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12/10/2014 - Packet Completeness Review for Boards, Commissions and Committee Records CITY OF TIGARD CCAC - City Center Advisory Commission Name of Board,Commission or Committee December 10,2014 Date of Meeting I have verified these documents are a complete copy of the official record. Joe Patton,Meeting Secretary Print Name ignature January 14, 2015 Date 41 City of Tigard City Center Advisory Commission Agenda MEETING DATE: Wednesday, December 10, 2014— 6:30 — 8:30 p.m. MEETING LOCATION: Red Rock Creek Conference Room 13125 SW Hall Blvd., Tigard OR 97223 Note: Pizza and refreshments will be served at 6:15 PM to celebrate the holidays and Chair Tom Murphy's service on the CCAC 1. Welcome and Introductions .........................................................................................................6:30— 6:35 2. Review / Approve October and November Minutes...............................................................6:35 — 6:40 3. Non-Agenda Items / Public Comment......................................................................................6:40— 6:45 4. CCAC Recruitment Update..........................................................................................................6:45 — 6:50 (Sean Farrelly) 5. Main Street Art/Gateways Update ..............................................................................................6:50— 7:00 (Sean Farrelly) 6. CCAC Input to City Council 2015 Goals ...................................................................................7:00 — 7:10 Provide input to City Council for development of their 2015 Goals (Chair Murphy) 7. Draft Annual Calendar ..................................................................................................................7:10 — 7:20 Review draft calendar for use in developing future CCAC agendas (Sean Farrelly) 8. CCAC Annual Retreat Discussion...............................................................................................7:20— 7:35 Discuss logistics and potential topics for January retreat (Vice Chair Arendes, Sean Farrelly) 9. Discussion on Development Incentives .....................................................................................7:35 — 8:00 Discuss commissioner research on development incentives (Vice Chair Arendes and Commissioner Fisher) 10. Nominations for 2015 CCAC Officers.......................................................................................8:00— 8:05 Election for Chair and Vice-chair to occur January 2015 11. Executive Session* ........................................................................................................................8:05 — 8:20 (Sean Farrelly) CITY CENTER ADVISORY COMMISSION AGENDA— December 10, 2014 City of Tigard 1 13125 SW Hall Blvd.,Tigard,OR 97223 1 503-639-4171 1 www.dgard-or.gov I Page 1 of 2 12. Liaison Reports...............................................................................................................................8:20— 8:30 13. Adjourn............................................................................................................................................8:30 p.m. *EXECUTIVE SESSION:The Tigard City Center Advisory Commission may go into Executive Session to discuss real property transaction negotiations under ORS 192.660(2) (e). 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. Upcoming meetings of note: Wednesday,January 14,6:30 p.m.,Regular CCAC Meeting,Red Rock Creek Community Room-note possible early start for CCAC retreat Tuesday,February 3,6:30 p.m. CCDA Board Meeting,City Hall CITY CENTER ADVISORY COMMISSION AGENDA— December 10, 2014 City of Tigard 1 13125 SW Hall Blvd.,Tigard,OR 97223 1 503-639-4171 1 www.tigard-ongov I Page 2 of 2 City Center Advisory Commission Meeting Minutes Date of Meeting: Wednesday,December 10,2014 Location: Red Rock Creek Conference Room Called to order by: Vice Chair Carine Arendes Time Started: 6:30 pm Time Ended: 8:59 m Commissioners Present: Chair Thomas Murphy;Vice Chair Carine Arendes; Deanie Bush;Laura Fisher;Lynn Scroggin; Sherrie Devaney Commissioners Absent: Linli Pao;Paul Miller; Richard Shave Others Present: Councilor Marland Henderson, Council Liaison to the CCAC; Neal Brown,local Realtor;Joyce Casey, potential CCAC appointee; and Ravi Nagaraj, potential CCAC appointee. Staff Present: Downtown Redevelopment Project Manager Sean Farrelly; and Senior Administrative Specialist Joe Patton. AGENDA ITEM #1: Welcome and Introductions Chair Tom Murphy opened the meeting and Joe recorded the roll call. AGENDA ITEM #2: Review /Approve Minutes The October 8,2014 CCAC Minutes were approved. Tom abstained from the vote. The November 12, 2014 CCAC Minutes were also approved. Carine abstained from the vote. AGENDA ITEM #3: Non-Agenda Items / Public Comment The Tigard Street Trail Design Ideas (Part II) meeting is on December 18, 3 pm - 4:30 pm at the Public Works Auditorium. Chair Murphy called for public comment. There was none. AGENDA ITEM #4: CCAC Recruitment Update Council will be asked to reappoint Sherrie and Deanie, to appoint Joyce Casey as a voting member and Ravi Nagaraj as an alternate to the CCAC at their January 13, 2015 meeting. AGENDA ITEM #5: Main Street Art/Gateways Update The art fabrication process is complete, the next step is painting. The Gateways design estimate was significantly higher than anticipated due to stonework and the additional site work required. The project will go out to bid in the hope that they come back lower than the estimate. If not, then one of the gateway sites may be deferred. CCAC Meeting Minutes for Wednesday,December 10,2014 Page 1 of 2 AGENDA ITEM #6: CCAC Input to City Council 2015 Goals The consensus for the input to City Council for 2015 goals was: continued planning of Aiain St./Green St. Phase II; continue downtown site acquisition, and contingent upon site acquisition design approval; continue Tigard St. Trail design and development;implement incentives to development (second half of year); and, support the TDA. AGENDA ITEM #7: Draft Annual Calendar The updated calendar prompts was discussed. It was noted that it would be helpful to combine it with the calendar on one sheet of paper for reference. Goal setting and revisit calendar as part of quarterly update will be added. AGENDA ITEM #8: CCAC Annual Retreat Discussion The next meeting will start at 5:30 pm on January 14,2015,possibly with a facilitator for goal setting. The regular meeting will precede the annual retreat. New member orientation will occur prior to that date. AGENDA ITEM #9: Discussion on Development Incentives Four possible incentives were discussed:waiving/reducing development fees;property tax abatement;land subsidies; and, public-private partnerships.A brief overview included background, examples, costs and possible criteria for each. AGENDA ITEM #10: Nominations for 2015 CCAC Officers Carine was nominated to Chair and Lind to Tice Chair the Commission for 2015. The willingness of nominees to stand for office was confirmed. The election will be held at the January meeting. AGENDA ITEM #11: Executive Session The regular meeting was recessed at 8:35 pm for an Executive Session to discuss real property transactions in accordance with ORS 192.660(2)(e).The Executive Session was closed and the regular meeting reconvened at 8:49 pm. AGENDA ITEM #12: Liaison Reports A. CCDA received a report on parking management. A new parking utilization study will take place in the spring of 2015. B. PRAB wants to spend the last$1 million of the park bond funds (the up to 10°"o of funds that were designated for the Downtown). Sean will get on their agenda to give them an update. AGENDA ITEM #13: Adjourn The meeting adjourned at 8:59 p.m. Lno Jo atton, CCAC Recording Secretary rte+ ATTEST: omas J. Alurphy, C ait CCAC Meeting Minutes for Wednesday,December 10,2014 Page 2 of 2 Tigard City Council Proposed Goals and Milestones September 2013-December 2014 Goal/Milestone Estimated Timehne Fater Lake Oswego-Tigard Water Partnership — — • Ncgotiatc/procccd with water purchase from Lake Oswego Winter 2013 • Renegotiate L0TV'PP Intergovernmental Agreement (IGA) to Early 2014 reflect structure and management post-construction (evaluate future of partnership roles) • LOTWP bond sale(#2) Spring 2014 • Monitor progress of construction and budget; L©TWP projects Through mid-2015 _ r�perational Develop Willamette River Water Sources • Rewrite WRWC member contract • Continue to consider other sources:Sherwood,nr%X'D (studies) Mid-2014 • Develop "roadmap" for Tigard's future water decisions through 2026 Intergovernmental Water Beard ■ Work plan for,and neat governance agreements with Tigard End of 2014 Water District,Durham, Ding Cit} (expires 2017, 2-yr notice) Communicate with Tigard residents about rate impacts/outreach 2015 and beyond regarding potential increases River Terrace Park land acquisition (strate funding, land dedication) Mid-2014 Complete Community Plan,zonin 1.adopted master plans June 2014 Building permits issued;development begins June 2014 Semice delivery planning For 2014-15 bud et Tigard Tris ink Complete Triangle Strategic Plan Fall 2014 Adopt zonin , street and design standards December 2014 Begin implementing last strategies December 2014 Southwest Corridor Determine modes and ahgnment far study in federal EIS process Fall 2013 Determine regional route segments I uly 2014 Participate in federal EIS process (regional partner, financial) Mid-2014 Recreation (Evaluate options and resources to create a pilot recreation program) Cort} fete demand analysis for recreation opportunities Sprang 2714 Compare recreation inventory with demand analysis to identify Spring 2014 needs/gaps {Council decision on city rale (direct delivery provider, In time for 2014`15 contract/ ar-mershi s with Gathers, funding source) budEt Page I Goal./Milestone Estimated Timeline Tm lement a new recreation effort based on rale Fall 2014 Economic Develo Praent Develo and ado t strate is riorities,resources,desi ro ram End of 2013 Data collection and understanding the economic base Underway 2014 Community En a ernetxt Redesign community survey effort to include regular two-way December 2013 communication efforts used on Fall,2013 survey results' Continue 3-4 quarterly open forums to engage residents/neighborhood During 2014 au s Community education efforts;develop fiscal report card (Blue Ribbon Ongoing in 2014 Task Force recommendation) Develop Ti rd's cornmuni identity Ongoing in 2014 Downtown Urban renewal ballot measure:Ti and voters clarify authori / roiects November 20113 Strategy fax redevelopment of ci -awned ra er December 2013 Resolve composition of CCDA (pros and cans: CODA,CCAC,Ec Dev December 2013 Commission to make it a development enc,) Main St./Green St. Construction January 2014 Continue Downtown Plaza Site acquisition and design approval Spring 2014 con ent on site ac wsiuon Continue Tigard St.Trail negotiation,design and development Through june 2014 Finalize downtown redevelopment opportunities (if issues can be June 2014 addressed Advance options for rail crossing"trade"for Ash Avenue at-grade Through 2014 crossi Explore Pacific Highway Urban Renewal District options Late 2014 Growth/Annexation Successfully complete River Terrace Community Plan See above Reconsider and agree to annexation policy: reauthorize financial February 2014 incentives as needed; consider islands and remainder of Bull Mountain; incentives for volunLag annexation;timeline for Washington County Develop planning and timeline together with Washington County for Before June 2014 future annexations (Bull Mountain,Metzger) Update annexation fiscal analysis (from 2004) Be `n mid-2014 Consider annexation of urban reserves for em to went land Late 2014 Finance Represent Tigard at the regional,state and federal level to advocate for 1"and 2"d Ql 2014 tax reform and other funding opportunities Review city facilities strategy and develop options for repair and Mid-2014 replacement ("good,better,best" Seek voter-approved treasure for major investment(capital, parks, etc.) Prepare for 2015 Page 2 CCAC Annual Calendar Prompts The following are notes for regular, recurring processes that the CCAC typically deals with, and can be included in setting agendas. The CCDA Board currently meets every two months. Ideally topics that will be discussed with the Board will be discussed with the CCAC at the prior month's meeting. January Regular meeting: Officers should be elected,based upon the previous meeting's nominations. Typically this is a time when the city's budget process is beginning, and it is important to get CCAC input on the budget and to begin planning a joint meeting with the CCDA Board for in February or April. Extra meetings: New members of the CCAC should undergo orientation. In addition to a materials packet provided by staff,new members are often given a walking tour of the urban renewal area.Also,new members must receive training in ethics laws and executive session procedure before attending executive sessions of the CCDA. Typically the CCAC will meet 2-3 hours before its regular January meeting schedule to have a retreat. During this retreat, the commission usually brainstorms goals for the coming year. February Regular meeting: Continuing budget talks. Approval of final draft of annual goals. Extra meetings: Historically the CCAC holds a joint meeting with the CCDA Board, to present the adopted annual goals and discuss progress. However the new CCDA Board schedule may cause the meeting to be held in April. March Regular meeting: First quarter goals update Extra meetings: It may be necessary to have one or more representatives of the CCAC attend Budget Committee meetings in March and April. June Regular meeting: Second quarter goals update September Regular meeting: Third quarter goals update October Regular meeting: Annual report needs to be assembled; assign this task or have executive officers take it on with a presented draft due by next meeting. November Regular meeting: Revise and adopt annual report to the Board of the CCDA, to be sent to staff by December 1. Reminder that officer nominations will be asked for at the next meeting. December Regular meeting: Fourth quarter goals update Officer nominations Reminder of upcoming annual retreat and solicitation for a 2-3 member committee for the retreat to plan the agenda, facilitate the meeting, and so forth. Note: a new CIP process is being developed. The time and manner of requesting for board and committee input has not been finalized. Briefing on Fee Subsidies, Property Tax Abatement,Subsidized Land,and Public-Private Partnerships for CCAC Incentives Discussion Prepared and presented by CCAC members Laura Fisher and Carine Arendes Background The City Center Advisory Commission has discussed the possibility of recommending Development Incentives for projects located within the Urban Renewal Area.At the September 10, 2104 meeting, building on previous work by the CCAC, commissioners reviewed the pros and cons of nine (9) possible incentives to "flesh out" a Development Matrix (attached). Four incentive policies were identified for further discussion: Fee Subsidies, Property Tax Abatement, Subsidized Land, and Public-Private Partnerships.The intent of this briefing and CCAC discussions on the topic is to: 1) Share information about various incentive policies with CCAC members, 2) Provide a forum for CCAC members and the broader public to provide input on policies, 3) Increase awareness of need for incentives, and 4) Inform CCAC recommendations regarding various Incentive Policies in the future. Need for Incentives Developers make investments in time and money(and take risks) in the development process with an expectation of return on their investment.The market determines where development will provide significant return on developer investment. Area that are "booming" have no problem attracting investment and development projects, however areas that are in transition or new development types in an existing market, will attract less investment and will be harder to fund. In some cases, a project that is desired by the community may not be able to secure sufficient funding because of market constraints. Incentives may close the gap and facilitate development that may otherwise not occur. Downtown Tigard has been the focus of long term efforts and planning to increase property values, activate uses and support a thriving retail environment.The urban renewal area approved in 2006, allowed the use of Tax Increment Financing to fund desirable development in the Downtown area. Using TIF funding(directly or indirectly)to incentive desirable development in Downtown Tigard is an investment in the Urban Renewal Area and supports new development that might not occur without support. Catalyst development can bring new uses to the area, attracts more people, and create a sense that good things are happening in Downtown Tigard. The CCAC has expressed support for the use of incentives to support desirable development and in having a transparent and fair set of policies for Development Incentives.This briefing provides a summary of information gathered on four possible Development Incentives: Fee Subsidies, Property Tax Abatement, Subsidized Land, and Public-Private Partnerships. Commissioner Discussion A brief summary'and a table identifying Benefits and Drawbacks are provided for each Incentive Policy for reference during discussion.The policy implications of the various incentives are complex and the character of the impacts will vary depending on the incentive. A list of possible criteria upon which to 'Note:For more detailed information on policies as needed, including a review of similar existing policies and case studies, refer to the Background material. Commissioners may wish to review prior to discussion Prepared and presented by CCAC members Laura Fisher and Carine Arendes review the various policies has been generated for discussion. At the time of discussion, it is expected that additional criteria may be added and, because commissioners are not financial or development experts, input will be at the broad policy level rather than technically detailed. Incentive Policy: Waiving/Reducing Development Fees Tigard collects fees for Land Use review and Benefits Drawbacks Building permits.Tigard also collects System Reduces up-front developer Development Charges (SDCs)for parks,water costs and sewer. In addition there is the Washington Target desirable Immediate impact on County Transportation Development Tax; and development URA budget School and Metro Construction Excise Tax. Fee Various options regarding amounts are project-specific.The specific policy implementation under consideration is to use URA funds to Costs can be limited to set reimburse developers for fees paid. amount Possible Criteria for Reviewing Incentive Policy • How do the costs of the policy compare to amount of leveraged private investment? • Will the policy lead to increased tax increment revenue in the long term? • Can public costs of the policy be controlled? • Will policy support new uses (i.e. not simply needed maintenance)? • Will policy support catalyst development with the potential to enhance downtown as a whole? • Does the policy target specific desired types of development for the URA? • Is quality of design or outcome of development enhanced through use? • Others? Commissioner Notes 2 Prepared and presented by CCAC members Laura Fisher and Carine Arendes Incentive Policy:Property Tax Abatement Tigard has implemented the Vertical Housing Development Zone (VHDZ), a temporary tax exemption program for mixed use housing. Other existing tax abatement programs for housing2 are available for affordable housing projects. A clear and compelling public benefit for property tax abatement for a specific market-rate multi-unit housing project may deserve consideration by decision makers as long as the fiduciary impacts are well understood. Benefits Drawbacks Targets desirable development Decrease in revenue in short term (depends on length of abatement) Long-term increase in increment Aside from VHDZ, no existing programs for market- rate multi-unit housing Existing programs for VHDZ Reduces overall development costs Possible Criteria for Reviewing Incentive Policy • How do the costs of the policy compare to amount of leveraged private investment? • Will the policy lead to increased tax increment revenue in the long term? • Can public costs of the policy be controlled? • Will policy support new uses (i.e. not simply needed maintenance)? • Will policy support catalyst development with the potential to enhance downtown as a whole? • Does the policy target specific desired types of development for the URA? • Is quality of design or outcome of development enhanced through use? • Others? Commissioner Notes z See Background for other existing programs. 3 Prepared and presented by CCAC members Laura Fisher and Carine Arendes Incentive Policy:Land Subsidies The sale of publicly-owned land below market value (or"subsidized land") may occur as part of a developer agreement to facilitate desired development and may enhance control over development outcomes. Publically owned land is exempt from property tax assessment and does not generate TIF revenue. Sales of publically owned land in the URA will generate revenue for the purchasing entity/fund and may generate revenue for the URA depending on circumstances. Land purchased with specific funds (i.e. Parks Bond, or gas tax), must be sold at market rate to reimburse those funds. Benefits Drawbacks Retain public control of development Foregone revenue Development likely to increase TIF revenue Supports URA Plan Goal 5 Possible Criteria for Reviewing Incentive Policy • How do the costs of the policy compare to amount of leveraged private investment? • Will the policy lead to increased tax increment revenue in the long term? • Can public costs of the policy be controlled? • Will policy support new uses (i.e. not simply needed maintenance)? • Will policy support catalyst development with the potential to enhance downtown as a whole? • Does the policy target specific desired types of development for the URA? • Is quality of design or outcome of development enhanced through use? • Others? Commissioner Notes 4 Prepared and presented by CCAC members Laura Fisher and Carine Arendes Incentive Policy:Public-Private Partnerships The specific policy under consideration is the public provision of facility improvements with development. Facility improvements typically required for new development include streets; sanitary sewer and storm drainage; and water utilities. Projects identified in the Tigard Conceptual Connectivity Plan and Transportation System Plan would be prioritized for eligibility. New infrastructure could be provided through the expenditure of both public and private resources, either directly through the construction process or indirectly through a credit system. Benefits Drawbacks Can be included in developer agreement and Cost reduce upfront developer costs Can serve to catalyze additional development Setting precedent Possible increased street circulation May take time to develop mechanism and/or improvement eligibility criteria Meets URA Plan Goals 3 &4 Street Improvements may be identified in URA Plan May address concerns/perceptions regarding proportionality Possible Criteria for Reviewing Incentive Policy • How do the costs of the policy compare to amount of leveraged private investment? • Will the policy lead to increased tax increment revenue in the long term? • Can public costs of the policy be controlled? • Will policy support new uses (i.e. not simply needed maintenance)? • Will policy support catalyst development with the potential to enhance downtown as a whole? • Does the policy target specific desired types of development for the URA? • Is quality of design or outcome of development enhanced through use? • Others? Commissioner Notes 5 Prepared by CCAC members Laura Fisher and Carine Arendes Background Materials: Additional Information and Examples Background on Fee Subsidies, Property Tax Abatement, Subsidized Land, and Public-Private Partnerships for CCAC Incentives Discussion Metro's Development Toolkit for Financial Incentives was a resource for preparing the background materials regarding the development process. Other resources are included as embedded hyperlinks. Note:Although case studies to illustrate how similar policies have been implemented are included in the Background Materials, development projects and costs vary considerably,therefore,site-specific information needs to be developed on a case-by-case basis. General Information about the Development Process Developers make investments in time and money in the process (i.e.take risks) and develop projects with an expectation of return on their investment. Construction (hard) costs typically account for approximately two-thirds of a project costa.The remaining one-third is "soft costs" such as architectural and consultant fees and permitting costs. When public improvements are required, costs for both soft and hard costs are increased. The development process typically requires more time on the front end preparing detailed plans of how a project will develop than the construction itself takes. It is not unusual for two-thirds or three-quarters of the development process to happen before a project breaks ground. Land use review to evaluate the appropriateness of the use occurs first. Next,the site is prepared and streets and utilities are constructed and prepared. Then structures are built. Areas that are "booming" have no problem attracting investment and development projects, however areas that are in transition or new development types in an existing market,will attract less investment and will be harder to fund. In some cases, a project that is desired by the community may not be able to secure sufficient funding because of market constraints. Incentives may close the gap and facilitate development that may otherwise not occur. Downtown Tigard has been the focus of long term efforts and planning efforts to increase property values, activate uses and support a thriving retail environment.The urban renewal area was created to harness Tax Increment Financing to support desirable development in the Downtown area. Using TIF funding (directly or indirectly) to incentive desirable development in Downtown Tigard is an investment in the Urban Renewal Area and supports new development that might not ever happen without support. Catalyst development can bring new businesses to the area, attract more residents and visitors, and create a sense of progress in Downtown Tigard. 3 Personal communication with Portland Parks and Recreation project manager,Sandra Burtzos 6 Prepared by CCAC members Laura Fisher and Carine Arendes Background Materials: Additional Information and Examples Fee Subsidies Regulating, Reviewing and Permitting Development Development is regulated at the local level to comply with state and federal requirements,to mitigate and control impacts of development on nearby existing uses and public infrastructure, ensure safe construction of structures and roadways, and to promote desirable development. Based on the premise that"development should pay for itself," most permitting jurisdictions regulating development fund costs associated with permitting and reviewing development through fees collected for services, rather than general budget funds.These fees are set through the public budget process and adopted by local authorities.Typically, permitting and review fees are based on the cost of administering permits and providing services for review and inspection, and are therefore calculated based on project-specific features, such as the value of the project,the number of units, amount of square-footage, number of electrical or plumbing devices, etc.Tigard has been working on streamlining their development process through the Community Development Efficiencies Initiative,future sample rp ojects include: Planning Department Cost of Service Study, Electronic Building Division Document Review, and Standardizing Procedures for multiple residential review submittals. System Development Charges and Utility Connection Fees System Development Charges (or SDCs) are fees assessed to new development to access and use existing public systems such as roadways, schools and parks. Oregon Statute (ORS 223.297 to 223.314) guides how SDCs are calculated, administered and amended. Utility systems such as public water and sewer charge "hook-up" fees to connect to existing systems.Tigard collects SDCs for parks.There is also the Washington County Transportation Development Tax, and School and Metro Construction Excise Taxes. Waiving or Reducing Development Fees A 2013 League of Oregon Cities survey found that 39%of respondents reported some type of accommodation of SDCs to encourage development.The most common was a reduction,followed by phased or delayed payments. The survey comments indicated that jurisdictions target reductions for specific types of development (for example affordable housing or commercial uses that provide a guaranteed amount of jobs) and may consist of partial reductions. Phased payments are also a common strategy. When a connection charge imposed by a local government that is greater than the amount necessary to reimburse the local government for its costs of inspection and installing connections with system mains, installment payments are required to be available. When SDC or utility hook-up fees are waived or reduced below the cost of providing service, entities may respond by increasing user fees to off-set costs and maintain service levels. The City of Brookings offers a program that pays the difference in sewer System Development Charges (SDC) between a general commercial use and a restaurant use for existing properties in the Urban 7 Prepared by CCAC members Laura Fisher and Carine Arendes Background Materials: Additional Information and Examples Renewal Area for new start-ups, paid for by the redevelopment agency. A city or urban renewal agency can target a reimbursement program to facilitate desired development. Reimbursements can be limited to a set amount and/or cover differences between use types. Reimbursing developers for a portion of assessed SDCs or fees will have immediate costs and will need a funding mechanism. Reimbursements could be limited to specific function under conditions,for example reimbursing a portion of the Parks SDC when development is located within % mile of existing park. When reimbursement facilitates development that would otherwise not occur,the future generated TIF revenue can be a source of repayment. Property Tax Abatement Ad Valorem Real Property Taxes A property tax (or millage tax) is a levy on real property that the owner is required to pay. Real property (also called real estate or realty) means the combination of land and improvements to land (immovable man-made objects, such as buildings). Real property is taxed based on its classification. Classification is the grouping of properties based on similar use. Properties in different classes are taxed at different rates. Examples of different classes of property are residential, commercial, industrial and vacant real property. Tigard's permanent property tax rate of$2.5131 per thousand 2012 is applied to the assessed value (AV) of property in the city each year.This permanent tax rate produces revenues to support General Fund operating costs such as Police, Library, and Parks and makes up 13%of Tigard's budgeted 2014-15 revenue. Bonds and levys collected through the assessment of property taxes are dedicated to specific activities (i.g. the city's Parks Bond,Tigard-Tualatin School District Levy, and the Tualatin Valley Fire and Rescue levy). For many existing programs, enabling legislation is adopted by the state Legislature and then cities/counties adopt by ordinance. Existing Programs for Property Tax Abatement For Commercial Uses Strategic Investment Program (SIP)Property Tax Abatement The State of Oregon's Strategic Investment Program exempts a portion of very large capital investments (in excess of$25-$100 million in urban areas)from property taxes for 15 years. Enterprise Zones Projects locating in the designated Enterprise Zones are eligible to receive a three year, 100% property tax abatement that create jobs with salaries at or above 150%of the average county wage. Requires sponsoring jurisdiction.Tigard has recently applied for a zone designation in the city. • City of Beaverton enterprise zone For Historic Properties Federal Tax Credit and Special Assessment The Oregon State Historic Preservation Office currently has two tax incentive programs to encourage 8 Prepared by CCAC members Laura Fisher and Carine Arendes Background Materials: Additional Information and Examples the appropriate rehabilitation and maintenance of historic properties, limited to properties that are listed in the National Register of Historic Places.The Federal Tax Credit program is for income- producing buildings only (commercial and residential rental). It saves the property owner 20 percent of the cost of rehabilitation through a federal income tax credit. Oregon's Special Assessment of Historic Properties program offers a 10-year"freeze" of a property's assessed value for buildings that will be significantly but appropriately rehabilitated and maintained.Applications are accepted year-round. For Housing Vertical Housing Zone The partial property tax exemption (20% per floor) applies to new construction on the first four floors of residential development built above a non-residential ground floor for in a "zone" designated by local authority. The maximum tax exemption on the new construction is 80% per year over the first ten years of the project.The Oregon Housing and Community Services Division has prepared an Excel workbook for calculating site specific benefits.A key component of the program is the non-residential uses on the ground floor. • The North Main multi-family housing in downtown Milwaukie Property Tax Exemption for Affordable Housing The Oregon legislature has authorized cities and counties to create tax exemption programs, Multi Unit Housing Tax Exemption (formerly the Transit Orientated Tax Exemption), cities/counties adopt by ordinance. • Portland Limited Tax Exemption Programs • Crossings at Gresham Station • Beaverton adopted ordinance implement for two year"test" period • Washington County Multiunit Rental Housing Special Assessment available depending on financing Implementing Property Tax Abatement for Multiple Unit Housing Oregon cities typically utilize a state sanctioned property tax abatement program.Tigard has implemented the VHDZ,while other tax abatement programs for housing typically target affordable housing projects and are available to all qualifying applicants. A clear and compelling public benefit for property tax abatement for a specific market rate multi-unit housing project may deserve consideration by decision makers as long as the financial impacts are well understood. Subsidized Land Publically Owned Land and Land Assembly Local governments own and purchase land for a number of reasons. Land may support current or future public uses or may be held for the purposes of land assembly. Acquiring two or more adjoining properties and piecing them together in some fashion to create a development can be done for residential or commercial land usage, depending on the purpose. Land assemblage is a common activity by Urban Renewal entities.The process might take place over a period of months or years and as a result, can be quite costly and is an investment over the long term. 9 Prepared by CCAC members Laura Fisher and Carine Arendes Background Materials: Additional Information and Examples Eugene Broadway Place Broadway Place Summary:The Eugene Urban Renewal Agency (URA) assembled the two half-blocks that were used to develop the Broadway Place mixed-use project. URA funds in the amount of$2.6 million were contributed to the parking structure construction costs.The City sold development rights for housing to be constructed on top of the parking structures. Outcome:The Broadway Place mixed-use project includes 170 apartment units, ground floor commercial space, and 740 structured parking spaces. It has become a major anchor for the west end of downtown and a popular residential destination with very low vacancy rates.The Broadway Place development received the 1999 Governor's Livability Award. Lake View Village(Lake Oswego) • 100K sq. ft. mixed retail and office in six commercial buildings. • 366 parking spaces on four levels(two are public) • City retained ownership of parking lot • LORA: $4.6 M for the garage ($.3 M funded w/ bonds) • Gramor and Tenants: Approximately$27-28 M • Properties assemble 1989 to 1996 • RFP in 1996—Development agreement in 2001 • Constructed in 2002 This block is bounded by State Street, "A" Avenue, First Street and Union Pacific railroad tracks. The project was initiated by the Agency through a process that included land acquisition, partial resale to a private developer, a binding development agreement, and public assistance to construct the parking structure.The parking structure remains in public ownership. The development agreement defines areas of private and public parking, and it requires the project developer to maintain the public parking structure. Construction was completed in November of 2003.The commercial buildings are privately owned. The ground floors are exclusively retail or restaurant uses, and the upper floors are predominantly offices. The retail spaces are accessed from the sidewalks, unlike a mall with interior access. This creates active sidewalks and public spaces, promoting an enjoyable pedestrian experience. Land Subsidies The City/CCDA could assist in land assembly in the Urban Renewal District. Larger parcels are typically more attractive to developers. Larger parcels facilitate the construction of new streets by allowing more options for the street connections to be integrated into the site plan.The sale of publicly-owned land below market value (or"subsidized land") may occur as part of a developer agreement to facilitate desired development and provides enhanced public control over the development process. Examples below include the partial retention of public ownership, which may provide a revenue stream. Public-Private Partnerships Coordinating Public Improvements with Development 10 Prepared by CCAC members Laura Fisher and Carine Arendes Background Materials: Additional Information and Examples Required improvements include streets, sanitary sewer and storm drainage and water utilities New development often triggers the need to construct required street improvements. Standard local street construction costs vary in cost depending on the width and location. Utility improvements for electric and telecommunications (range between $20-$40/foot- undergrounding more expensive.) Urban renewal plans often include public improvements to be funded by urban renewal funds. Sometimes public improvements required by redevelopment in a district are funded or partially funded by urban renewal funds. Nationally,the use of public-private partnerships (P3s) in the development of transportation improvements have become more common. Considerations include setting precedent for future development and proportionality4. City of San Antonio adopted Public-Private Partnership (P3) Guidelines in accordance with the Texas Legislature enacting the Public and Private Facilities and Infrastructure Act of 2011 under Chapter 2267 of the Texas Government Code.The P3 Guidelines are an additional tool for developing qualified capital improvement projects, using the Design-Build contract method. Under said guidelines,the City and a private entity(comprised of a single operator or a team) enter into a contractual agreement where the skills and assets of each sector(public and private) are shared in delivering a service or facility. 4 Proportionality is a legal construct used to evaluate the cost or"exaction" imposed on a property owner in order to develop or mitigate negative impacts of development.The exaction should be proportional to the impact.Street improvements,such as requiring construction of a new street may or may not be proportional to the impact of the development on the transportation system. 11 Attachment B Policy Tools and Incentives to_Attract Mixed Use and Compact Residential Development to Downtown (Revised 11/30/10) Policy Comments Effect on Attracting Cost Past Use in Tigard? Development 1. Development Cade Increase in allowed Weak to moderate.w'on't Small-requires change to Yes (Downtown Cade) Revisions density,height. Decrease create a market by itself code in re uured parking. 2. Streamlined permit Streamline permitting; Moderate: "Time is money" Small-requires change to Yes process and decision making to developer, however won't internal process. create a market by itself However.budget cutbacks can reduce effectiveness. 3. Pee Subsidies Reduce perrrtit fees and Moderate to strong.Direct Moderate to high: loss in Yes, for lav income System.Development effect on the cost of government revenue housing Ch s SDC's development 4.Land Assembly Acquisition from willing; Strong:increases Moderate Not by Citv sellers of contiguous marketability of Downtown parcels to create larger property for redevelopment developable tracts. Can be sold for market or below market rates. a. Property Tax Abatements Tax reduction or Moderate to strong.Increases Moderate: Increment is Yes, f©r non-proilt abatement for residential net operating income or forgone, however there development and/or mixed use achievable rents/prices. is long term gain in development that meets value. community goals G.Public/Private Street irnprovements, Weak to moderate. Won't i%ioderate to high Yes Partnership parking,parks,plazas are create a market by itself built, benefitting private develo anent +. Direct Utban Renewal Stibssdv 1 :subsidized Laud Publically owned land is Strong.Direct intervention to High-Direct No "written down", (sold at fill feasibility gaps or to participation in financing; below market) rate for ensure that project includes development developments that rnect publicany desired features. community goals Policy Tools and Incentives to Attract Mixed Use and Compact Residential Development to Downtown (Re-vised,11/30/10) W Urban Renewal Low interest loans are Strong: Direct intervention to High. Direct No Subsidized Loans provided ffom.urban fill feasibility gaps or to participation in financing renewal funds for ensure that project includes development Loans are developments that meet publically desired features assumed to be repa4 conunututy goals. "Second position debt"can but are typically low leverage additional loan interest and m2y nor -amounts from private lenders.. reflect the risk of a project. 4dapedfim TWrd Tnwo CewerDevelopwat Oppowento Stwi# Ftgterr 4 2. qabir;run Rnd)