Urban Renewal Agency

Urban Renewal is a local government financing tool used to improve and revitalize areas within a community and to facilitate new development in the urban renewal area.  When cities and towns want to create an urban renewal area, they must first show that the area is “blighted” or undeveloped.  An urban renewal governing body (Lakeview Urban Renewal Agency) is established. An urban renewal plan is created to demonstrate how this economic development tool can help improve the area.

The Lakeview Town Council (Town Council) created the Lakeview Urban Renewal Agency (Agency) on August 23, 2022, by adopting ordinance No. 891. The Agency board of directors is comprised of the members of the Town Council. The Town Council must adopt the proposed Lakeview Urban Renewal Plan (Plan) before any funds are allocated to the Agency. If the Plan is adopted, the Agency will make the decisions on Agency fund expenditures throughout the life of the urban renewal area.

No. Urban renewal does not raise property taxes.

Urban renewal isn’t new money. Instead, money is redirected from the existing taxing districts within the Agency’s boundaries to the urban renewal agency. This shifts the impact of funding urban renewal from the taxpayers to the government (i.e., taxing districts).

An urban renewal area uses tax increment financing (TIF) to help fund projects within the identified urban renewal area. The money for urban renewal essentially comes from any new growth in property taxes within the Plan area, either from the typical annual 3% assessed value increase or through further development and significant rehabilitation.

Urban renewal has successfully grown local economies across Oregon by providing much-needed infrastructure and resources to rehabilitate buildings, facilitating new housing development, improving existing housing stock, and encouraging economic growth. Lakeview needs additional financing tools to initiate these activities.

Other central and eastern Oregon cities have successfully used urban renewal in their communities. The cities of John Day, Madras, and Burns have all implemented similar urban renewal plans to provide incentives for developing new housing in their communities. Substantial new residential development has occurred in all three communities due to this financing tool.

In Oregon, tax increment financing is authorized under Oregon Revised Statute 457, Urban Renewal. Tax increment financing, or TIF, is a tool that allows local governments to set aside property taxes generated from existing properties and development in the urban renewal area. It also creates guidelines for how money can be spent. TIF funds are used on projects that encourage public and private development. When an urban renewal area is created, the assessor establishes a “frozen base,” which is the total assessed value of all of the properties in the urban renewal area when the urban renewal plan is adopted. All taxing districts continue to receive taxes from that frozen base.

Taxing districts continue receiving all taxes on all properties outside of the urban renewal area, town-wide, and within their larger taxing district boundaries if the boundaries go beyond the Town limits. The proposed urban renewal area is determined in the Plan. Existing taxing districts continue receiving taxes on the frozen base of the properties within the urban renewal area – nothing is subtracted from their current tax base.

While the urban renewal area is in operation, all taxing districts, including the Town of Lakeview, defer receiving the taxes of the assessed value growth within the urban renewal area to the Lakeview Urban Renewal Agency. For many of these properties, growth would not otherwise occur unless there were incentives provided by urban renewal, so the actual assessed value foregone is the annual 3% assessed value increase.

The taxing districts will benefit in the short term from the urban renewal agency’s ability to help provide incentives for improving existing housing, construction of new housing, and the commercial core, making Lakeview a more livable community. The taxing districts will also receive future benefits by increased assessed values.

Lakeview’s urban renewal area focuses on commercial and residential parcels that could be developed or rehabilitated in the future. The final area will be adopted by an ordinance of the Lakeview Town Council in the URA Plan, and the financial impacts of the Plan will be presented in the report that accompanies the Plan.

The Agency will spend money on projects identified in the Urban Renewal Plan. Those projects may be in the following categories:

• Planning and code assistance
• Land acquisition and due diligence
• Pre-development incentives
• Infrastructure investments
• Land development incentives
• System Development Charge payments
• New construction incentives
• Renovation incentives
• Research and development for plan area improvements
• Manufactured and modular home preservation assistance

Schools and the Education Service District get their funds on a “per-pupil basis” from the State School Fund. The State School Fund is funded on a state-wide equalization formula that provides all schools with equivalent funding for their students. The funding sources include property taxes and other revenues from the State School Fund. The Oregon Legislature establishes the per-pupil funding ratios and backfills reduced property tax revenues with other funding sources.  Because of how funds are allocated to schools, the Lakeview urban renewal area will not result in the school district getting less funding than it would typically receive.