Saturday, July 23, 2016

City Council, July 25th - Governor Geer says Yes to Bike Park

Gov. T.T. Geer
Council meets on Monday and while it is not the most important thing, the proposal to move forward formally with a bike park and pump track at Geer Park is the most interesting thing.

It's just not possible to get tired of talking about Governor Geer and bikes. (If you are tired, skip ahead!)

He rode a bike and he signed Oregon's first bike path law in 1899. The law wasn't very successful, but it happened, and it happened before automobiles were significant.

You can read more about it here and here.

The upshot of it all is that Geer Park is a perfect place for a bike park.

More formally, the City determined that an amendment to the park master plan is a necessary step at the moment:
A bicycle pump track will be a major amenity to Geer Park and construction could be initiated in late 2016. However, a bicycle track is not identified in the 2003 master plan and conducting a full master planning process for Geer Park will not take place until sometime after 2020. Therefore, staff recommends Council approve the addition of a bicycle pump track as an amendment to the 2003 Geer Park Master Plan. Note that a playground and a picnic shelter are standard features of a community park per the Comprehensive Park System Master Plan Update (adopted 2013). When the master planning process is next conducted for Geer Park, a new location for these facilities will be identified.
We held a seance Friday night, by the way, and we are happy to report that Governor Geer enthusiastically supports the proposal. "Knock three times if you like the idea" and you should have heard the resounding, bam! bam! bam! The intensity was a little startling, actually, and we had to take a break for a moment to calm and recompose ourselves.

Bicycle track at Willson Park, 1896
(current site of Executive Building and
former site of Post Office)
Salem Library Historic Photos
He also remembered and wanted to remind Salemites that Willson Park used to have a track for bike racing. The Post Office (now Gatke Hall) was erected there in 1903.

Other Items

Henningsen Cold Storage; Or, the Veil of Mystery draped over the Enterprise Zone like Fog from Dry Ice

Mill Creek Corporate Center - via MCCC
In an absolute sense, other items are of course more important than the bike park. One of them is the proposed expansion of the Enterprise Zone for a new $27 million Henningsen Cold Storage warehouse at the Mill Creek Corporate Center. This is a property tax abatement traded for jobs. According to Business Oregon
In exchange for locating or expanding into any enterprise zone, eligible (generally non-retail) businesses receive total exemption from the property taxes normally assessed on new plant and equipment...[usually for] three to five consecutive years of full relief from property taxes on qualified property, after it is in service.
For this project, the Staff Report notes
There will be a minimum of five new permanent, full time equivalent (FTE) jobs added and an additional three seasonal employees, with annual average wages of $60,264; 150 percent above the Marion County annual average of $40,176. Additional jobs are anticipated with future phases of the development. Henningsen’s job estimates are conservative and will likely increase over time. The enterprise zone application for their Madrona Avenue facility estimated a total of 19 jobs and employment has grown to 42 jobs.
Not in the City's Staff Report, but in the Henningsen application materials is the intent for a "hub"
to add up to 200,000 square feet of multi-tenant production space attached to the cold storage.
But the Staff Report does not even state outright what is the dollar value of the expected loss in property tax receipts. Based on a quickie comparison with a $20 million Kettle facility, which pays about $300,000 in property taxes (the total would be higher, but some is abated), it looks like a $27 million warehouse would get a pass on about $500,000 a year in property taxes. 8 new jobs at $60,000 = $500,000 a year. Those 8 jobs and $500,000 in payroll aren't going to backfill with $500,000 of new property tax revenue. If there is no additional extension of the Enterprise Zone, then it is an interesting question: How many years and how many jobs are necessary to fill the hole created by abating a half-million a year for five years?

On that simple analysis, it looks like the Enterprise Zone may be a net loss rather than a net gain. You may appeal to the prospect of new jobs to pay it off, but as the "hub" is built out, new modules will qualify for the property tax abatement also and the Enterprise Zone will be extended or renewed. It's not obvious at all that all this subsidy is truly generative for the City.

We're deeply skeptical of the MCCC here, and worry about ways that businesses there with high water demands could intercept and diminish the amount of mountain tap water available for City residents. Over on a Facebook discussion, Councilor Bennett also says "Widening on Kuebler has nothing to do with this was widened to deal with existing traffic demand as well as growth in the area." But "nothing to do with it" is not true. All the development we put on the edge of the city has everything to do with it - especially development right on Kuebler/Cordon.

And this points to a larger problem with the way he discusses the project. There is no overall sense of the total subsidy for projects on the edge of the city. (Remember the $42 million for Sanyo Solar?) Some proportion of Kuebler/Cordon widening should unquestionably be "charged" to these new developments. There are other nearby widening projects that should also be fractionally charged to the new developments. There will be new driving trips to the facility, and of course the truck traffic. We also have chosen not to invest in less costly and more efficient forms of mobility and land use, and instead have doubled down on autoism and car trips. There's other infrastructure, also. There's that new reservoir out there, for example, and the I-5/Kuebler interchange, and the $48 million more (and may be as much as $120 million) for I-5 widening right in there at Kuebler.

And are these developments sufficiently large and dense enough to create a self-sufficient tax base that will be able to support the maintenance and replacement obligations for the second lifecycle of the infrastructure. Since we already cannot afford all the maintenance, repair, and replacement necessary in the central city, and last fall we found expanding transit an intolerable tax burden, what makes us think that depleting our property tax base further is a sound move?

When you sum up all the direct and indirect subsidies for the green field development on the edge of the city, something that the City has not in fact done, it is almost certainly not as good a deal as it seems.

As it is, we have to trust and swag the cost/benefit. The City actually mystifies rather than clarifies - and so you have to wonder just how much of a give-away it might be. The quarterly and annual reports on Economic Development (see below!) certainly don't give any analysis. Within the constraints of the program as it is, and the limited public analysis, maybe this is a reasonable move. Investing in agriculture is the right thing for Salem. It's one of our real assets and as far as these things go, this looks relatively straight-forward.

But wouldn't you like to know that the investment is prudent with a greater degree of confidence? If we had a better analysis of our system of direct and indirect subsidies, we could make a more educated assessment of proposals like this.

State Hospital Demolition and Mitigation

McKenzie Hall is among those to be demolished
There's more on the proposed mitigation plan for the demolition on the North Campus of the State Hospital. In the materials is a memo from Department of Administrative Services, and the budget discussion is interesting:
The [Salem Historic Landmarks Commission] expressed concerns that there would be adequate funding to complete the mitigation work. Their recommendation states that “..the overall DAS budget for the proposed mitigation be either .1% of the estimated market value of the historic resource, or as proposed in the mitigation plan, whichever is higher.” To clarify, DAS is spending approximately $80,000 on mitigation which significantly exceeds the .1% ($7,300-minimum spending requirement noted by the HLC), thereby easily meeting the HLC’s recommendation.

Specifically, the appraised value of the 30.74 acres made available for redevelopment through the demolition of the buildings is $7.3M. This value is used, as the buildings have no economic value. The mitigation required under the City of Salem process comes to $7,300.

The attached Memorandum of Agreement (Attachment 1) is the outcome of this process. The final draft Memorandum of Agreement provides the highest quality documentation and a range of educational and interpretive opportunities. Artifacts are being donated from the buildings for museum display, and documentation and oral histories will be made available via a website. Bricks from the buildings are preserved for use in a future City park and interpretive display. The estimated total cost for mitigation will come to approximately $80,000. The total mitigation is 1.1% of the $7.3M appraised land value.
And in minutes from the HLC meeting:
The HLC looked for guidance in SRC 230.082(b)(2)(C) to establish a measurable monetary standard for this level of mitigation for the demolition of a historic resource. This code section states in part: “..The public agency shall donate 0.1% of the estimated market value of the historic resource to the City’s Historic Preservation Trust Fund.” The HLC utilized the .1% as a benchmark to determine whether adequate funding has been set aside for the proposed mitigation.
I think there's an analytical mistake - or at least a deep difference of opinion - here in the way we are conceiving of "mitigation" and its cost.

DAS considers the "appraised value" of almost 31 acres of bare land (after "the demolition of buildings") as $7.3 million.

But we are not mitigating the lost value of bare land.

We are ostensibly mitigating the value of lost buildings, the architecture, and the history of patients and staff who dwelled in them.

It seems to me that a better framework for mitigating that is with"replacement cost."  The HLC got closer, and appealed to provisions in our SRC, by saying "the estimated market value of the historic resource," but if the historic resource is dilapidated, as unfortunately they so often are having been neglected by accident or design, its market value will still be low. If we want to place a value on an historic building, maybe it would be better to say, "what would it cost today to rebuild that same building?" That still doesn't get at the cultural, historical side of things, but at least it's a more honest assessment of the building's value. If we are going to put a dollar value on an historic resource, why don't we start with replacement cost, even if it might need some secondary adjustment upward or downward?

By this "replacement cost" standard, $80,000 is nothing for "mitigation" and is far from 1.1% of the total.

Altogether this is just a shallow, maybe even a little shabby, approach to mitigation and in fact mitigates very little. It's museum display, not historic preservation. It's just some photography, signage, and website development. It's "commemoration" of loss not mitigation. It doesn't lessen the amount and scope of actual loss or serve to mitigate future loss. (For previous thoughts on it see the discussion of the HLC here.)

Bullets for the rest:
  • The Simpson Hills project at Fairview got an extension. The whole thing has been slow to develop, so this seems fairly unremarkable. 
  • Because of the Garmin expansion and a State economic development grant that funded work on Turner Road, the Elks get a free pass on a 1993 deferral agreement to fund work on Turner Road.
  • Jesse Hayes, impresario of Archive, will be appointed to the Downtown Advisory Board. They also look to remove the "non-voting, ex-officio members" members of DAB, who have been members of the Planning Commission and of the Housing and Community Development Advisory Commission. They also will widen the boundaries for certain eligible members from the Downtown Parking District to the Riverfront-Downtown Urban Renewal Area.
  • The "Fiscal year 2015-16 economic development update" as usual is too much summary and not enough analysis. It assumes the effectiveness of everything and never circles back to see if it is actually yielded economic development and a net gain or if it's just churn and deck chairs.
  • A couple of items on the Transient Occupancy Tax: The Conference Center will get almost $300,000 for annual marketing expenses, and Travel Salem will get a fixed 25% annual allocation, right now just under $1 million. The Conference Center, and its various subsidies, is another thing that gets lots of summary and little analysis, and it is an open question how much it actually nets Salem.
  • Not on Council agenda, but worth noting: Salem Weekly has a very nice dive into FBI crime stats. One interesting thing: "Since 1995, the average annual increase since 1995 has been only 1.05 officers per year," much smaller than the 2.4 officers per year the super-sized facility is based on, or even the actual figure of 1.8 per year since 1972. Especially since crime has been falling, there's no reason to think anything close to 2.4/year is necessary now. This is more evidence that a reasonable, right-sized facility is nothing like the 150,000 square foot fortress and monument on the table now.

1 comment:

Anonymous said...

According to the SJ today,

"The city estimates the company will save an estimated $380,000 to $390,000 in tax abatement in the first year alone."

So that's right in between the $300,000 and $500,000 figures you noted. It would have been nice for the total value to be reported also, however.