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http:// --> Ashland, Oregon HOME Valley & State Sports Nation & World Opinion/Editorial Classifieds Business Columnists Local Issues Obituaries Weather Archive Revels Etcetera Backpage Hot Topics Most Viewed Forum Photo Galleries Video Readers Polls O-Zone Online Games Movie Preview Special Sections Real Estate Guide Menu Guide Shakespeare Subscribe Contact Us Rate Card Place an Ad Featured Galleries: April 28, 2007 Boom bust leaves budget drop By Robert Plain Ashland Daily Tidings The City of Ashland makes money with each new development, but as large-scale projects decline, the bottom line over the last three fiscal years is showing the strain. In 2004-05, more than $60 million in new development projects were approved in Ashland. In 2005-06, almost $50 million in new construction projects came through. This fiscal year, with one quarter still remaining, the total dropped to slightly more than $22 million. The drop in total valuation of local development projects resulted in the city over-estimating the amount it would reap in fees to the tune of about $800,000. "What has caused a $800,000 decline in permit revenue this past year, plus other rippling effects in the city's budget?" asked Community Development Director David Stalheim, after a March department head meeting in which staff was apprised of shortfalls in the city's budget. The simple answer is the drop in projects. When new development occurs, the city profits through 1 percent community development fees, engineering fees as well as increased tax revenue. Still theories abound about the drop-off, from problems with a slowed-down planning process to the bursted bubble of the real estate economy. Broken planning? George Kramer, a local historical development consultant and architect said the planning process is to blame. "The tax implications of not building Northlight are in the millions of dollars," Kramer said. A large, mixed-use project slated for the former Copeland Lumber site on Lithia Way, Northlight would have added approximately $10 million to the city's total valuation of projects, Kramer said. Specifically, the city's bottom line would have grown immediately But after a lengthy and contentious public hearing in front of the Ashland Planning Commission, planning commissioners shot down the project because of its overall "bulk and scale," even though it technically met the size requirements. A a setback ordinance that previously had not been enforced downtown played a significant factor in the planning commission's denial. "When a well-designed project is defeated on a technicality it is foolish not to realize the tax implications on the city," Kramer said. "A chunk of the planning commission ... doesn't want to see much [new development]. They have chosen to micromanage every decision." Ashland City Councilor Eric Navickas, who was a vocal critic of Northlight, said the problem lies not with the planning commission but rather with the developers. "It's really developers fault for putting forward projects that push the limits of Ashland's land-use code," he said. "We've seen several other downtown projects that have met the rules and got approved." He cited the Jasmine Building on Lithia Way, built by some of the same developers who proposed Northlight, as an exmaple. The building sits across from the Northlight site. Navicakas also pointed to a project that was approved on the former site of the Bear Creek Coffee Roasting Company on First Street. Both were significantly smaller than Northlight as originally proposed. "They haven't seen appeals or strong opposition from the community because they didn't exceed the scale limitations," Navickas said. That budget concerns are being paired with new development criteria "exposes the pro-growth assumptions that are built into our system," he said. Larry Medinger, a local developer and former planning commissioner, agreed with Kramer, saying that the problem lies with the planning process. "We have a very professional citizenry," he said. "There is no reason the [planning] meetings should be run so inefficiently." He said planning meetings have devolved into "endless discussions" in which approval depends on "what does legal say." Medinger said some members of the commission should be removed. He believes the planning process in Ashland has been going down hill since John Frigonese left the city 12 years ago. It's the economy, stupid Others, however, believe the slow-down is related to the overall condition of the economy. Ron Green, who manages foreclosed property for LibertyBank in Eugene, said all of Southern Oregon has seen property values rise faster in the last three years than the rest of the state. He said it was "unrealistic" to assume that the boom would last forever. "They call it speculative building for a reason," he said. "Developers had the rugged yanked from beneath them. It happened that quickly." Green recently foreclosed on two homes in the Billings Ranch subdivision, a local project that underwent a fairly contentious process through the planning commission in 2004. "I would imagine there are more to come," he said of foreclosures in the Billings Ranch subdivision. Andy Cochrane, a local developer, had a project approved by the planning commission between the Billings project and Northlight in 2005. Although the city has made its money from the project, Cochrane still hasn't made his. In fact, he hasn't even begun to build the homes for the 100-plus unit subdivision on Clay Street. "It's just a sign of the times," he said. "We haven't been going slow for any particular reason." But, he added, the economy has changed since his project won approval from the planning commission. "It's no secret the market is down," he said. "The last houses I sold for 30 percent less than they would have two years ago. Two years ago I had 15 homes under construction, now I have two. I've definitely pulled back on what I've been building." He said he is making 20 percent less when selling a home than he did when the building economy was booming, and admits to proceeding in this new economic paradigm cautiously. "Two years ago I made a decision to drastically reduce prices," he said. "As it turned out, it was the right thing to do." Cochrane added, "From what I can gather, my peers' projects are still selling, the pay scales [for employees] is about the same." He said the cost of supplies was briefly affected by Hurricane Katrina when the lumber supply funneled to New Orleans, but that trend has since leveled off. "The only difference in the economy is the retail value of a house is less than it was two years ago," he said. "All that means is the profit margins are less than they were in the boom years." The city's bottom line can also attest that the boom years are a thing of the past, at least for now. Staff writer Robert Plain can be reached at 482-3456 x. 226 or [email protected] . Current Comments: The word is "burst", not bursted; as in ...they had their bubble burst. C. Chambers - Carson City, NV - April 29th, 6:52 AM First, just to clarify, I'm not an architect. Second, Councilor Navicakas bends the facts here, in that Northlight MET all the codes until certain members of the public dug out the auto-centric 20' setback that City had ignored for almost 4 decades. And, even after dredging up that chesnut, the PC still had to perform linguistic gymnastics regarding a comma to make it apply to this project. Nobody opposed Northlight WHICH MET THE BULK AND SCALE elements of the law. George Kramer - Ashland, Or - April 29th, 7:30 AM Northlight met the downtown design standards, the height requirements, parking and every other aspect of law, even the bizarre separation between buildings. But, relying upon an piece of bad planning law geared to allow parking in front of the building (which is no longer permitted, or to allow some future street widening (which ODOT stated would never happen), Navicakas, Swales, Street and certain members of PC gleefully twisted code toward their dream of a static community. George Kramer - Ashland, OR - April 29th, 7:35 AM Everybody has a piece of the truth? Regardless, it is the Cities responsibility to keep our community viable during good times and bad. What works are realistic budgeting and prioritizing not socially engineering. We are “wowed” by the same few Councilors and Commissioners self realized superiority, so what do you supposed went wrong? That’s easy! Just ask anybody that has had the displeasure or being grilled by those few control freak City inquisitionist demanding their fantasies/goal be met. on and on - ashland - April 29th, 2:38 PM I'm happy to pass on the benefits of Northlight. I Development in Ashland serves the few, and they have enough. newswatch - Ashland, OR - April 29th, 8:24 PM George has it right again. I could not agree more. If we are to remain a viable community then we need planned development and we need the jobs that development will bring. If the councils motive is to drive out young families then they are achieving that end brilliantly. If it is to drive the city into penuary they are achieving that end also. It is time for a change in city management. Vote Yes on 15.76. Libertarian - Ashland - April 30th, 8:24 AM Repeating myself: Ashland is for Shakespeare theatregoers and retirees only. Northlight would not have served either, ergo it's a bad project that shouldn't be approved. Follow the money, people. Richard Cranium - Ashland OR - April 30th, 9:23 AM Leave a Comment: Advertisement: Advertisement: Paid Advertising: Debt Help Inkjet Printers Payday Loans Free Ringtones Debt Consolidation Security Systems Debt Relief New Hampshire Primary Advertisement: Copyright © 2007 Ashland Daily Tidings and Ottaway Newspapers. All Rights Reserved. Del.icio.us