The Annual Economic Edition
News Analysis – On the Budget
By Anne Scheck
As city staff toil over finalizing a new budget, two revenue-generating predictions need revising -- the May opening of the Independence Hotel and the spring construction of Osprey Point.
July is the soonest the hotel is expected to open for the public; Osprey Point remains a vacant lot, with plans for a mixed-use development. Both buildings were forecast to become the first two businesses of urban renewal along the riverfront, now called Independence Landing.
In fact, the Independence Hotel and Osprey Point were listed as commercial factors in the message of the adopted budget for fiscal year 2018-2019. “This budget is built upon realistic assumptions, a lot of operational planning and a keen eye toward managing the public’s resources responsibly and sustainably,” wrote former city manager David Clyne before referencing this month as the opening date for the hotel and springtime as the period of near-completion for Osprey Point.
As Independence heads into summer with a $37-million debt, last year’s promise of new tax revenue from the city’s urban renewal program seems worthy of a closer look – the city now is more indebted than many of its municipal counterparts.
And city spending appears an upward trend. For example, in the fiscal year of 2018-to-2019, a $4 million gap lies between the nearly $23 million projected requirement for 2018 and the almost $27 million for the proposed 2018-19 budget.
That $4M difference can be met by grant money when it’s obtained, and most funds have a budgeted contingency account, according to the city’s finance director, Gloria Butsch.
As she explained: “We do not generally budget for receipt and expenditure of a grant unless we already have some kind of commitment from a grantor.” (For an explanation of the city’s most recent grant application, see “Grant Would Make City Ground Zero for Ag Tech,” in Downtown Dispatch.)
Independence has been counting on more tax revenue in the form of what is called tax-increment financing (TIF), which is future tax money from transforming the riverfront into development. The taxable value of land at Independence Landing is expected to increase substantially as construction occurs, and the new tax revenue -- the TIF -- can be used to repay the money that the city initially provided to fund the project. And the TIF can be used in other ways by municipal governments, as well.
In fact, the TIF is an important goal in most urban renewal programs, like the one in Independence, where the city designated an area in need of improvement as an “urban renewal district.” Independence Landing, which once was home to a concrete company by the Willamette River, lies inside the boundary of that district. Under such urban-renewal efforts, bonds can be sold to raise money to acquire land.
The bond money also can be used to create incentives for developers, including discounts on the purchase price of the property. For example, at Independence Landing, the city paid $800,000 for the land and invested more than $400,000 to grade the property. Tokola Properties paid $162,000 for the parcels by the river, and pledged to build the hotel, apartments and townhouses at the site.
Independence also sunk several million dollars into building a new street there – Osprey Lane -- and other infrastructure necessities, including a traffic circle.
As a result, the TIF has been repeatedly cited by city staff as one way that Independence can address and manage the city debt, which is comparatively high when contrasted with neighboring towns.
In Polk County, Dallas has a debt level about a third that of the one in Independence. Monmouth’s debt is just under two-thirds of the Independence debt load – and Monmouth's obligation is 10% higher for repaying what's owed for MINET, the municipal fiberoptic company that Independence and Monmouth co-founded.
In 2016, Independence estimated that about half of its share of the MINET debt -- nearly $13 million -- is “non-collectible,” technically labeling it a “doubtful account.”
But, in recent years, MINET has paid more toward that debt than in the past, reducing the amount the two cities are required to pay annually. Additionally, the TIF money has been proposed as one way to ease that loan burden, as well.
“Independence behaves as if it’s a city of 50,000,” observed Sean O’Day, executive director of the Mid-Willamette Valley Council of Governments. Asked whether that’s worrisome or admirable, Mr. O’Day said the answer lies in the future.
As city staff toil over finalizing a new budget, two revenue-generating predictions need revising -- the May opening of the Independence Hotel and the spring construction of Osprey Point.
July is the soonest the hotel is expected to open for the public; Osprey Point remains a vacant lot, with plans for a mixed-use development. Both buildings were forecast to become the first two businesses of urban renewal along the riverfront, now called Independence Landing.
In fact, the Independence Hotel and Osprey Point were listed as commercial factors in the message of the adopted budget for fiscal year 2018-2019. “This budget is built upon realistic assumptions, a lot of operational planning and a keen eye toward managing the public’s resources responsibly and sustainably,” wrote former city manager David Clyne before referencing this month as the opening date for the hotel and springtime as the period of near-completion for Osprey Point.
As Independence heads into summer with a $37-million debt, last year’s promise of new tax revenue from the city’s urban renewal program seems worthy of a closer look – the city now is more indebted than many of its municipal counterparts.
And city spending appears an upward trend. For example, in the fiscal year of 2018-to-2019, a $4 million gap lies between the nearly $23 million projected requirement for 2018 and the almost $27 million for the proposed 2018-19 budget.
That $4M difference can be met by grant money when it’s obtained, and most funds have a budgeted contingency account, according to the city’s finance director, Gloria Butsch.
As she explained: “We do not generally budget for receipt and expenditure of a grant unless we already have some kind of commitment from a grantor.” (For an explanation of the city’s most recent grant application, see “Grant Would Make City Ground Zero for Ag Tech,” in Downtown Dispatch.)
Independence has been counting on more tax revenue in the form of what is called tax-increment financing (TIF), which is future tax money from transforming the riverfront into development. The taxable value of land at Independence Landing is expected to increase substantially as construction occurs, and the new tax revenue -- the TIF -- can be used to repay the money that the city initially provided to fund the project. And the TIF can be used in other ways by municipal governments, as well.
In fact, the TIF is an important goal in most urban renewal programs, like the one in Independence, where the city designated an area in need of improvement as an “urban renewal district.” Independence Landing, which once was home to a concrete company by the Willamette River, lies inside the boundary of that district. Under such urban-renewal efforts, bonds can be sold to raise money to acquire land.
The bond money also can be used to create incentives for developers, including discounts on the purchase price of the property. For example, at Independence Landing, the city paid $800,000 for the land and invested more than $400,000 to grade the property. Tokola Properties paid $162,000 for the parcels by the river, and pledged to build the hotel, apartments and townhouses at the site.
Independence also sunk several million dollars into building a new street there – Osprey Lane -- and other infrastructure necessities, including a traffic circle.
As a result, the TIF has been repeatedly cited by city staff as one way that Independence can address and manage the city debt, which is comparatively high when contrasted with neighboring towns.
In Polk County, Dallas has a debt level about a third that of the one in Independence. Monmouth’s debt is just under two-thirds of the Independence debt load – and Monmouth's obligation is 10% higher for repaying what's owed for MINET, the municipal fiberoptic company that Independence and Monmouth co-founded.
In 2016, Independence estimated that about half of its share of the MINET debt -- nearly $13 million -- is “non-collectible,” technically labeling it a “doubtful account.”
But, in recent years, MINET has paid more toward that debt than in the past, reducing the amount the two cities are required to pay annually. Additionally, the TIF money has been proposed as one way to ease that loan burden, as well.
“Independence behaves as if it’s a city of 50,000,” observed Sean O’Day, executive director of the Mid-Willamette Valley Council of Governments. Asked whether that’s worrisome or admirable, Mr. O’Day said the answer lies in the future.
News Report – Update on Hotel
It’s got 75 rooms, a new name and million-dollar views. It’s the Independence Hotel, and it’s taking applications this month for personnel.
“Our goal is to have the hotel open to the public by the Fourth of July," said Jeff Edinger, vice president of Tokola Properties, based in Gresham OR. The July holiday weekend is a "sliding date,” he said. However, guests are expected to be able to start reserving rooms in June.
Both “The Independence Hotel,” and “The Dundee Hotel,” located in Dundee, will fall under the Trace Hotel brand. There are plans for additional Trace hotels, as well, he said.
The parking lot, which flanks the hotel, will have 80 parking spaces. Asked if parking would be a challenge -- complaints about it have continued to grow on downtown's Main Street -- Mr. Edinger observed that when parking starts to become an issue it can be viewed somewhat positively.
"It can be a good thing," he said, explaining that this may mean a more heavily utilized downtown.
“Our goal is to have the hotel open to the public by the Fourth of July," said Jeff Edinger, vice president of Tokola Properties, based in Gresham OR. The July holiday weekend is a "sliding date,” he said. However, guests are expected to be able to start reserving rooms in June.
Both “The Independence Hotel,” and “The Dundee Hotel,” located in Dundee, will fall under the Trace Hotel brand. There are plans for additional Trace hotels, as well, he said.
The parking lot, which flanks the hotel, will have 80 parking spaces. Asked if parking would be a challenge -- complaints about it have continued to grow on downtown's Main Street -- Mr. Edinger observed that when parking starts to become an issue it can be viewed somewhat positively.
"It can be a good thing," he said, explaining that this may mean a more heavily utilized downtown.
Tracking the Tempo of State Economy for Tourism
Almost every merchant on Main Street, along with Independence City Manager Tom Pessemier, believes that the new hotel will be good for the city. "It's a great addition for us," Mr. Pessemier affirmed. But how great? Generally, what influences hotel occupancy -- apart from natural tourist demand -- is marketing and economics, according to city planners.
Promotion for the hotel doesn't seem to have begun, but Oregon has an economist, Josh Lehner, who regularly reports on the health of the state economy. So he was asked to weigh in. Oregon's economy remains strong, he said, though spending has slowed some. And it shows a clear “demographic impact,” said Mr. Lehner, of the Oregon Office of Economic Analysis. In older households, “we see things like car and furniture sales decline the most,” he noted.
Yet baby boomers are typical hotel customers. They take four-to-five leisure trips annually, according to a 2019 AARP poll. And about half of “boomer” travel is expected to take place domestically -- many vacation plans are the kind of “getaway” that can mean regional trips.
The Independence Hotel has geared up to attract a younger crowd, too -- outdoor enthusiasts, like bicyclists, with "bike-friendly" touches. Nearby vineyards are expected to draw wine buffs.
Promotion for the hotel doesn't seem to have begun, but Oregon has an economist, Josh Lehner, who regularly reports on the health of the state economy. So he was asked to weigh in. Oregon's economy remains strong, he said, though spending has slowed some. And it shows a clear “demographic impact,” said Mr. Lehner, of the Oregon Office of Economic Analysis. In older households, “we see things like car and furniture sales decline the most,” he noted.
Yet baby boomers are typical hotel customers. They take four-to-five leisure trips annually, according to a 2019 AARP poll. And about half of “boomer” travel is expected to take place domestically -- many vacation plans are the kind of “getaway” that can mean regional trips.
The Independence Hotel has geared up to attract a younger crowd, too -- outdoor enthusiasts, like bicyclists, with "bike-friendly" touches. Nearby vineyards are expected to draw wine buffs.
The CIVICS LESSON: Law May Take the Bite Out of Hunger
Who says there is no such thing as a free lunch? A sweeping new law, the Student Success Act, means hungry public-school students can get no-cost meals more easily. That could be important for Central School District 13J, which has racked up thousands of dollars of debt to provide free lunches. This spring, when Gov. Kate Brown signed the act into law, it meant about a billion- dollar package annually -- and its likely to more than double the number of schools able to offer free lunches. An estimated 762 schools with the highest need will be able give meals to all children and youth at no charge and without applications, which have proven a deterrent to families fearful of the forms.
"Giving more schools and families the tools to focus on serving good meals to kids isn't just good for reducing debt," said Matt Newell-Ching, public affairs director for Partners for a Hunger-Free Oregon. "Decades of research shows students who eat school meals are more likely to do better in school and life," he said. For the remaining estimated 484 schools, targeted support will be undertaken, in part by raising family-income eligibility, he said. Oregon would be the first state to enact this expanded policy.
"Giving more schools and families the tools to focus on serving good meals to kids isn't just good for reducing debt," said Matt Newell-Ching, public affairs director for Partners for a Hunger-Free Oregon. "Decades of research shows students who eat school meals are more likely to do better in school and life," he said. For the remaining estimated 484 schools, targeted support will be undertaken, in part by raising family-income eligibility, he said. Oregon would be the first state to enact this expanded policy.
The INDY HOP: Is Casper the Only Friendly Ghost? Nope!
It may be time to add an address to the city's famed Ghost Walk.
Sarah, a gentle soul, seems to be residing at the pinkest place in town -- The Pink House Cafe, in downtown Independence. "We were contacted by Big River Paranormal, which had conducted research on the area and indicated they had identified this house," explained Brenda Farley, owner of the restaurant. The nearly 20-year-old company recently conducted an on-site investigation for suspected ghostly phenomena at the home-turned-restaurant, which was built in the 1870s. The results were promising -- and a second visit is in the works.
But Ms. Farley doesn't need any follow-up to know there's a ghost. "I'd hear noises upstairs, creaks and clangs, but it just felt like, if there was something there, it didn't want to do me any harm," she said.
Once she felt a gentle burst of air lift her hair while she sat quietly at one of the dining tables. It felt like a tender gesture from a “friendly, female presence," she said. So she's given it her favorite name: Sarah. Will Sarah qualify for the Ghost Walk? Ms. Farley isn't sure. So far, the event doesn't seem to feature spirits that are really nice to have around.
Sarah, a gentle soul, seems to be residing at the pinkest place in town -- The Pink House Cafe, in downtown Independence. "We were contacted by Big River Paranormal, which had conducted research on the area and indicated they had identified this house," explained Brenda Farley, owner of the restaurant. The nearly 20-year-old company recently conducted an on-site investigation for suspected ghostly phenomena at the home-turned-restaurant, which was built in the 1870s. The results were promising -- and a second visit is in the works.
But Ms. Farley doesn't need any follow-up to know there's a ghost. "I'd hear noises upstairs, creaks and clangs, but it just felt like, if there was something there, it didn't want to do me any harm," she said.
Once she felt a gentle burst of air lift her hair while she sat quietly at one of the dining tables. It felt like a tender gesture from a “friendly, female presence," she said. So she's given it her favorite name: Sarah. Will Sarah qualify for the Ghost Walk? Ms. Farley isn't sure. So far, the event doesn't seem to feature spirits that are really nice to have around.
DOWNTOWN DISPATCH
Grant Would Make City Ground Zero for Ag Tech
Can you imagine a town center that combines agriculture and technology? Independence’s economic development director can – and he’s applied for a federal grant of $650,000 to make that "hub" happen in the city’s downtown.
The project aims to create a three-year program of opportunities for higher-level learning in agriculture and technology, and it’s also designed to help people from different backgrounds interact -- ideally farmers and technology professionals. Indy Commons will provide the core office space.
The grant proposal includes matches of in-kind services from about a dozen prospective participants, many of whom already have been attending “Ag-Tech” workshops and meet-ups that the city’s been hosting since 2015. “It is just taking what we've been doing and putting it on steroids," said Shawn Irvine, Independence's economic development director and the author of the grant. The City of Independence will kick in $20,000, Mr. Irvine said.
Independence will be assisted by the Technology Association of Oregon (TAO), a group that has been helping with the ag-tech effort for the city since its inception.
“TAO will play a role as a connector and amplifier,” Mr. Irvine said. “We’ll be relying on TAO’s expertise, to help us spin up the first couple of events.”
The goal is problem-solving and, just as importantly, community bonding. One example is the "reverse pitch" competitions "where farmers come in, maybe wanting a solution, and ideas are bounced around," he said.
"Then various teams pitch their solutions," he said. "The result could be finding an idea that will hit one out of the park," he added. "Or it could simply be relationship-building."
The city has listed Oregon State University (OSU) as a partner; That university has specific faculty and representatives from across campus who can provide expertise, Mr. Irvine said.
Steve Clark, vice president of university relations and marketing at OSU, explained that “while these efforts are not part of formal agreements with the city or the grant application, they are significant examples of collaboration and partnerships that OSU engages in with many cities, local governments and other entities in our region.”
OSU’s College of Agricultural Sciences and the university’s Advantage Accelerator “are among the many partners with the city of Independence regarding this grant application,” Mr. Clark added.
OSU’s Advantage Accelerator will work with the city to provide access to information about how to launch start-up businesses, commercialize research and take business ideas into the marketplace, he added.
Business Oregon also confirmed its intention to provide $125,000 over three years if the grant is funded, though the contract with Independence hasn’t yet been executed, according to a spokesperson for the Salem-based state organization.
The project aims to create a three-year program of opportunities for higher-level learning in agriculture and technology, and it’s also designed to help people from different backgrounds interact -- ideally farmers and technology professionals. Indy Commons will provide the core office space.
The grant proposal includes matches of in-kind services from about a dozen prospective participants, many of whom already have been attending “Ag-Tech” workshops and meet-ups that the city’s been hosting since 2015. “It is just taking what we've been doing and putting it on steroids," said Shawn Irvine, Independence's economic development director and the author of the grant. The City of Independence will kick in $20,000, Mr. Irvine said.
Independence will be assisted by the Technology Association of Oregon (TAO), a group that has been helping with the ag-tech effort for the city since its inception.
“TAO will play a role as a connector and amplifier,” Mr. Irvine said. “We’ll be relying on TAO’s expertise, to help us spin up the first couple of events.”
The goal is problem-solving and, just as importantly, community bonding. One example is the "reverse pitch" competitions "where farmers come in, maybe wanting a solution, and ideas are bounced around," he said.
"Then various teams pitch their solutions," he said. "The result could be finding an idea that will hit one out of the park," he added. "Or it could simply be relationship-building."
The city has listed Oregon State University (OSU) as a partner; That university has specific faculty and representatives from across campus who can provide expertise, Mr. Irvine said.
Steve Clark, vice president of university relations and marketing at OSU, explained that “while these efforts are not part of formal agreements with the city or the grant application, they are significant examples of collaboration and partnerships that OSU engages in with many cities, local governments and other entities in our region.”
OSU’s College of Agricultural Sciences and the university’s Advantage Accelerator “are among the many partners with the city of Independence regarding this grant application,” Mr. Clark added.
OSU’s Advantage Accelerator will work with the city to provide access to information about how to launch start-up businesses, commercialize research and take business ideas into the marketplace, he added.
Business Oregon also confirmed its intention to provide $125,000 over three years if the grant is funded, though the contract with Independence hasn’t yet been executed, according to a spokesperson for the Salem-based state organization.
Longtime Restaurateur Departs Independence
Five years ago, Gregg Peterson bought the Independence Grill and Bar, and then spent most of his time at the griddle, the oven and the stove. Nonetheless, he became a familiar face on Main Street.
Recently, he sold it to a new owner, Jeaneen Greenberg – with assurances to his customers that he’d stay in the kitchen as chef.
However, this month he heads out to help manage a restaurant chain, leaving behind the town’s most spacious eatery.
"It is time to move on," he said, but it's also hard to "step back" from the clientele he built. Asked if he had any words of wisdom to impart to other “Indies in Indy,” he said: “Only that it's a challenge every single day, so every single day these businesses need local support."
Recently, he sold it to a new owner, Jeaneen Greenberg – with assurances to his customers that he’d stay in the kitchen as chef.
However, this month he heads out to help manage a restaurant chain, leaving behind the town’s most spacious eatery.
"It is time to move on," he said, but it's also hard to "step back" from the clientele he built. Asked if he had any words of wisdom to impart to other “Indies in Indy,” he said: “Only that it's a challenge every single day, so every single day these businesses need local support."
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