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HomeMy WebLinkAboutAgenda Item - 2020-05-19 - Number 14.1 - Funding Capacity Lake Grove URA 14.1 E REDEVELOPMENT AGENCY REPORT r 0 EG0\- Subject: Lake Grove Urban Renewal District—Consideration to Increase Funding Capacity Meeting Date: May 19, 2020 Staff Member: Sidaro Sin, Redevelopment Manager Department: Redevelopment Agency Action Required Advisory Board/Commission Recommendation ❑ Motion ❑ Approval ❑ Public Hearing ❑ Denial ❑ Ordinance ❑ None Forwarded ❑ Resolution ❑ Not Applicable ❑ Information Only Comments: ❑X Council Direction ❑ Consent Agenda Staff Recommendation: Do not increase funding capacity at this time. Recommended Language for Motion: N/A Project/ Issue Relates To: ❑X Council Goals/Priorities ❑Adopted Master Plan(s) ❑Not Applicable EXECUTIVE SUMMARY A Council Goal for 2020 is to consider increasing the funding capacity for the Lake Grove Urban Renewal District. The current maximum indebtedness (MI) of the Lake Grove Urban Renewal Plan (Plan) is $36m with the district closing in 2034. Increasing the funding capacity by increasing the MI to pay for projects is estimated to be approximately$39m. This would increase the total MI for the district to $75m and would extend the closing date of the district to 2041. An increase to the MI for any amount is considered to be a substantial amendment, which requires concurrence from Clackamas County and the Lake Oswego School District because they are part of the overlapping taxing districts that impose at least 75% of the taxes in the district. The economic impact of COVID-19 on state and county funding is uncertain at this 503.635.0215 380 A Avenue PO BOX 369 Lake Oswego, OR 97034 www.ci.oswego.or.us Page 2 time, but the impact will likely affect the level of support for an increase in the MI as it would extend the time taxing districts would forego tax revenue. Staff recommends not increasing the funding capacity of the district at this time. The Council may want to revisit this when there is a better understanding how funding for other taxing districts will be impacted. DISCUSSION At the March 17 Council meeting, the approach to increasing funding included receiving more information on the following discussion items: How Much Additional Funding is Needed? The current MI of the Plan is $36m with an estimated district close date of 2034. The cost for Boones Ferry Road (BFR) Phase 2, the parking project, and administrative expenses is approximately$39m. The BFR project phasing map is included as Attachment 1. This would increase the total MI for the district to $75m and the estimated closing date of the district would move from 2034 to 2041. The Plan requires that any increase in the maximum indebtedness for any amount be processed as a substantial amendment, which requires the amendment to be processed in the same manner as the original Plan, including notice, hearing and approval procedure. Additionally, it requires concurrence of the overlapping taxing districts that impose at least 75% of the taxes in the district. In this case, it would require that Clackamas County and the Lake Oswego School District to support the increase. This requirement was included in the Plan in response to the School District's concern that amendments could increase maximum indebtedness and therefore could increase impacts on overlapping taxing districts. This requirement goes beyond the State requirement where 75% concurrence is only required if the maximum indebtedness is increased by more than 20%. It is anticipated that COVID-19 will have a significant economic impact which will affect state, county and local funding. It is unknown what the actual impact will be, but it will likely be significant enough to impact how local governments and schools will do business in the future and certainly would impact any decision to support an increase in funding for the district. Due to this impact and uncertainty, staff recommends not increasing the funding capacity of the district at this time. Funding Source Other funding sources were considered including the Street Fund, Systems Development Charges and creating a Local Improvement District (LID). Due to trade-offs with planned pavement improvement projects, lack of resources and potentially not getting support from affected properties for an LID, it was determined that increasing the MI for the district is the most viable option, however not the best timing due to the concurrence required from other taxing districts. 503.635.0215 380 A Avenue PO BOX 369 Lake Oswego, OR 97034 www.ci.oswego.or.us Page 3 Adding Affordable Housing Project to the Plan Increasing funding for the district is processed through a substantial plan amendment, which requires a significant amount of resources and effort. This would be the time to include other projects the Board may be contemplating such as affordable housing, if it were done at the same time. Otherwise, it may not be the most efficient use of resources. If the decision was made to not increase funding at this time, to move the affordable housing initiative forward, the Board acting in its capacity as the City Council could initiate rezoning of the BFR staging site to accommodate a future affordable housing project. The rezone is a necessary step regardless of how affordable housing is funded. Additionally, staff could work with Metro and the Clackamas County to determine if the site is a good candidate for the Metro Housing Bond. The MI decision would not affect bond eligibility. Process and Timeline Due to limited staff capacity, consistency and to ensure that ever changing urban renewal regulations are met, it was recommended that we work with Elaine Howard Consulting (EHC) to process the amendment. EHC worked on the original Plan in 2012 and the first amendment to the Plan in 2015. The amendment could take between 6-8 months and approximately $30,000, however, staff is not recommending pursuing the amendment at this time. FISCAL IMPACT There is no fiscal impact unless the board would like to move forward with the amendment, using $30,000 in consultant services. RECOMMENDATION Staff recommends not increasing the funding capacity of the district at this time. The Council may want to revisit this when there is a better understanding how the funding for other taxing districts will be impacted. ATTACHMENTS 1. Boones Ferry Road Project Phasing Map 503.635.0215 380 A Avenue PO BOX 369 Lake Oswego, OR 97034 www.ci.oswego.or.us BOONES FERRY ROAD ATTACHMENT 1 PROJECT AREA MAP Street Improvements el — - Utility Improvements N 0 New Signalized Intersection with Pedestrian Crossing O New Pedestrian Crossing � " e • Improved Signalized Intersection :0 . A. with Pedestrian Crossing ; 1 a liennin ton Pal • Staging Area Collins Way 1 •ed CedalDr. Douglas Way Waluga Park East* ‘11. I Phase 2 I Lake gave Lan vu ,. : Elementary D. 1 z School I ao vre' I Oakridge Rd. 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