Saturday, January 11, 2014

City Council, January 13th - The Corner Lot at State and Commercial! - Updated

The most interesting item on City Council agenda for Monday is a public sign of movement on the gravel lot on the corner of State and Commercial downtown!

Movement on Empty Lot at State and Commercial!
Not interesting, but possibly very relevant is the annual financial report for the Urban Renewal Agency.  Here's the brief cover note to Council, and the full report.  (Because the city scans a paper copy of the staff reports, the OCR yields some gibberish when you copy and paste, so the url for the financial report itself leads to a 404 error and you have to sortof interpolate the correct characters for the url.)

Conference Center's Operating Loss for 2013
From Urban Renewal Agency Annual Financial Report
Somebody with a good accounting background really ought to review these things!  What does it mean, for example, that the Conference Center carries an operating loss?  Does this matter?  (Maybe there's a reasonable argument for it operating at a loss.) Last year it happened too.

Conference Center Operating Loss from 2012
What else do we get for our Urban Renewal Areas?  Some people think the whole tax-increment financing thing is a boondoggle, others like it a great deal.  The truth is probably somewhere in the middle.  But a SWAG here suggested that the property values in the Pringle Creek Urban Renewal Area did not exceed the value of 1970s-era property left alone and simply adjusted for inflation. It's not clear that the new construction after more than a generation was more valuable than doing nothing, especially since the new construction was low-density campus sprawl, more parking lot and park than building. It's my hunch that we use urban renewal too much, but that we would not want to go without it altogether - that we need to use it more wisely and with better assessment metrics.  Someone with real finance chops should be looking into the report.

McMahan's site on State and Commercial
Back to State and Commercial, State Street Square LLC is asking the City to sell the smaller parcel, 129 Commercial Street so they can add it to the larger 260 State Street parcel. According to the staff report:
the Developer has proposed to develop the former McMahan's site and the Property as part of a mixed use development, which include at least two of the following uses; office, retail, residential, hotel or restaurant. The Developer's proposal is consistent with the "Core Area Redevelopment" project of the Plan, Section 1105, which calls for establishing downtown Salem as a vibrant mixed-use area.
There's good stuff percolating here, much better than the old bank and drive-through concept. Some of the principals involved are very interested in sustainability, and there is reason to think a genuinely good project will emerge. (And hopefully, too, more public information will come out soon, since it is hard to embrace staff recommendation without more details.)

The loss-of-use agreement will pay the Queen $50,000/year
Since final financing on the Minto Bridge is on the very near horizon, but the decision and payment dates don't line up conveniently with the original contract with the Willamette Queen, Council will need to approve an amendment to the loss-of-use agreement with the Willamette Queen. It will pay the Queen $50,000/year for five years for the loss of use of the slough during high water episodes.  (It is important to remember that a quarter of a million is a lot less than the multi-million difference between a low and high bridge; given the Queen's leverage in the antiquated 19th century legal framework governing navigable rivers and bridges, this was a reasonable expense and decision.)

Out south, there's an interesting bit dedicating two right-of-ways for park/path connections off of Battlecreek.  Here's the google, and here are the dedications. The path apparently already exists, built by a developer. So this appears to be a transfer of something already constructed. It's in a part of town with long blocks, that's not super connected, and the paths will be useful.  I'm not sure it's worth a closer look.

Update, Wednesday the 15th

Public details are out!

via Nathan Good Architects
From the paper:
Nathan Good, the project’s architect, said the building planned for 260 State St. would match the character of the neighborhood’s historic district. The structure would include a rooftop garden, and perhaps a rooftop restaurant, with a sweeping view of downtown.

“It’s like a flower box in the city,” Good said of the building’s design that includes an abundance of “rain gardens” to absorb stormwater....

State Street Square’s mixed-used building would include an underground parking garage with 20 spaces.
There's a lot to like here. Lots of windows along the sidewalk, the arched Beaux-artsy entries, a little like the train station - and then the horizontality of the terraces, a little ziggurat or layer-cake like. The arches also nod to those in the cast iron facade of Ladd & Bush across the street. The parking entry looks like it's off Commercial, not State.  I do wonder if the strength of the upper, terraces will get dialed back a bit in the final design.

Putnam Center at Willamette
Something I never noticed until recently was that the Putnam Center has the same basic form as the Public Library at the Civic Center.  But the columns are much more slender, the railings metal rather than concrete, and maybe most importantly, the brick camouflages the brutalism.  It's got a delicacy the Civic Center totally lacks.  It's not really all that remarkable, but the way it doesn't call attention to itself better serves the campus ensemble.

I wonder if the upper half of the design for 260 State will similarly become a little more delicate.  But even if it doesn't, this would be a great addition to downtown. Without being Disneyland faux-historical, it totally fits into the streetcar era fabric of neighboring buildings.

The Hallie Ford Center for Healthy Children & Families, Oregon State University, Corvallis (2011) was recently cited as
An outstanding example of compatible infill development, this major new building harmonizes beautifully with its neighbors. It makes a distinct statement that’s of its time, yet is complementary in scale, massing, proportion, and materials, enhancing the story of the historic district.
The building proposed here plays much the same game, and is so much nicer than the Meridian's design.


Jim Scheppke said...

I beg to differ on the "most interesting" items on the Council agenda. How about the proposal to allow cell towers built within 30 feet of residential properties? And how about the Mayor's State of the City movie at the low, low cost of $4,600, plus at least that much and probably a lot more in staff time. What a waste!

Susann Kaltwasser said...

Urban Renewal areas have been discussed a lot over the years. Based on what I have learned about them they do not produce the results that are intended. What they do is take money out of the general fund that causes burden on the rest of the city.

A number of years ago a knowledgeable person in these matters asked to look at the URA books to see if they balanced. They didn't and as far as I know some creative bookkeeping makes it so that even experts can't tell where the money come in and goes out.

I am not saying that the documents that are put before Council, I am talking about the real documents. And this person found that the books were not audited.

Don't think much has changed since then.

Also, a lot of people do not know that the Urban Renewal Agency ( which is in fact the City Council members and the mayor) operated under a different set of rules than the Council does.

The City Charter that sets up the rules for the City Council are voted on by the people. The URA rules are created by the City Council.

You can do things under the URA that would never be allowed under the City Charter. Maybe that is why they like it so much?

Salem Breakfast on Bikes said...

(Hey, trying to be positive here!)

Yeah, wireless towers are kinda outside the scope of the blog. This isn't a total review of Council agenda, so a tacit implication is that "most interesting" is from the perspective of the blog's scope - indeed, as you point out, regularly there are items outside the perspective of the blog that some would reckon vastly more interesting than items highlighted here.

So from the standpoint of the blog's, I totally think the corner development is the most interesting issue. But as you say, there has been lots of talk in the N/As about the wireless towers, and for many it is a far more pressing issue.

@ Susan - are the conversations about URAs archived anywhere? It would be great to be able to refer to them in current conversations!

Anonymous said...

Salem Weekly has a longer piece on the cel phone towers.

Walker said...

Tax increment financing isn't an automatic scam, it just lends itself quite readily to use by scammers. It's kind of like Paracelsus's law that the dose makes the poison -- an honest TIF would be harmless, like a homeopathic nostrum.

What would really save TIF and allow it to be used creatively and effectively to produce real gain is an accurate measuring system that would let us actually sort out which increment of gain can reasonably be connected to the TIF investment.

Right now, what happens is that the city pours money into rich guys' pockets, and they have a grand time spending it and raking off their profits (totally privatized, despite the public risk taking) and then the URA agency does nothing but look for the next opportunity to run the same play again.

What ought to happen is that all TIF projects are discounted for the overall rate of appreciation in the relevant area. So if property values appreciate 5% in the URA but 4% citywide, then the portion subject to TIF restrictions is only 1% -- the schools and county governments and libraries don't get shorted the 4% since it's obvious that the URA project didn't produce that increment of appreciation.

Such a system would result in a much better allocation of risk and reward, benefit surrounding areas and local government services, and remove the distinct smell of scam that clings to all TIF projects under the existing rules, where the developers are rewarded for political connections rather than successfully assessing market trends and demands and designing projects to meet them.

Susann Kaltwasser said...

I am not aware of any documents that would illustrate the debate over URA that would be in a public record. The debate has taken place over the past 20 years and flares up from time to time. I know that there was some Council discussion about closing a URA that was supposed to be open for only 10 years and got extended. Trouble is that once we close one, the City opens another one up.

Basically there are no checks and balances in the URA because the URA board IS the City Council.

There is plenty of materials on the Internet discussing whether they work or not. I think Oregon limits what percentage of area a city can have in a URA. Salem seems to use them more than other cities.

I hope that you and others can raise the profile of the debate. The community just does not realize that it is a system that has questionable value to taxpayers.

Curt said...

SJ commenters say: "Make it a parking lot!" (facepalm)

Susann Kaltwasser said...

Here is a feasibility study done for the South Waterfront area that became the basis of the URA. Note however, the projects were made in 2007 BRFORE the financial meltdown.

Susann Kaltwasser said...

This is from an article written by the League of Women voters who studied the issue in Portland.

There has been a recent groundswell of concern and opposition to urban renewal. California recently ended urban renewal completely. Clackamas County now requires voters to approve urban renewal districts. The Portland city auditor has cautioned that increasing urban renewal liabilities are weakening the city's ability to provide basic services. It is imperative that the City Council uses this powerful financing tool appropriately; to do otherwise will place it at risk.

The reason for this opposition and concern is that urban renewal takes money from schools and county and city services and commits it to projects in the designated urban renewal area. Statewide, approximately $180 million in property taxes were diverted to urban renewal projects

This makes one wonder how much total taxes are kept from our general fund, county and schools here in Salem.

Salem Breakfast on Bikes said...

Thanks for the links, Susann!

I think Walker's got the right idea for the kind of analysis we need. There's got to be some CPA/Real Estate type who'd love to dig in and blog about it!

As Curt points out, it's not surprising, but it is dispiriting, that so many of the SJ comments are for MOAR PARKING. If all the downtown surface lots that came about because of fire were instead occupied with buildings, downtown would be so much more vital. There was just a story on an effort in Dublin for "a new vacant lot levy charged to owners of both empty and derelict sites." I think Walker has commented before on just such a scheme!

Susann Kaltwasser said...

Good luck digging out the real records for the URA in Salem. When someone tried in the past they found that the accounting was so convoluted that you really could not tell. Not even a person with considerable dealings with public budgets could make head nor tails of the documents. i do not know if the City has an audited version, so that might be the first question to ask.

Salem Breakfast on Bikes said...

updated with clips from the paper and a few additional observations

Anonymous said...

The comments in the paper - aside from the one "Not enough parking spaces" - are overwhelmingly positive.

A very good sign!