Urban Renewal District Is Wasteful, Ineffective; Let's End It
Byline: GUEST VIEWPOINT By Paul Nicholson
We should support Lane Community College's new downtown center, but not by extending and expanding urban renewal in Eugene.
Don't be fooled by the false alternatives peddled by proponents of perpetual urban renewal. After 40 years and about $200 million, the downtown renewal district is still a blighted area. We need to end urban renewal because it is both ineffective and unprincipled. The city should spend the funds on hand for the projects that are our citizens' highest priority.
The short explanation of tax increment financing is that a portion of the property tax that would otherwise go to each of the taxing jurisdictions that overlap the urban renewal district is diverted to the urban renewal district. If the Eugene City Council passes the proposed 10-year extension, tax increment financing will divert a total of about $1.9 million from the city of Eugene, Lane County and the Eugene School District.
This is not a bad deal for the city, which sacrifices $1 million per year on the average in taxes from its general fund but gains $1.9 million per year in its urban renewal slush fund. It is a great deal for developers, too - more about that later.
The foremost reason to oppose urban renewal is that by its very structure it attracts speculators instead of entrepreneurs. Speculators buy the blighted property inside the district and allow it to deteriorate while awaiting a windfall payout from the city.
In stark contrast, in areas adjacent to but outside the district, entrepreneurs invested in and restored rundown properties. For example, in the area north of Sixth Avenue between Charnelton and High streets, we have a thriving part of town filled with local businesses in restored historic buildings.
The taxable valuation in this area north of Sixth Avenue increased 16-fold between 1968 and 2007, while the value of property in the urban renewal district increased a mere four-fold. Urban renewal is spreading Agent Orange instead of fertilizer. Think of all of the property taxes lost to all divisions of government through the stunting of the natural growth that would have occurred without the urban renewal district!
The second important reason for closing the urban renewal district is that it promotes wasteful spending. Borrowing for capital expenditures otherwise must be referred to the voters. Absent this reality check, our politicians are easily persuaded to fund some foolish projects.
For example, the city pitched in 46 percent of the cost of the Broadway Place project. …