Saturday, February 21, 2015

City Council, February 23rd - More Streetlight Fee and Historic Preservation

At Council on Monday there are two  matters on which Council has asked for more information and discussion before making a final decision. In and of itself this is not new, but with a much smaller agenda than there was on the 9th, the proportion of "revisiting" is high, and this seems like a hopeful sign that maybe this Council as a collective body will engage in deeper probing more often, and be less quick simply to rubber stamp a staff recommendation.

On the Streetlight fee, Councilor Andersen has proposed a different fee schedule, raising the amount for large businesses and apartments, who under the first proposed fee schedule would be charged proportionately much less than a regular family household. That seems like a fine conversation and debate to have! (See previous discussion here.) (Monday night update - letters mostly against it here and here.)

Starkey-McCully block, detail, 1964
University of Oregon (Elizabeth Walton Potter)
As the Urban Renewal Agency, Council also asked to learn more about the yearly property taxes they would forgo if the Salem-Keizer Education Foundation gets urban renewal funding for the Starkey-McCully block (circa 1869) and stays exempt from property taxes. The Salem portion of the taxes look to be $1,673 - so let's call it an even $2,000. The Foundation is asking for $300,000 from the City. In a way-simplified calculation, it would take 150 years of $2,000 property taxes/year for the City to get back the $300,000 grant.

(Obviously $300,000 today is worth way more than $300,000 in 150 years, but someone with better accounting skillz will have to figure an appropriate discount rate and all. And if the total proposed investment is about $2 million, the building's assessed value will be higher, and the yearly property taxes the City would forgo commensurately higher, but the City apparently couldn't get even a SWAG on this value. Someone should be able to model this!)

This is what I don't get about urban renewal and tax increment financing. How the heck does an investment like this (considered chiefly as urban renewal to generate a tax increment and not primarily as historic preservation) actually pencil out for the City? Why don't we have a good answer?

But again, this particular project is an ambiguous middle case (see more here), so it's not clear that one answer - to fund or not to fund by this program - is obviously superior. But it does illustrate ways that the way we analyze urban renewal funding and urban renewal outcomes is very thin. We would do better if we could say with greater certainty that this investment A will be repaid by the tax increment, and that investment B is worthy but will not be repaid and generates important benefits that cannot be directly monetized. (Like the Minto Bridge and its piece of urban renewal funding - that's a project that will not generate a direct tax increment, but yet has great community benefit that will not be directly monetized. Historic preservation, too, has benefit that can't always be directly monetized.)

(Monday night update - SKEF has withdrawn the request. In a letter they write, "In light of the complexity of the deliberation and its long ranging impact as well as our desire to keep a positive working relationship with both you and council we respectfully withdraw our request...")

Gone: Howard Hall and Trees were leveled this winter
On the theme of preservation, if you want to know why we'll never get to see this scene again, you could do worse than think about the interlocking boards between City Council and the Hospital Facilities Authority.

Council will make two appointments to the Hospital Facilities Authority. It may be that the proposal to seat the Mayor and Councilor Lewis on the board, which facilitates tax-free bonds, is an insufficient check and balance on the Hospital's notions about facilities expansion. (Monday night update - a revised Staff Report here.)

The City also looks poised to move forward with more Real Estate/Developer types on planning commission. (See previous article in Salem Weekly for more.)

Finally, there is a new round of Legislative positions. One of the "priority" bills is SB 565. It is called the "Revitalize Main Street Act," and according to Restore Oregon, it would "create a state Historic Rehabilitation Fund to provide a 25% rebate on the costs of fixing up historic commercial buildings." It's the kind of thing that might have helped with Howard Hall, and would be appropriate for the Starkey-McCully block. Happily the City "supports" it, saying it has "the potential to benefit more than 100 property owners in Salem's Downtown Historic District." Portland Architecture also has more on it.

Several other of the City "priority" bills concern land use laws and the Fairgrounds and are of peripheral interest. Another bill on "inclusionary zoning" is being "monitored" and so far the City is not taking a position on it. (BikePortland has a good discussion, both the post and in the comments, of inclusionary zoning and its benefits and problems.)

Just as a footnote, there's an information report on an approved 29 lot subdivision going in out south. The lots are forested and abut some new development as well as what looks like actual farming. The lots will basically be clear-cut.

Area of new 29 lot subdivision off of Landau
It seems like as a matter of policy we should have incentives for higher density development closer in and disincentives for utterly car-dependent development like this. (In a way, things like this will be a cost of doing less and/or lower density at Fairview and the north campus of the State Hospital.)

Update, Sunday

The paper has a little bit more on the Starkey-McCully block.

The Mayor: smash Howard Hall,
don't invest in the Starkey-McCully block...
kinda interesting, don't you think?


Susann Kaltwasser said...

The link between the actions of the Hospital and the City might be called into question around conflict of interest. If the city's hospital advisory board recommends and helps acquire bonds for a hospitla project and then those same people on the Council/advisory board vote to enable construction of that same project funded by the bond through their council votes, it could be a conflict of interest. This is what some say happened with the Blind School property. Deserves a review, I think.

Susann Kaltwasser said...

I am opposed to putting the street light fee on the water sewer bill. Even though it seems like a small amount, when you add extra burden to the bill, it will mean fewer people on fixed income will be able to pay. The addition of funds to the elderly and disabled relief fund is a joke. When the average water bill is $68 giving $11.80 to that bill is not helpful, especially when you have to jump through a lot of hoops to get that $11 and you still have to pay the rest of the bill or you don't get it. About 200 households a month get their water turned off because they can't pay the bill in full. The City doesn't care who they come up with the money to pay the bill. They just refer people to agencies they know have no money. So some people are not paying for other essential things in order to get their water back. I know of people who just go without their medicine, or don't make a payment to another creditor and risk losing their car or heat for example.

The City does not know what the impact is on the customer and does not care. I have heard staff say that this is a cheap way to collect the money. And some councilors think that a few dollars is easy to come by. Neither knows the impact in reality.

The first step would be to find out how many people are impacted by raising the water fees. The second would be to check with charities to see what help they actually give.

Other cities like Eugene and Portland have better systems for helping people stay in their homes and paying for services when emergencies happen.

Salem is very cruel in their systems, IMHO

Anonymous said...

Some of the details in the article on the SK Ed Foundation building are interesting:

- They bought it for $400,000
- They plan on spending another $2.2 million for renovations

A former SJ reporter and now Foundation spokesperson said:

"It would be a shame for the city to miss out on this opportunity that would benefit everyone," said Stefanie Knowlton, spokeswoman for SKEF. "No matter where SKEF goes in the future, this building belongs to downtown. It's the ripple effect of attracting other tenants to the area."

It hardly looks like saying "no" to the $300,000 would tank the whole $2.2 million project!

Jeff Schumacher said...

The City denying the $300,000 grant likely wouldn't tank SKEF's project, but the City's rationale seems shortsighted. Any grant application for the Riverfront-Downtown Urban Renewal Area should be judged on its merits - if the project could serve to benefit the area and eventually increase property values and tax base. It is strange to see people so concerned about the proverbial "slippery slope" - is it really that hard to just analyze each application on a case-by-case basis?

The SKEF plans look pretty interesting to me, and after seeing how terrific the McGilchrist-Roth building turned out (and seeing the people streaming in and out of it!) I'm surprised the City doesn't seem more excited about the opportunity that SKEF's building renovation could lead to for the surrounding area. Barring the City's outright approval of SKEF's application, I at least hope that the City and SKEF can reach an agreeable compromise that will help kick start SKEF's capital drive.

Salem Breakfast on Bikes said...

Glad you mentioned the McGilchrist/Roth project. Really quickly, the URA investment there is in round numbers about the same, $200,000 or $300,000. This comparison deserves more attention - it is paying property taxes, and has for-profit businesses in it, however - and maybe we can come back to it later.

Also, in Northgate, the City did just approve the $1 million sewer project. That's a relevant comparison, too.

Salem Breakfast on Bikes said...

Inserted three brief updates with links to additional staff reports and additional public comment. SKEF pulled their request for URA funds, and it looks like they are confident fund-raising can proceed independent of this source.

Council also moved ahead with the streetlight fee.