parking structures that are part of their transportation system. - Mike KoMnoff, Attorney,
• City of Wilsonville
• In addition, the city uses supplemental SDCs to cover the costs of significant
• infrastructure improvements in developing areas with increased demand. For
example, the demand at the ramp intersections on Wilsonville Road and at the
• adjacent intersections recently exceeded its level of service capacity. The city
• amended its transportation capital improvements plan to include its share of the
• improvement project. To pay back the initial financing, the city then calculated
• and collected a supplemental SDC from developments in the local area whose
trip generation led to the need for the added capacity. The supplemental SDC
• allowed the city to add capacity, which led to new developments such as a $50
• million mixed use development of commercial retail, office space, and residential
• apartments and condominiums.
a
• The ramp intersections on Wilsonville Road before (left) and after( right) the infrastructure
improvements that were funded, in part, by the supplemental SDC, City of Wilsonville
•
• Financial incentives: SDCs : 63
• June 2007
The nuts and bolts •
0
SDCs M
SDC methodologies generally include unit costs of capacity, revenue credits for other •
funding sources, and a demand schedule establishing capacity requirements for differ-
ent type or sizes of developments. Impact-based SDCs and innovative approaches to 0
calculating SDCs consider additional variations for each of these items when calculat- •
ing their fee schedules. The best approaches reflect both full cost recovery, including fa-
cility planning and construction and SDC development and management, and recogni-
tion of potential cost variations across the service area. To the extent that development •
may be less costly to serve based on density, location, configuration, or other consider- •
ations, SDCs can be a tool to encourage this type of development, and at the same time
fully recover infrastructure costs.
► Existing use of the tool in the region: More and more jurisdictions throughout the •
country and the State of Oregon are implementing SDC methodologies designed to
recover the real costs of infrastructure development and promote sustainable develop-
ment patterns. jurisdictions within the region that have adopted innovative SDC •
approaches with these goals in mind include the City of Gresham, City of Portland, and •
City of Wilsonville.
►Housing choices: SDCs do increase the amount of upfront capital a developer must •
have, resulting in higher total per housing unit cost. However, some innovative SDC •
approaches address this issue by lowering SDCs for projects with a lower impact on
public facilities. Thus, residential development located near transportation corridors
and in mixed-use development areas, as well as housing developments that service •
specific populations that use transportation less frequently, would pay a lower •
transportation SDC than other housing projects.
Impact-based and innovative SDCs present a concern to some affordable housing •
advocates. If location and density impact SDC rates, developers may not find affordable
housing feasible in areas with high SDCs resulting in the concentration of affordable
housing to specific areas. However, some local jurisdictions may choose to waive, •
reduce, or defer the SDC fee for developments that include affordable housing. The •
reduction in upfront capital costs to the developer provides an incentive that improves
the financial feasibility of an affordable housing project.
> Manageability: Connecting SDCs directly to the specific projects included in facilities •
plans that are linked to capital improvement plans can require a lot of work up front
for the jurisdiction to create alternative calculations and establish various SDC fees and •
funds that reflect the actual infrastructure improvement projects. Developing innovative •
SDC approaches, which include varying SDCs by location and development character-
istics, may also take more time up front to develop the data to support the fee differ-
entials, construct the SDC methodology, educate the public and elected officials, and •
implement necessary administrative procedures. •
64 : Financial incentives: SDCs
June 2007 •
The City of Gresham recently developed a new SDC methodology, which "Funding urbanization
established three districts for calculating and collecting SDCs: Pleasant Valley, of major urban groivtb
• Springwater, and within current city limits. The city calculated the rates based boundary expansion
• on the costs of servicing these areas determined by facilities plans. Water and areas requires careful
wastewater charges remained the same for all three areas, but the transportation facility planning."
facilities, parks, and stormwater facility charges increased in Pleasant Valley and
Springwater due to the additional costs of the needed infrastructure projects - Dale Department
Department of Environmental
• in these areas. Location, lack of existing infrastructure facilities, and landscape Services,
features contributed to the increase in costs. The result of this approach is fees City of Gresham
that are significantly higher in the new districts, compared to the current city
limits.
• In addition, the City of Gresham lowered its SDC fees due to the effect of low-
impact design elements it established in its development codes. The city set green
street requirements for street developments and improvements to help capture
• and manage the local rainwater. By integrating this green design element, the
• city did not need as many holding tanks, decreasing facility costs. Furthermore,
the margin of cost differential between the green street designs and traditional
streets was not significant. Thus, the overall SDC fee for development decreased
while supporting lower impact development.
• A property tax credit is also included in the city's SDC methodology to recognize
the potential contribution of new growth to the costs needed to remedy existing
deficiencies. The city also charges a compliance fee that includes the costs of
• master planning; annual SDC and capital improvement plan management,
accounting, and reporting costs; and the costs associated with development of
• the SDC methodology. Finally, the methodology includes a basis for adjusting
the fees annually for construction and land inflation. During the process of
establishing the new SDC methodology, the city ensured the legal defensibility,
• educated the public, and built public and political acceptance for the differing
• SDC rates.
~ r.
• Using pervious pavers, porous concrete, and swales are all green streets practices that can
reduce impact fees, City of Gresham
Financial incentives: SDCs : 65
• June 2007
~ n
However, as these methods become institutionalized within the region, they will •
enhance data availability and public awareness and may support further development •
and administration of such approaches. Furthermore, greater coordination among land
use and facility planning functions and SDC approaches will develop data regarding •
the differing costs and impacts of various development patterns and designs. It can
also make updating SDCs easier. jurisdictions can reflect any changes made to planned
facility projects by modifying that portion of the SDC calculation and developing a •
new SDC fee. Despite the additional up-front efforts, this process helps establish a more •
accurate SDC, and cities and counties can include these costs of planning for future
capital needs and developing methodologies to pay for the facilities in the fees.
= > Equity: Applying a methodology that calculates SDCs directly based on capital
improvement plans and planned facilities projects can establish a more accurate SDC
fee schedule. Incorporating the different levels of demand on the infrastructure system •
from various types and locations of developments also helps establish a more accurate •
SDC fee schedule. In addition, this fee schedule promotes a more equitable approach by
connecting the actual impact of a project to the SDC paid by that project.
More defined SDCs ensure that development and growth more accurately pays for itself .
and its impacts on the community's infrastructure without being compensated by the
rest of the community or other developments. This helps maintain that compact, infill
development near services pays for the infrastructure improvements in that area, but •
is not subsidizing the more expensive infrastructure expansions to newly developing •
areas.
►Community: Cities and counties can face pressure from current residents and the •
development community regarding SDCs. Current residents are concerned about being
charged twice and developers assume the up-front costs for the public improvements.
As a result, many jurisdictions choose not to recover the full costs of new facilities •
through SDCs. However, if cities and counties can demonstrate that the SDCs are based •
on impact to the system and link the charges to impact, then where impact varies,
different charges are defensible and this approach can gain more public and political •
acceptance. Politically, cities and counties also need to demonstrate the link between •
SDCs and overall community development goals. By connecting SDCs to facility plans
based on comprehensive plans, the resulting SDC fee schedules can then promote
development patterns envisioned by the community and create greater public and •
political approval. •
>•••>Sustainability: Applying varying SDC rates based on the impacts to public facilities
promotes sustainable development patterns. Lower SDC fees for low-impact, green •
development and compact infill and redevelopment may encourage developers to build •
more environmentally-friendly projects in sustainable locations.
66 : Financial incentives: SDCs
June 2007 •
Putting it together
• Traditionally, cities and counties in Oregon determine SDC fees at the local level and
make some distinctions between level of service and type of use. However, innovative
SDC fee schedules base fees more specifically on the impact of the development to
• public facilities. This approach charges lower fees for development in areas with
• access to existing infrastructure and higher fees for projects in areas where little or no
infrastructure is currently in place.
• Metro hired a consultant to further research opportunities to recalibrate SDCs in the
region. The study is intended to provide cities and counties with another potential tool
to accelerate the implementation of the 2040 Growth Concept. As part of this work,
• a subcommittee representing city and county needs and expertise provided input and
• guidance throughout the process to inform and enhance the final report.
The report, "Promoting Vibrant Communities with System Development Charges,"
• provides model approaches and recommendations for modifying SDCs throughout
• the Metro region in order to acquire the real costs of infrastructure development and
promote more sustainable development throughout the region. These approaches
• outline SDC methodologies and approaches that promote more efficient provision of
• facilities and services, manage containment of urban growth to reduce urban sprawl,
and encourage infill development. The model approaches for SDCs provide flexibility
and applicability for the different cities and counties in the region.
Tips for implementing Impact-based System Development Charges
at the local level:
• ® Coordinate land use and facility planning functions with SDC development.
• IN Ensure SDCs recover all of the costs needed to serve development as it is currently
envisioned by the comprehensive plan and proposed through planned facilities
projects.
• 131 Define level of service standards for different development designs and locations
• when calculating SDCs.
• ® Consider having multiple SDCs based on the different impact and demand levels of
various development patterns.
O Take into account the full array of costs needed to plan, design, construct, and
• finance public facilities for future growth and include these costs in the SDCs.
• El Work with developers and educate the public whenever recalculating SDCs to
• build support for the new fee schedule and necessary infrastructure for projected
development.
® Review the report, "Promoting Vibrant Communities with System Development
• Charges," for more information on the different calculation methodologies, compare
• to the jurisdiction's current methodology, and consider modifications to promote
local and regional development goals.
® Use the report, "Promoting Vibrant Communities with System Development
• Charges," to revise SDC methods and fee schedules to incorporate applicable model
• SDC approaches.
• M Regularly update fees and methodologies to keep pace with inflation and changing
land use and facility plans.
Financial incentives: SDCs : 67
• June 2007
•
Resources
►To access "Promoting Vibrant Communities with System Development •
Charges," contact: •
Metro
600 NE Grand Ave.
Portland, OR 97232 •
(503) 797-1839 •
http://www.metro-region.org
For more information on the use of Impact-based SDCs in the region, contact: i
City of Gresham •
1333 NW Eastman Parkway
Gresham, OR 97030
(503) 661-3000
http://www.ci.gresham.or.us •
City of Wilsonville •
Wilsonville City Hall
29799 SW Town Center Loop E
Wilsonville, OR 97070 •
(503) 682-4960 •
http://www.ci.wilsonville.or.us
> For more details on the statutory guidelines for SDCs, see: •
OAR 223.297 •
http://www.Ieg.state.or.us/ors/223.htm
> For more information on innovative approaches to calculating and assessing •
SDCs, visit: .
http://www.impacifee.org •
http://www.impactfee.com
68 : Financial incentives: SDCs •
June 2007 .
• About Metro
Clean air and clean water do
• not stop at city limits or county
lines. Neither does the need for
• jobs, a thriving economy and
good transportation choices
• for people and businesses
• in our region. Voters have
asked Metro to help with the
• challenges that cross those
lines and affect the 25 cities
• and three counties in the
Portland metropolitan area.
A regional approach simply
• makes sense when it comes to
protecting open space, caring
• for parks, planning for the best
use of land, managing garbage
• disposal and increasing
recycling. Metro oversees
• world-class facilities such as the
• Oregon Zoo, which contributes
to conservation and education,
• and the Oregon Convention
Center, which benefits the
• region's economy.
. Your Metro representatives
Metro Council President
David Bragdon
• Metro Councilors
• Rod Park, District 1
Brian Newman, District 2
• Carl Hosticka, District 3
Kathryn Harrington, District 4
• Rex Burkholder, District 5
Robert Liberty, District 6
• Auditor
• Suzanne Flynn
Metro's web site
• www.metro-mgion.org
• Printed w recycled paper. 071211g
•
• li
M ETRO
• PEOPLE PLACES
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