Investment in undeveloped Lake Oswego area may come, but not immediately

The Lake Oswego City Council gave the go-ahead to staff to pursue increased investment in Lake Grove and lay the groundwork for transforming the undeveloped Foothills area during a meeting Tuesday, Feb. 20.

The city plans to use urban renewal — which takes the taxes associated with increases in property values and uses the money for public improvement projects — to further redevelopment in Lake Grove and spark construction in Foothills.

Urban renewal helped fund the first phase of Southwest Boones Ferry Road improvements in Lake Grove and the city must increase its maximum indebtedness by about $50 million to complete the second phase and parking expansion. Further, the city is considering adding a multi-purpose community center in Lake Grove, which would increase costs. However, the city described combining the parking and public facility projects into one as a possible cost-saving measure and a way to address multiple needs.

“For example a new public facility could include parking that benefits both the building users and surrounding businesses, thereby reducing parking impacts to the neighborhood,” the meeting staff report reads.

The city would need to pass an amendment to the existing Lake Grove plan, which would require concurrence from local taxing districts. Inclusion of a public building would require a more extensive approval process.

This could be achieved with just concurrence from Clackamas County and the Lake Oswego School District (along with the city itself) but consultant Elaine Howard noted that Clackamas County sometimes does not like urban renewal projects, so the city may need to get concurrence from some of the other nine affected taxing districts.

Foothills plan

The city completed a 2012 plan for the Foothills area but did not pursue it after pushback from the community, particularly surrounding a proposed streetcar that would have run to and from Portland. The city scrapped the streetcar idea but is reengaging efforts to redevelop what could potentially be prime real estate.

Right now, the city plans to pursue grants to fund the formulation of the plan from the Oregon Department of Transportation and Metro. The grant process means the plan’s completion may not come until 2027 or 2028. The city also plans to align the opening of the Foothills urban renewal district with the closing of the downtown urban renewal district. The final project of the downtown district will be to develop a hotel and mixed-use facility (North Anchor) in collaboration with Urban Development + Partners.

Because the 2012 Foothills plan was repealed, the city must start a new plan from scratch.

A consultant who spoke at the council meeting said Foothills could be promising in terms of redevelopment and generating urban renewal revenue — but it would also bring uncertainty. They estimated potentially $113 million in total tax revenue during the 25-year lifespan of the district, about $16 million of which would be spent on debt interest. The rest would be free to use for capital projects.

However, the consultant noted that inflation means actual spending power is projected to be equivalent to about $51 million in today’s dollars.

“There is much more uncertainty in this area about what exactly this cash flow would look like. Depending on how large you draw the boundary, what construction activity happens here and what density you wind up allowing in the framework plan, you could have a very substantial amount of growth here long-term,” the consultant said.

They also said the new plan may feature less dense development than the 2012 plan due to the lack of a streetcar. The city will also likely look to utilize existing transportation networks in Foothills rather than creating a transportation grid, as was previously envisioned.

Mayor Joe Buck felt that some guiding concepts around connectivity to downtown from the 2012 plan would still be relevant today, while Councilor John Wendland expressed frustration about the length of time it would take before new development materialized. City Manager Martha Bennett noted that the city also has to complete the wastewater treatment plant in Foothills in the next three years, adding that transportation planning for the area would be a significant process and trying to do too much too quickly could result in lower-quality products.

“The old plan will give us ideas and give us goals and aspirations and a vision, but it’s not going to give us the actual investments we need to make,” she said.

Buck noted the success of urban renewal districts in downtown and Lake Grove and was optimistic that these reformulated plans would spark similar results.

“These kinds of projects that we’re talking about in Lake Grove and Foothills are the type that will produce a big return for the community and keep our community moving forward, (incentivize) private investment in the community and make Lake Oswego a better place,” he said.