I bold faced the important point in this article. Molalla Planning and Staff, Take notes
In 2002, Gresham pushed hard to bring the 1,200-acre Springwater area southeast of the city inside the urban growth boundary.
The goal in three words: jobs, jobs, jobs. The city, long a bedroom community for Portland, and plagued by a small tax base, wanted a piece of the industrial development that has enriched Washington County
The City Council adopted a community plan in 2005, calling for 500 acres of industrial land, enough to support 15,000 jobs, a Village Center commercial zone and housing. It’s still just lines on a map.
Seven years later, virtually nothing has happened in Springwater. No development. No jobs.
The recession killed the development market, but even when the economy rebounds, the rural area will have obstacles to growth: no water service, no freeway access, a patchwork of small parcels – the 500 industrial acres have about 150 individual owners — and no money to resolve any of the problems.
“The money has to come from somewhere to begin with,” said Ron Papsdorf, government relations manager for Gresham. “That’s the real hurdle we keep running up against.”
So to start somewhere, Gresham has talked about prioritizing a small part of the industrial area, said Janet Young, economic development director for the city. The City Council is scheduled to discuss this plan Tuesday.
The idea is to focus on sites of about four or five acres on about 50 acres on both sides of U.S. 26, just over the city limit. The land must be annexed into the city before it can be rezoned in alignment with the plan.
The area is rural, with rolling hills. Johnson Creek runs through it.
This month, the council expressed unease with a staff plan to remove Springwater items from the city’s capital improvement plan for 2010.
“We’ve spent tons of money and worked hard to get it in the UGB,” Mayor Shane Bemis said. “I’m uncomfortable with writing it off.” (sounds like our Molalla city staff also)
Young said property owners have made a few scattered annexation requests.
She said the smaller site strategy worked well in Tualatin, where she was economic development director before taking the same job in Gresham.
One bright spot: Major sewer work done to serve Pleasant Valley, a primarily residential area brought inside the growth boundary in 2006, will also serve Springwater.
“Pleasant Valley is ahead of Springwater,” Young said. “A number of developers have put together properties and led the charge. About 500 acres have been annexed in Pleasant Valley.” But development has been slow there as well.
Industrial development is more difficult.
“Infrastructure really need to be in place first. It’s very unusual to get an industrial developer to come in and buy up a bunch of land, do a building, and then find tenants,” Young said.
“The challenge right now is even getting infrastructure to a smaller subset is a very expensive thing to do.” she said. Utilities such as water, sewer, and stormwater systems for the smaller area carry a price tag of $40 million to $50 million.
(Molalla wants to waive our SDC’s that would cover the infrastructure mentioned above. Who’s going to pay for it?)
One of the challenges: Water will have to come from the west, and sewer goes out to the east.
Transportation is another challenge. The community plan calls for a $29.5 million full intersection, complete with an overpass and on- and off-ramps, on U.S. 26, but city officials are pursuing as a temporary measure an at-grade interchange that would cost $4 million.
In the meantime, planning needs to go forward on the full interchange in order to place the temporary interchange in the right location, Young said.
How to pay for all this is a serious problem. Historically, developers pay for utilities and other infrastructure through system development charges, but this pot of money has dried up as development has stalled in the recession.
“The problem is rural areas don’t have any basic backbone infrastructure in place,” Papsdorf said. “You can’t get the money until development pays the SDCs.”
He said the 2009 Legislature looked at creating a revolving loan fund to finance infrastructure development in growth boundary expansion areas such as Springwater and North Bethany in Washington County.
Then once development occurred, cities could collect the system development charges and repay the loan. (Molalla already has this)
“But with the state budget circumstances, it was difficult coming up with money to capitalize such a fund,” Papsdorf said.
He said there has also been some conversation with Metro about a regional funding solution, given that Metro makes decisions about where future growth should occur.
http://www.oregonlive.com/gresham/index.ssf/2009/12/greshams_springwater_growth_pl.html