INFORMATIONAL MEETING,

URBAN RENEWAL DISTRICTS OVERVIEW

TAPES 41-42, A-B

005

Chair Deckert

Calls meeting to order at 8:35 a.m.

INFORMATIONAL MEETING, URBAN RENEWAL DISTRICTS OVERVIEW

020

Mary Ayala

Begins overview of urban renewal districts. Introduces experts who will speak to the committee.

032

Chair Deckert

Announces, SB 412, which deals with the school component of urban renewal, will not be discussed until tomorrow.

043

John Phillips

Gives historical overview of Oregon’s urban renewal. See handouts: Urban Renewal Historical overview (EXHIBIT 1); and Urban Renewal Information Circular (EXHIBIT 2).

056

Jeffrey Tashman

Presents overview of the concepts of urban renewal. See written testimony, Senate Revenue Committee Overview of Urban Renewal (EXHIBIT 3).

072

Tashman

Urban renewal grew out of a federal program that required local matching funds for projects. In 1959 Oregon voters approved a constitutional amendment to create tax increment financing to match the federal money.

092

Tashman

Since Measure 5 there has been intense interest in urban renewal. One reason is that it is one of the few remaining locally controlled financing tools communities have.

105

Tashman

Discusses urban renewal programs that he worked on and jobs that were generated as a result. Urban renewal changed drastically with passage of Measure 50. Impact is now on taxing districts, not taxpayers.

145

Tashman

Discusses page 3, Urban Renewal Division of Taxes equation.

186

Karen Williams

Gives white board presentation. Governing body draws a geographic boundary around a city that is suffering from slum or blight. Explains the difference between slum and blight.

225

Sen. Prozanski

Asks whether this definition has been tested in the courts.

230

K. Williams

Does not know.

248

Chair Deckert

Asks whether it would be important to better define the term “blight.”

255

K. Williams

No. There are already industry standards in place.

274

K. Williams

Continues white board presentation. Discusses concept of creating a frozen base model in terms of property tax value. Gives example of Macadam area in southwest Portland. Transportation and infrastructure improvements enabled growth.

360

K. Williams

Explains selling tax increment bonds. Explains reason for financing urban renewal with bond sales.

399

Chair Deckert

Asks Williams to respond to a prior conversation concerning a city not having to levy to the full extent. Follow-up questions.

408

K. Williams

Clarifies, if there are problems with urban renewal, how should they be addressed? There are several alternatives. Final message is urban renewal is a local process undertaken by local officials. One question is how to facilitate more local accountability.

441

K. Williams

Resumes white board presentation. Until “maximum indebtedness” is reached and the bonds are paid off, the urban renewal plan continues to function and the tax increment revenues are pledged to the bondholders.

030

K. Williams

Conceptually, urban renewal is like a property tax trust that must be managed for beneficiaries.

064

Chair Deckert

Requests concept be drafted as an amendment.

069

Phillips

Continues historic overview of urban renewal (exhibit 1) Pre-Measure 5 treatment through 1990 – visibility.

101

Phillips

Today Oregon has a number of plan options.

126

Chair Deckert

Asks for an estimate on how much of this money is foregone to police, fire and schools.

133

Phillips

Directs attention to exhibit 2, chart on page 3 in partial response. Will get additional data.

153

Tashman

Comments, the easiest way to answer this question is not the most accurate.

175

Chair Deckert

Asks questions in regard to the transfer of school funding to the state. There is a wave gathering on anything that encroaches upon school funding.

196

Tashman

Responds, 3% of total assessed value was not taxed by schools. Policy decision is a trade-off of short-term and long-term.

220

K. Williams

Urges legislators to think long-term in this process. Reminds them that during the robust 1990s they didn’t plan into the future, and have had trouble recovering. Urban renewal could go the same way.

250

K. Williams

Discusses how urban renewal benefits schools; for example, affordable housing allows poor children to compete with their peers.

293

Wade Fickler

Introduces City Club of Portland colleagues who were part of a committee that studied Portland Development Commission. Directs members’ attention to Portland Development Commission, Governance, Structure and Process (EXHIBIT 4), Affordable Housing in Portland (EXHIBIT 5), and summary City Club of Portland, Good citizens are the riches of a city (EXHIBIT 6).

324

Fickler

Explains, PDC is a quasi-governmental urban renewal agency.

338

David Mandell

Reads exhibit 6 written testimony, verbatim. Tax Increment Financing (TIF) is a broken tool.

440

Mandell

Refers to white board chart, frozen base, increase in cost of projects.

468

Mandell

Page 2, paragraph 2: Measure 50 has also significantly undermined the original rationale for tax increment financing.

035

Mandell

Page 3: Tax Increment Financing as Funding Source for Funding

TIF has become a significant source of funding for affordable housing.

040

Mandell

Summarizes, if TIF is broken, it still may be the only tool we have. Asks whether public is getting its money’s worth from TIF. City Club cannot answer this question. But it contributes to jobs, parks, green spaces, vibrant neighborhoods.

069

Paul Meyer

Recommends committee amend TIF to permit affordable housing funds to be spent outside an urban renewal area.

074

Chair Deckert

Comments, this possible amendment may be in SB 412. In argument against this, what would the effect be on a private developer who knows a percentage would go out of the district?

087

Mandell

Proposal would increase the ability to generate TIF.

098

Meyer

That’s because affordable housing might be non-profit.

105

Sen. Metsger

Asks, when bonds are paid off, how are they assessed at that point?

121

Meyer

No differently. New construction will be assessed at its value. New construction creates a new value. That’s capped by M50 so won’t appear in the increment. Only new construction will be the source of the TIF.

133

Chair Deckert

Wonders if Portland has been too aggressive in making new urban renewal districts.

144

Mandell

Part of the issue is how to make it more clear to the public what are the trade-offs in entering into an urban renewal project. Question can no longer be whether it seems like a good investment. Must also look at public investments that are being foregone.

160

Meyer

Does not believe state legislature needs to concern itself about internal operations. That’s a matter for Portland to deal with.

176

Chair Deckert

Natural nexus is the state school fund.

201

Meyer

Directs members’ attention to chart on inside back cover of exhibit 4, page 83.

210

Meyer

Committee has concluded a lot of good gets done. Does not want to leave impression that it is negative on the concept. Just trying to focus on ways to improve the process.

215

Chair Deckert

Legislature’s focus is, are there changes and updates to be made? Requests having recommendations drafted into amendments.

231

John F. Williams

Suggests committee consider two separate bills, one for Portland metro area and one for rest of the state. Urban renewal has worked to detriment to the rest of the state. Gives example in Oregon City.

282

J. Williams

Discusses urban renewal in relation to Oregon City schools. Contends that urban renewal taxes are not going to the schools. Taxpayers don’t know where their money is going.

340

Chip Lazenby

Clarifies an earlier question by Sen. Metsger on what happens to individual properties once an urban renewal district ends. Individual taxes will go up as valuations go up. Addresses Chair Deckert’s concern on making affordable housing dollars portable. Also, California’s system might not be a good overlay for Oregon. Contends abolishing PDC is untenable.

412

Chair Deckert

Portland has used urban growth more than anywhere else. Why?

424

Lazenby

It’s more a mater of longevity than anything else. It’s been a process Portland has used over and over. Would have to define what chair means by too aggressive.

455

Chair Deckert

Is there a culture in Portland that’s looking for blight to develop?

018

Lazenby

One positive aspect of City Club report is the need for Portland to be more focused as a community. Needs to be more deliberate in its decision making processes. Basic structure in how urban renewal agencies work is sound.

045

Chair Deckert

Closes informational hearing. Adjourns meeting at 10:00 a.m.