Jeb Bladine: City council faces tough decisions on expenditures
McMinnville City Council — acting as governing body for both the city and its Urban Renewal Agency (URA) — faces some serious financial challenges in a series of upcoming meetings.
Years of overspending went unchecked — spending that swallowed up city reserves, required major fee increases on utilities and local development, and prompted transfer of fire district responsibilities to increase city property taxes. Now, the council has to find $3 million in cuts for its 2025-26 budget.
That city budgeting exercise takes immediate priority, but another potential financial misadventure is brewing in urban renewal financing. As URA leader, the council will consider entering negotiations with a developer on the sale of the Ultimate RB property in the Alpine District — a developer, Palindrome Properties Group, that already declared the ambitious project is not feasible without excessive city gifts and concessions.
A recommendation to engage Palindrone came from what arguably was an illegal meeting under rules of Oregon’s Public Meetings Law, but that’s a story for another time.
The URA is paying about $20,000 in monthly interest on a $4.35 million loan to purchase the Alpine property, with the original intent to quickly “flip” the property for development. There is significant risk in entering extended negotiations on a project that easily could evaporate over time.
The proposal is an upscale boutique hotel, restaurant and retail area surrounded by 188 housing units — two-thirds of those “affordable housing” — all next to the railroad tracks. The developer wants the property for free; a 15-year exemption on property taxes for the affordable units; major discounts on permit fees and system development charges; and reduction of parking requirements by 145 spaces.
What could go wrong?
Receiving the land free is essential to deliver the project, said the Palindrome director of development: “I don’t think it would be financially viable as proposed without … the incentives we requested in place.” That opinion was reconfirmed by the Palindrome president.
If those negotiations actually begin, they should end quickly unless Palindrome acknowledges that it can purchase the RB property for relatively fair market value and develop a project that doesn’t require the massive city subsidies being proposed.
In the background of all this, McMinnville’s core downtown area is getting dingier by the day as the URA focuses attention and places bets on Alpine development. Sidewalks are upheaved from trees needing replacement; awnings are a disgrace; streets and walkways and buildings and trimmings are too grubby for the reputation; traffic and parking annoy local people and visitors; there’s no downtown manager for an association with limited funding while the visitors association collects substantial revenue to sell McMinnville’s “great downtown” to prospective visitors.
In 2018, city officials announced life for badly needed infrastructure updates through a Third Street Streetscape Project, saying, “Funds have been allocated, with an eye toward beginning in 2021 or 2022.” That beginning still is years away.
A somewhat new council was elected in 2024 to solve, not exacerbate, city financial problems. It appears that responding to those challenges begins in earnest this month.
Jeb Bladine can be reached at jbladine@newsregister.com or 503-687-1223.
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