URBAN RENEWAL
Please note that the following
information serves as a general overview of urban renewal.
There are aspects of urban renewal law in Oregon that are complex, and the
following information is not intended to serve as an exhaustive
description.
What is Urban Renewal?
Urban renewal is a
financing tool used to stimulate suitably-located growth in
underdeveloped areas. The tool is called “Tax Increment Financing”
- funding derived from the increase in taxable property values
over time within an urban renewal area (URA). As property values
increase within the district because of new investment and appreciation
of existing property, the resulting increase in property taxes (the ‘tax
increment’) is captured and used to pay off the bonds.
Why is
an urban renewal plan being prepared in conjunction with the Downtown
Community Plan?
The Downtown Community Plan
will allow the public to identify the projects and programs that will
guide how our downtown and surrounding neighborhoods grow in the
future. Urban renewal is being considered as part of the Downtown
Community Plan because it provides a funding source to help pay for
sidewalks, street lights, park improvements, and a host of other
projects that improve neighborhoods.
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How can urban renewal funds be
spent?
Urban renewal funds can be
spent on capital projects which help to alleviate the deteriorated
conditions within the URA. Urban renewal funds can not be used for
operations or maintenance.Eligible expenditures
include:
-
Permanent public improvements such as
transportation facilities, lighting, trees, parks, utilities
-
Financial and technical assistance for
private reinvestment including storefront grants, home repairs and
improvements, and commercial rehabilitation incentives
-
Funding partnerships for new housing
and mixed use developmentsLand acquisition (typically for key
redevelopment sites or public projects)
-
Planning of capital projects
(including development of the urban renewal plan) and general
administrative costs related to the activities of the Urban Renewal
Agency
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How
does the City benefit from urban renewal?
Urban renewal can help to
stabilize neighborhoods and commercial districts by assisting in the
reinvestment of these areas, and by also focusing new development where
it is most appropriate. Urban renewal is a potential funding
source to fulfill the City’s and the public’s vision for downtown
Hillsboro (and other urban renewal areas that may be considered in the
future).
How
does Urban Renewal funding work?
A municipality draws a line
around a targeted area, identifies specific improvements to be carried
out and over time issues bonds to pay for those improvements. The
assessed property values that exist at the time the URA is formed are
called the “frozen base” – revenues on these values continue to go to
the general funds of the affected taxing jurisdictions (e.g., the City
and the County) for the life of the URA.
When the URA expires
and the urban renewal bonds are fully retired, the increment is restored
to the regular tax rolls, and the taxing jurisdictions benefit from the
increased valuations that urban renewal helps to instigate.
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What are
the steps for creating an Urban Renewal Area?
-
Preparation of a feasibility study to
determine if the criteria for formation of an URA are met.
-
Preparation of a formal report which
addresses the criteria and also satisfies other requirement of Oregon
Revised Statues 457 (State’s Urban Renewal law).
-
Preparation of a Urban Renewal Plan to
establish the boundary, maximum indebtedness (maximum amount of urban
renewal debt that can be issued over the life of the URA), guiding
principles, demonstration of compliance with relevant Comprehensive Plan
policies and goals, and a list of eligible improvements.
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What are the criteria for creating and Urban Renewal
Area?
-
The total amount of land within the City’s
existing and proposed urban renewal areas constitutes no more than 15%
of the total land area in the City.
-
The total amount of assessed values within
the City’s existing and proposed urban renewal areas constitutes no more
than 15% of the City’s total assessed value.
-
The area in question meets the statutory
definition of “blight”. State urban renewal law makes it clear
that “blight” can refer to a host of conditions, including lack of
infrastructure, age and physical condition of buildings,
under-utilization of property (frequently evaluated in terms of low
improvement-to-land value ratios), and other factors.
-
Carrying out the urban renewal plan is
economically sound and feasible.
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Who administers an Urban Renewal
Area?
Pursuant to State law, the Hillsboro
City Council has opted to delegate urban renewal authority to itself, as
the Hillsboro Economic Development Council (HEDC). As the urban
renewal agency for Hillsboro, it is the HEDC’s charge to plan and
undertake projects in the urban renewal plan and to oversee the
financial viability of the URA.
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Can an
Urban Renewal Area be amended after its formation? If so, what is the
process?
Urban renewal plans must
provide a description of the possible types of future amendments that
are “substantial” and will therefore require the same noticing, hearing,
and approval procedure as the original plan. The state statutes
offer some guidance as to amendments that are required to be defined as
“substantial”: those that increase the size of the URA by more
than 1%, and those that increase maximum indebtedness by any
amount. It is typical for municipalities to define lesser
amendments for Council approval or other administrative approvals with
specified approval processes.
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Can
the City condemn property in an Urban Renewal Area?
Under recent state
legislation, municipalities cannot condemn property for private
development. So, for instance, if the Urban Renewal Agency seeks
to acquire some or all of a block for what will ultimately be a private
use, it can only acquire the affected properties from willing
sellers.
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Will urban renewal increase people’s property
taxes?
State laws about the value of property
for tax purposes (the “assessed value”) are the same regardless of
whether or not the property is in a URA. Specifically, state law limits
the growth in the assessed value to 3% per year, unless a property owner
constructs a major redevelopment or remodel/reuse of the property.
Even if real market values increase more aggressively due to
the beneficial impacts of urban renewal, the assessed value
will not increase by more than 3%. Since virtually all taxable
property in Hillsboro has a real market value substantially higher than
the assessed value, urban renewal will have no impact on the property
taxes for these properties.
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Does urban renewal have a financial impact on taxing
jurisdictions?
During the time
that the urban renewal plan is in effect, the City, County and other
taxing entities will receive the same funding as they are currently
collecting in the area. Any increase over current tax revenue will
be set aside to directly pay for projects in the URA. After the URA
is closed out, our expectation is that taxing jurisdictions will see more revenues due to the success of the URA in generating more
private investment than would have taken place if the URA had not been
formed in the first place; and the public entities will have additional
assets paid in part by the URA.The City is obligated to consult with
affected taxing jurisdictions in the feasibility analysis and in the
formation of an urban renewal area. It is also required to send a
notice citywide regarding the proposal to form the URA.
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Will
Urban Renewal have a financial impact on the school
district?
As a general rule, the School District is
not impacted the same way that the City and the County are. The
State of Oregon manages the State School Fund (SSF) for all K-12 public
schools in the state and allocates monies to districts based on a per
pupil basis, not on the collection rate. A URA would collect tax
increment revenues off the Hillsboro School District’s permanent rate, and
could have a marginal impact on statewide funds. However, HSD’s annual
budget is not directly impacted.
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Has
Hillsboro used urban renewal in the past?
The City has only had one Urban Renewal
Area in the past – Ronler Acres. This URA is considered a textbook
example of a successful urban renewal area. By forming the URA, the
City was able to partner with the private sector to create a major high
tech campus as well as the Orenco mixed use development. These
projects would not have happened without urban renewal. Because of
urban renewal the City and County are receiving substantially more tax
revenues than would have been the case had the URA not been formed.
While the nature of a Downtown Urban Renewal Area will be markedly
different than Ronler Acres, urban renewal is nonetheless a powerful
funding source to accomplish the City’s goals in this important sector of
the City.
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About This Plan – FAQ
What is a Community Plan?
The Downtown Community Planning effort is
an opportunity for citizens to help shape the neighborhoods in which they
live, work, own property, or manage a business. The resulting plan
will serve as a guide for the future of Hillsboro’s Downtown Core and
surrounding neighborhoods.
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What
is this planning process attempting to do?
The process is attempting to
determine the answers to the following questions:
-
Where are we
now? (i.e., what are our existing conditions in terms of
land use, zoning, traffic, and so forth?)
-
Where do we
want to be in the future? (i.e. What is the community’s
vision for the future? What kind of public investments should we make?
How do we protect the things about our past that we cherish while also
accommodating appropriately designed and appropriately located higher
density development which will support a thriving retail core?)
-
How do we get
there? (i.e. How do we fund the improvements? What changes
do we need to make to our development codes and other policies to
accommodate the community’s vision? What should the “guiding
principles” be?)
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What are the plan components?
The Plan will include:
-
A comprehensive Vision for downtown and
close-in neighborhoods which is based on extensive public input;
-
A Framework of specific short- and long-term
actions to turn the vision into reality, and
-
An implementation component to provide the
funding and regulatory tools necessary to carry out those actions.
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Why focus planning efforts on downtown
Hillsboro?
The City of Hillsboro, through the
Hillsboro 2020 Vision and other initiatives, has identified the
revitalization of downtown Hillsboro and adjoining neighborhoods as a high
priority. While there have been substantial investments in
downtown Hillsboro in recent years, there are many parts of town that have
languished, particularly when compared with more economically robust parts
of the City. Finally, many neighborhoods surrounding downtown
Hillsboro lack basic infrastructure and urban amenities such as sidewalks,
lights, street trees.
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How can I get involved?
Complete a survey online or call and
request one (503-681-6468), attend a workshop or open house
or visit one of the satellite offices set-up in the three project subareas
(Locations TBD). Planning Department liaisons will be available
3-days per month where conversations with people in their neighborhood
about their neighborhood can occur.Your Planning Department liaisons are:
-
Northern Neighborhoods – Doug Miller,
Urban Planner II
-
Southeastern Neighborhoods – Dan
Rutzick, Urban, Planner I
-
Southwestern Neighborhoods – Karl
Antonini, Urban Planner III
Stay tuned to this website to find out
the location of the satellite office in your neighborhood or watch your
mailbox for the next Downtown Community Plan bulletin.
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