Tax revenues to the Phoenix Urban Renewal Agency from increasing property values will be more than sufficient to cover the cost of a loan to complete the Phoenix Plaza building and grounds, agency officials told City Council this week.
Phoenix loaned the agency $3.5 million in 2015 to undertake downtown redevelopment, and city officials wanted to ensure that there would be sufficient revenues for repayment if the agency took on the loan. The council must approve the loan and told the agency to return with final documents before affirming the deal.
“We can afford the loan," said PHURA board Chair Al Muelhoefer. “Any day we should get the actual loan documents.”
Phoenix Plaza will include a 6,271-square-foot community building, which the city will operate, and an adjoining, landscaped area east of Main Street between Third and Fourth streets. Cost of the plaza project is $2.6 million, which exceeds PHURA's assets. The agency is selling adjacent commercial lots, has developed parking and is creating a wetlands park in the area.
In 2015, the agency and city thought the PHURA budget would allow for construction of Phoenix Plaza, viewed as the centerpiece for redevelopment. But cost estimates came in higher than expected. Negotiations with Umpqua Bank have resulted in an opportunity to secure $1.25 million.
Mayor Chris Luz noted original plans called for construction of the plaza building to start in December.
“We are only a few months behind. It is a huge contribution to the city to have a building out there,” said Luz.
Former city Finance Director Steve Weber, who works for the agency on a contract basis, saw no problem with the proposal, Muelhoefer said.
“I was very conservative on tax revenues,” PHURA Acting Executive Director Genetta Hughes told the council Monday. She used figures of a 95 percent collection rate on projected tax revenues, although they typically have run 96 to 98 percent in recent years. Hughes said projections show the agency will be able to pay off its bonded indebtedness by 2032, even though the bonds run until 2035.
Luz noted that three construction projects that will occur in the near future will produce an estimated $70,000 in tax revenue to the agency initially, with increases afterward. They include a storage facility at Fern Valley and Grove roads and a Rite Aid on Bolz Road.
In other PHURA developments:
The City Council confirmed the appointments by Luz of councilors Stuart Warren and Terry Baker to serve as PHURA board members. The council has three members on the body, but the agency had considered seeking a reduction of that number. Muelhoefer said citizens with skills who might benefit the agency have been assisting with the plaza project and might be interested in serving on the seven-member board. Luz said he felt that one council member would be enough, but agreed to the wishes of the council.
The agency has sold a 3,800-square-foot building it owned at 3121 N. Main St. for $321,000.
PHURA reduced prices on two lots it has for sale because no interest had been shown. The lots are at 4345 S. Pacific Highway and the corner of Main and Second streets. Grading and timber removal will be done at the latter lot to make it more marketable. Lots in the area of the plaza will receive similar treatment but prices will remain the same.
— Tony Boom is an Ashland freelance writer. Reach him at email@example.com