Urban Renewal Update
Tax diversion referral unlikely, for now
By Alan Pittman
Urban renewal opponents appear unlikely to challenge the City Council’s tax diversion scheme anytime soon.
Former city councilor Bonny Bettman, a leading opponent of urban renewal tax diversion, said in an email, “It makes no sense to refer this.”
“Even if it was defeated, like it was in ’07, the city elite would just come up with another plan amendment, and another, and another,” Bettman said.
In 2007, after opponents threatened a signature drive, the council referred a larger urban renewal measure to voters who defeated the private chain-store subsidy 2-1. The new measure diverts about $20 million from state school, city and county revenue to fund a LCC building downtown, Park Block improvements. and increased Eugene police spending. The VA clinic subsidy is no longer in the plan.
Councilor Betty Taylor said the popularity of the new LCC building in the library pit has reduced energy for gathering signatures. A referral would require 8,041 signatures by June 24. To get urban renewal passed, “this was good bait, the LCC thing,” Taylor said.
Taylor said proponents’ argument that urban renewal was the only way to fund LCC was simply not true. But the council voted 6-2 against Taylor’s motion to fund LCC using city proceeds from ending the tax diversion. “It really frustrates me,” she said.
Paul Nicholson, a former city councilor and urban renewal opponent who spoke at City Club last week, said he’s not working to gather signatures for a referral. “I’m not part of it.”
“I fear they are not doing it,” Taylor said. “I wish they were doing it.”
Bettman said that the threat of a referral caused proponents to pass a smaller, more moderate urban renewal plan this time. “I consider that a victory without having to gather one signature,” she said.
But opponents are still considering a charter amendment to end urban renewal. A charter amendment could prevent councils from passing urban renewal plans over and over since 1968.
A Eugene charter amendment now requires 12,769 signatures gathered over a 100 day period.
The council could vote to refer a charter amendment to voters to end urban renewal by 2019. Even urban renewal supporters said they would like to end urban renewal in eight years after the borrowing for LCC and the police is paid off.
Taylor said she would consider making a motion to refer a charter amendment that would hold current councilors to their rhetoric and bind future councils to the termination schedule. “We could try that,” she said. But she said she wasn’t sure it would pass the council, “I don’t know.”
Such a council action to refer a charter amendment would apparently have wide support. The Register-Guard has been the city’s strongest supporter of urban renewal for decades. But on May 30 an R-G editorial called for a council vote “requiring a public vote on any proposal to extend the life of the district.”
Bettman said the charter amendment should also limit the city’s Riverfront Urban Renewal District. “Any solution, to be worth the effort and expense, needs to be comprehensive,” Bettman said.
Nicholson said the Oregon Legislature could enact reform. Urban renewal districts statewide divert a total of $61 million a year from state school funding, according to Nicholson. “The Legislature is looking at it with a much more critical eye,” he said.
Nicholson said Corvallis, Oregon City and other cities have already retreated from the tax diversion scheme. “I think the state voters are going to put an end to it.”
Nicholson said that Eugene’s use of urban renewal capital money for police operations is illegal. But a legal challenge could have a high price tag, he said. Nicholson said two different lawyers told him, “Give me $50 grand, and I’ll stop them cold.”
Bettman said the lowest lawyer estimate she got was $20,000 and she was unable to interest Attorney General John Kroger in the case. With schools facing drastic cuts, “Every one of the teachers who get laid off should be lobbying the state Legislature to eliminate urban renewal districts or at least leaning on Kroger to ensure the laws are followed and the program is creating a public benefit.”
At City Club Nicholson said Eugene’s Downtown Urban Renewal District has diverted $200 million in Eugene over 42 years. But he said property value increases in the still “blighted” district have trailed both inflation and property value increases outside the district.
Nicholson said city government only wants urban renewal because it allows them to divert tax money from others, including school children, throughout the state. “I don’t think we should be part of it,” Nicholson said. “It’s immoral, frankly.”