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Urban renewal projects fighting market forces

Tracts of land in both downtown Talent and Phoenix owned by the towns’ urban renewal agencies remain undeveloped four years and more after the agencies acquired them to revitalize the areas.

Only one development submission was received by Talent Urban Renewal Agency when a new request for proposals was sent out after negotiations on the town’s Gateway Project with another developer were terminated in January.

Phoenix Urban Renewal Agency borrowed $100,000 from city government this month to cover its expenses until December.

Market forces may be a factor in the lack of interest, said a consultant with ties to both projects.

“The heart of the matter is that construction costs continue to rise and rents don’t justify those high costs,” said John Southgate, a Portland development consultant employed by PHURA who worked with TURA on its first round of RFP submittals. He said such developments typically contain more residential than commercial space.

TURA will ask Ashland developer KDA to come back for more discussion on the proposal it submitted, which was reviewed at the agency’s July 17 meeting. PHURA anticipates putting three available lots up for sale and continuing to work with Southgate, said board Chairman Stuart Warren, a city councilor. City councils in both cities serve as the board of directors for the urban renewal agencies.

“Right now, so many people are engaged full-bore in so many projects it’s hard to get the attention of folks, and it’s a rough market out there,” said Darby Ayers-Flood, chair of the TURA board and mayor of Talent, commenting on the lack of submissions.

During 2016 and 2017, TURA amassed the 4.23-acre Gateway site on the corner of Highway 99 and West Valley View Road, paying $1.875 million for three lots.

Phoenix’s urban renewal agency bought 31 acres bounded by Main Street, Bear Creek Drive, First and Fourth streets in 2015 for redevelopment. Infrastructure has been installed, wetlands rejuvenated and the Plaza Civic Center built on the site at a cost of $2.8 million.

“I think the Phoenix situation, it’s rough being on a fairly busy road. It’s not a walkable sort of place (for) location of a mixed-use development,” said Southgate. “That said, my job is to try to ascertain if there are developers that would fulfill the city aim.”

Construction costs are up statewide and rents are lagging, said Southgate. With that dynamic cities or agencies need to participate financially in projects, he said. During the since-terminated negotiations with DOSO Properties, Talent offered subsidies, including financial help for design, engineering and permits.

Working with public agencies is not always the easiest way to develop, said Southgate. It can be easier for developers to buy property and get the necessary permits.

Key elements of the Gateway Project haven’t changed since it was first envisioned and refined through three public meetings and a state-funded study, said Ayers-Flood. Those are open space, commercial spaces, an attractive entrance to town and so-called “missing middle” housing needed for the work force.

“I think the board is really committed to a creative project. We will just keep trying with that with KDA or any other organization,” said Ayers-Flood. KDA was the only other developer to submit a proposal during the first round in 2017.

Talent took a soft approach to gaining RFPs on the second round, which was conducted by the agency staff, said Ayers-Flood. If another round is held, she said, the agency might do more networking and perhaps seek outside help again.

“We don’t have a whole lot of money to work with due to the high costs of building the civic center,” said Warren. No additional project will be taken on by PHURA in the near future, he said.

A loan from the city, to be repaid by Dec. 1 when the agency will have received property tax revenue, was approved by Phoenix City Council at its July 15 meeting. The agency had debts of $57,000 that needed to be paid by July 29.

At board direction, three commercial lots surrounding the civic center will be put back on the market in the near future, said Warren. The agency also expects to meet with Southgate in early September to hear whether he has seen interest from developers.

Reach Ashland freelance writer Tony Boom at tboomwriter@gmail.com.

Photo courtesy cityoftalent.org