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This page contains a single entry from the blog posted on February 2, 2011 9:47 AM. The previous post in this blog was Trees are untouchable -- unless City Hall doesn't like them. The next post in this blog is Ring! Cell phone spam from Super Carole. Many more can be found on the main index page or by looking through the archives.



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Wednesday, February 2, 2011

The real estate developer mindset

The builders of the Portland area never cease to amaze. They have a stunning sense of entitlement to taxpayer money. And when someone suggests that perhaps the taxpayers should be allowed to vote on the latest handout to them, the developers stomp around expressing righteous indignation.

The latest chapter is playing itself out over a proposed shopping mall in sleepy Oregon City:

Requiring voter approval of bonds could scuttle a nearly completed deal with the CenterCal Properties, developer of The Rivers, a retail center that comes with the promise of a Cabela's sporting goods outlet and 1,500 permanent jobs.

The mall would be built on a former landfill. CenterCal is seeking $17.6 million in urban renewal money to deal with environmental and soil problems but would not receive the money until the mall is open and 80 percent leased.

CenterCal and the urban renewal commission were close to a deal when City Commissioner Jim Nicita introduced the voter-approval requirement last month. CenterCal President Fred Bruning has long been frustrated by Nicita's opposition and the city's divided stance on the project. Bruning has been silent since stating last month that he's ready to pull the plug....

Ed Darrow, who is developing The Cove, a residential-commercial project near the landfill, said he would not have spent the initial $2 million needed to jump-start the project had if he faced voter-approved financing. If the measure passes, Darrow warned, "you're going to push developers away."

Scott Parker, whose family owns the former landfill, said a few vocal elected and appointed officials in Oregon City "are trying to rob the citizens of this opportunity." If the measure passes, it will be time to post signs that say "the city is no longer open for business," Parker said.

So go ahead and put up the signs. That kind of business, the city is much better without.

Comments (24)

We live in an age where the aggregations of public debt and unfunded liabilities are choking cities across the country.

What is so controversial about a city requiring public approval before assuming more public debt?

The proponents say this is once in a lifetime opportunity. OK. Then it shouldn't fall apart under a little public scrutiny.

These businesses should want to locate in a city that demonstrates concern for its long term fiscal health.

I happen to support this project but also would vote for this measure. The arrogance of the politicians and the real estate sharpies is breathtaking: how dare the people think they should have a say in how their money is spent!

Scott Parker, whose family owns the former landfill, said a few vocal elected and appointed officials in Oregon City "are trying to rob the citizens of this opportunity."

Yes, the opportunity to not have the opportunity to decide how their money is spent.

I am familliar with this project and the proponents. Some are even UR critics. But their pitch is "Unlike others this one is the good Urban Renewal Project."

The big question and red flag is why any projects have to depend solely upon Urban Renewal?

If it's such a grand project, and it may very well be, why must it take $27 million
in Urban Renewal public dollars?

Proponents say that any other approach will cause a delay that will kill the project. Another red flag.

Another big concern is the old landfill property itself and the selling price believed to be $13 million and dependent upon the UR approval. Another red flag.

If the property purchase/price depends upon UR approval by the city council then some of the UR public contribution is simply to provide the seller with a bigger payment for his property.

Perhaps if the property were to sell at the market rate/landfill price CenterCal wouldn't need or demand as much.

The seller would take a big hit but so what? It's only worth what someone is willing to pay.

This whole deal is being pitched like a time share sale. The offer is only good right now, take it or leave it.

They used to call this type of taxpayer swindle: "public private partnership." Can't we get back to a framework where a business can locate within industrial and commerical zone on their own accord as long as they don't pose absolute impairment on surrounding property interests and ground water. Instead of having to subsidize new jobs, it'd be far cheaper for the taxpayer just to have government intereference removed (that is, deregulate). The latter is cheaper, and gets some of the favoritism out of local politics.

Typical comments from the far left and right.
If we are going to talk about this let's start by getting the numbers right. The participation by the UR agency is $17.6 million. This money is to be used to mitigate the impacts of the entire region dumping its garbage there for 50 years. Pilings to stabilize the foundations and methane recovery and mitigation systems. Nicita and Edgar and Roth are all talking sustainability,green,new paradigm all code words for the far left agenda which is to stop economic development and jobs. The time has long since passed to recall this Pacific greenie (Nacita) and get someone who will get the economy in Oregon City moving.

The opening sentence of Burt v. Blumenauer, 299 Or 55 (1985) reads:

"The issue is whether defendant public officials can be held personally liable for the return of public monies expended to promote water fluoridation during an election period when that issue was before the voters."

I like the nuanced issue here regarding the mere introduction by a city commissioner of a proposal to present the public participation scheme to the voters for their approval. A petition by a voter just to gain access to the ballot does seem to fall within the scope of actions covered by the above case. Will Oregon City expend any money to opine in any way on the advisability or in advisability of holding a public vote?

If they say that the city has already spent money, and that such money would be wasted if the voters reject the proposal, or that merely holding the vote would itself cause delay and be the proximate cause of loss, could the responsible public officials be required to personally cover public costs already expended? If they say that it would cause a loss of X, then X should be the amount that they should personally have to pay.

Or, has Scott Parker (et al) underpaid the city for even asking them to consider the UR-based project itself?

Gosh, Dan, does this mean you're no longer interested in getting together for a beer Friday night?

Dan Holladay wrote:

sustainability,green,new paradigm all code words for the far left agenda which is to stop economic development and jobs.

Dan - Exactly when did "economic and development and jobs" become your code words for new government debt to subsidize private business?

Driving up 26 to Mt Hood, has anyone noticed the number of "Good Citizens Build Bridges" signs? Is this related to this effort? Or something else entirely?

Driving up 26 to Mt Hood, has anyone noticed the number of "Good Citizens Build Bridges" signs? Is this related to this effort? Or something else entirely?

Could it be drumming up support in Clackamas County for helping fund the county's share of the reconstruction of the Sellwood Bridge?

the issue you refer to is not comparable. Using public money to influence the outcome of an election is wrong. Such as Clackamas County Commissioners advocating for measures 66 and 67. No, the city of Oregon City will not spend any money campaigning for or against this measure in the very unlikely event it should reach the ballot.
Not at all I am always willing to talk and listen. do not get me wrong this is not personal just because I believe your positions are so wrong that you should no longer hold that office does not mean that I don't like you on a personal level.See you Friday.

If you knew anything about this project you would know that there are no bonds projected for this project. The 17.6 million will be paid to the developer after the project is 80% occupied and out of tax increment receipts after it is producing actual tax increment.

"would not have spent the initial $2 million needed to jump-start the project had if he faced voter-approved financing"

I always hate it when you have to ask bill-payers for permission.

Yeah, re: those little white signs that say only, "Good Citizens Build Bridges" that are littered around up here...

I also assumed it's "drumming up support in Clackamas County for helping fund the county's share of the reconstruction of the Sellwood Bridge" as Eric wrote above.

But, where did they come from? Who's putting them out and paying for them? Doesn't there need to be something that tells us who is sponsoring this?

Dan, since you claim it is $17.6 million in TIF property tax dollars, then have you calculated how much money doesn't go to schools, police, fire, parks, and the general fund for Oregon City and Clackamas Co.?' And it should also be calculated over a period of time of the URA so that it's full impact is known. A few $Million goes a long way for a few more school days and for city services.

In your consideration of this matter that would be good to know. Plus, if it goes to a public vote, that information would be useful for voters to consider.

Dan wrote:

If you knew anything about this project you would know that there are no bonds projected for this project.

Notice in my earlier post I referred to "government debt" rather than "bonds".

Regardless, ORS 310.140(3) defines "bonded indebtedness" as:

any formally executed written agreement representing a promise by a unit of government to pay to another a specified sum of money, at a specified date or dates at least one year in the future.

The proposed charter amendment would require public approval of "bonded indebtedness" as defined by statute.

Dan, you can quibble about whether bonds may ever be issued, but it is clear that the deal won't go forward without a commitment of future property tax revenues (aka, a public debt).

I don't know if this proposed project is all that and a bag of chips. If proponents could prove that this deal was engineered to protect the tax revenue streams currently designated for municipal services and public education, I might even applaud it. But I haven't heard that argument from anyone, and that's what makes your denunciation of efforts to create better safeguards for the public fisc more troubling than this missed opportunity.

I don't know all the numbers, but if you are waiting for TIF alone to generate $17.5 million, so that you don't have to sell bonds, I think you'll be waiting many a year. TIF doesn't build that quickly.

The typical course of events is to take out the bonds so you can start the project, then use the TIF to pay it back over time.

If the land is selling for $13,000,000 and the subsidy is $17,000,000 then the land is WORTH -$4,000,000.

That subsidy is going into the Parker's pockets. My guess is it is "worth" closer to zero and the other $4,000,000 goes to government "overhead" and "consultants".

There is a lot of land these days with little or no value, watch the owners fight to get something for it.

I'm experiencing land sales in Clackamas County at a discount of 40 to 70% today as opposed to the top of the market in July of 2007.

Dan, you never answered the question on how many dollars are lost for schools, fire, police, parks, etc.

You also didn't comment on how many years the payback is for your claimed $17.6 Million in TIF. But on the radio today a similar question was asked of you. Your response was equivocating, but you finally answered "maybe 6 years". But what is more important that people should know is that your proposed Agreement has no drop-dead date for the payback. If OC wanted to continue the URA for the full 20 years or more, it can.

So all the governmental departments that depend on property tax revenue would suffer for who knows how long. Let the citizens vote if you are so sure of this project and its benefits to those who will be paying the bill-the taxpayers. It's only fair.

Oregon City isn't known as "The End of the Oregon Trail" for nuttin'! Hurray for the people!

I have no doubt everyone opposed to government subsidizing business will be putting a big, fat zero (0) on their 1040 for home mortgage interest deduction.


Well, so much for that spat. Looks as though Nicita and others caved to putting this before the voters?

The folks who run CenterCal are really running a penion scheme for retired California teachers. They run Bridgeport Village and other malls in the PNW. A pretty heavy handed bunch too from what I have been told by those businesses who rent from them.
Then the big wigs who run this scam take huge salaries and live in Gresham to avoid CA taxes, and Portland and Multnomah county taxes as well.
It's all on the web in various places.
But if they build on the toxic land fill which I recall is also subject to flooding...well time will tell I guess


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