Recent property sales at Juniper Ridge gave the city of Bend the money it needs to decide whether to invest in redeveloping three other areas.

Urban renewal areas like Juniper Ridge allow cities to invest in new infrastructure or other improvements in a specific part of town and use expected tax revenue from that area to pay for it — a process called tax increment financing. Bend’s growth management department is in the early phases of a feasibility study and expects to present options to the Bend City Council in February, but contenders include a central business district, the former KorPine mill site and the central westside area along Century Drive.

All three were marked as areas Bend could squeeze in more housing or businesses when the city applied to expand its city limits last year, Bend Growth Management Director Nick Arnis said. Other areas include a section of SE 15th Street adjacent to land that can be annexed and a downtown area near Greenwood.

Land outside city limits that the state said Bend could annex could also work for an urban renewal area.

“We won’t be solely confined to these opportunity areas, but they’re a starting point,” Arnis said.

Oregon law allows cities to establish urban renewal areas in “blighted” parts of town, but it has a wide-ranging definition of blighted.

A neighborhood with dilapidated buildings can be considered blighted, but so can a vacant lot or a grassy field. In urban renewal areas, cities can use tax increment financing to develop neighborhoods, rehabilitate existing properties, build new streets and utilities and sell or lease property.

Being in an urban renewal area doesn’t affect the amount of taxes individual property owners pay, but it does affect where that tax money goes. For instance, a random property owner in the central district now pays $1,632.02 in property taxes. About $500 of that goes to the Bend-LaPine School District, about $300 goes to the city of Bend and the rest goes to the county, park district and various voter-approved bond measures.

If the central district becomes an urban renewal area and that property’s assessed value goes up to the point that the owner owes $2,000 in property taxes, the school district would still get its $500, the city would still get its $300, and every other taxing district would still get its share. But the remaining $367.98 — the difference between the current total tax bill and the new total tax bill — would be set aside to pay for improvements in the urban renewal area.

That means the city won’t get to use additional money it generates from these urban renewal areas to do things like hire more police officers or firefighters, repair streets outside the urban renewal area or invest in other economic development for a number of years. Other taxing districts, like the school district, park district and county, agree to forgo their share of increased taxes during the urban renewal period.

But proponents of tax increment financing say it eventually results in much higher property tax revenue and helps maximize an area’s potential.

Because urban renewal keeps funds from property taxes inside the area where they are collected, it can be used to kick-start revitalization where it isn’t naturally occurring, Bend Economic Development Director Carolyn Eagan said.

“There are areas of town where you are going to have a natural revitalization and other areas that have barriers,” Eagan said. “What urban renewal can do is get at that barrier.”

Bend’s two urban renewal areas are at Juniper Ridge, a 1,500-acre mostly vacant lot in the northeast part of Bend that the city’s been selling off piecemeal, and Murphy Crossing, a 230-acre area surrounding the convergence of 3rd Street and the Bend Parkway in the southern part of town. Any new urban renewal area would need to be approved by the Bend Urban Renewal Agency, a seven-member committee made up of the Bend city councilors.

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