The Lincoln City City Council inaugurated their first efforts to do something with the big 300 acre plus “The Villages” purchase they made last Summer. The $2.5 million buy has been characterized as the city’s platinum opportunity to not only encourage smart residential and commercial development but also leave untouched the crown jewel of the property – the spectacular vistas from atop the “The Knoll,” with views of Depoe Bay to the south and beyond and Cascade Head to the north and beyond.
It appears that the council is planning to recoup the city’s investment and then some through what they’re calling very careful land use planning and the recruitment of developers that will provide a wide array of housing, from multi-family on up. All that would be “snuggled” into the the landscape which is already criss-crossed with hiking trails that offer views of the Oregon Coast that take your breath away.
But in the midst of the worst recession in 85 years, construction of new homes and businesses are slow where they exist at all. The council and City Manager David Hawker have been examining their municipal “tool box” to jump start such development using creative devices commonly used by cities and counties when the private sector requires a “little nudge” from the public sector.
It’s “urban renewal” which is no stranger to Lincoln City. Urban Renewal has empowered the city to clean and upgrade many “asset” areas along the city’s shoreline to give tourists a more pleasant and “in your face” kind of exposure to the area’s natural beauty.
Hawker told the council that development profit margins and market demand are soft. That’s why the city was able to acquire The Villages at such a reasonable price – the developer was between a rock and hard place. Hawker said that employing the use of urban renewal funds ‘up front’ for some of the sewer, water and other necessary infrastructure, developers can build the houses and commercial buildings without immediately adding those costs to the mix. In short it reduces the amount of money developers have to borrow to get going. As The Villages develop, the property taxes paid by those new residents and businesses ‘pay off’ the taxpayer’s initial pre-investment that paid for the infrastructure.
The mechanics are fairly simple. By extending the city’s urban renewal district north into the targeted 120 acres of The Villages, the surplus tax money from the district city-wide can be fronted for the infrastructure – again which is paid back to the district when new residents and business owners move in and start paying property taxes. The city doesn’t lose any money while gaining a sizable increase in overall property taxes.
The urban renewal district, however, does siphon off a portion of annual property tax increases that normally would be collected by the city, the school district, fire district and a few others, but the amount is not burdensome. Such a broad tax base yields a tidy sum that can easily handle the investment to accelerate the development – in this case, the sooner the better because the city wants to start getting reimbursed for the original Villages purchase.
However, the council decided to postpone making a final decision on the urban renewal option until those various tax districts are consulted. Hawker said the city wants to ensure that they all understand that by investing a small portion of their annual bump-up in tax receipts to accelerate the launch of The Villages, they will eventually see an increase in their overall tax revenues.