Brian Campbell, president of the Oregon chapter of the American Planning Association, says it has been frustrating to see cities trim planning departments to reduce costs. Planning is needed in tough times, he said.

As budgets absorbed hits, and private-sector construction slowed, many municipalities were forced to cut planning departments to their bare bones. But as the building industry begins to rebound, planning departments in Oregon are being forced to take drastic measures to keep up with day-to-day permitting and prepare for the long term.

“Some people think planning is nonessential compared to other things (like police enforcement and firefighting),” said Campbell, a retired planner. “But we are taught as planners to always find efficiencies, and right now operating efficiently is just what cities and counties need.”

Molalla‘s planning department last year accumulated a deficit of nearly $300,000 despite reducing its staff to a single planner and spending much less than budgeted.

So, Molalla City Council this week decided to shut down the planning department completely and outsource all of its services to Clackamas County. If the county’s Board of Commissioners were to approve the move, Molalla would pay the county an hourly rate for it to handle services. That rate would vary, depending on the service being provided – such as land-use review, permitting and plan review.

“The (City) Council’s view is that by contracting the services to the county we will pay an hourly rate instead of having to staff and operate an entire department all the time,” Molalla City Manager John Atkins Jr. said. “The department has been a completely standalone department, funding itself entirely by the fees it collects. This move was entirely driven by the recession.”

Builders would not need to drive to Oregon City to get a plumbing or electrical permit, Atkins noted, because Molalla city staffers would receive paperwork and fax it to the county.

Also, the city has not yet worked out how it will accomplish long-term master planning. The state requires certain documents to accompany land-use decisions, and work on those documents is spearheaded by planners.

“We’re going to eventually need a new parks and recreation master plan, and we haven’t really addressed how we will go about doing that,” he said.

The city of Portland’s Bureau of Development Services also has been impacted by the construction slowdown. As revenues started to decrease, planners were laid off, office hours were reduced and services were bundled.

“We just told builders that if they could wait for plumbing and electrical services, we could send an inspector out to do inspections all at once,” said Ross Caron, spokesman for the BDS. “We really had to look at where we could be efficient, whether it was car trips or when we could answer certain questions.”

BDS officials also cut out all ancillary services like brown-bag lunches or participation in home shows. The bureau would like to do such things again, Caron noted, when they become feasible.

Perhaps the most drastic change for the BDS came in March when it borrowed $6.6 million to implement a new computer system to aid permitting and improve efficiencies. In response to the loan, and a slow recovery, BDS on Friday is increasing most of its fees between 5 and 8 percent.

The anticipated increase in revenues would allow the BDS to rehire 13 full-time employees this year, Caron said. The plan is to bring back plan examiners, planners and inspectors first, and long-range planners later.

Bend‘s fate has turned out to be similar to Portland’s. Since the recession hit in 2007 the city’s Community Development Department has laid off 60 percent of its staffers, and implemented an electronic permitting service. The problem, according to Mel Oberst, the department’s director, is that the number of permits hasn’t decreased as much as their values have.

“(They’re) not shopping centers or large subdivisions anymore,” Oberst said. “(They’re) small remodels, which still take time to process.”

Plus, Bend has had to retain long-range planning services as it continues to seek state approval for an urban growth boundary expansion. The effort has cost the city nearly $4 million.

Campbell said cities that can’t outsource services are choosing to seek greater efficiency first, and then pursue technological advances and rate increases as necessary.

“It’s unfortunate that planning departments have been early on the chopping block, and suffering like this,” he said, “because I truly believe the services planners offer – efficiency and planning – are indicative of what Oregonians want and what has made this a great state.”

The post Oregon planning departments mull drastic measures to stay afloat appeared first on Daily Journal of Commerce.

When Molalla City Manager John Atkins Jr. walks through downtown, he can imagine new mixed-use developments replacing boarded-up industrial buildings and other remnants of a former mill town.

But none of these dreams will ever be realized, Atkins said, unless the city has an updated city comprehensive plan approved by Clackamas County and the state of Oregon.

The Clackamas County Board of Commissioners last week denied a proposal from Molalla for a 2,290-acre urban reserve based on a population projection the commission called overly aggressive. City officials say the ruling not only dashes a $250,000 planning effort, but also hampers their ability to form a new comprehensive plan.

“We are stuck, and to be honest, I’m not entirely sure how to move forward,” Atkins said. “I’ve got a 30-year-old (comprehensive plan) and I have a vision for redevelopment opportunities in town, but instead we are stuck in a state of land-use limbo.”

For most of the last decade, Molalla officials have tried to secure more land for both commercial and residential development. Their need wasn’t urgent, so they sought designation of urban reserves.

The advantage of urban reserves, according to Jennifer Donnelly, the Portland metro regional representative for the state Department of Land Conservation and Development, is that they are the first pieces of land that the urban growth boundary expands into. Without urban reserves designated, the expansion would take place on land with the least productive soil for agricultural use as designated by the state.

“With an urban reserve you get to skip the hierarchy,” she said.

About 80 percent of the land in the rejected urban reserve proposal is zoned for agricultural purposes. County Commission Chairwoman Charlotte Lehan said the county must be conservative with population projections in order to preserve land used by agricultural interests.

But Atkins believes the population projections were conservative for Molalla, which presently has slightly more than 8,000 people. The city conducted research and estimated that it would grow by 2.3 percent annually over the next 50 years, and reach a population of 24,289 by 2060. That growth rate is lower than the actual one for the past 50 years, he noted.

Molalla City Attorney Chris Crean added, “At a certain point, politics stop and it’s just math.”

The population projections and the urban reserve designations were going to be the base for building a new comprehensive plan, Atkins said. The plan helps guide the city as it makes decisions.

“Both the county and the city were admittedly unclear on what the state wanted, so we asked the county to provisionally agree to the urban reserve so we could get in front of (the Land Conservation and Development Commission) and ask them,” Atkins said. “But that’s not what (the county) wanted, so now we can’t get in front of them.”

Donnelly said that ideally, the county would already have a countywide population projection that it could use for comparison, but Clackamas is one of many counties that don’t have one. She added that the logical next step is for the county and Molalla to ask DLCD officials about their ideas for possible solutions.

“(City officials) need to work with the county so they aren’t surprising them with this type of data,” Donnelly said. “But the first step is writing a letter and asking the state to clarify the laws.”

Atkins said he planned to send the letter before the end of the week.

The city considered appealing the decision, but City Council decided not to because of the high cost. Atkins and Donnelly also mentioned the possibility of pursuing a UGB expansion instead, but Atkins said that would cost at least an additional $200,000, which the city doesn’t have.

“This took the wind out of our sails and has created a sentiment to not pour any more money into this,” Atkins said. “But at the same time there are old mill sites that could be designated as employment zones and used for mixed-use development. I can’t do that with our current comprehensive plan.”

Donnelly is slightly more optimistic.

“(The city of Molalla) might not get exactly what they want, but I think they are close to accomplishing something close,” she said. “DLCD is willing to work with them, and if they can work cooperatively with the county I think there are solutions.”

The post Clackamas County rejects Molalla’s urban reserve proposal appeared first on Daily Journal of Commerce.

Five Clackamas County planning commissioners earlier this week unanimously recommended that the county commission reject a 2,290-acre urban reserve proposal being pitched by the city of Molalla.

If the area were designated as an urban reserve, it would become the next one incorporated into the urban growth boundary. But planning commissioners said the proposal relied on population projections that were too high. Their decision jeopardizes the city’s growth plan, which was developed at a cost of $250,000 over five years.

According to Dan Chandler, counsel for the county, the city projected 2.3 percent population increases for the next 50 years. The city used that percentage to back its urban reserve proposal, which would designate the rural acreage – mostly exclusive farmland and exception land – as the first priority for urban expansion.

“Long-term population forecasting is inherently uncertain, especially in smaller towns,” Chandler said. “For the most part, every major population shift is dictated by only a few events, and those events are pretty much impossible to predict.”

But as Molalla City Manager John Atkins pointed out, there isn’t a point in the previous 50 years when the city’s the population didn’t increase by at least 2.3 percent. Consultants hired by the city estimated that Molalla’s population would be 24,289 by 2060. The city presently has 8,100 residents.

The urban reserve proposal and the planning commission’s recommendation will go before Clackamas County commissioners this month if Molalla officials decide to go forward with the proposal. It would have to be approved by a majority of county commissioners and then be approved by the state Land Conservation and Development Commission in order to be finalized.

While Atkins admitted that projecting population isn’t an exact science, he said city officials are most frustrated with the process required to gain an OK.

“The final approval of this proposal would have to come from LCDC, so I don’t understand why the plan shouldn’t just be presented to them,” he said. “We feel comfortable with our proposal, and it just seems that a lot of our work is being short-circuited by having to go through this process.”

City officials haven’t decided on their next step, but Atkins guessed that they will go forward with the county commission hearing and see if they can get it pushed to the state level.

Chandler said the city of Molalla has several options. Officials could move forward with the proposal as it is, revise its population projections, retool the urban reserve map or scrap the project altogether. The city also could contend for an urban growth boundary expansion, which Chandler said could probably gain approval more easily than the urban reserve could.

The county commission is scheduled to discuss the proposal during its April 27 meeting.

The post Molalla urban reserve rejected by planning commission appeared first on Daily Journal of Commerce.

Lowering system development charges, and in some cases scrapping them all together, has become a tool used by municipal governments to stimulate development and entice business to the area. This has been reported extensively in the Daily Journal of Commerce (here, here, here and here) over the past few months.

Molalla was the first town to take the drastic step by going on a development fee holiday, waiving all system development charges for 2010 until a million-dollar threshold is reached. The town was the first Oregon municipality to drop SDCs in 15 years. Out of it, the city has attracted a few major development projects. One is a 160-unit apartment complex. Under the fee holiday, the developers were only charged $400,000 instead of $1.4 million in development related fees. The savings alone made the project financially feasible.

Grants Pass took a similar approach, rolling back all SDCs to the 2006 levels. The fee savings will run through August 2011.

Roseburg decided to decrease transportation related development charges by 75 percent. Transportation development charges are often the most disputed because the methodology for creating the fee is less concrete than SDCs for water, sewer and parks.

Portland has taken some advice from the smaller towns in Oregon. City staff announced earlier this month that they are dropping all development fees for homeowners who build or convert space on their land into a second living unit. The fee waiver will last three years and will save homeowners $7,000 to $15,000 on these projects.

While Portland focused its fee waiver around homeowners looking to expand, the City of Gresham is focusing on helping businesses expand. Under the new Vibrant Storefront Incentive, Gresham is waiving business license fees, development-related fees and SDCs for anyone looking to start a business or expand into a downtown storefront.

In The Dalles, the city council has created a task force to restructure the transportation SDC in order to make it more development friendly. Seaside, Tigard and Wilsonville are looking into similar approaches.

While fee holidays sound great for developers and economic vitality, they put a hindrance on tax payers. SDCs go toward expansion of infrastructure associated with development. Now, the tax payers have to cover those fees. It could be said that increases property taxes because of new developments, but there is no guarantee that money will actually go to infrastructure improvements.

Only time will answer these questions.

The post Oregon cities waive system development fees appeared first on Daily Journal of Commerce.

Lowering system development charges, and in some cases scrapping them all together, has become a tool used by municipal governments to stimulate development and entice business to the area. This has been reported extensively in the Daily Journal of Commerce (here, here, here and here) over the past few months.

Molalla was the first town to take the drastic step by going on a development fee holiday, waiving all system development charges for 2010 until a million-dollar threshold is reached. The town was the first Oregon municipality to drop SDCs in 15 years. Out of it, the city has attracted a few major development projects. One is a 160-unit apartment complex. Under the fee holiday, the developers were only charged $400,000 instead of $1.4 million in development related fees. The savings alone made the project financially feasible.

Grants Pass took a similar approach, rolling back all SDCs to the 2006 levels. The fee savings will run through August 2011.

Roseburg decided to decrease transportation related development charges by 75 percent. Transportation development charges are often the most disputed because the methodology for creating the fee is less concrete than SDCs for water, sewer and parks.

Portland has taken some advice from the smaller towns in Oregon. City staff announced earlier this month that they are dropping all development fees for homeowners who build or convert space on their land into a second living unit. The fee waiver will last three years and will save homeowners $7,000 to $15,000 on these projects.

While Portland focused its fee waiver around homeowners looking to expand, the City of Gresham is focusing on helping businesses expand. Under the new Vibrant Storefront Incentive, Gresham is waiving business license fees, development-related fees and SDCs for anyone looking to start a business or expand into a downtown storefront.

In The Dalles, the city council has created a task force to restructure the transportation SDC in order to make it more development friendly. Seaside, Tigard and Wilsonville are looking into similar approaches.

While fee holidays sound great for developers and economic vitality, they put a hindrance on tax payers. SDCs go toward expansion of infrastructure associated with development. Now, the tax payers have to cover those fees. It could be said that increases property taxes because of new developments, but there is no guarantee that money will actually go to infrastructure improvements.

Only time will answer these questions.

The post Oregon cities waive system development fees appeared first on Daily Journal of Commerce.

Molalla City Council took a gamble in December when it approved the waiver of up to $1 million in system development charges to lure potential developers.

Now, two Molalla development partners plan to take all of that money.

Karl Ivanov of I & E Construction and Troy Vest of Troy’s Diesel & Truck Repair Service plan to build a new 160-unit apartment complex with ground-floor retail in downtown Molalla. They will have to pay only $400,000 in SDCs instead of the usual $1.4 million.

“I think we have achieved what we set out to do,” said Molalla city manager John Atkins Jr., who came up with the SDC waiver plan. “We’ve attracted interest, which has led to a live applicant who will put residents into our downtown core.”

The partners recently developed and completely leased out the Stoneplace Apartments in Molalla. For the new project, Vest would provide 8.5 acres of land in downtown Molalla and Ivanov would build the project.

Vest several years ago purchased 8.5 acres of land near downtown Molalla with the hope of one day developing the land into a light industrial business park. But nothing moved forward.

“Getting the best return for the dollar on the land makes it tough,” Vest said. “If we built up a light industrial area like the property is zoned for, I don’t think we could fill it. We looked at apartments two and a half years ago, but the total cost of the project versus what it was worth didn’t equal out.”

Then the city announced its offer to waive up to $1 million in system development charges.

“With the SDC waiver on the table, it just made sense,” Ivanov said.

Vest said the SDC waiver allows the project to pencil out, but just barely. As the project moved into the design phase, Vest discovered that construction of two new city streets and 3,330 feet of street improvements would be necessary. Such work added cost to the estimated $10 million project. The team also is responsible for $400,000 in SDCs as well as $530,000 in additional city fees.

“We’re very close, but we’re still working on the numbers,” Vest said. “We do want to move forward, but it still needs to be economically and physically possible.”

To close the gap, Ivanov and Vest are hoping to pre-lease some of the mixed-use project’s retail spaces. Vest would like it to be entirely pre-leased before construction begins, but added that even if 30 percent of the space were pre-leased, the project could move ahead quicker.

“We’ve had a potential lessee contact the city and it looks promising,” Vest said. “I would think that retailers would want to be downtown, especially with the apartments being so close.”

There is presently little housing in downtown Molalla, according to Atkins, but residents have expressed interest in living closer to the city’s core. If the apartment building is constructed, Atkins said, the influx of retailers and increased foot traffic could help lure new businesses and services to downtown.

Atkins acknowledged that some residents weren’t happy that the entire SDC pot will go to one project.

“There are folks who are disappointed,” Atkins said. “But that was the rule. Unless this project is withdrawn or scaled down, we’re going to provide that $1 million. It’s first come, first serve.”

Ivanov expects to submit a final application to the city this week for the SDC funds. That application will then be reviewed by the city’s planning commission. If the developers receive approval, they would then have 180 days to start construction as per the SDC waiver rules. If the application is denied, the $1 million in SDCs will be on the table until Dec. 31.

The post Molalla fee waiver lures developers appeared first on Daily Journal of Commerce.

The city of Molalla apparently is a comprehensive plan. The city’s planner presented what everyone thinks will be the final version, including new development codes, at Wednesday’s city council meeting.

Molalla Pioneer reporter Bethany Monroe points out that even if city councilors approve the plan, it won’t be “permanently set in stone.” The city will need to update the plan and codes every so often.

Still, Molalla deserves congratulations. Whether people view the final result as good, bad or indifferent, everyone who’s been involved in the long, complicated process deserves to sit back for a moment and heave a sigh of relief, even if it is a short moment.

The post Molalla’s comp plan almost good to go appeared first on Daily Journal of Commerce.

The city of Molalla apparently is a comprehensive plan. The city’s planner presented what everyone thinks will be the final version, including new development codes, at Wednesday’s city council meeting.

Molalla Pioneer reporter Bethany Monroe points out that even if city councilors approve the plan, it won’t be “permanently set in stone.” The city will need to update the plan and codes every so often.

Still, Molalla deserves congratulations. Whether people view the final result as good, bad or indifferent, everyone who’s been involved in the long, complicated process deserves to sit back for a moment and heave a sigh of relief, even if it is a short moment.

The post Molalla’s comp plan almost good to go appeared first on Daily Journal of Commerce.

Molalla City Council yesterday decided to waive system development charges on new commercial and industrial developments until the end of 2010.

Proposal creator and Molalla City Manager John Atkins Jr. pushed for the moratorium, which will be in effect from Jan. 1 to Dec. 31, 2010, or until a total of $1 million in SDC waivers has been reached.

“I don’t know that it’s necessarily going to generate millions of dollars, but I do know it will generate interest in Molalla,” Atkins said. “I am very excited.”

Molalla is hurting for new development because of increasing business closures over the last 18 months, Atkins said. The town has lost two car dealerships, a building supply company and many small businesses and storefronts in the past year and a half.

“We’re worried we’re going to lose some more,” Atkins said. “I’ll be interested to see what this moratorium leads to.”

Applicants with commercial and industrial projects wanting to take advantage of the moratorium will need to start construction within 180 days of receiving approval. Atkins said that 15 years ago, Junction City introduced a limited SDC moratorium and was successful.

The post Molalla City Council approves SDC waiver appeared first on Daily Journal of Commerce.