Council approves new urban renewal plan for downtown area

The Lebanon City Council approved a new urban renewal plan and ordinance Wednesday evening, Nov. 14. 

The new Downtown Urban Renewal Area encompasses 51.3 acres of property between Grove and Third streets and between Rose and Oak streets. Most of it is commercial. Four lots are residential mixed density.

The district will provide about $3.6 million in revenue through 2044 to complete numerous projects to improve the downtown core, according to city staff. The figure incorporates adjustments for estimated inflation. 

Among the projects to be funded by the URD are streetscape improvements, $374,000; Ralston Park improvements, $692,000; design consultation, $35,000; street reconstruction, $1.6 million; financing fees, $29,000; plan administration, $376,000; and other projects, $385,000. 

Initially, the district will collect about $15,000 in increased revenue diverted from overlapping taxing districts, which include the Lebanon Fire District, 4-H Extension, Linn County, the Lebanon Aquatic Center, City of Lebanon, the Linn-Benton-Lincoln Education Service District, the Lebanon Community School District and Linn-Benton Community College. In 2044, the district will collect about $570,000. 

“The purpose of urban renewal is to improve specific areas of a city that are poorly developed or underdeveloped,” City Manager Gary Marks explained last month. “These areas can have old deteriorated buildings, public spaces which need improvements, a lack of investment, streets and utilities in poor condition or they can lack streets and utilities altogether.”

The area has properties that are undeveloped or underdeveloped, Marks said, and it also lacks sufficient transportation infrastructure. 

The idea comes from the city’s 2040 Vision and Community Strategic Plan, adopted in 2016. 

“One of the focus areas that came out of that process was downtown,” Marks told the council Wednesday evening. “The community wanted us to focus on downtown, make improvements down there that would help it be more of a center for commerce and for social activities for our residents and citizens.”

The URD is a key element to pay for some of the improvements, Marks said. 

In an urban renewal district, property values are frozen at the point the URD is created. The URD collects revenue from the growth of assessed value after that point to complete projects while regular taxing districts forego those increases in revenue. While the calculations are made on property in the URD, the revenue is collected from across the entire city and appears on property tax bills outside the URD. 

Consultant Scott Vanden Bos of Elaine Howard Consulting explained that this is not a tax increase but rather shifting of funds based on the incremental increases in property values of properties in the URD. 

No matter what, property tax bills will increase when assessed values increase, he said. It just doesn’t go to the usual taxing districts. 

Marks explained it using simplified round numbers, asking the council and audience to consider a property tax bill of $1,000 with four taxing districts, such as the city. The property tax might be split four ways, $250 to each taxing district. 

Assessed value may grow only up to 3 percent per year under state law. Marks suggested an increase of 2 percent in assessed value the next year. The property tax bill would be $1,020. 

Without an urban renewal district, that amount would be split $255 each among the four taxing districts. With an urban renewal district, each taxing district would continue to receive $250. The urban renewal district would collect up to $20 from the increase in assessed value.

“That $20 would be levied regardless of whether there is an urban renewal district or not,” he said. “It’s just distributed differently. It’s often said that this is a tax increase and it simply is not.”

It appears on property tax bills outside the district because it is shared throughout the entire city. 

Vanden Bos said the URD would, in fact, raise taxes slightly due to an effect caused by the existence of general obligation bond levies that expire in 11 years. During that 11-year period, the total cost on a $100,000 property would be $3.33, or 30 cents per year.

Marks told the council that the Northwest URD has levied $1 million less in each of the past two years than it is allowed. The revenue instead has gone to the regular taxing districts. 

“They have benefited from the growth that is happening in the Northwest District earlier than by statute we would have been required to do that,” he said. “We do that because we want to be responsible partners in managing urban renewal. When I spoke with the county commission, they expressed their appreciation for the fact that we have been doing that. I think that has built trust with them that we’re going to manage our urban renewal activities in a sound way.”

Marks said the Lebanon Fire District and Linn County Board of Commissioners, which both will be affected by the URD, supported the proposal. The Planning Commission also reviewed the plan and found that it was in compliance.

Marks said the Downtown Association supported the plan, and Chamber of Commerce Executive Director Shelly Garrett said the chamber supported the plan. 

“I think this is one of the best uses of government opportunity, and I wholly support it,” said Councilor Robert Furlow.

“I do also,” said Councilor Wayne Rieskamp. “It’s unfortunate that citizens actually believe that it is going to be a tax in many years to follow. As many times as we explain that, there’s still those that have a doubt. It’s pretty evident that it has proven to be very successful in the other URDs that we have had within Lebanon, and this one here will be a great benefit to downtown.”

“I would support it also,” said Councilor Bob Elliott. “And I support it also.”

“Downtown has been on the lips of most citizens since I got involved with the city,” said Councilor Floyd Fisher. “I think that it’s been a high concern. This, I think, gives a focusing point, a revenue source, that can bring that concern that’s been around for decades to a positive momentum.”

“I agree with the councilors that our town, the success we’ve had at this point would not have happened if we wouldn’t have had URDs,” said Mayor Paul Aziz. “We’ve got COMP Northwest here, the whole Samaritan campus, Lowe’s, Laticrete, all of these different places. We’ve got Cheadle Lake. So many things have happened through URDs with our community, it’s great. 

“I moved here in the ’90s, and it was just a bunch of junk shops. I hate to say it. I don’t know how to say it, but it was terrible and everything was vacant downtown. We’re at a point now where downtown is bustling. You go downtown on a Friday or Saturday night, and there’s people down there. They’re going to businesses. They’re eating, drinking and having a good time. I’m really in favor of having the URD for downtown, and I think it’s going to be a big shot in our arm.”

The council voted unanimously to approve the ordinance creating the URD. Rebecca Grizzle and Jason Bolen were absent.

In other business, the council:

n Appointed Bolen, Deanna Bowser, Matt Cowart, Tre Kennedy, Christina Unitet, Ron Whitlach and Jason Williams to the Ralston Park Improvement Plan Ad Hoc Advisory Committee. 

n Adopted a resolution suspending detailed permitting for public events, temporary uses and street vendors during the annual Holidays in the Park event the first weekend of December, similar to how the city handles the Strawberry Festival. 

n Approved a $215,000 change order to construct a 1,300-foot pipe to Cheadle Lake as part of the new $28 million Water Treatment Plant located at 2500 River Road. 

The designer had intended to use an existing storm drainage line, said Engineering Services Director Ron Whitlach, but that line has since been abandoned and removed. The line is required to drain water from the plant during a 45-day period where the city must prove it can produce water that meets state drinking water standards. 

In the future, it will drain backwash water from the plant, Whitlach said. The new plant is intended to use infiltration basins for backwash water, but those basins are draining slower than anticipated. 

When used, the pipe will handle up to a relatively small 30,000 gallons per day, Whitlach said. 

Even with the change order, the project should finish about where it was budgeted, he said. 

He expects plant to be complete next month followed by a start-up phase, which includes proving the plant functions correctly.