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  • OREGON LAND BANK IS BRANCHING OUT IN 2016

  • OREGON LAND BANK IS BRANCHING OUT IN 2016

  • OREGON LAND BANK IS BRANCHING OUT IN 2016

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Oregon Land Bank Is Branching Out in 2016

By David Rabbino

As in many states throughout the country, the redevelopment of contaminated real property in Oregon’s urban, suburban, and rural communities is a problem.

In the Portland metropolitan region alone, there are approximately 2,300 brownfield properties, covering approximately 6,300 acres that represent almost 7% of all commercial/business properties within the Metro Region’s Urban Growth Boundary (UGB).

Of these sites, approximately 1,800, or roughly 78%, are small commercial sites, while 300, or 13%, are existing, operating industrial properties. While the small sites represent the largest number of brownfield sites, the large industrial properties comprise the largest total acreage, 4,078 as against 885. The majority of these sites are located along or near the Willamette River or one of the major highways (such as I-5) in and near Portland.

There is vast economic potential in these sites. If all of these brownfield sites were developed, it has been estimated that they could provide workspace for upwards of 69,000 jobs, generating approximately $3.3 billion in wages.

In addition, the cleaned up and improved properties could generate between $324 million to $427 million in additional property tax revenue. Lastly, full build-out could potentially lead to the construction of approximately 138,000 dwelling units.

Due to liability concerns and financial risks associated with brownfields, private developers have been reluctant to acquire and redevelop these parcels, and most local governments have also been unwilling to fill this void, notwithstanding a desire that they be redeveloped and brought back into productive use.


In June 2015, the Oregon legislature took steps to address the latter issue with the passage of HB 2734, the Land Bank Authorities Bill.

Bill Summary
The HB 2734 provides local governments with the authority, at their option, to establish separate municipal corporations, Land Bank Authorities (LBAs), for the purpose of purchasing or acquiring brownfield properties and promoting development of brownfield properties in ways that meet each local community's particular needs (e.g., industrial, residential, mixed-use, low income housing and open space).

An LBA can acquire brownfields in any lawful manner, including by gift, and thereafter hold, rehabilitate, redevelop and restore the brownfields it has acquired.(Section 2). LBAs can initiate cleanup activities at these properties and by statute, have the right to seek recovery of their cleanup costs from the parties that actually contaminated the properties.

An LBA is created by a local government through enactment of a local ordinance or resolution. The initial Board of Directors is appointed by the local government that created the LBA.

The board must have an odd number of members, between five and 11 in total, and must include a member of the local government, a representative of the largest municipal corporation within the jurisdiction, and a representative of the largest school district.

The terms of the board members are initially four years, though shorter terms may be enacted to stagger board membership. All board members are limited to no more than three terms. There are formal procedures for the dissolution of the LBA if it is appropriate to do so.

As municipal corporations under Oregon law, LBA's have record keeping requirements, including giving public notice of proposed dispositions of property, and providing at least a 30-day public comment period prior to disposition.


LBAs are required to prepare and submit annual reports to the Governor and the Legislature summarizing their activities over the prior year.

As separate legal entities, the actions of an LBA are not attributable to the local government that creates it, including not being liable for an LBA's debt (unless it expressly agrees to be). LBAs do not acquire "owner" liability to the State or other parties for contaminants (including oil) present at the property at the time of acquisition.

LBAs are also exempt from both property tax and income tax on LBA assets while they own them. In combination, the liability protection and tax exemption provisions of HB 2734 remove much of the financial risk and uncertainty previously associated with a local government's acquisition of contaminated property.

LBAs will enable local governments to be more proactive concerning the redevelopment of brownfields as LBAs can acquire, consolidate and begin to remediate environmentally-impacted land for future development, and can do so without the risk of becoming a potentially liable party.

LBAs can serve as “patient capital”–acquiring properties and holding them until the right development opportunity arises. This makes them unique from Urban Enterprise Zones, which generally have specified time periods within which development must take place.

Used properly, this tool should increase the pace of brownfield redevelopment, improving the health of the residents in the area, and increasing jobs, tax proceeds, and local property values.

David A. Rabbino is an attorney with the Environmental/Natural Resources Practice Group, Tonkon Torp LLP, Portland, Ore., and a member of Renewal & Redevelopment’s 2016 Editorial Board.



Footnotes:

Metro Brownfields Scoping Project, ECONorthwest/Maul Foster Alongi, November 12, 2012, pg. 6

Metro Brownfields Scoping Project, ECONorthwest/Maul Foster Alongi, November 12, 2012, pg. 14

Metro Brownfields Scoping Project, ECONorthwest/Maul Foster Alongi, November 12, 2012, pg. 6

Some of the large industrial properties are considered part of the Portland Harbor Superfund Site. This writer acknowledges that at this time, HB 2734 will do little to speed up redevelopment of these properties due to the enormous financial exposure that the Portland Harbor Superfund site brings with it. Once EPA selects a remedy for that site, however, it is likely that HB 2734 can be used by the City of Portland, the Port of Portland, and local governments to speed the redevelopment of these properties.

Metro Brownfields Scoping Project, ECONorthwest/Maul Foster Alongi, November 12, 2012, pg. 19

Metro Brownfields Scoping Project, ECONorthwest/Maul Foster Alongi, November 12, 2012, pg. 20

Metro Brownfields Scoping Project, ECONorthwest/Maul Foster Alongi, November 12, 2012, pg. 21

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