UGB expansion still stymied

Developers, land use attorneys and others want expedited plan

By Hillary Borrud / The Bulletin / @hborrud

Published Jul 7, 2013 at 05:00AM

Bend is relaunching an effort to update its city growth plan in a much different climate than the construction boom in which officials developed the last version.

Pressure from landowners, developers and other interests to expand the city’s urban growth boundary subsided after the real estate bust. The process slowed as partially developed subdivisions sat vacant during the recession — but now, as the economy recovers, many are calling for the city to speed up that work.

It is a tall order for the city to expedite the growth plan right now, with just two long-range planners available to tackle the job. City revenues have started to recover and the budget calls for the hiring of 15 new employees over the next two years, but that is a small addition considering Bend reduced its workforce by about 110 jobs — nearly 20 percent — over the last five years.

The city is also still in the midst of planning for a painfully expensive expansion of its sewer system to catch up to development from the last boom. And some city councilors have said they want to look for opportunities to redevelop and encourage infill development around the city’s core.

But at a recent public meeting, there was clear pressure from property owners and developers for the city to expand. Land use lawyers and consultants said city officials should dig deep to find money to expedite the growth plan, and one said the city should do this even if it has to dip into its savings accounts.

“I think it’s really critical that we realize this may be the most important issue facing the city, and the city may need to dig deep to find resources,” land use lawyer Bruce White said. The city “may need to raid reserve funds” to pay for more employees to complete the boundary expansion process, White said.

City Councilor Sally Russell said the city is in a different position now, due not only to limited property tax revenue but also the end of most federal funding for sewer infrastructure necessary to accommodate development.

“I urge everyone in this room to not just look over your shoulder at past experiences, but think of how we’ll do it moving forward, with our current resources,” Russell said.

In Oregon, the urban growth boundary is the limit around a city beyond which urban development such as sewers and new subdivisions are not allowed. Cities in Oregon must also prove the need for expanded boundaries.

State officials in 2010 rejected the last version of the city’s plan to expand the UGB by approximately 8,500 acres. City planners have been chipping away at some of the problems the state identified, but most of the issues have yet to be addressed.

The city must complete sewer and water system plans, plus analyses of the future need for residential, commercial and industrial land, before the community can decide where and how much to expand the city boundary, according to a city planning memorandum.

Expansion by 2018?

The previous deadline for Bend to submit a revised plan for expanding its UGB was May 2. A committee of three city councilors and two city planning commissioners will meet this summer to decide on a work plan and timeline to address problems with the last UGB plan and a budget for planners to complete that work. The task force will offer a recommendation on these issues to the City Council, which will make the final decision on how to proceed.

Planners developed three possible scenarios to proceed with the remand work, the first of which would be to continue with only the two long-range planners currently working for the city. They estimated this could result in the state accepting a new growth plan by June 2018.

A second scenario involves hiring another planner to work on the project. This might not result in the city completing work on the growth plan more quickly, because it depends on when the city finishes its sewer plan. Planners expect the sewer plan to be complete and accepted by the state by March 2015 at the earliest. However, an additional planner might help the city do a better job on the plan, according to the memorandum.

A third option is to hire an additional planner and increase community outreach through a citizen committee to oversee work on the growth plan and a “public outreach campaign.” Planners estimated this scenario might also result in the state accepting a new growth plan by June 2018. However, the additional outreach might improve the process and result in fewer appeals, principal planner Brian Rankin wrote in the memorandum.

There is also the question of which work planners should do first. City Councilor Doug Knight said he would like the city to proceed with its analysis of how much land in the city is available to develop for businesses before researching the amount of land available to build homes. Rankin said the city could stop the residential analysis and focus on land for business development, if that is the direction officials want to go.

Land for homes

At the recent city meeting, Andy High, staff vice president of government affairs for the Central Oregon Builders Association, said there are probably 1,300 to 1,500 lots in the city ready for homes to be built. This equates to a 12- to 18-month supply of new homes, High said.

“If you’re concerned — which (the) council always has been — about affordability, we need supply,” High said. “We have no supply, and demand is continuing to increase.”

According to figures from Community Development Director Mel Oberst, the situation is not so dire, at least for residential land.

Oberst estimated there are more than 2,100 vacant lots for single-family homes that are ready for construction in Bend, based on city data. These lots already have all necessary infrastructure, including streets, sidewalks, sewer, water and other utilities.

The city issued 400 building permits for single homes from July 2011 to June 2012, and Oberst expects an upcoming report will show 800 permits issued from July 2012 through June 2013.

If the city issues an average of 700 permits per year, there are plenty of ready-to-build residential lots to last through June 2016, even if developers did not create any new subdivisions. In reality, developers are already applying for new subdivisions. City planners are currently reviewing applications to create roughly 200 more lots for single-family homes, Oberst wrote.

“There are hundreds of acres of vacant buildable land zoned for residential use remaining within the existing urban growth boundary,” Oberst wrote. The only problem is much of that land does not have sewer service, which is why a new sewer plan is so important.

“Expanding the urban growth boundary can create ‘paper’ land for residential development, but without sewer service it will not create additional platted building lots,” Oberst said. “Currently, the most expeditious way to create more platted residential lots is to provide sewer service to the vacant lands within the existing urban growth boundary.”

Oberst did not provide details on available vacant industrial and commercial land inside the city, but he said there is “very little vacant industrial land within the existing UGB” and most of it is at the city’s mixed-use development, Juniper Ridge. There are approximately 75 acres of bare industrial land at that location.

For developers willing to remodel or demolish existing industrial and commercial buildings, there are many such unoccupied properties within the city limits, Oberst said.

At the recent city meeting, lawyer Liz Dickson said there is a shortage of commercial and industrial land in Bend. Dickson said she represents a number of clients who own property in the city and outside its UGB.

“We are seeing in the field how extreme this problem is,” Dickson said. “In the last 45 days alone, I’ve had two investors interested in coming to Bend who decided not to come because there wasn’t property here, or because the process was so beleaguered they couldn’t put a price on the cost of coming to Bend and thus went elsewhere.”

As long as the city does not have parcels of the size and zoning type that investors want, “we’re thwarting our growth,” Dickson said.

Yet Dickson acknowledged the city’s street and sewer infrastructure shortfalls are also getting in the way of growth. One client passed on land in Bend because of a “significant problem with transportation” at a particular site, while another client looked at a property that would have problems connecting to the city sewer.

Mayor Pro Tem Jodie Barram said she had thought the UGB expansion would be finished this year. “It pains me we’re still here,” Barram said. “I would like to see us get it done and devote as much as possible to get it done sooner than later.”