MINUTES FOR THE STUDY SESSION

ASHLAND CITY COUNCIL

Monday, July 18, 2011

Siskiyou Room, 51 Winburn Way

Mayor Stromberg called the meeting to order at 5:30 p.m. in the Siskiyou Room.

Councilor Silbiger, Morris, Lemhouse, Voisin, and Chapman were present.  Councilor Slattery was absent.

1.     Look Ahead Review

Agenda item not discussed.

2.     Does Council have questions regarding the draft Urban Renewal Feasibility Study?

Jeff Tashman from Tashman Johnson LLC addressed Conclusions in Section X. of the Urban Renewal Feasibility Study draft on the Downtown/Railroad and Croman Mill Site areas.  There were existing conditions of development, infrastructure, and public facilities in the Downtown/Railroad area where Council could make a finding for urban renewal under the statute of blight.  The Railroad area contained underdeveloped areas, and lacked adequate access and infrastructure throughout the area.  They based projected revenues and tax increment financing on a specific real estate market assessment over a 20-year period that showed the area could provide 140,000 square feet of office space, 60,000 square feet of retail, 90 residential units, and 115 hotel rooms.  The key public investment and infrastructure needed to support that level of development included intersection improvements, additional public parking, a possible plaza enhancement, a railroad crossing at 4^th street and a road extension and utilities at Clear Creek Road. 

The real estate market assessment projected a funding capacity for the Downtown/Railroad area of $24,000,000 over a 20-year period.  A smaller urban renewal district or a shorter period was feasible. Mr. Tashman separated future development by what would happen with or without urban renewal and determined without urban renewal development would occur in the downtown area. He explained the calculations used to determine the amounts taxing districts levied from their permanent base came from the prior fiscal year.  Ashland had two major taxing districts, the City and the School District.  The School District would not be impacted from urban renewal because of state funding.  The other districts were countywide and any development that occurred through urban renewal in Ashland was a small part of that amount. They projected 2% of last year’s permanent rate levy or approximately $170,000 year.

For the East Ashland Study Area, there were obvious conditions of blight because the area lacked major access and infrastructure.  Development projections included 300,000 square feet of employment uses, 85,000 square feet of office, 150,000 square feet of retail and 90 housing units.  Public improvements were substantial, expensive, and included a parking structure and public park for the Croman Mill Site area.  Present dollar projected costs were $20,000,000 and would require $11,000,000 in future urban renewal dollars.  The conclusion was urban renewal and tax increment financing would need substantial subsidizing from other funding sources to develop as projected.  However, impacts on the East Ashland Project taxing districts were smaller because very few projects would happen without Urban Renewal.  City impact would be .05% of the permanent rate levy and the other taxing district would have .1%.

Mr. Tashman explained urban renewal plans fail because the market did not support the development, the development did not occur, there were no revenues to spend and subsequently projects not started. In the event urban renewal fails, taxes already collected are returned to the taxing districts.  Urban renewal plans authorize projects only.  Citizens benefit from urban renewal in 20 years through higher property tax revenues from the urban renewal area.  Additionally, tax increment financing used property taxes paid in the normal manner and allocated them for specific projects.  Another possible revenue source was General Obligation Bonds. 

Councilor Silbiger declared a conflict of interest due to his investment in a company that had expressed interest in the Tolman Creek area. 

Council noted each of the areas designated for urban renewal had very different components and requirements and was not convinced urban renewal fit all solutions to these problems.  Another issue was the effort required to establish an urban renewal agency to manage the areas.  Council could see the value in the tool but were not comfortable with all the unknowns.

Mr. Tashman commented on the challenge of doing development projections and how management, budgeting, and ensuring the city involved could support the debt with current revenues mitigated uncertainty related to urban renewal.

Colin Swales shared a conversation he had with the Jackson County Assessor that stated this year 25% of Jackson County property would have a real market value less than the assessed market value.

Mr. Tashman concluded urban renewal was a major decision and it might be useful to separate it from the need of public investment in order to achieve the development the City was seeking through the comprehensive Plan.  The City needed to decide how to fund development projects.

Councilor Chapman left the meeting at 6:27 p.m.

Meeting was adjourned at 6:28 p.m.

Respectfully submitted,                                

Dana Smith

Assistant to the City Recorder