County Counsel Wayne Belmont, the chief booster for rebuilding the Lincoln County Fairgrounds, ran into considerable resistance from the Newport City Council Monday night on his pitch to to get financial help from the city to make it all happen. Belmont made it clear that he and the county expect millions of Newport city dollars to get the job done. Except for one city councilor, they all responded either cautiously or in the negative.
Belmont came into the meeting with what appeared to be a full head of steam that implied that the city council should go “all in” with the county’s plans to not only rebuild the Fairgrounds, but possibly expand them.
The request for city money involves what’s called Urban Renewal Funds which are earmarked for economic growth but with restrictions. The funds are part of a complicated plan that grows the local economy by floating construction bonds which are paid off when property values rise and commerce grows as a result of projects like more water/sewer/storm drain construction, improved roads, enticing new businesses to move in and the growth of commercial enterprises. In short, expanding the tax base. This “urban renewal device” has been used across the U.S. for decades with great success.
Again, it’s expected to help grow the tax base which directs new revenue to pay off the project’s construction bonds. But in this case, the project is a public project…a renovated government enterprise that isn’t taxed itself but income from special events held there will pay off part or all the bonds. What the county and city would also count on is property values (tax base) rising in the general vicinity and add those added revenues to pay off the bonds.
While there were a number of citizens supporting the re-building of the Fairgrounds, others questioned why there is still no business plan for it. They questioned whether the income projections are credible. How can you project revenues to retire bonds if you REALLY don’t know how much revenue a re-vitalized Fairgrounds will generate? They want more proof of those projected income figures and you can’t do that if you don’t even have a business plan.
If it’s a flop, everything from property taxes to hotel-motel room taxes probably won’t support the bonds and both the county and the city budgets could take a big hit. Others fear that with so much volatility in Washington DC, this might not be the best time to roll the dice on a $10 million dollar gamble. Many economists are already predicting another recession on the horizon. Recessions mean empty hotel and motel rooms and therefore lower transient room taxes. And that means having to cut local budgets, possible layoffs and vastly reduced services like sewer/water/storm water improvements, streets, police, fire, parks and all the rest.
City Councilor David Allen, who basically led the charge, questioned the financial clarity of the project – certainly without a business plan. County Counsel Belmont seemed assured that by proposing a bare bones version of the project, it would be quite viable and certainly could be expanded down the road. Belmont went on to further request that the city make even more city redevelopment funds available for utilities, parking and for acquiring more land bordering the fairgrounds – and providing support for a greatly improved intersection of Highway 20 and Harney with an upgraded arterial street connecting to NE 7th.
The City Council didn’t seem to be convinced. At least not yet. Further discussions are planned. To muddy the waters even further, this year’s election will see a number of new councilors on the Newport City Council. So it behooves Newport citizens/taxpayers to pay close attention to this issue. In fact the more you learn about economic development, the easier it is to understand it.
City Council meetings are on their website. But you almost have to be a private investigator to find them. Go to Newport’s city website: NewportOregon.gov. Go to “City Government” and click on it. Then slide down to “Committees.” Click on it. Slide down to “Urban Renewal Agency.” Click on it. Then click on the Urban Renewal meeting of July 30.