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The former mill site in Dallas, which shut down in 2009, might be the next site to see redevelopment in Dallas, according Dallas Mayor Brian Dalton.

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An investor has expressed interest in the old mill site.

DALLAS — Dallas recently learned that Mint Valley Paper, a paper products manufacturing company, is making a serious move to come to town, but that may not be the only industrial interest the city’s seeing.

Mayor Brian Dalton hinted at another possible development in his state of the city address last week.

“You heard it here: The Dallas mill site is under negotiation by a prospective buyer,” he said, referring to the former Weyerhaeuser mill at Uglow Avenue and Monmouth Cutoff Road that closed in 2009. “The intent is to redevelop and market the site for industrial users as it is one of the few remaining 50-plus-acre sites on the I-5 corridor. The city is helping.”

Dalton said the city has been booming with construction in the last year, issuing 720 building permits, totaling more than $48 million in value. However, the vast majority of the new construction — not remodel or expansion — is residential. The city issued 143 permits for single-family homes and 32 for multiple-family units.

The city approved four new subdivisions last year, with 118 lots, so more construction is on the way, Dalton added.

“What is discouraging to me is exactly zero industrial building permits were issued (in 2018). A real bummer,” he said. “On our commercial lands, same bummer situation, only one new building permit was issued in 2018 (Grocery Outlet).”

That lack of balance of residential construction with industrial and commercial development could be a problem for the city if the trend continues, Dalton said.

“We are sure on a roll with houses, but let me interject a reminder that houses are expensive to service,” he said. “Bluntly put, under the current tax system, they cost the city more in services than they pay in taxes.”

He said on average, for every $1 paid in taxes, industry demands 25 cents in services. Commercial costs 75 cents for every $1 in taxes. Residential costs the city $1.25 for every $1 of taxes paid.

“These numbers are just approximate. You hear all kinds of numbers, but the point being that in almost every set of numbers you see, residential costs a good deal more than industrial,” he said.

The average home pays $780 per year in taxes to the city and receives $975 in services, Dalton said.

“How many new houses can we afford to service losing a couple hundred bucks per year, per house if industrial and commercial development can’t keep up to fill the gap?” he said.

That’s what makes the Mint Valley Paper announcement and movement on the long-vacant mill site so critical, from Dalton’s perspective.

“It looks like industry will finally be the high point of this evening,” he said.

Mint Valley Paper’s new facility — known as Project Indigo for the last two years as it explored site options before landing on Dallas — should move forward unless something unforeseen happens, Dalton said.

“Mint Valley still has to obtain all the required permits and approvals, both state and our own, but we are encouraged by the interest being shown in Dallas for new industrial investment and development,” he said.

Dalton noted other positive indicators.

“There’s a little good news on existing commercial: Filling vacant commercial buildings downtown. Last year, we had 29 vacancies. This year it’s down to 22,” Dalton said. “A really good sign … plus with some hope of filling some more soon.”

Part of the city is now part of a federal program to benefit lower-income communities called Opportunity Zones, as well. Participants are given capital gains tax incentives for long-term investment in the zones in commercial or residential development.

 “A slice of east Dallas has been selected as one of a handful of Opportunity Zones in Oregon, a federal program to stimulate investment in economically distressed communities,” Dalton said. “The tax treatment in the zones is highly favorable to investors and may attract substantial investment in our community over the next few years.”

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