A controversial tax exemption for a mixed-use housing development has put the City of Bend's development incentive programs under a microscope, motivating City Council to reassess some of the parameters. As of Jan. 17, the City was set to pause its Multiple Unit Property Tax Exemption program, along with its other development incentive programs, and direct staff to assess current and new incentive programs. The final decision will take place at the Feb. 7 City Council meeting.
(Editors note: City Council approved an ordinance on Feb. 7 suspending the acceptance of MUPTE applications after Feb. 21.)
The assessment of these incentive programs will look at almost everything involved, according to Jonathon Taylor, the City's urban renewal manager. That includes the total amount in incentives, the process the applicant goes through, and how to scale programs for everyone in the community, including those with smaller, as well as larger projects.
"Given the State of Oregon's new focus on housing production and employment, we want to make sure that when we do roll these out, that we can adapt to any kind of change in state legislation," said Taylor.
Right now, the City is gathering data and listening to community feedback from stakeholders, businesses and residents. "We heard from the community that moving forward, the community benefits need to be tailored, so we're going to look at that," said Taylor.
The decision will pause the MUPTE program, a system that allows developers to request a tax exemption to encourage development, if the proposed site meets program requirements. Requirements include a development having three or more residential units, multiple stories and providing at least three public benefits.
To receive the exemption, developers must also prove that construction would not be financially feasible without the program's tax exemption.
The Jackstraw project, which was ultimately approved for its requested $10.6 million tax exemption, generated a lot of community input surrounding complaints about the construction and the requirements of the MUPTE program. Some, including City Councilor Mike Riley, wondered why the project was requesting an exemption after having started construction earlier in April 2023.
While all development incentive programs are set to be paused, meaning developers will no longer be able to apply, exceptions include applications that are already in the queue. According to Taylor, there are two submitted applications that will go forward to the City Council, after they go through the appropriate process. The process includes getting approval from each of the individual taxing districts, such as parks and schools, then City Council.
Taylor anticipates bringing a draft policy to City Council around the end of summer or beginning of fall, to hear from councilors and get public feedback.
