Agenda Item - 2024-02-20 - Number 04.1 - Urban Renewal Plans and Foothills Area Update503-635-0215 380 A AVENUE PO BOX 369 LAKE OSWEGO, OR 97034 WWW.LAKEOSWEGO.CITY
Subject: Provide direction on Urban Renewal areas, including the Foothills area.
Meeting Date: February 20, 2024
Report Date: February 7, 2024
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:
☒Board Direction☐Consent Agenda
Staff Recommendation:
Initiate a substantial amendment to the Lake Grove Village Center Urban Renewal Plan to
increase the maximum indebtedness and add projects(s), seek grant funding to update the
Revised Foothills Framework Plan and develop an urban renewal plan for the area.
Recommended Language for Motion: N/A
Project / Issue Relates To: Urban Renewal Plans and Foothills Area
Issue before LORA Board (Highlight Policy Question):
☒Council Goals/Priorities ☐Adopted Master Plan(s)☐Not Applicable
ISSUE BEFORE LORA Board
The staff report reflects the Board’s direction on the existing urban renewal plans and the
Foothills area. The Board can direct staff to move forward to update the plans as proposed or
make amendments as necessary.
4.1
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EXECUTIVE SUMMARY
In May of 2023, the Lake Oswego Redevelopment Agency (LORA) Board directed staff to
1. bring back a plan to close the East End Redevelopment Plan (EERD) as anticipated in
2028;
2. pursue increasing the maximum indebtedness for the Lake Grove Village Center Urban
Renewal Plan (LGVCURP) to fund projects in the area; and
3. update the Foothills District Refinement Plan (FDFP) and develop a Foothills Urban
Renewal Plan (FURP).
Staff summarizes its proposed responses as follows:
1. In order to close the EERD the Board must adopt a Resolution specifying its termination
date;
2. An increase in the maximum indebtedness of LGVCURP would require a “substantial
amendment”—as that term is used in relation to Urban Renewal Area (URA) plans-- and
concurrence from taxing districts. If the closing date of the Lake Grove URA were
extended, preliminary high-level estimates indicate that the URA could have the
capacity to generate around +/- $50M to fund project and administrative service costs.
The amendment process could be completed by early next year.
3. Updating the 2012 FDFP and creating a new FURP involves an extensive process that
could take up to four years to complete and cost up to $500K. Preliminary estimates
indicate that the Foothills URA could have the capacity to generate around +/- $100M
to fund project and administrative service costs.
The potential revenue generated for projects and administrative services is based on the best
information available at the time of this report and assumptions related to growth rates, length
of the districts, URA boundary limits, revenue sharing, etc. Staff anticipates bringing back
additional projections for discussion at a future study session.
Staff is seeking Board feedback about the proposed responses and direction about the process
for initiating them. Given the slight delay in the development of the Lake Oswego wastewater
treatment plant, staff recommends that the Board pursue the amendment process for the Lake
Grove Urban Renewal Plan prior to undertaking the Foothills process.
BACKGROUND
A Council initiative for 2024 is updating the LGVCURP and begin work on a plan to use urban
renewal to support the redevelopment of the Foothills area. In particular for the LGVCURP,
Council expressed interest in developing a strategy for an all-ages and all-activities community
center on the west side of town that could include event and meeting spaces, public services,
and library services. The City would also collaborate with Lake Oswego School District and other
stakeholders as part of this project.
In May 2023, the City Council, acting in capacity as the LORA Board received an update on the
status of the EERP, the LGVCURP, the FDFP, and the FURP. The Board directed staff to bring
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back a plan to implement the direction given at the meeting. Specifically, the Board directed
staff to:
• EERP: Close the district as anticipated in 2028 or sooner.
• LGVCURP: Increase the maximum indebtedness of the plan in order to fund projects in
the area.
• FDFP and FURP: Update the Foothills Plan and prepare a new urban renewal plan for
the area.
DISCUSSION
The information in the report and attached schedule (Attachment 1) outlines the different
processes for the City’s two URAs and the Foothills area.
A) East End Redevelopment Plan (EERP)
The Board direction was to close the EERP as planned in 2028.
The EERP is the oldest URA for the City and has had the most impact on the redevelopment of
the downtown area. The downtown is thriving with new housing, community amenities and
economic vitality and directly reflects the benefits of how urban renewal works to help
revitalize an area. Since the URA was created in 1987 and with a maximum indebtedness (MI)
of $94M, 66 projects have been completed including major signature projects like Lake View
Village, The Windward, Millennium Plaza Park, and City Hall.
Upon closing the district in 2028, it is estimated the assessed property value in the URA area
will be approximately $450M, compared to $55M in 1987 when the URA was formed. The
frozen tax base that was established would then be terminated and the full assessed value of
properties in the URA would return to taxing districts. The City of Lake Oswego is anticipated to
receive approximately $2.2M annually when the URA closes.
Closing the URA in 2028 would leave 17 projects uncompleted (approximately $64M in project
costs) and will include the completion of the North Anchor project in 2025.
When the time comes to close the URA in 2028 and all of the bonded debt has been paid off,
the LORA Board will need to approve a resolution to terminate the EERP and to stop receiving
tax increment financing (TIF) revenue. The resolution would then be sent to the County
Assessor’s Office to officially stop receiving TIF revenue.
B) Lake Grove Village Center Urban Renewal Plan (LGVCURP “Plan”)
The Board direction was to increase the maximum indebtedness of the Plan in order to fund
projects in the area.
The Plan was adopted in 2012 and consists of two projects, Boones Ferry Road (BFR)
improvements and public parking. BFR Phase 1 was completed in 2021 for $39M of which
$30M was TIF funded. A 2020 estimate indicated BFR Phase 2 would cost approximately $32M,
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while the parking project was estimated at $4M. The MI for the Plan is $36M and is anticipated
to close in 2032. A preliminary high-level estimate based on using the existing URA boundary,
incurring new debt to be repaid over 25-30 years, combined with unused MI, and existing
"program income" not subject to MI limits, the URA might have the capacity to fund a total of
around +/- $50M in project costs and administrative services.
In order to increase the MI, the Plan includes a provision that ANY increase in MI requires a
“substantial amendment” to the Plan and concurrence from other taxing districts. Additionally,
Oregon law requires that if construction of a public building is included in the list of projects,
additional concurrence from taxing districts is required. The process and requirements are
more specifically discussed below:
• Substantial amendment process, would include the same procedural requirements as
adoption of the original Plan including: public/taxing district notices, public involvement,
consultation with taxing districts, presentation to the Planning Commission and
adoption by the City Council by non-emergency ordinance after a hearing. This process
could take up to 12 months to complete after projects have been identified and funding
strategy developed.
• Taxing District concurrence to increase the MI is required per the Plan from taxing
districts imposing at least 75 percent of the amount of taxes imposed under permanent
rate limits in the urban renewal area. This concurrence is in the form of adoption of a
formal resolution by the board of the taxing district. There are 12 taxing districts that
are affected by the URA and the 75 percent threshold can be achieved in multiple ways,
but concurrence from the top three districts, including Clackamas County, Lake Oswego
School District and the City of Lake Oswego, would satisfy this requirement.
• Taxing District concurrence to use TIF for a public building including fire station, police
station, public library, public hospital, or school, requires concurrence by three of the
four taxing districts estimated to forgo the most property tax revenue. This concurrence
is also in the form of adoption of a formal resolution by the board of the taxing district.
For the Plan, the top four taxing districts are Clackamas County, Clackamas County
Library, Lake Oswego School District and the City of Lake Oswego.
If the Board directs staff to move forward with increasing the MI, the next step would include
coming back to the Board for a study session to discuss:
• TIF Revenue: Understanding the amount of revenue the URA could generate can help
determine what projects to pursue and how they are funded. After a URA is
established, the county assessor determines the current assessed value of all property
within the area and freezes that tax base. Whatever property tax revenue taxing
districts receive from this frozen base is the same amount they will receive on a yearly
basis until the URA is closed. As property values increase above this frozen base, all tax
revenues from increases (the “increment”) in permanent rates are used to fund projects
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within the urban renewal area. Revenue in a URA increases due to the 3% assessed
value increase annually, when the assessed value (AV) in the URA is increased through
new construction projects with increased AV, expanding the URA boundary to take in
more AV, or extending the closing date of the URA. Another consideration is the urban
renewal revenue sharing provision, whereby revenue is shared with other taxing
districts when annual TIF revenue exceeds ten percent of the maximum indebtedness of
the plan. At this threshold, the URA receives TIF revenue equal to ten percent of the
original maximum indebtedness plus 25 percent of the remaining tax revenue generated
by the increment value of the URA. When annual TIF revenue equals 12.5 percent of the
maximum indebtedness of a plan, the annual TIF revenue for a URA is capped at that
level, with any additional tax revenue generated by the increment being shared
proportionately between the overlapping taxing districts.
• Project Scope and Cost Estimates: The amendment to the plan will need to include a list
of projects to be added and cost estimates. An outcome of the 2024 Council Goal
setting was interest in a collaborative effort with the Lake Oswego School District and
other stakeholders in developing an all-ages and all-activities community center on the
west side of town that would include event and meeting spaces, public services, and
may include library services. Additionally, as noted previously, the last estimate that
was provided in 2020 for the BFR Phase 2 cost was $32M while the parking was
estimated at $4M. A cost saving strategy to implement existing projects and a multi-
generational public facility could be to combine projects. For example, a new public
facility could include parking that benefits both the building users and surrounding
businesses, thereby reducing parking impacts to the neighborhood.
• Funding Strategy: Depending on the projects to be included, cost of the projects and
projected TIF revenue, TIF revenue can be combined with additional funding sources to
complete a project. Other funding sources could include the Street Fund, System
Development Charges (SDC), utility revenue, creating a Local Improvement District (LID),
and general obligation bonds.
Staff can provide a more detailed schedule, estimate of additional TIF revenue that can be
generated in the URA, provide project scope and cost, and funding options at a future study
session. Adoption of a “substantial amendment” could be completed by early next year.
C) Foothills Area
The Board direction was to update the revised Foothills Framework Plan and prepare a new
urban renewal plan for the area. Implementation would be a two part process:
• Update the Revised Foothills Framework Plan, which sets the vision and identifies
projects to be completed in the area, and;
• Adopt an urban renewal plan which will help fund the project in the area.
Revised Foothills District Framework Plan (FDFP)
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The revised Foothills Framework Plan was adopted in July 2012 and outlined what was
described as “Lake Oswego’s next great neighborhood”. It included a walkable street pattern,
connections to the downtown and Willamette River and a mix of residential and commercial
developments, but did not include a street car connection.
It’s been 12 years since the last plan was adopted with no redevelopment activity in the area.
With a new waste water treatment plant under consideration for moving from its current 14-
acre site to a much smaller six-acre site, it provides the opportunity to revisit the plan to ensure
the area redevelops in a manner consistent with the community vision and values. The update
would include an extensive public involvement process to ensure the area reflects the
community vision for housing, recreation, connectivity, sustainability, preservation of natural
resources and economic development. The updated plan will also identify infrastructure and
community projects that would need to be accomplished to ensure success in the area.
There are several opportunities to fund the update that includes a combination of City funds
and grants. In reviewing other similarly scoped grants and cost escalation, a high-level estimate
to fund the plan update could be between $400K - $500K.
Two grant opportunities that staff would like the Board’s support in pursuing include the
Oregon Department of Transportation, Transportation Growth Management (TGM) grant and
the Metro 2040 Planning and Development grant (Metro). Ultimately, only one grant will be
pursued.
The TGM grant provides up to $250K (with 12% City matching funds) to help with planning for
streets and land that result in more livable, sustainable, economically vital communities and
increased opportunities for transit, walking and bicycling. In addition to using the grant to fund
the FDFP update, we would pursue using it to update other plans/codes as needed
(Comprehensive Plan, Zoning Code, Capital Improvement Plan, Transportation System Plan,
etc.) It is worth noting the last time the City applied for a TGM grant for the Foothills area was
in 2004 and the grant was for $150K.
The other grant is the Metro grant with the purpose of helping remove barriers to housing
development, support economic growth, promote planning that makes land ready for
development, and implement Metro’s long-term plan for livable and equitable communities for
people of color and historically marginalized communities. In the previous 2023 grant cycle, up
to $1.25M was available for the “equitable communities” category. Project awards for the
2020 grant cycle in this category ranged from $250K - $750K. To date, the City has never
applied for this type of Metro grant.
Both the TGM and Metro grant would follow similar grant schedules as noted below:
• 2025: Grant Pre-application, Application, Award, Refine Scope (12 months)
• 2026: Negotiate scope and fee with consulting team (up to 12 months)
• 2027/2028: Update plan (18 months)
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Foothills Urban Renewal Plan (FURP)
In December 2012, the Foothills Urban Renewal Plan was adopted and was later repealed in
February 2013. The plan identified the 57 acre boundary of the URA and included 21 projects
that implemented major infrastructure improvement identified in the FDFP. At the time, the
cost of the public improvement projects was estimated at $55M, with $43M to be funded
through urban renewal funds and the balance from SDCs and utility revenues.
Since the last FURP was repealed, adoption of a new plan would need to start from the
beginning. Once the FDFP has been updated with new projects and cost estimates,
development of a new FURP can begin. Actual adoption of the new FURP would coincide with
closing of the EERP so there are no overlapping URAs. This process could take up to 12 months
and follow the same procedural requirements as previous followed including: public/taxing
district notices, public involvement, consultation with taxing districts, presentation to the
Planning Commission and adoption by the City Council by non-emergency ordinance after a
hearing. Depending on the size, growth rates and other factors, preliminary estimates indicate
the URA might have a capacity to fund around +/- $100M in project and administrative service
costs.
RECOMMENDATION
With the possible slight delay of the wastewater treatment plant process, staff recommends
moving forward with the “substantial amendment” process to increase the MI for the
LGVCURP, then pursue updates and an urban renewal area for the Foothills area.
Direct staff to:
• (When the time comes), draft a resolution closing the East End Redevelopment Plan as
anticipated in 2028 or sooner.
• Pursue increasing the maximum indebtedness of the Lake Grove Village Center Urban
Renewal Plan to fund projects in the area and bring back additional information for the
Board’s consideration at a future study session.
• Initiate updating and pursuing grants for the Foothills Refinement Plan and develop a
Foothills Urban Renewal Plan.
ATTACHMENTS
1. Project Schedule
Review Urban Renewal Plans (East End, Lake Grove) and Foothills Planning (Refinement Plan & UR Plan)
2/7/2024
Council Goal 2024 Update the Lake Grove Urban Renewal Plan and begin work on a plan to use urban renewal to support the redevelopment of Foothills
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Tasks
A) East End Redevelopment Plan (EERP)
• North Anchor Project Construction
• Close EE URA ‐ Q2 2028
B) Lake Grove Village Center Urban Renewal Plan (LGVCURP)
• Increase Max Indebtedness & add project(s)‐ revise Plan
C) Revised Foothills Framework Plan (RFFP)
• Update RFFP
• Review Comp Plan/ZC/Code Amend
• CIP / TSP Amends
D) Foothills Urban Renewal Plan (FURP)
2024 2028202720262025 2029
Attachment 1