City Examines Urban Renewal District Feasibility

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The City of Hermiston will soon examine the feasibility of creating an Urban Renewal District in the central part of the city.
Many other cities in Oregon have successfully used Urban Renewal Districts to pay for targeted public improvements that attract and stimulate private investment in the area. The way that an Urban Renewal District is funded can create a drawback, however.
Urban Renewal Districts use Tax-Increment Financing. This taxing mechanism works to freeze the effective property tax rate on those properties located within the district. As improvements and new investment in the area raises property values, the additional tax revenue that’s generated gets diverted into the Urban Renewal District to be used for more improvements. That means that the other agencies that use property taxes, like cities, schools, and other special districts, don’t see any increase in revenue from the higher property values until the district expires.
The Hermiston City Council approved a feasibility study at its July 23 meeting to examine whether an Urban Renewal District in the central part of the city could create enough benefits to offset the potential drawbacks.
“This study will give us a better idea of whether or not an Urban Renewal District will actually work in Hermiston,” said Clint Spencer, City Planner. “We have to be very careful because all of the taxing districts involved will essentially forego some future revenue for a time.”
No specific boundaries have been created yet for a possible Urban Renewal District.  Part of the study, performed by Stiven Planning & Development Services, will examine where those boundaries would have the best impact.