Informal meeting of stakeholders results in no new action
Contributed by: Gil Riddell | AOC Policy Director
August 15, 2016
Stakeholders from both redevelopment associations which use urban renewal as a tool to remove blighted areas, and overlapping taxing jurisdictions which can lose property tax revenues when urban renewal plans are imposed, met informally to discuss the future of the concept and impending expiration of a memorandum of understanding on the subject.
House Bill 3056 (2009) imposed reforms on the operation of urban renewal. Cities and counties can activate urban renewal agencies with the power to propose and act on plans to remove blighted areas. Most urban renewal plans are funded substantially from portions taken out of overlapping local government property tax levies. Thus a county can play either role – as an urban renewal agency or as an overlapping local government that must contribute property taxes to another jurisdiction’s urban renewal plan. Before HB 3056 an urban renewal agency was merely required to “consult and confer” with overlapping taxing districts on plan adoption and amendments; there was no requirement for concurrence or limits on indebtedness.
HB 3056 set initial maximum indebtedness for urban renewal plans and established an indexing scheme for increasing the maximum indebtedness for plans. In addition, it required concurrence of overlapping jurisdictions for substantial plan amendments that increased the maximum indebtedness by more than 20 percent of the plan’s initial indebtedness. The Act also established a mechanism for an urban renewal agency to limit collection of taxes either for a single year or in the future.
These improvements were negotiated by urban renewal sponsors and overlapping taxing jurisdictions. Their agreement was memorialized in a memorandum of understanding (MOU) to be effective until January 1, 2017. Parties to the MOU included AOC, League of Oregon Cities, Special Districts Association of Oregon, Oregon School Boards Association, Clackamas and Multnomah counties, Portland Development Commission, Oregon Fire District Directors Association, and Association of Oregon Redevelopment Agencies. The intent of the MOU was to commit to future cooperation and communication on issues of urban renewal districts and tax increment financing. The parties stated support for and recognized the value of urban renewal districts, but also recognized the need to return property value to the tax rolls for funding of public services. The parties agreed not to initiate urban renewal legislation and to oppose such legislation introduced by others during the term of the MOU.
The stakeholders confirmed that their groups had no current plans to initiate urban renewal legislation in 2017, in spite of expiration of the MOU, but also decided not to extend the MOU. They also agreed that urban renewal, when used correctly, is a valuable tool for community improvement and economic development. The School Boards Association cited instances where the intention of the “consult and confer” requirement, admittedly difficult to define, was not respected by the urban renewal agency. Stakeholders complained about urban renewal financing of projects with small or no return, for example, building a city hall or improving a public park or other public space. An individual project of this type, e.g., constructing an esplanade, may return indirect economic benefits to taxing districts, but these are exceptions. Ideas were explored to make consulting and conferring more meaningful, such as appointing at the outset a representative of overlapping jurisdictions on the urban renewal agency board.
The group agreed to continue to keep each other informed on best practices and new legislative developments.