City Council, March 25th - A New Urban Renewal Area?

The most interesting item at Council on Monday is a proposal to create a new Urban Renewal Area. (Curiously, I thought we were going to start calling them Tax-Increment Financing Districts.) As Urban Renewal Agency, Council will consider initiating the process.

As the downtown Salem becomes built out, interest is growing in development and redevelopment opportunities within the north waterfront/north downtown area. Building on prior City-wide strategic planning efforts that examined areas for future urban renewal areas and current interest in redevelopment along Front Street, Staff is seeking Agency Board approval to begin the process of creating a new urban renewal area between the Riverfront-Downtown Urban Renewal Area and the North Gateway Urban Renewal Area.  This area meets the statutory requirement of “blight” due to changing economics, uses, and vacancies. With Board approval, staff will begin the process to create a new urban renewal area (URA) to assist with redevelopment of the area. Following the analysis of a potential new URA, staff would bring back to the Agency Board a draft plan, draft financial report, and draft geographical boundary for review before initiating the steps to adopt a new plan as outlined by Oregon Revised Statute.

Industrial parcels along Front St.

While the lots along Front Street, including riverfront parcels, have been slow to redevelop, there are also residences along Liberty, Commercial, and Broadway whose residents could be displaced in Urban Renewal. Drawing boundaries and considering displacement would need care.

• Previously see notes on the former Truitt Bros. site, which with Front Street itself looks to be at the center of any future URA here.
• Also recent notes, "City's Lack of Reporting Hides Range of Urban Renewal Projects"
• And with the claim that the City currently misses $6.7 million annually from the URAs, "City Council, January 22nd - Urban Renewal, Climate, Baseball"
  

A prior question that Council should insist on asking is how effective are the URAs to begin with. They are an instrument to fund wanted projects, but we have no idea how effective they are to "grow property tax valuation."

When it was closed, the value of the old Pringle Creek URA seemed to underperform a simple calculation of inflation.

It is nonsense, devoid of real meaning!
(Comments reversed in white added, chart from 2020)

In published materials, the City, seemingly willfully, has muddled city-wide property value appreciation in general with URA appreciation specific to the district. A few years back they trumpeted "growing assessed value," but they did not say anything about compared to what. In our current market a vacant, rotting building is "growing" in value. Merely to assert growing value is a trivial claim. And if the growth inside a URA is not exceeding the growth outside it, we should look more closely at whether we need that URA.

We need a more critical analysis, even audit, of the whole URA program and figure out whether it is really doing what we want it to do.

Without themselves being on the agenda, Clutch Industries has two items of interest on Council agenda. They are a newish development company, and while none of the Salem Business Journal, the Portland Daily Journal of Commerce, and Portland Business Journal seem to have taken notice of them yet, Clutch is quietly amassing a real portfolio of projects here. The SJ has briefly noted them in individual "what's that happening?" listings, but nothing that makes any assessment of their portfolio as a whole. They may be worth more attention.

Their website is not very useful for any "about us" information, but at LinkedIn they say

Clutch Industries is a full-development construction company.  We focus on adaptive reuse, flex warehouse, and full multifamily construction from land acquisition to occupancy.  We focus on projects in the Willamette Valley and the surrounding area.  We currently have over 500 multifamily units planned for the next 3 years.    Our development story begins in 2017 with the need to advance projects in our portfolio and start developing new acquisitions....The old adage "Buy land, they are not making anymore" is very true.  In Oregon, our land use restrictions are rapidly getting significantly stronger and more expensive.   It is getting harder and harder for any developer to push a project through the system.  We have seen many of the old-guard builders step away from building in Oregon or simply no longer want to fight the battles to get a project approved.

One of the two items at Council is to consider a request for an Urban Renewal Grant exception for renovation of the former Liberty Plaza into The Forge. They seek "a grant in the amount of $600,000 as an exception to the maximum grant amount of $300,000."

The proposed project is an entire reconfiguration of a 73,500 square foot, three-story building into multiple tenant spaces. Renovations will include upgrading the basement to event/meeting space and partitioning space into twenty-seven (27) beauty style suites on the second floor along with space for a bar/cafeteria. Work on the third floor will demolish existing walls to create commercial office for a CPA/Wealth Consulting firm. Exterior building upgrades include the removal of the existing tile, replacing it with a masonry siding and new cornice. Roll-up doors in the main entrance area will open up first floor space to attract food and beverage tenants.

The total project costs are estimated to be $4.8M. The grant funds are requested because of increased construction costs, significant tenant improvements, and to address the poor condition of the property due to long-term deferred building maintenance and vacancy.

More housing should really be the focus for Urban Renewal downtown. Downtown office space no longer seems like a very useful thing to focus on, as reduced demand for it seem structural rather than temporary change. But since this is a reuse of an existing building, something we should not want vacant, it might be a reasonable use for URA incentives.

New zoning approved

The other item involving Clutch is an information item only, approvals on new zoning for the former Reform School and Prison Annex area. This is a large parcel, about 400 acres, nearly the size of the former Fairview parcel. The new zoning is low-density residential (RS), Mixed-use III, Industrial Commercial, and General Industrial.

With the creek and flood plain, and with multiple historic sites, including at least one known cemetery, this will be a challenging site, and the developer has not gone out of their way to signal sensitivity to any of that. This will be something to watch. It could be really great! But it also could be a struggle and not so great. Above all, it is on the city edges and likely to be very autoist.

Previously see:

• Before purchase, when the land was being auctioned, "Another Murky DLC and Parking Mania: Notes on the Sunday Paper" (2022)
• On the first scheduled Hearing, "Rezoning the Former Reform School and Prison Annex Area: At the Planning Commission" (2023)
• After multiple postponements and supplemental Staff Reports, "New Zoning for the Former Reform School and Prison Annex Site" (2024)
  

Back in December

Clutch also has plans for the DA White seed building and Boise building (pictured in clip) on the northwest corner of State and Front.

They are active and a firm to watch.

Bullets for the rest:

• There's an update on bond projects, but I didn't see anything new in it.
  
• The proposal to fold ambulance service back into the Fire Department is now an action item for a decision. (Previous note here.)
  
• A very general update on the Revenue Task Force
  
• More expense at the Airport, a "Perimeter Intrusion Detection System" to electronically fence off Garmin from the Airport.
  
• Some policy changes to the Streetlight Fund, Transportation Services Fund, Capital Improvement Program, with expanded reserve contingency allocations, cost-of-living increases, and improved reporting requirements. These didn't seem remarkable, but they also seem like the kind of technical fix that could hide something more significant.