Hermiston City Council to Vote on New Urban Renewal District

The Hermiston City Council heard no opposition Monday night during a public hearing on a proposed urban renewal district.

Following the public hearing, the council directed staff to draw up an ordinance for the council to consider at its July 24 meeting to create the North Hermiston Urban Renewal Area (NHURA).

The proposed new area consists of approximately 102 total acres, 93.49 acres of land in tax lots and 8.51 acres of public rights-of-way.

The city wants to create the NHURA to address infrastructure deficiencies and parcel patterns that are limiting the development potential of the area.

“The idea behind this urban renewal area is to alleviate congestion on Highway 395, help build infrastructure and help with some of the blighting conditions,” said City Planner Clint Spencer.

Spencer said the city began looking at the possibility of creating the district after the Rogers Toyota building was demolished in 2022.

“There’s always been a real issue with left-turn movements on Highway 395,” Spencer said. “We’ve long had the goal of signalizing where Home Depot is to make it easier for left-turning movement.”

Spencer said demolition of the Rogers Toyota building created the possibility of a new east-west street that would extend from the Home Depot area into N.E. 4th Street aligning with Aspen Drive.

This street is proposed for construction in the easement for the Hermiston Drain. Spencer said constructing the street in the easement allows otherwise unbuildable land to be productively utilized for the public good as well as providing new points of access for the irregularly shaped parcels along the easement.

This new street will provide nearly 1,300 feet of new street frontage for an area which currently has less than 100 feet of highway frontage.

A new signal is also proposed for the N. 1st Street/Aspen Drive intersection. This signal is expected to provide better traffic spacing and allow for more left turns onto the highway.

NHURA projects also include an extension of N.E. North Street south from the current terminus to N.E. Aspen Drive. This street extension is approximately 100 feet and will provide opportunities for commercial and residential traffic to use the newly-constructed signal at N.E. Aspen Drive and avoid the unsignalized intersection of E. Oregon Avenue and N. 1st Street.

A new municipal water line is also proposed following the N.E. Aspen Drive route, looping water between N. 1st Street and N.E. 4th Street and to serve new commercial development in the future.

The estimated cost of all projects is $4.8 million.

“We are very conservative in how we look at these things,” Spencer said. “If you just assume organic growth of 3 percent a year in assessed value over the lifespan of the URD, this will cover that amount.”

Urban renewal allows for the use of tax increment to fund its projects. Tax increment revenue is the amount of property taxes generated by the increase in total assessed values in the urban renewal area from the time it is first established. That revenue is what is used to pay for projects and programs in the NHURA Plan. City staff is recommending the city borrow up to $5 million to pay for the improvement projects. Revenue generated over the life of the area will be used to pay off the loan. It is expected that it will take 16 years of tax increment collections to pay off the loan.

Councilor Jackie Linton asked the city’s consultant, Elaine Howard, about a discrepancy in the financial report for the project. One figure shows the city will pay just over $6 million in total expenditures, including interest, during the life of the loan. Another figure shows that amount to be just over $8 million.

Howard said she would have to look into that and get back with the council at the July 24 meeting. She commended Linton for noticing the discrepancy, noting it was the first time in her 20-year history as a consultant that someone actually looked at the financial figures of a report.

The council did hear from a representative of Good Shepherd Health Care System about the urban renewal district during the public hearing. Good Shepherd COO Jim Schlenker said the hospital, which will build a new Urgent Care facility on Highway 395, is fully supportive of the NHURA.