URD may extend duration 10 years

The Dallas Urban Renewal District has helped start numerous improvement projects.

Photo by Jolene Guzman
The Dallas Urban Renewal District has helped start numerous improvement projects.

DALLAS — The Dallas Urban Renewal District may extend the duration of its district, possibly another 10 or more years.

On Nov. 6, the Dallas Urban Renewal agency board and advisory council met with consultant Elaine Howard to review options.

The current district plan was created in 2004 and limits the window to start projects or take on debt to 20 years. Howard said not all urban renewal districts have a duration limit.

“That is one of the things that we were looking at in terms of this analysis of your plan, where are you and is that really the duration provision you want to keep in your plan,” she said. “The Oregon revised statute that governs urban renewal does not require duration provisions.”

She said what governs the duration of most plans is “maximum indebtedness,” the total amount of money the district can spend on projects and programs.

That amount is set in the plan.

The district would continue to collect incremental taxes until 2033, but 2024 is the latest it could issue debt or begin projects.

Under the current plan, the district could complete another $1.8 million in projects, bringing the total used to $5.1 million.

That is short of the project maximum amount of funding of a little more than $9 million “maximum indebtedness” in the district plan. Maximum indebtedness is the limit of what can be collected and spent while the district is active. That figure is set when the plan is approved.

In 2010, the district had a fiscal analysis completed that revealed the district is well short of collecting that much money in the time allotted. A few circumstances account for that, including the recession that began about four years after the district formed and an error that added a tax-exempt building project into expected revenue, district officials said.

After the analysis, the district considered an expansion to district map to collect more incremental taxes, but decided against that, Howard said.

“Here we are in 2017 and we’re in a similar problem, where the actual growth in revenues aren’t where the district was projected to be at this point in time,” Howard said.

Howard presented the agency board and it advisory committee with three options: Do nothing, add 10 years or add 20 years.

Moving the deadline out 10 years allows the district to get closer to its maximum indebtedness, using $7.8 million, with the last projects starting by 2034 and taxes collected until 2041. The agency could add another $1.5 million in project funding compared to doing nothing.

The downside to that is the district would collect incremental property tax increases — the tax increase since the district formed – for a longer time. That syphons off revenue from other districts — the Dallas School District, Polk County and the city of Dallas, Howard said.

“That’s a longer time that all the taxing districts forgo that increase in revenue in your area, including the city,” she said. “It’s always important to remember that you are one of those taxing districts.”

Going with the 20-year option, the district would add $3.3 million for projects. Tax collections would continue until 2044. Howard advised against the 20-year option because it would involve an increase in the district’s maximum indebtedness, a substantial change to the plan, requiring the same process as approving the original plan.

“The bottom line is if you don’t do something, you are never going to do the amount of projects you really wanted to in your downtown,” Howard said. “That is just simply because the growth rate hasn’t not been what it was originally projected to be.”

Community Development Director Jason Locke said adding more time to the plan opens the door to wide variety of projects — from improving the “streetscape” on the 500 to 700 blocks of Main Street to helping renovate the interior of buildings for housing or commercial use.

He said finishing Main Street through downtown will be a substantial expense, perhaps topping $1 million.

“Part of this issue, too, is our ability to be able to bond for these dollars over a certain time horizon. You can only service so much debt at one time,” Locke said. “It becomes a practical issue as well as a duration issue. The maximum indebtedness is still there. You can’t exceed that $9 million amount, but you can look at how much closer you get to being able to utilize that maximum under that 10-year duration (extension).”

Director Jackie Lawson, also a Dallas city councilor as the council serves as the agency board, asked Howard to calculate the number of years required for the district to collect the maximum indebtedness and present that to the agency as a fourth option.

City Manager Ron Foggin said the next steps in the process would be for Howard outline the amendment for the district advisory committee to review. The committee will make a recommendation for the agency board of directors — and if approved, it will go the city council for final approval.

Howard said though it’s not required for a council-approved amendment, that the district should notify the public and the taxing districts affected by the change.

“As a good partner in your community, checking in with them and letting them know what you are thinking and running it past them is a step that we think is really important,” she said.

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