Oregon: Development financing ordinances on council agenda

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Ordinances that will establish three Tax Incentive Financing districts in Oregon will be presented to city council on Dec. 16.
A TIF district is a public financing instrument used by local governments to fund infrastructure and other improvements. With the improvements benefiting development, the objective is to recoup interest and other costs through an increase in property tax valuations resulting from a completed development project.
During a recent public hearing, Joel Mazur, city administrator, informed council a TIF district will be used to pay off infrastructure costs for a residential area under development north of Pickle Road and west of South Coy Road. The TIF covers 36 properties.
The city, through the Oregon Economic Development Foundation, purchased the site and platted the parcels. The developer, K. Hovnanian Residential Homes, has been buying the properties from the city and now owns about 20 of the 36, Mazur said.
K. Hovnanian held an opening Dec. 7 of a completed home on Nautical Lane.
“We will be establishing the TIF district for those properties,” Mazur said during a recent committee of the whole meeting of council. “Any increase in property valuation on those properties; that property tax increase will be collected by the city and then used to pay off the debt service for the road construction and work that has taken place.”
The city is also establishing a TIF district to pay off bonds issued to cover the cost of purchasing a 12.4-acre parcel along Navarre Avenue where a former Kmart store was located as well as future public improvements planned for the area. The city has retained a firm, River Rock Property Group, for commercial development of the site.
In 2022, the city and Oregon school board approved a compensation agreement for the area around Navarre Ave., from Wheeling Street to Coy Road.
“The schools will still receive the property taxes from the base value of all the property valuations. So all the property taxes that they were receiving they will continue to receive. As the value increases, instead of receiving the full amount they would receive, which is roughly 68 percent of all the property tax that goes to the schools, they would receive 40 percent,” Mazur said.
A third TIF district covers an area along S. Wheeling Street. That TIF district is structured so that the school district will continue to receive the full amount of property taxes they would normally receive in perpetuity.