Item 3 - PH on Downtown UR Plan - Laserfiche WebLink

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ATTACHMENT F Urban Renewal Q&A 1. What is urban renewal? Currently, urban renewal in the State of Oregon typically refers to "tax increment financing" that is used to eliminate blighted conditions. When the Downtown urban. Renewal District was created in 1968 the term was broader and also referred to substantial federal grants to renew deteriorated cities by removing blight. An urban renewal district can be created by a city or county to initiate improvement projects. The basic idea behind urban renewal is simple: future tax revenues pay for revitalization efforts within the district. When created, urban renewal areas must show evidence of some degree of blight, which is demonstrated by conditions such as poorly constructed buildings, faulty planning, lack of open spaces, deteriorated properties, an incompatible mix of uses, or improper utilization of land. Projects are designed to remedy the poor conditions within the district. 2. What is "division of tax" and how does it work? "Division of tax" is a way to determine the amount of funding'that an urban renewal district will receive. When a district is first created, the assessed value within the district boundaries is established as the "frozen base". In theory, if urban renewal efforts are sucCessful, the value of the district will grow above the base amount. That increase is called the "incremental value" or "excess value". Property taxes from the overlapping jurisdictions (schools, general gove. rnments, bonds) are then divided between the jurisdictions that continue to receive taxes on the frozen base, and the urban renewal agency that receives taxes on the incremental value. The "division of tax" method of funding projects results .in the urban renewal agency receiving significantly more funding than the City would receive ir~ i.ts general fund in taxes from district property. In this way, the agency is able to complete more projects than the City would have been able to complete during the same time period. 3. What is the urban renewal "special levy"? When Measure 50 passed in 1997, existing urban renewal districts were given the opportunity to "grandfather" in the property tax levels needed to complete projects existing at that time. In Eugene, the City Council chose to grandfather the Downtown District so that it would continue to receive a higher level of property taxes in order to fund the library project. This special levy should come off the tax bill by FY11 (after the current district termination date of 12/9/09). ' 4. Who pays urban renewal taxes? Are the taxes different for taxpayers inside the district versus outside the district? The tax bills for Eugene taxpayers in the 2003 tax year included three lines for urban renewal. All taxpayers in the City paid these taxes. There is no differenCe between the taxes paid by taxpayers inside the district and outside the district. The three tax lines are: (1) "City of Eugene Special Levy" which is