CCAC Subcommittee on Leadership Capacity

City of TigardCity Center Advisory Commission

Research Report on

Downtown Associations in Oregon

September 18, 2008

Prepared by

Subcommittee on Leadership Capacity in Downtown

Members: Alexander Craghead Thomas Murphy Elise Shearer

CONTENTS

Executive Summary 3

Research Questions 4

Needs Assessment 5

Leland’s Context 8

Comparable Cities 10

Different Models 15

URD Only Models 19

Web Solutions 20

Failures 21

Appendix 22

Bibliography & Acknowledgments 25

City of Tigard / Downtown Associations in Oregon... 2

EXECUTIVE SUMMARY

In 2007, the City of Tigard hired the Leland Consulting Group to assist in the creation of a strategy for implementing revitalization in its downtown core. In the resulting Downtown Strategy, Leland recommends the creation of a downtown organization aimed at fostering private sector leadership. This recommendation was forwarded by the City Council to the City Center Advisory Commission (CCAC), with the charge of deterring if the recommendation should be implemented, and if so how.

The CCAC has been concerned with the complexity of such an effort, and created a subcommittee in May of 2008 to investigate the issues surrounding the establishment of or support of a downtown association. This document was created by that subcommittee to assist the CCAC in making a recommendation on this subject.

What this document is not is a recommendation regarding the establishment or support of a downtown organization. It provides no recommendation, and puts forth no specific opinion in favor of or in opposition to downtown associations.

Summary of Findings

Downtown Tigard is a diverse environment with many interests and little community. This makes communication between stakeholders and the city, as well between the stakeholders and other stakeholders difficult. It also means that a coordinated vision of the future of downtown does not now exist amongst staekholders.

The Leland Group made a recommendation of supporting an association partly in response to such concerns. Additional concerns included providing a forum independent of the city government for advocacy and conflict resolution, as well as a venue for the private sector to demonstrate their support of downtown revitalization. While leland strongly favors an association, no specific form or timeline for such an organization was advocated, except that such groups sometimes take time to formulate.

A number of comparable cities exist within the state. In examining them, there is no clear route that is chosen more than others; in short there are multiple ways of achieving revitalization goals. Some cities have chosen to participate in established, traditional forms, such as the National Trust’s Main Street program, while others have chosen to create their own, innovative programs tailored to their specific needs.

In very few cases did associations have a direct impact on urban renewal efforts, however, by their nature they are often positioned well to undertake routine efforts such as promotion, maintenance, advocacy, business outreach, and other “soft” skills that cities without economic development departments general lack.

Failure is common in such associations, and is usually the result of a lack of broad leadership (reliance on one or too few individuals), a lack of vision or purpose, and a lack of stable funding. Funding levels seem less important than funding stability.

Conclusion

The creation or support of a downtown association in Tigard would be a challenging effort. Making matters more complex is the high degree of failure rates that these associations experience, along with the broad path of options available. One important fact to note is that regardless of whether the city chooses to take a traditional role, or a more innovative path, there are other cities in the state with similar experiences and with whom the city would likely be able to share knowledge for mutual benefit.


RESEARCH QUESTIONS

At the May 14 meeting of the CCAC, the subcommittee was tasked with researching leadership capacity within downtown Tigard. At the subcommittee's May 21 2008 meeting, seven research questions were developed based on the questions raised by the CCAC, as well as on further discussion within the subcommittee. They are as follows:

1.) Needs assessment. What are the needs of the downtown property owner, business owners, and residents within downtown Tigard that are currently not being filled by the city? Also the reverse: what are the needs of the city downtown that are not currently being addressed by downtown business and property owners?

2.) Leland's Context. What is Leland's broader context for providing a recommendation that the city support financing an association at this juncture?

3.) Comparable Cities. What are "comparable" cities doing in their downtowns; was an association involved in those efforts, and if so how?

4.) Different Models. What are some different models of associations? How do they work, &c?

5.) URD only models. What are other cities (of any size/make-up) doing that have urban renewal but do not have an association?

6.) Web solutions. How many associations utilize web-based solutions, and how?

7.) Failures. What are some examples of cities with associations that failed, and what are the reasons for such failures?


NEEDS ASSESSMENT

Research Question:

What are the needs of the downtown property owner, business owners, and residents within downtown Tigard that are currently not being filled by the city? Also the reverse: what are the needs of the city downtown that are not currently being addressed by downtown business and property owners?

Downtown Survey 2004.

In Spring of 2004, the City conducted a citywide survey regarding Downtown Tigard. This survey took the form of a single sheet of 8.5x11 inch paper that combined a multiple choice section, a scaleable answer section, and an open-ended question section. Its focus was to determine how often and why people visit downtown, as well as their impressions of it. Also on each survey sheet was a check box interface asking if the respondent was a downtown property or business owner. Surveys were distributed at the Tigard Farmer’s Market, the library, selected downtown businesses, at Tigard Chamber of Commerce meetings, and through the City’s newsletter, the Cityscape. Survey data was utilized during the formation of the Tigard Downtown Improvement Plan.

Of the 563 returned surveys, 22 came from individuals who identified themselves as either a property owner in downtown, a business owner downtown, or a combination of both. Of these 22, three were duplicates, making 20 unique respondents from the area.

Four (4) respondents indicated that the area needed more housing or offices in order to stimulate economic activity. Generally these sorts of projects come as a result of city regulations (zoning, design standards), city incentives (tax breaks, grants, subsidized property sales), and private sector interest. Associations usually do not have a role in such projects, although they could provide promotion and developer outreach that could lead to deals.

Another four (4) respondents identified parking, traffic, and pedestrian access as key areas that need improvement in downtown. These are capital projects that are usually undertaken by a government or an urban renewal agency, rather than an association.

Eight (8) respondents mentioned business mix as a primary concern. Typical requests came for small specialty retailers, bakeries, coffee shops, and the like. Business recruitment is usually a task handled by private property owners on a property by property basis, or by third party nonprofits such as business or merchants associations.

One respondent utilized the survey as an opportunity to state his opposition to the City’s plans and his belief that the survey was a total waste of time. Another respondent mentioned opposition to any plan that included tax breaks.

City of Tigard GIS Data / 2008

The City Center Urban Renewal District consists of 193.71 acres, divided up into 183 parcels, and hosting approximately 308 businesses.

According to records of business licenses issued in the URD, of the 308 businesses in place at present, less than half (144) are registered with ownership shown as Tigard locations. Of these, most show the same location as the place of business. Of the remainder of the businesses in the URD, about half show owners registered at addresses in the Portland metropolitan area, while the remaining half show as being registered out of state.


Of the 308 businesses registered in the URD, a little over a third (116) are retail in nature. The bulk of businesses registered in the downtown core are service based or are professional offices.

Retail Uses. There are 116 retail type uses in the URD. These are defined as businesses where a storefront is essential to business, and thus includes barbers, salons, and showrooms as well as traditional retail stores, but does not include medical offices or the like.

Most retail uses are concentrated in the Hall/99W region (58), with another large concentration located along Main Street (35). Notably there are no registered retail businesses in the Burnham district. However, in both areas, retail uses are outweighed by non-retail uses, with the most striking example being Main where the ratio of non-retail to retail begins to approach 2-to-1.

Ownership of retail tends to be primarily locally registered, with 27 out of 35 being “local” on Main Street, and 40 out of 58 registered as “local” in the Hall/99W region.

Non-Retail Uses. There are 192 non-retail uses in the URD. These are defined as businesses of any type that do not require a storefront presence. This includes a span from automotive repair to industrial manufacturing to offices to professionally managed apartments.

Non-retail uses are fairly evenly spread across the URD. There are 49 non-retail uses on Main Street, 66 non-retail uses in the Burnham district, and 57 non-retail uses in the Hall/99W region. In the Burnham district non-retail uses are the only licensed businesses on record. In the Hall/99W region, they take nearly equal weight with retail uses (57 non-retail to 58 retail uses), while on Main Street they outnumber retail uses (49 vs. 35).

Ownership of non-retail uses tends to be primarily registered as local. On Main Street, 41 out of 49 are “local”; in the Burnham district, 46 out of 66 are “local”, and in the Hall/99W region, 41 out of 57 are “local”.

Employment Downtown. Of the 308 registered businesses downtown, only 23 have ten or more employees. The largest employer is Magno-Humphries, a manufacturer of vitamins and dietary supplements, with 97 employees. The second and third highest are Luke-Dorf Inc, a healthcare related firm with 74 employees, and Russ Chevrolet with 70 employees.

Limitations. This data is imperfect. In some cases, beauty salons (counted here as retail uses) have multiple business licenses, one for each practitioner. Also, some duplications were noted in the data, which was obtained from the City of Tigard’s Geographic Information System (GIS), most likely attributed to one business going out of business, and another taking it’s place within a short time span. Most of these discrepancies were in retail uses. Also, some businesses may be operating either without a business license, or using a license listed at a location outside the URD.

Lastly, this survey of business license data only paints part of the picture, as it does not address ownership of property, only of businesses and tenants.

Summary. Three notable facts stand out:

Most businesses in the URD are not retail. Non-retail uses outnumber retail uses even on Main Street.

There is a significant geographic split. Burnham is entirely without retail businesses, and is oriented towards auto repair and construction. Main Street is primarily non-retail uses -- mostly professional offices -- with retail coming in second. Hall/99W, with its high visibility, has the highest concentration of business activity, and is evenly split between retail and non-retail uses

There are few big employers downtown. Most employers have fewer than ten employees. Small


offices are typical of employment downtown.

Downtown Strategy -- Existing Conditions

In an appendix of the Downtown Strategy, the Leland Group include a summary of existing conditions in downtown Tigard. Among their findings are:

Low overall improvement to land value ratio. The current value of commercial land in the URD was estimated to be between $20 and $24 per square foot in 2007 dollars. This reflects “substandard” conditions. As a result rates of rent are low, generally $12 to $18 per square foot, which is too low to attract developers.

Broad land use mix. Leland identified Burnham as primarily industrial in nature, with Main and the Hall/99W region being the primary commercial areas.

Large lot locations. Most lots over one acre in size are located either in the Burnham district or in the Hall/99W region. These areas would be most attractive to developers.

Downtown Strategy -- Developer Interviews

In order to assemble the Strategy, Leland Consulting Group interviewed a group of developers in the Portland area, asking for input on redevelopment in the URD. A summary of these interviews was attached to the Strategy as Appendix B. Among the mentioned items were:

Business mix. A series of business types were mentioned as being needed in the URD, including specialty grocers and other high quality and specialty retailers.

Property owner engagement. It was recommended that the property owners need to be engaged by the City to discuss alternative means of redeveloping sites that will bring profit to existing owners while benefitting the community.

Downtown ombudsman. It was suggested that the City have a key individual whose sole role is communicating with downtown business and property owners with a goal of championing retenanting or improving businesses.


LELAND’S CONTEXT

Research Question:

What is Leland's broader context for providing a recommendation that the city support financing an association at this juncture?

Development Strategy for Downtown Tigard, Oregon (“Leland Report”)

Funding and support of a downtown focused association was identified as a recommended project by the Leland Group in the Development Strategy for Downtown Tigard, Oregon, dated October 2007. Leland identifies this project as a short term, high priority project which would cost the city approximately $40,000 annually, with the primary responsibility being in the private sector (Redevelopment Strategy, p. 18).

Leland suggests that such an organization would take on a leadership role to champion projects in the private sector. They further note that the existing association, the Tigard Central Business District Association, lacks both broad membership and funding, while the Tigard Chamber of Commerce lacks a focus on downtown. They advocate an association that is born from the private sector and then initially funded by the City, with an eventual goal of being completely self-funding from the private sector. This recommendation takes the form of Organizational Task 1 in the Strategy.

The “Leland Memo”

In late 2007, the Tigard City Council requested from Leland a list of projects that they would advise be undertaken with the first six months or first $500,000. In a memo dated 19 November, 2007, Leland replied with a series of recommendations pulled from the Strategy. Although organizational tasks such as increasing outreach are identified, Organizational Task 1 was not identified as a priority for the early implementation of the Strategy.

Q&A With Leland

The subcommittee forwarded to Leland a series of questions seeking greater context for their recommendations. In one of their responses, they note that a downtown association can take on projects that the city cannot complete on their own, such as marketing, outreach, and advocacy. Regarding timing, Leland notes that “the timing of forming such an organization is a consideration that Tigard will have to figure out”. (Memo from Sean Farrelly to CCAC, dated 2 June 2008).

Leland also stated that the City should set criteria against which to measure performance of such an organization before dispersing funds.

One of the primary roles that Leland sees such an association fulfilling is an advocacy role. An association, being made up primarily of members of the private sector, can advocate for projects with the public and other staekholders to a greater degree than can staff. Leland notes that an association “could serve as a forum to work through contentious issues and to resolve differences”, and also notes that they can engage in marketing and economic development activities for which the city is not as suited (Memo from Sean Farrelly to CCAC, dated 7 July 2008).


Additional Leland Recommendations

Leland added a condensed recommendation as follows:

His belief is that Downtown Tigard could really use an organization and the City should play a role in forming it. It could start with a part time director with seed money from the City. It should eventually support itself with a BID, which the City (as a major property owner) would be a part of. Early projects to focus on could be grant writing (Main Street and arts grants), developing a web site, helping to develop a parking plan, and improving city-business communication. (Memo from Sean Farrelly to CCAC, dated 7 July 2008).


COMPARABLE CITIES

Research Question:

What are "comparable" cities doing in their downtowns; was an association involved in those efforts, and if so how?

Initial Comparison Factors

Three factors were used to identify key cities with similarities to Tigard; population, budget, and size. Due to limitations on population number availability, data used dates to 2006/2007.

In 2006, Tigard was home to 41,223 people. It has a surface area (citywide) of 10.86 square miles. Its total adopted city budget for Fiscal Year 2006/2007 was $77.7 million.

Cities with similar populations

Cities with similar populations to Tigard were chosen based on total populations ranging from 35,000 to 60,000 residents. This resulted in just four other cities:

City 2000 Pop 2006 PopAlbany 40,852 46,610Corvallis 49,322 53,900Lake Oswego 35,278 36,350Springfield 52,864 57,065

TIGARD 41,223 46,300

Of these four, two are freestanding cities (Albany and Corvallis) while the other two are suburbs (Lake Oswego to Portland, Springfield to Eugene).

Albany has a significant historic district and a downtown plan crafted in the 1980s that was very ahead of its time. To accomplish their goals, the city created an Urban Renewal District (URD) of over 900 acres, including the waterfront, the traditional downtown, and large swaths of adjacent areas that are industrial or strip commercial in nature. Although significantly larger than Tigard’s URD, Albany’s major geographic diversity is similar in character to Tigard.

Albany has a downtown association known as the Albany Downtown Association (ADA). The association concentrates just on the traditional downtown and not the entire URD. The city provides ADA with funding by allowing the association to run the city’s parking meter program downtown and keep the revenue for operating expenses. The ADA also relies on funding via an Economic Improvement District (EID) that assesses properties in the traditional downtown area. This EID is a voluntary EID, meaning that individuals can opt out via remonstrance. Although there are a significant number of remonstrances the association has managed to receive significant funding from this source.

Corvallis has a downtown association but no urban renewal district. Their association, like Albany’s, utilizes a voluntary EID to fund their programs. The association also receives a stipend of less than $90,000 annually from the City.

Currently Corvallis is seeking to create an urban renewal district that will encompass both the traditional downtown and nontraditional areas where the City hopes to expand their urban core. The Downtown Corvallis Association is a key player in advocating for urban renewal. The city gave grant money to the DCA to create a downtown plan and an urban renewal plan. Once the process begins,


however, it is foreseen that the DCA will step away from this role and that an advisory commission will be appointed for the URD.

Lake Oswego has a thriving urban renewal district located in their historic downtown core. Most buildings, however, are more modern in both age and character. The city does have a downtown association, the Downtown Business District Association, formed after the urban renewal plan was enacted by local businesses. They have had little to no role in the URD’s redevelopment efforts, and are completely self-funded.

Currently the City has been looking into the Main Street program put out by the National Trust for Historic Preservation. The City is currently leaning against participation as it feels the program is duplicative and redundant with efforts the City has already taken on.

Springfield has many similarities to Tigard. Their URD is relatively new and encompasses a traditional downtown main street of 6-8 blocks long as well as light industry, strip-mall development, and a mobile home park. This creates a significant geographic diversity within the URD.

Springfield did have an association until recent times, known as the Springfield Downtown Association. The SDA was formed in the late 1970s and was a strong promoter of downtown projects with a close working relationship with the City. They were dependent on a single leader, however, who succumbed to Cancer last year. As a result the association foundered and has been unable to revive itself.

In addition there is a private nonprofit in Springfield known as the Springfield Renaissance Development Corporation. The SRDC is privately funded and does not focus exclusively on downtown, but has placed a lot of its projects in the downtown area.

When the advisory board for the URD was created, the City was swamped with over forty applications. The City hopes to capture the enthusiasm of those applicants and get them involved in the formation of a new association of some kind. In the meanwhile, their advisory board has a strong majority representation of stakeholders within the downtown area.

Cities with similar budget numbers

Cities with similar budget size to Tigard were chosen based on adopted budget numbers for FY 2006/2007 between $70 million and $100 million. This resulted in seven other cities:

City FY 2006/2007 Budget (Millions)Ashland $84.4Beaverton $93.5Corvallis $84.1Grants Pass $97.9McMinnville $86.7Redmond $92.2Tualatin $91.5

TIGARD $77.7

Of these seven, only two are suburbs (Beaverton and Tualatin, both suburbs of Portland). In addition, Corvallis also appeared on the list of cities with similar populations to Tigard. Interestingly, only three cities have urban renewal: Grants Pass, Redmond, and Tualatin.

Ashland has no urban renewal and no downtown association. The City does have a historic district defined and administered by the City, and protected by a design standard developed by the City.


Beaverton has no urban renewal and no downtown association. There used to be an association but it became inactive five or more years ago, and most promotional work that it used to do is now undertaken by the Beaverton Chamber of Commerce.

Corvallis was described in the section above dealing with cities with similar populations to Tigard.

Grants Pass has an urban renewal district but it is scheduled to sunset within the next few years. The City considers it to be successful and is considering starting another. There is no active downtown association, instead the City contracts with the local Chamber of Commerce to provide outreach and soft services.

McMinnville has no urban renewal but has a strong downtown association. They receive the bulk of their funding through an EID and an associated Business Improvement District. The City also provides a small stipend of approximately $15,000 annually to the association.

Redmond has urban renewal and has a young downtown association. At present the City is attempting to determine a role and a funding level for the association, which is fully funded by the City at this time. The association recently made a request for a five-year, $500,000 stipend from the City to be used primarily for overhead and for organizational development. City staff are proposing a significantly lower number over a shorter three-year period and are requesting the association spend more time on events to get shoppers to return to the downtown.

Tualatin has an urban renewal district encompassing its downtown. It does not, however, have an association, nor does it have a citizens advisory group for the URD.

Cities with similar citywide size

Cities with similar surface area size to Tigard were chosen based on a surface area between 8 and 12 square miles. This number was pulled from the 2000 U.S. Census, the most recent number available. This resulted in nine other cities:

City Surface Area (2000)Coos Bay 10.59Lake Oswego 10.35McMinnville 9.9Newport 8.88Oregon City 8.14Pendleton 10.05Redmond 10.24Roseburg 9.22The Dalles 8.45

TIGARD 10.86

Of these nine, only two are suburbs (Lake Oswego and Oregon City, both suburbs of Portland). In addition, Lake Oswego also appeared on the list of cities with similar populations to Tigard, and McMinnville and Redmond both appeared on the list of cities with similar budget sizes to Tigard. All but two -- Coos Bay and McMinnville -- have urban renewal.

Coos Bay has no urban renewal but has an association, the Coos Bay Downtown Association. CBDA is funded through dues and is stand alone from the city.

Lake Oswego was discussed under cities with similar populations, above.

McMinnville was discussed under cities with similar budget sizes, above.


Newport had an urban renewal district that included part of downtown, called the North District. This URD sunsetted recently and the City is now only paying down debt. Newport does have an association, the City Center Newport Deco District. This association is completely self funded.

Oregon City has an urban renewal district encompassing the traditional downtown as well as larger expansion areas. There also was a preexisting downtown association focused on events.

Currently the City is looking at becoming involved in the Oregon Main Street Program, part of the overall program overseen by the National Trust for Historic Preservation. The City contacted the preexisting association to determine if they were interested in participating but they decided they would rather retain their autonomy and focus on events. To administer the program the City is helping to form a new nonprofit. This involved getting many stakeholders both within and adjacent to downtown to meet and get on board with the project. The bylaws of the new association are crafted to explicitly require the association to work with the URD and be a partner with the City. They also have a very carefully crafted board makeup that includes representation from the City, the Chamber of Commerce, the two largest employers citywide, and various arts, culture, and preservation interests. Representatives from the business community are to be voted on by the businesses, and property representatives are similarly voted on by area property owners.

Pendleton has an urban renewal district that encompasses downtown plus expansion areas. They did have a merchants association but it faltered many years ago.

Redmond was discussed under cities with similar budget sizes, above.

Roseburg has an urban renewal district that encompasses its downtown as well as various expansion areas, including the airport. There are also two separate business associations within the URD, the Roseburg Town Center Association, and the Downtown Business Association. Neither receives funding from the City.

The Dalles has urban renewal encompassing downtown and other areas. They also have an association, the Downtown Business Association. DBA is freestanding and receives no City funding.

Overview

In the cities listed above, when both a URD and an association are present, in very few cases did the associations provide any meaningful impact on urban renewal efforts. It is only Corvallis that stands out as an example where the association had a direct hand in the formation or implementation of urban renewal.

Cities with successful and established downtowns such as Ashland and Lake Oswego have weak or nonexistent downtown associations, but so too did cities with unfocused downtown efforts, such as Beaverton. Common to these cities is a reliance on capital investment and centralized control.

Cities actively pursuing the establishment of an association tended to be cities with significant difficulties in achieving redevelopment goals, such as Oregon City and Springfield, or cities with very young programs, such as Springfield (again) and Redmond.

McMinnville has a very strong downtown program that takes the lead in downtown matters. This seems to be an aberration, with most programs being either weak and freestanding, or a smaller scope partner in a URD, such as with Albany.


Key example cities to watch

Albany. Although larger by many times than Tigard’s efforts, Albany has a similar land use mix within its URD and is focusing on similar URD goals. Their association focuses just on the smaller traditional downtown rather than the entire URD.

Springfield. Similar in population to Tigard, Springfield hosts a URD with a similar land use split, including the concentration of the traditional downtown on a single, 6-8 block long strip within the URD. Springfield’s URD is also a fairly new one, and they are dealing with many of the same outreach challenges.

Oregon City. Similar in physical size to Tigard, Oregon City has an older URD which has experienced many challenges over the years. To achieve goals, the City is establishing a new association that is broad based, with a carefully composed board of directors aimed at ensuring high quality and cooperation between all parties. Although the historic character of Oregon City is not evident to any great extent in Tigard, their approach to achieving downtown leadership goals has application to Tigard’s fractured status.


DIFFERENT MODELS

Research Question:

What are some different models of associations? How do they work?

Association Roles.

Downtown associations perform a variety of roles, but generally most take on economic development functions for their districts. As Catherine Corner, Economic Development Director for the City of Canby puts it, an association “can tackle projects that aren’t capital projects. You can’t use urban renewal funds for promotion or maintenance.” Canby, which currently has an urban renewal district but no downtown association, is considering the establishment of an association to help with these non-capital projects.

One way of looking at it is that while a URD can invest in building things over a long period of time, associations are seen as a way of taking care of day-to-day tasks. “Urban renewal is focused on larger economic restructuring and major projects,” says Oregon City’s Christina Robertson-Gardiner. “Urban renewal has the power of the purse, but the association is more advocacy.”

In his white paper, Mead outlines a typical “ideal” association:

The most logical and effective structure is that of a Board of Directors and a dedicated Association paid staff person. The Board would have at least one city staff liaison position. The Board, association and city staff and other stakeholders/members create a vision, goals, and an implementation strategy and associated tasks.... (Mead, 2008).

According to the web site for the National Trust for Historic Preservation, most programs nationwide are less than a decade old (63%), affiliated with a statewide program (90%), and organized as a 501c3 (61%), with the next most common organization method being the form of a government agency (17.4%). Nationally, most programs receive public sector funding via grants or general fund expenditures from their local municipalities, (38% and 42% respectively), as well as private sector funding, mostly from memberships, sponsorships, and events. Nationwide, relatively few (16%) utilize special taxation districts.

Baker City & McMinnville.

Advocates of downtown associations in Oregon frequently point to Baker City and McMinnville as examples of the strengths of the model. While both cities do indeed have strong associations, research has shown that these cities are the exception and not the norm. Both cities are county seats of non-urban counties with populations between 10,000 and 25,000. Neither city has an urban renewal program.

Additionally, both Baker City and McMinnville have a strong tourism market, with the former being in the middle of major recreational opportunities, and the latter being in the middle of Oregon’s “wine country”. Both cities also have strong historic downtowns consisting of multiple blocks of large vintage structures. Both began their downtown programs decades ago to combat a plague of empty storefronts and vacant buildings.

Sadly, research shows that the typical association in Oregon is a standalone association with weak power, little membership, and poor funding, focused on the occasional public event.


Funding Associations.

Downtown associations achieve their funding in a variety of ways. Most are self-funded, either through memberships and donations, or through assessment programs such as Economic Improvement Districts. Very few receive direct funding from their municipal governments.

The predominant form of funding for associations in Oregon is the Economic Improvement District (EID). This is a form of assessment similar to a tax, assessed against properties within a defined district. Ids are usually administered by the local municipality, however, the program is usually instigated by the association. Ids can be made voluntary -- allowing a property owner to opt out if he/she feels the program will not benefit them -- or involuntary, where all properties in the district must pay if the EID survives passage.

Adoption of an EID usually consists of an EID proposal being made by an association to their local municipality. The municipality then handles the paperwork for formation, and notifies the land owners within the proposed district of the assessment and gives them the option of declining, known as remonstrance. If property owners representing up to or in excess of 33% of the proposed assessed value remonstrate, the EID can not be implemented. Surprisingly, very few associations are using involuntary Ids, and those using voluntary Ids have reported respectable compliance levels.

Another funding method similar to the EID is the Business Improvement District. This is a form of assessment similar to a business license tax, assessed against businesses within a defined district. BIDs are usually administered by the local municipality, however, the program is usually instigated by the association. BIDs can be made voluntary -- allowing a property owner to opt out if he/she feels the program will not benefit them -- or involuntary, where all properties in the district must pay if the BID survives passage.

Adoption of BIDs usually consists of an BID proposal being made by an association to their local municipality. The municipality then handles the paperwork for formation, and notifies the business owners within the proposed district of the assessment and gives them the option of declining, known as remonstrance. If business owners representing up to or in excess of 33% of the proposed businesses in the district remonstrate, the BID can not be implemented. The BID seems to be a less popular funding choice, perhaps due to the lower dollar amount that is usually assessed by them.

Initial research seems to indicate that few associations are using both EID and BIDs together.

Some cities provide direct stipends to their associations. Oregon City, Albany, Hillsboro, and Corvallis all provide direct funding, but in almost every case officials from the local governments described this funding as “a small stipend”, usually ranging between $10,000 and $50,000 annually. Currently, Redmond is considering a request from their association for a 5-year, $500,000 stipend.

In some cases, the local municipality provides funding assistance to their associations through indirect means. As an example, Albany allows their association to implement a parking meter program and retain the profits for their operations. In Grants Pass, the city contracts out visitor information and tourism services as well as the administration of a downtown historic district program to its local Chamber of Commerce. Hillsboro has created a Local Improvement District (LID) to fund capital projects that support the vision of their downtown association.

Many associations receive no stable funding source, relying on memberships and/or donations to continue operations. Such groups rarely can afford to hire a staff person, and most of their funds tend to go towards public events. In most of these cases, the association either had no working relationship with their local municipality, or had a history of conflicts with the municipality.

None of these methods provide significant funding. In most cases, the funding raised is just enough to cover the costs of association staffing, overhead, and events. Major programs -- including storefront grant programs -- tend to be paid for through the local municipality.


Membership & Business Associations vs. Downtown Associations.

Membership, as mentioned above, is sometimes relied upon as a funding source for downtown associations. It should be noted that this is the primary role of membership in such organizations. Business associations and downtown associations or downtown organizations are not the same. Unlike a business association, downtown associations exist to represent geographic areas, not just their members. Although the ability to vote or hold office in the organization is typically tied to membership, most municipalities will expect that a downtown association will represent the interest of their entire downtown, not only their paid members.

The term “business association” and “downtown association” should not be used as if they are interchangeable, due to this fundamental difference.

Main Street Programs.

Associations are welcome to join the Main Street program from the National Trust for Historic Preservation (NTHP). This program is aimed towards downtowns with a strongly historic character that have need of both physical and economic improvement. This program provides benefits such as technical assistance and training. In exchange, the program requires extensive record keeping that must be submitted to the NTHP, who use it to monitor the performance of the nations downtowns as well as use it as support for advocacy with national policymakers.

The program consists of the so-called “four points” approach. These four principles are considered absolutely required by the NTHP, and consist of organization, promotion, design, and economic restructuring.

Baker City’s Don Chance notes that their historic district had been very successful in partnering with the city and disbursing grant money to renovate the city’s downtown. Many of the structures in the area were empty or derelict when the district began its efforts more than twenty years ago.

In Oregon, the program is currently administered by the Oregon Economic & Community Development Department (OECDD). The program had a good track record of many years, but fell victim to budget cuts in the late 1990s. Governor Kulongoski’s 2007-2009 budget has provided money to reestablish the program.

The reaction of various cities in the state has been mixed. While some cities are embracing the new program, others -- such as Lake Oswego -- are choosing not to. Partly this is due to the fairly rigid structure of the national program, and its focus on historic matters.

The Oregon program, however, is somewhat more flexible. Program coordinator Gary Van Huffel indicated that he is open to modifying the state’s program to meet the needs of individual communities. Although cities with a modified program would likely not meet the requirements of the full national program, they would still enjoy certain advocacy and support benefits with the state. Oregon City’s highly tailored version of the Main Street program -- mentioned earlier -- is an example of such a modification. With many towns lacking a surviving historic center, as well as some cities (such as Damascus) starting from scratch, such flexibility will be needed.

Leland on Other Models.

Leland notes that there are numerous other models besides the Main Street program. Other models include public/private economic development associations. Another idea that was suggested was to include the 99W corridor businesses in a broader organization, as this would allow pooling of resources. (Memo from Sean Farrelly to CCAC, dated 7 July 2008).


Additional Models of Note

A number of cities both in and outside of the region are notable examples of differing approaches and may warrant further investigation. The following list includes links to profiles for these cities, for further reading:

Holland, MI: Main Street/Downtown Development Authorityhttp://www.mainstreet.org/content.aspx?page=6075&section=3&kbentry=1700

New Bern, NC: Swiss Bear, Inc.http://www.mainstreet.org/content.aspx?page=7132&section=3&kbentry=1706

Pittsburgh, PA: Pittsburgh Cultural Trusthttp://www.mostlivable.org/paying-for-it/pittsburgh-cultural-trust.html

St. Paul, MN: Lowertownhttp://www.mostlivable.org/leadership/lowertown.htmlhttp://www.lowertown.org/

Sonoma, CA: Sonoma County Business Environmental Alliancehttp://www.mostlivable.org/paying-for-it/sonoma-county-business-environmental-alliance.htmlhttp://www.sonoma-county.org/bea/

Winston-Salem, NC: Winston-Salem Alliancehttp://www.livable.com/prgms_model/leadership/Winton_Salem.html


URD ONLY MODELS

Research Question:

What are other cities (of any size/make-up) doing that have urban renewal but do not have an association?

URD Without Associations.

A number of cities utilize urban renewal programs to enhance their downtowns without using a downtown association component. These towns tended to be small and rural, as in Brookings, Coquille, and Pendleton -- or suburban, as in Canby, Keizer, and Tualatin. In interviews with members of city staff in these communities, each city had a strong urban renewal program, or had a strong economic development department. A significant financial commitment towards infrastructure from the city was a common feature of these models.

When a city did have both urban renewal and a downtown association, there was rarely any coordination between the association and the city. Few Oregon associations receive funding from their local municipalities, and many were described by city staff as being “in existence” but “not doing much”; rarely was an association described as a vital or highly active partner.

Regarding the use of urban renewal and downtown associations, Don Chance, planning director at the City of Baker City had some interesting comments. He mentioned that, in retrospect, they wish they had not gone the historic downtown association route, and had instead concentrated on urban renewal. According to Chance, there are a number of streets within downtown that are adjacent to the historic district but not included within it. The city is considering the use of Urban Renewal to finance and revitalize these streets. Said Chance: “we’ve been wondering if we had just included all this in one urban renewal district years ago rather than going the historic district route if we could have just done all this under one umbrella”.

Non-URD, Capital Intensive Programs.

Some cities have neither an association nor urban renewal, but still have a financial commitment to their infrastructure or to historic preservation efforts. In Beaverton’s case, the city has invested significant funds into their downtown through direct expenditure, without using urban renewal; this is the result of a city charter that forbids the use of urban renewal financing. (Currently there is an effort to rewrite or remove this provision.) At the opposite end of the spectrum is Ashland, which has no urban renewal and which has concentrated on historic preservation. In Ashland’s situation, the historic preservation program is coordinated entirely “in house” at the city in a topdown approach.


WEB SOLUTIONS

Research Question:

How many associations utilize web-based solutions, and how?

General Comments.

As a general statement, most associations have some form of web presence, but rarely do these presences go beyond a simple web site. There are many different web-based tools -- such as e-mail lists and online forums -- that would be available to an association, but their use does not seem common at this time.

Further research into this subject would be of use to an existing or prospective association, however, such research was precluded due to a shortage of time for this report.


FAILURES

Research Question:

What are some examples of cities with associations that failed, and what are the reasons for such failures?

Typical Failures.

Over the course of this research, it is undeniable that more associations in Oregon have experienced or are experiencing failure than are not. As a clarification, such failure tended to be defined as:

• Inadequate funding to continue operations• Inadequate membership• Lack of leadership from more than one individual within the association• Lack of leadership in general in the association• Lack of association vision or purpose• Poor organization

Such features are typical of most associations in the state. Only a very few associations have remained strong enough to avoid such failures. They have tended to be associations in historic, stand-alone cities such as Baker, McMinnville, or Albany.

The most common problem encountered surrounded leadership issues. Springfield, for example, had a strong association, but it was built around the leadership of a single individual. When that individual passed away, the association failed. Sometimes, leadership failure occurs when personalities become stronger than issues. In Grants Pass, for example, personal conflicts came between the leadership of the association and members of city staff, disagreements that were not resolved until there were personnel changes on both sides.

Leland on Association Leadership.

Leland echoes these concerns, noting that leadership -- along with funding -- are crucial to maintaining an association’s health. Leland points out as an example Bellingham, Washington. “The City provided seed money for a couple of years, but after that was phased out there was no stable funding, since a BID was never formed. There was early committed leadership, but when that person left, the organization declined.” Leland further notes that there needs to be not just a single individual, but a pool of people capable of providing leadership (Memo from Sean Farrelly to CCAC, dated 7 July 2008). This sentiment is echoed by Oregon City, whose efforts to create a very broad-based board of directors is an attempt to engineer an environment that will promote a healthy spectrum of leadership.


APPENDIX

The following are summaries taken from Main street renewal: A handbook for citizens and public officials. This book is an extremely valuable resource, and cannot posibly be sumarized in only three pages, however, the following material stood out as particularly relevant to this fact-finding mission.

Ten Myths of Downtown Revitalization


Successful businesses found you need to provide what the customer wants (special products, great service, unique atmosphere) in order to get customers to come downtown and use the parking.

Unreasonably stringent & demanding communities cause developers to locate projects elsewhere.

Developers will do business in communities that demand quality projets as their investments are protected.

Not advantageous to retailers as hours should be “market driven” to serve needs of targeted customers. Shift to different hours rather than keep longer hours.

Sucessful commerical districts have similar & compatible businesses in groupings (clusters such as antique stores, furniture, clothing, auot, personal services, professional services, etc....)

Specialty retail works. Bringing pedestrians downtown requires a mix of services, retail, and dining/entertainment facilities that adress needs of customers.

Redefine anchors as government complexes, cultural/entertainment facilities, tourist draws, housing units, specialty retail, office buildings.

Sucess requires multi-faceted effort addressing all of downtown’s key issues.

Building preservation combined with intensive business recruitment does attract developers.

Need a market analysis & business plan implemented by newly formed partnership of city hall and businesses.

10.

9.

8.

7.

6.

5.

4.

If we had more parking, they would come! (Scapegoat approach).

Be tough as possible or developers will take advantage of us.

Be lenient or developers won’t do business with us.

Downtown must keep uniform business hours. (Lets pretend we’re a mall approach).

Competition is bad business. (Head in the sand approach).

If there is no department store, then no retail of any kind can flourish. (Big retail or no retail approach).

Need a department store to anchor the downtown! (Traditional anchor approach).

Complete a major project and they will come! (Build in isolation approach).

3.

Demolish it and they will come! (Clean it up approach).

2.

Build it and they will come! (Physical improvement approach).

1.

RealityMyth

Seven Secrets of Success

• Form partnerships among businesses, with the public sector, civic organizations, and community residents.• Have a defined clear vision of where you want to go shared by all in body.• Be market driven! Who are your customers, potential customers, & what do they want today and what will they want tomorrow? Provide for them!• Create & use a business Plan! City could help businesses to develop business plans (as well as the commissioned body having a written visionary plan) with 5, 10 & 20 outlooks.• Dare to be different. Carve a market niche in the marketplace, so you don’t compete with malls and descanters.• Focus! Concentrate resources in well-defined focus areas as resources are scarce. Results will become more visible quickly. What resources are already available for you to share? See #1.• Follow the “5 M’s”

Management of downtown should be like a business. Marketing campaigns for downtownMaintenance of private and public propertyMarket knowledge to create nicheMoney for ongoing enhancement

Lessons from Birmingham

The following are key points from the Birmingham, Alabama “Beacon” project:

• Revitalize active merchant’s associations• Reduce blight caused by existing businesses and vacant space• Preserve the historic character of the neighborhoods• Recruit new tenants that enhance the quality of the neighborhoods

and promote cohesiveness• Encourage development transactions within the districts• Assist entrepreneurs in opening local businesses• Receive, buy and develop key properties

For more information on the Beacon project, see:

http://www.livable.com/prgms_model/place/BEACON_Initiative.htmlhttp://www.mainstreetbham.org/


Goals & Vision

Some possible goals for an association might include:• Vision – 5, 10 & 20 year plans• Economic Stability• Use Current Business Management & Research Techniques• Strategic Economic Development to build solid foundation• Sound Priorities:

a) quality jobs b) quality educationc) economic developmentd) housing

The larger question is, how does Tigard see its downtown as relating to local, state, national, and international economies? As shown by the needs analysis section of this report, non-retail uses are predominate in the URD. In the global economy of the 21st century, many of these companies do business not just locally. but regionally, nationally, and beyond. What are their needs and how might downtown Tigard be relevant to them?

One of the factors that town centers use to compete for business is the “quality of life” factor. This is especially true of areas where housing is a key aspect of the downtown mix. Quality of life, however, has many definitions. Nationally, the term is usually defined as a loop that starts with jobs and economic development, linked to quality education, which then links back to jobs. In the Pacific Northwest, quality of life is usually seen as a trifecta of housing, education, and employment.

A key goal of an association in downtown Tigard might be to define what quality of life means for this specific place. Such a definition might include housing, access to healthcare, culture & cultural amenities, the environment, and transportation.


BIBLIOGRAPHY

Farrelly, S., City of Tigard. memo to City Center Advisory Commission dated June 2, 2008.

Farrelly, S., City of Tigard, memo to City Center Advisory Commission dated July 7, 2008.

Kemp, R. Main street renewal: A handbook for citizens and public officials (2nd ed.). Jefferson, North Carolina: McFarland & Company, 2006.

Leland Consulting Group. (October, 2007). Development Strategy for Downtown Tigard.

Marcus Mead / City of Tigard. (April, 2008). Summary of Research on Downtown Associations: Structure, Funding, Effectiveness.

National Trust for Historic Preservation Main Street Program (Web site), Retrieved from http://www.mainstreet.org/

Oregon Department of Revenue. (April, 2007). Oregon property tax statistics: Fiscal year 2006-2007.

Population Research Center, Portland State University. (December 15, 2006). PRC Certified Cities.

State of Oregon. Oregon Blue Book Online (Web Site). Retrieved from http://bluebook.state.or.us/

U.S. Census Bureau. (2000). Oregon -- place GCT-PH1. Population, housing units, area, and density: 2000. Washington, D.C.

Zahas, C., Leland Consulting Group. Letter to Tigard City Council, dated November 19, 2007/

ACKNOWLEDGMENTS

Many people helped in the creation of this report. it is not possible to thank them all, but the following individuals should be acknowledged for their contributions:

Jacki Yoder, Oregon Economic Development DepartmentArthur Fish, OEDDLinda Ludwig, League of Oregon CitiesStephanie Foley, LOCGary Van Huffel, OEDD

Don Chance, City of Baker CityCatherine Comer, City of CanbySean Farrelly, City of TigardCourtney Griesel, City of SpringfieldChristina Robertson-Gardiner, City of Oregon CityChris Zahas, Leland Consulting Group


Technology

CCAC Subcommittee on Leadership Capacity