Never give an urban renewal sucker an even break
Community Soapbox by John Williams
The Oregon City News, Feb 22, 2012
A $30 million scam right here in Oregon City? Who lost the big bucks? Who pulled it off? Bankers, private equity manipulators, junk bond purveyors? Is it hard to believe?
It’s true. If you paid property taxes in Oregon City in the last 20 years you were a victim of a “grand scam.” A scam called the Downtown/North End Urban Renewal Plan promising to make you and the city property tax richer.
Proponents will say, “Just give us some of the city general fund tax income today and in 20 years we will pay it back with a bigger tax base than ever before! We’ll give you new jobs, business and progress. It’s like free money!”
Want the facts? From 1992 to 2011, $10 million was diverted from taxes meant to pay for police, fire, parks, and senior center, etc. Nearly $10 million was drained from the state school fund, and the remaining $10 million came from a direct special levy tax paid by Oregon City property owners.
What did the taxpayers get for $30 million? In 20 years zero, nada, not one dime of new taxable values was created in downtown Oregon City’s urban renewal plan area by urban renewal expenditures. The only new tax-generating project in the urban renewal area is Home Depot. It was built without ANY urban renewal dollars!
Proponents will say, “But look we have a new $8 million City Hall, we paved Washington Street, 7th Street, McLoughlin Boulevard, did a streetscape on Main, rebuilt the historic Promenade rock wall, bought some land, built a parking lot and painted some downtown buildings, all good projects, right?”
Wrong! Those projects are exempt from property taxes never to pay back the $30 million, or produce a bigger tax base for the city. No new permanent jobs or new property values were created as promised by the experiment in “urban renewal.” The “scam” is in.
Were the projects good? Certainly paving roads can be good. Repairing a historic rock wall could be good. But using urban renewal money to build City Hall borders on “criminally fiscal negligence,” and any respectable professional urban renewal specialist will agree erecting public buildings with urban renewal dollars is oxymoronic.
Our former city manager insisted a new city hall would bring “new value” to the surrounding neighborhood. It did not, and it will not. Since 1998 taxable property can only increase 3 percent. There is no “halo” effect. New values come from new construction. Buying and remodeling the city hall building only subtracted the value of the building and land from the tax rolls by becoming “exempt.”
To add insult to injury, since 2006, a “consulting firm” has been paid more than $1 million for “good advice” on how to spend urban renewal tax money.
Here’s another way to judge urban renewal. During the same 20-year period, how does the increase in taxable value of Downtown Urban Renewal Plan compare to the rest of Oregon City?
Urban renewal area taxable values DOUBLED. Taxable values in the rest of Oregon City QUADRUPLED! Taxable values have increased twice as fast outside as within the urban renewal boundaries!
How did urban renewal backers snooker the voters and misappropriate $30 million? By ignoring the Oregon City charter and using the urban renewal financing mechanism. The charter requires voter approval of any new bonded indebtedness proposed by the City Commission, but, by oversight, the charter omits indebtedness undertaken by the Urban Renewal Commission.
Successive city commissions (aided by city staff) have turned over many capital improvements, building city hall and paving streets, etc., to the URC to avoid the required public vote. Why not? Why risk voters disfavor when we can use urban renewal taxes? That’s the scam.
As W.C. Fields advised his niece Gloria in a 1940s motion picture, “My dear, never give a sucker an even break.” He must have been a consultant to the Oregon City Urban Renewal Commission.
John Williams is a former mayor of Oregon City.
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