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06/12/1990 - Packet AGENDA ECONOMIC DEVELOPMENT COMMITTEE MEETING TUESDAY, June 12, 1990, 7:30 A.M. DAVIDSON'S RESTAURANT - 12830 SW PACIFIC HIGHWAY, TIGARD, OR 1. CALL TO ORDER 2. ROLL CALL: SAVORY CORLISS DE BERNARDIS ETCHEMENDY ORLANDINI MOORE PULLIAM_ 3. APPROVE MINUTES 4. ACTIVITY REVIEW (10 min. ) o Presidents Parkway o Developments 5. NEW MEMBERS (5 min. ) 6. COMMITTEE SCOPE (20 min. ) o What can the committee do? 7. COMMITTEE FOCUS (40 min. ) o Continued from previous meeting 8. OTHER BUSINESS 9. ADJOURNMENT 140W, ECONOMIC DEVELOPMENT COMMITTEE MEETING MINUTES Tuesday, May 29, 1990 MEMBERS PRESENT: Jim Corliss, John Savory, Brian Moore, Amo DeBernardis, Paul Etchemendy OTHERS PRESENT: John Acker The meeting started at 7:30 a.m. and the minutes of the April meeting were approved as written. The purpose of this meeting is to discuss what projects or issues the committee will focus on in the coming year. The committee discussed the matter of City Council direction and concluded that the EDC needs to take the initiative in choosing where the focus should be. There was discussion concerning what developable land is left and what would be the most beneficial use of that land. Focus was on the CBD, the Triangle, and the Diamond areas. Discussion then turned to methods of influencing development of these areas. There was talk of EID's, LID•s, a Downtown Development Corporation with the main point being that there needs to be a mechanism to organize private interests and to fund improvements if they are to occur in a directed manner. Tax increment does not appear to be an option in Tigard, but other means of financing may work in selected areas. The issue was raised concerning what role would be appropriate for the committee to take in a process of, for instance, forming an EID. There was no resolution to this issue in the allotted time; discussion will continue at the next meeting. The meeting was adjourned at 9:00. COA11 lC. .1 i�PRAMS i �S rz tc`7 S ODDA Downtown Information Report No.3: Economic Improvement Districts INTRODUCTION Over the past three years, the Oregon Downtown Development Association has been helping to rebuild Oregon's downtowns and older commercial districts. Through the Oregon Main Street Program these downtowns and commercial districts have seen millions of private dollars invested, scores of businesses developed, and hundreds of new jobs created: Despite the tough economy of the 1980s, Oregon's downtowns have not only survived, but are showing signs of renewed vitality. However, downtown revitalization efforts have historically lacked secure funding. Much effort has been put towards raising money instead of actually doing revitalization. In order to help communities focus their energies on actual revitalization projects, The Oregon Downtown Development Association (ODDA) successfully sponsored legislation during the 1985 session to enable downtowns to fund the costs of their local revitalization efforts through self—imposed property assessments. In _ June of 1985 the Legislature approved House Bill 2443, B—Engrossed, allowing cities to create Economic Improvement Districts (EIDs). The legislation allows commercial or industrial districts to organize, establish a program, and fund that program through a self imposed assessment, after review and approval by the city. The assessment can be for up to three years. The legislation allowing this special assessment authority expires June 30, 1990 unless renewed by the State Legislature before that time. The concept of an EID is similar to that of a Local Improvement District (LID). However, rather than funding streets, sidewalks, and other tangible items, an EID is meant to fund the many intangible improvements of a Main Street revitalization program, such as: planning, promotion, maintenance, management, recruitment, etc. Local downtown revitalization efforts need no longer rely solely on the unpredictable and time consuming method of raising money through memberships and special fund raising activities. The beauty of the EID legislation lays in its flexibility, effi— ciency and predictability. The district boundaries, the budget, the program, and the assessment formula are decided on locally. The , assessment can be an amount per thousand, per property, per square foot, or whatever, as long as it is fair and equitable. The efforts now expended on continual fundraising can be directed towards the actual revitalization projects. The entire process of establishing an EID will take three to six months. Allow ample time for initial planning and organization of support. If the EID is approved, assessments are collected by the city in the same manner it collects other special assessments (i.e. parking districts, local improvement districts). OREGON DOWNTOWN DEVELOPMENT ASSOCIATION, Portland, Oregon 1 ew ODDA Downtown Information Report No.3: Economic Improvement Districts THE BASIC STEPS FOR CREATING AN EID The enabling legislation contained in House Bill 2443-B requires: 1) That an -advisory group prepare the initial economic. improvement plans and estimated assessments. This group- should be the Downtown Association or a representative group of downtown business people, property owners, and public officials. 2) That a formal city council public hearing be called to consider the plans, the program, the budget, the boundaries, and the proposed assessment formula. 3) That property owners who could be assessed be notified of the EID proposal, and the assessment formula and method, 30 days prior to the first formal city council hearing. - 4) That the city council take testimony and evaluate all aspects of the proposal at a formal hearing. The council may change any part of the EID proposal, continue consideration at a later date, or table it entirely. S) That, if the council approves the plans, the affected property owners be notified of their proposed assessment 30 days before a second formal public hearing. Property owners may appeal their assessments, in writing, during this period. 6) That the council review the amount of the individual assessments and consider all objections at the second formal public hearing, and may adopt, correct, revise, or modify the proposed assessments. 7) That written objections from owners representing more than thirty-three percent of the total assessments levied within the EID "sfop the assessment program. 8) That if objections are less than 33%, the council shall approve the i district. The council then finalizes the amount of the individual assessments and establishes the payment procedure. If the city does not already have a formal procedure for making assessments upon property benefited by a public improvement, such a procedure will need to be adopted by ordinance, following the guidelines set out in the EID legislation. OREGON DOWNTOWN DEVELOPMENT ASSOCIATION, Portland, Oregon 2 OREGON L'J DOWNTOWN ApPENDTX B ASSOCVELPMO T I I DOWNTOWN DISTRICT ACTION GUIDE Published by Downtown Research and Development Center 270 Madison Avenue. New York, NY 10016 Tel. 212/889-5666 OREGON DO"' O" N ASSOCIATION Page 5 Downtown Districts: Mind, Money & Muscle -6 Why Downtowns Create Improvement Districts 8 Evolution of the Downtown District Concept 10 Downtown District Action Powers 13 District Economic Resources 15 Justifying the District Idea 17 Selling a District to Downtowners 19 Legislating a Vistrict into Life 21 Case: The Downtown Development Authority, Miami, FL 23 Details on the Miami Operation 25 Case: The Central Business Improvement District, Little Rock, AR 27 Details on the Little Rock District 29 Case: The Business Improvement Area, St. Catharines, Ont., Canada 31 Details on St. Catharines "City Core" by,Hugh Boyd, Executive Director 34 Case: The Special Business District. St. Louis, MO 37 Case: The lyew Jersey Pedestrian Mall Improvement District Law 39 Case: The Downtown Development Board. Orlando, FL 41 Case: The Michigan Enabling Legislation 43 Case: Minnesota Downtown Development District Law 44 Case: Developing Nicollet Mall, Minneapolis, MN 45 Case: District Plus Tax Increment Finance. Hopkins. MN 47 Case: Mall Improvement District, Ithaca, NY 48 District Prognosis 1 ORE DOW�N�TOWN D ASSOCIATION Justifying the District Idea The downtown improvement district is not the answer to all downtown prob- lems wrapped up in one neat little package. A district will not "solve" the problems of .aggressive suburban develop- ment, of downtowners' bad judgment or of declining transit ridership. At least not directly. But as a downtown management tool -- which is what it really is -- the district may well be the unifying, power-orienting element that enables downtown interests to get together, plan, decide. finance and execute programs which can. in fact, solve problems like those listed, and a great many more. - In other words. the work of creating and running a district -- and it is arduous work getting a district established -- may actually involve the building of the perpetually functioning machinery for producing physical action, mental orienta- tion and a flow of benefits for downtown year after year. Bear in mind that the true downtown improvement district has the powers to plan, finance and act; and that true downtown improvement districts with this capa- bility are relatively new. Only a handful of downtown improvement districts have been established to date. Most of them are very new. Some are brand'new or thoroughly untested. Others are just a few years old. This is a short time span in which to work and over which to demonstrate measurable benefits. - A good number of districts can show important accomplishments in the Physical sense. But a mature, long-run evaluation of how effective districts are working out for downtowns cannot yet be made. Allowing for that, our study and analysis of downtown improvement dis- tricts to date suggests that this is very likely the most comprehensive and poten- tially effective downtown revitalization mechanism yet put together. Districts have shown they can accomplish things. They show real evidences of local acceptability. But probably most important, they are composed of familiar. tried and true elements recombined into the downtown improvement district. That is, old tools are reforged for new applications. Downtowners must also consider if the district is good for the city and the citizens in toto. Downtowns are important places economically, socially, cul- turally. We all know that in the long-run downtown must be good for the citizens and for the city. otherwise it will lose interest and support from them. To survive and thrive, downtown must serve the people and produce benefits for them. If it does not. the laws of economics and of politics will operate to phase out downtown. If these two ideas are valid, downtown ought to be able torp ove it and to generate citizen and political backing for improvement districts locally. In its study on districts. the Advisory Commission on Intergovernmental Relations stated. "It should be borne in mind that the essential ingredient, before any influence is brought to bear for creating a district, is that the people of a 1 -15- t + Q DDEWNTO DOWNTOWN DEVELO ASSOCIATION community want a service." In this context. the service they must want is a down- town. And the term community must mean the downtown community and the general citizen community. i In deciding if a district makes sense -- as a place and mechanism for pro- viding services -- both downtowners and general citizens will have to be fully satisfied: that the proposed district can do the job set for it in an effective manner; • that the district will mesh with existing city government and admin- istration; that it can do the job economically and without duplication; • that the district will be a viable financing mechanism; • that the district will be responsive to the needs of those who created it including both the downtowners and the citizenry; _* that it will produce positive benefits, not serve as a mere crutch to prop up a crumbling structure. The ACIR "finds that the creation of special districts is generally the result of the need to: (1) provide an essential service when resort to regular governmental processes has failed to produce an acceptable means of providing the service through existing units of general local government (i.e., counties, cities, .or towns); (2) otherwise meet a particular local governmental or political problem." It is evident that in many downtowns there is a vacuum, at least a partial vacuum, in the ability to cope with downtown problems. Even when there is a real desire to act, the money and mechanism are typically not fully available. There is good reason td believe that the district can help out strongly. In fact, it was exactly to do so that the downtown improvement district idea was conceived and is being refined. For the district to be established, it is necessary to convince the two publics, the downtown interests and the general citizens, that downtown is worth having and that a district will help strengthen and improve downtown. In doing this it is necessary to demonstrate that the district will be efficient, economical, suited to the tasks assigned it, and that it will be a re- sponsive entity. Research suggests that the district can do this job, that the business, political and citizen leadership can be "sold the idea" on its merits -- and there- fore, that downtown improvement districts will indeed be a powerful and swiftly growing force in the downtown renaissance. -16- Q DOWNORETOWN D ASVELOPMENT ASSOOCIATI M Selling a District to Downtowners As a practical matter, advocates of downtown improvement districts must be able torp oject real benefits that will accrue to the people and firms within the district in order to win initial support for the idea. Those within the district are the ones who will be paying the bills. It is certainly generally true that -- as in any endeavor -- the payers expect some benefits. This is even more specifically true for downtown improvement districts. This is because they exist, financially, by taxing the district and have as their goal achieving some benefits. These benefits will be fairly obvious. So will any failure to get them. It will be difficult to sweep failures under the carpet. Any downtown getting into a development district as a means of planning, executing and financing central business district improvements must face this real- ity in advance. The name of the game is benefits. So, in the campaign to establish a district, it is essential to: (1) Clearly present to the people and firms in the district what will be done. This is the plan. (2) Clearly present the costs and financing. This will include income for district purposes from all sources. The critical funding source (or cost) will inevitably be the share raised within the district itself via some sort of tax-type levy. This is the financial plan. (3) Clearly present the benefits which will come from the expenditure of funds in accordance with the plan. This is the benefit package. (4) Clearly demonstrate that the benefits are worth the costs. Most critical in launching a district are the costs levied within the district relative to benefits. But broader costs merit consideration also. The pressure to prove benefits does not abate once a district is oper- ating. Project by project, year by year, the full task of portraying the costs and the benefits will continue. Equally important, as projects are undertaken, the people in the district will rigorously and ruthlessly check to see if the predicted benefits are indeed materializing. Promises, forecasts, predictions and dreams will be tested ,in the real world. Did retail sales rise by 15 percent as projected? Did empty stores start to fill up with good tenants? Have the 700 promised parking spaces been built -- and are they being utilized as planned? Was it possible to build the convention center for eight million dollars and is it attracting the events, patronage and revenue promised? The firms in the district which are taxed for its programs will want to see solid projections of benefits and accurate presentations of costs. They want to have benefits projected in terms of their vested interest in the district. Retailers -17- 1 , DOWNTOWNORE DEVEIOPMENT AMOCIION i i want to know if greater sales will accrue and by how much. Landlords want to know ' if greater downtown activity will rent up vacant space, attract more firms. increase revenues through lower vacancies, higher rentals or bigger returns from percentage leases. Office operations will want to know if the district will be more accessi- ble, safer. better-lighted, able to compete with other locations in attracting em- ployees. There will always be interest in amenities, better appearance, less pollu- tion, a nicer atmosphere. But it is necessary to show those who will pay the bills that such investments will also make downtown economically more attractive so that the district's tax collector can be paid. Because of the need to show the benefits, there is the underlying neces- sity to mark out the district and to develop arp ogram that will lead to benefits. _ More than one district proposal for downtown has aborted because of thought- less location of its boundaries. The district must encompass land, people and businesses with a sufficient common interest to work together. A net cast too widely does not bring in more district revenue: it brings in dissidents who do not share downtown core interests. The actions planned and funded by the district must be carefully conceived and broad enough to provide benefits to all. A plan that would, for example, yield strong retailer benefits only would not command support from other segments of the downtown community. Not understanding these two rules will lead to failures in the effort to enact a district, or to a short life span for any district. They are fundamental rules for helping to insure creation of a merchandisable benefit package. , It is not an especially difficult task to calculate the costs of running an improvement program through a district mechanism. It is a good deal more diffi- cult and requires a vastly greater degree of sophistication to estimate the benefits which may be earned. Nevertheless, this must be done. And it must be done well and conscientiously. with the grim knowledge that in a year or two everybody will know if the projections were right. This is a solid impetus to careful. hard planning work. With districts, the old days or rules-of- thumb, guesses and wishful thinking may disappear. We have concentrated here on costs and benefits as they impact the business- person in the district, but there is more. This includes city and citizen costs and benefits. This will be examined in another section of this study. But, for the district itself, benefits and costs are highly visible. .Pro- jects must be smartly chosen, well-planned and expertly executed to guarantee those benefits. Exceroted from Downtovn District Act on Gvide.Downtovn Reseer•h s Develonment renter _Ig_