CCAC Subcommittee on Leadership Capacity

City of Tigard
City Center Advisory Commission

Research Report
on
Downtown Associations in Oregon

September 18, 2008

Prepared by

Subcommittee on Leadership Capacity in Downtown

Members: Alexander Craghead
Thomas Murphy
Elise Shearer

City of Tigard / Downtown Associations in Oregon... 2

CONTENTS

Executive Summary 3

Research Questions 4

Needs Assessment 5

Leland’s Context 8

Comparable Cities 10

Different Models 15

URD Only Models 19

Web Solutions 20

Failures 21

Appendix 22

Bibliography & Acknowledgments 25


EXECUTIVE SUMMARY

In 2007, the City of Tigard hired the Leland Consulting Group to assist in the creation of a strategy
for implementing revitalization in its downtown core. In the resulting Downtown Strategy, Leland
recommends the creation of a downtown organization aimed at fostering private sector leadership.
This recommendation was forwarded by the City Council to the City Center Advisory Commission
(CCAC), with the charge of deterring if the recommendation should be implemented, and if so how.

The CCAC has been concerned with the complexity of such an effort, and created a subcommittee in
May of 2008 to investigate the issues surrounding the establishment of or support of a downtown
association. This document was created by that subcommittee to assist the CCAC in making a
recommendation on this subject.

What this document is not is a recommendation regarding the establishment or support of a
downtown organization. It provides no recommendation, and puts forth no specific opinion in favor of
or in opposition to downtown associations.

Summary of Findings

Downtown Tigard is a diverse environment with many interests and little community. This makes
communication between stakeholders and the city, as well between the stakeholders and other
stakeholders difficult. It also means that a coordinated vision of the future of downtown does not now
exist amongst staekholders.

The Leland Group made a recommendation of supporting an association partly in response to such
concerns. Additional concerns included providing a forum independent of the city government for
advocacy and conflict resolution, as well as a venue for the private sector to demonstrate their
support of downtown revitalization. While leland strongly favors an association, no specific form or
timeline for such an organization was advocated, except that such groups sometimes take time to
formulate.

A number of comparable cities exist within the state. In examining them, there is no clear route that is
chosen more than others; in short there are multiple ways of achieving revitalization goals. Some
cities have chosen to participate in established, traditional forms, such as the National Trust’s Main
Street program, while others have chosen to create their own, innovative programs tailored to their
specific needs.

In very few cases did associations have a direct impact on urban renewal efforts, however, by their
nature they are often positioned well to undertake routine efforts such as promotion, maintenance,
advocacy, business outreach, and other “soft” skills that cities without economic development
departments general lack.

Failure is common in such associations, and is usually the result of a lack of broad leadership
(reliance on one or too few individuals), a lack of vision or purpose, and a lack of stable funding.
Funding levels seem less important than funding stability.

Conclusion

The creation or support of a downtown association in Tigard would be a challenging effort. Making
matters more complex is the high degree of failure rates that these associations experience, along
with the broad path of options available. One important fact to note is that regardless of whether the
city chooses to take a traditional role, or a more innovative path, there are other cities in the state
with similar experiences and with whom the city would likely be able to share knowledge for mutual
benefit.


RESEARCH QUESTIONS

At the May 14 meeting of the CCAC, the subcommittee was tasked with researching leadership
capacity within downtown Tigard. At the subcommittee's May 21 2008 meeting, seven research
questions were developed based on the questions raised by the CCAC, as well as on further
discussion within the subcommittee. They are as follows:

1.) Needs assessment. What are the needs of the downtown property owner, business owners, and
residents within downtown Tigard that are currently not being filled by the city? Also the reverse: what
are the needs of the city downtown that are not currently being addressed by downtown business
and property owners?

2.) Leland's Context. What is Leland's broader context for providing a recommendation that the city
support financing an association at this juncture?

3.) Comparable Cities. What are "comparable" cities doing in their downtowns; was an association
involved in those efforts, and if so how?

4.) Different Models. What are some different models of associations? How do they work, &c?

5.) URD only models. What are other cities (of any size/make-up) doing that have urban renewal but
do not have an association?

6.) Web solutions. How many associations utilize web-based solutions, and how?

7.) Failures. What are some examples of cities with associations that failed, and what are the
reasons for such failures?


NEEDS ASSESSMENT

Research Question:

What are the needs of the downtown property owner, business
owners, and residents within downtown Tigard that are currently not
being filled by the city? Also the reverse: what are the needs of the
city downtown that are not currently being addressed by downtown
business and property owners?

Downtown Survey 2004.

In Spring of 2004, the City conducted a citywide survey regarding Downtown Tigard. This survey took
the form of a single sheet of 8.5x11 inch paper that combined a multiple choice section, a scaleable
answer section, and an open-ended question section. Its focus was to determine how often and why
people visit downtown, as well as their impressions of it. Also on each survey sheet was a check box
interface asking if the respondent was a downtown property or business owner. Surveys were
distributed at the Tigard Farmer’s Market, the library, selected downtown businesses, at Tigard
Chamber of Commerce meetings, and through the City’s newsletter, the Cityscape. Survey data was
utilized during the formation of the Tigard Downtown Improvement Plan.

Of the 563 returned surveys, 22 came from individuals who identified themselves as either a property
owner in downtown, a business owner downtown, or a combination of both. Of these 22, three were
duplicates, making 20 unique respondents from the area.

Four (4) respondents indicated that the area needed more housing or offices in order to stimulate
economic activity. Generally these sorts of projects come as a result of city regulations (zoning,
design standards), city incentives (tax breaks, grants, subsidized property sales), and private sector
interest. Associations usually do not have a role in such projects, although they could provide
promotion and developer outreach that could lead to deals.

Another four (4) respondents identified parking, traffic, and pedestrian access as key areas that
need improvement in downtown. These are capital projects that are usually undertaken by a
government or an urban renewal agency, rather than an association.

Eight (8) respondents mentioned business mix as a primary concern. Typical requests came for
small specialty retailers, bakeries, coffee shops, and the like. Business recruitment is usually a task
handled by private property owners on a property by property basis, or by third party nonprofits such
as business or merchants associations.

One respondent utilized the survey as an opportunity to state his opposition to the City’s plans and
his belief that the survey was a total waste of time. Another respondent mentioned opposition to any
plan that included tax breaks.

City of Tigard GIS Data / 2008

The City Center Urban Renewal District consists of 193.71 acres, divided up into 183 parcels, and
hosting approximately 308 businesses.

According to records of business licenses issued in the URD, of the 308 businesses in place at
present, less than half (144) are registered with ownership shown as Tigard locations. Of these, most
show the same location as the place of business. Of the remainder of the businesses in the URD,
about half show owners registered at addresses in the Portland metropolitan area, while the
remaining half show as being registered out of state.


Of the 308 businesses registered in the URD, a little over a third (116) are retail in nature. The bulk of
businesses registered in the downtown core are service based or are professional offices.

Retail Uses. There are 116 retail type uses in the URD. These are defined as businesses where a
storefront is essential to business, and thus includes barbers, salons, and showrooms as well as
traditional retail stores, but does not include medical offices or the like.

Most retail uses are concentrated in the Hall/99W region (58), with another large concentration
located along Main Street (35). Notably there are no registered retail businesses in the Burnham
district. However, in both areas, retail uses are outweighed by non-retail uses, with the most striking
example being Main where the ratio of non-retail to retail begins to approach 2-to-1.

Ownership of retail tends to be primarily locally registered, with 27 out of 35 being “local” on Main
Street, and 40 out of 58 registered as “local” in the Hall/99W region.

Non-Retail Uses. There are 192 non-retail uses in the URD. These are defined as businesses of any
type that do not require a storefront presence. This includes a span from automotive repair to
industrial manufacturing to offices to professionally managed apartments.

Non-retail uses are fairly evenly spread across the URD. There are 49 non-retail uses on Main Street,
66 non-retail uses in the Burnham district, and 57 non-retail uses in the Hall/99W region. In the
Burnham district non-retail uses are the only licensed businesses on record. In the Hall/99W region,
they take nearly equal weight with retail uses (57 non-retail to 58 retail uses), while on Main Street
they outnumber retail uses (49 vs. 35).

Ownership of non-retail uses tends to be primarily registered as local. On Main Street, 41 out of 49
are “local”; in the Burnham district, 46 out of 66 are “local”, and in the Hall/99W region, 41 out of 57
are “local”.

Employment Downtown. Of the 308 registered businesses downtown, only 23 have ten or more
employees. The largest employer is Magno-Humphries, a manufacturer of vitamins and dietary
supplements, with 97 employees. The second and third highest are Luke-Dorf Inc, a healthcare
related firm with 74 employees, and Russ Chevrolet with 70 employees.

Limitations. This data is imperfect. In some cases, beauty salons (counted here as retail uses) have
multiple business licenses, one for each practitioner. Also, some duplications were noted in the data,
which was obtained from the City of Tigard’s Geographic Information System (GIS), most likely
attributed to one business going out of business, and another taking it’s place within a short time
span. Most of these discrepancies were in retail uses. Also, some businesses may be operating
either without a business license, or using a license listed at a location outside the URD.

Lastly, this survey of business license data only paints part of the picture, as it does not address
ownership of property, only of businesses and tenants.

Summary. Three notable facts stand out:

Most businesses in the URD are not retail. Non-retail uses outnumber retail uses even on Main
Street.

There is a significant geographic split. Burnham is entirely without retail businesses, and is
oriented towards auto repair and construction. Main Street is primarily non-retail uses -- mostly
professional offices -- with retail coming in second. Hall/99W, with its high visibility, has the highest
concentration of business activity, and is evenly split between retail and non-retail uses

There are few big employers downtown. Most employers have fewer than ten employees. Small


offices are typical of employment downtown.

Downtown Strategy -- Existing Conditions

In an appendix of the Downtown Strategy, the Leland Group include a summary of existing
conditions in downtown Tigard. Among their findings are:

Low overall improvement to land value ratio. The current value of commercial land in the URD was
estimated to be between $20 and $24 per square foot in 2007 dollars. This reflects “substandard”
conditions. As a result rates of rent are low, generally $12 to $18 per square foot, which is too low to
attract developers.

Broad land use mix. Leland identified Burnham as primarily industrial in nature, with Main and the
Hall/99W region being the primary commercial areas.

Large lot locations. Most lots over one acre in size are located either in the Burnham district or in the
Hall/99W region. These areas would be most attractive to developers.

Downtown Strategy -- Developer Interviews

In order to assemble the Strategy, Leland Consulting Group interviewed a group of developers in the
Portland area, asking for input on redevelopment in the URD. A summary of these interviews was
attached to the Strategy as Appendix B. Among the mentioned items were:

Business mix. A series of business types were mentioned as being needed in the URD, including
specialty grocers and other high quality and specialty retailers.

Property owner engagement. It was recommended that the property owners need to be engaged
by the City to discuss alternative means of redeveloping sites that will bring profit to existing owners
while benefitting the community.

Downtown ombudsman. It was suggested that the City have a key individual whose sole role is
communicating with downtown business and property owners with a goal of championing retenanting
or improving businesses.


LELAND’S CONTEXT

Research Question:

What is Leland's broader context for providing a recommendation that
the city support financing an association at this juncture?

Development Strategy for Downtown Tigard, Oregon (“Leland Report”)

Funding and support of a downtown focused association was identified as a recommended project
by the Leland Group in the Development Strategy for Downtown Tigard, Oregon, dated October
2007. Leland identifies this project as a short term, high priority project which would cost the city
approximately $40,000 annually, with the primary responsibility being in the private sector
(Redevelopment Strategy, p. 18).

Leland suggests that such an organization would take on a leadership role to champion projects in
the private sector. They further note that the existing association, the Tigard Central Business District
Association, lacks both broad membership and funding, while the Tigard Chamber of Commerce lacks
a focus on downtown. They advocate an association that is born from the private sector and then
initially funded by the City, with an eventual goal of being completely self-funding from the private
sector. This recommendation takes the form of Organizational Task 1 in the Strategy.

The “Leland Memo”

In late 2007, the Tigard City Council requested from Leland a list of projects that they would advise
be undertaken with the first six months or first $500,000. In a memo dated 19 November, 2007,
Leland replied with a series of recommendations pulled from the Strategy. Although organizational
tasks such as increasing outreach are identified, Organizational Task 1 was not identified as a priority
for the early implementation of the Strategy.

Q&A With Leland

The subcommittee forwarded to Leland a series of questions seeking greater context for their
recommendations. In one of their responses, they note that a downtown association can take on
projects that the city cannot complete on their own, such as marketing, outreach, and advocacy.
Regarding timing, Leland notes that “the timing of forming such an organization is a consideration
that Tigard will have to figure out”. (Memo from Sean Farrelly to CCAC, dated 2 June 2008).

Leland also stated that the City should set criteria against which to measure performance of such an
organization before dispersing funds.

One of the primary roles that Leland sees such an association fulfilling is an advocacy role. An
association, being made up primarily of members of the private sector, can advocate for projects with
the public and other staekholders to a greater degree than can staff. Leland notes that an
association “could serve as a forum to work through contentious issues and to resolve differences”,
and also notes that they can engage in marketing and economic development activities for which the
city is not as suited (Memo from Sean Farrelly to CCAC, dated 7 July 2008).


Additional Leland Recommendations

Leland added a condensed recommendation as follows:

His belief is that Downtown Tigard could really use an organization
and the City should play a role in forming it. It could start with a part
time director with seed money from the City. It should eventually
support itself with a BID, which the City (as a major property owner)
would be a part of. Early projects to focus on could be grant writing
(Main Street and arts grants), developing a web site, helping to
develop a parking plan, and improving city-business communication.
(Memo from Sean Farrelly to CCAC, dated 7 July 2008).


COMPARABLE CITIES

Research Question:

What are "comparable" cities doing in their downtowns; was an
association involved in those efforts, and if so how?

Initial Comparison Factors

Three factors were used to identify key cities with similarities to Tigard; population, budget, and size.
Due to limitations on population number availability, data used dates to 2006/2007.

In 2006, Tigard was home to 41,223 people. It has a surface area (citywide) of 10.86 square miles.
Its total adopted city budget for Fiscal Year 2006/2007 was $77.7 million.

Cities with similar populations

Cities with similar populations to Tigard were chosen based on total populations ranging from 35,000
to 60,000 residents. This resulted in just four other cities:

City 2000 Pop 2006 Pop
Albany 40,852 46,610
Corvallis 49,322 53,900
Lake Oswego 35,278 36,350
Springfield 52,864 57,065

TIGARD 41,223 46,300

Of these four, two are freestanding cities (Albany and Corvallis) while the other two are suburbs (Lake
Oswego to Portland, Springfield to Eugene).

Albany has a significant historic district and a downtown plan crafted in the 1980s that was very
ahead of its time. To accomplish their goals, the city created an Urban Renewal District (URD) of over
900 acres, including the waterfront, the traditional downtown, and large swaths of adjacent areas
that are industrial or strip commercial in nature. Although significantly larger than Tigard’s URD,
Albany’s major geographic diversity is similar in character to Tigard.

Albany has a downtown association known as the Albany Downtown Association (ADA). The
association concentrates just on the traditional downtown and not the entire URD. The city provides
ADA with funding by allowing the association to run the city’s parking meter program downtown and
keep the revenue for operating expenses. The ADA also relies on funding via an Economic
Improvement District (EID) that assesses properties in the traditional downtown area. This EID is a
voluntary EID, meaning that individuals can opt out via remonstrance. Although there are a
significant number of remonstrances the association has managed to receive significant funding from
this source.

Corvallis has a downtown association but no urban renewal district. Their association, like Albany’s,
utilizes a voluntary EID to fund their programs. The association also receives a stipend of less than
$90,000 annually from the City.

Currently Corvallis is seeking to create an urban renewal district that will encompass both the
traditional downtown and nontraditional areas where the City hopes to expand their urban core. The
Downtown Corvallis Association is a key player in advocating for urban renewal. The city gave grant
money to the DCA to create a downtown plan and an urban renewal plan. Once the process begins,


however, it is foreseen that the DCA will step away from this role and that an advisory commission will
be appointed for the URD.

Lake Oswego has a thriving urban renewal district located in their historic downtown core. Most
buildings, however, are more modern in both age and character. The city does have a downtown
association, the Downtown Business District Association, formed after the urban renewal plan was
enacted by local businesses. They have had little to no role in the URD’s redevelopment efforts, and
are completely self-funded.

Currently the City has been looking into the Main Street program put out by the National Trust for
Historic Preservation. The City is currently leaning against participation as it feels the program is
duplicative and redundant with efforts the City has already taken on.

Springfield has many similarities to Tigard. Their URD is relatively new and encompasses a traditional
downtown main street of 6-8 blocks long as well as light industry, strip-mall development, and a
mobile home park. This creates a significant geographic diversity within the URD.

Springfield did have an association until recent times, known as the Springfield Downtown
Association. The SDA was formed in the late 1970s and was a strong promoter of downtown projects
with a close working relationship with the City. They were dependent on a single leader, however,
who succumbed to Cancer last year. As a result the association foundered and has been unable to
revive itself.

In addition there is a private nonprofit in Springfield known as the Springfield Renaissance
Development Corporation. The SRDC is privately funded and does not focus exclusively on
downtown, but has placed a lot of its projects in the downtown area.

When the advisory board for the URD was created, the City was swamped with over forty
applications. The City hopes to capture the enthusiasm of those applicants and get them involved in
the formation of a new association of some kind. In the meanwhile, their advisory board has a strong
majority representation of stakeholders within the downtown area.

Cities with similar budget numbers

Cities with similar budget size to Tigard were chosen based on adopted budget numbers for FY
2006/2007 between $70 million and $100 million. This resulted in seven other cities:

City FY 2006/2007 Budget (Millions)
Ashland $84.4
Beaverton $93.5
Corvallis $84.1
Grants Pass $97.9
McMinnville $86.7
Redmond $92.2
Tualatin $91.5

TIGARD $77.7

Of these seven, only two are suburbs (Beaverton and Tualatin, both suburbs of Portland). In
addition, Corvallis also appeared on the list of cities with similar populations to Tigard. Interestingly,
only three cities have urban renewal: Grants Pass, Redmond, and Tualatin.

Ashland has no urban renewal and no downtown association. The City does have a historic district
defined and administered by the City, and protected by a design standard developed by the City.


Beaverton has no urban renewal and no downtown association. There used to be an association
but it became inactive five or more years ago, and most promotional work that it used to do is now
undertaken by the Beaverton Chamber of Commerce.

Corvallis was described in the section above dealing with cities with similar populations to Tigard.

Grants Pass has an urban renewal district but it is scheduled to sunset within the next few years.
The City considers it to be successful and is considering starting another. There is no active
downtown association, instead the City contracts with the local Chamber of Commerce to provide
outreach and soft services.

McMinnville has no urban renewal but has a strong downtown association. They receive the bulk of
their funding through an EID and an associated Business Improvement District. The City also
provides a small stipend of approximately $15,000 annually to the association.

Redmond has urban renewal and has a young downtown association. At present the City is
attempting to determine a role and a funding level for the association, which is fully funded by the
City at this time. The association recently made a request for a five-year, $500,000 stipend from the
City to be used primarily for overhead and for organizational development. City staff are proposing a
significantly lower number over a shorter three-year period and are requesting the association spend
more time on events to get shoppers to return to the downtown.

Tualatin has an urban renewal district encompassing its downtown. It does not, however, have an
association, nor does it have a citizens advisory group for the URD.

Cities with similar citywide size

Cities with similar surface area size to Tigard were chosen based on a surface area between 8 and
12 square miles. This number was pulled from the 2000 U.S. Census, the most recent number
available. This resulted in nine other cities:

City Surface Area (2000)
Coos Bay 10.59
Lake Oswego 10.35
McMinnville 9.9
Newport 8.88
Oregon City 8.14
Pendleton 10.05
Redmond 10.24
Roseburg 9.22
The Dalles 8.45

TIGARD 10.86

Of these nine, only two are suburbs (Lake Oswego and Oregon City, both suburbs of Portland). In
addition, Lake Oswego also appeared on the list of cities with similar populations to Tigard, and
McMinnville and Redmond both appeared on the list of cities with similar budget sizes to Tigard. All
but two -- Coos Bay and McMinnville -- have urban renewal.

Coos Bay has no urban renewal but has an association, the Coos Bay Downtown Association.
CBDA is funded through dues and is stand alone from the city.

Lake Oswego was discussed under cities with similar populations, above.

McMinnville was discussed under cities with similar budget sizes, above.


Newport had an urban renewal district that included part of downtown, called the North District. This
URD sunsetted recently and the City is now only paying down debt. Newport does have an
association, the City Center Newport Deco District. This association is completely self funded.

Oregon City has an urban renewal district encompassing the traditional downtown as well as larger
expansion areas. There also was a preexisting downtown association focused on events.

Currently the City is looking at becoming involved in the Oregon Main Street Program, part of the
overall program overseen by the National Trust for Historic Preservation. The City contacted the
preexisting association to determine if they were interested in participating but they decided they
would rather retain their autonomy and focus on events. To administer the program the City is helping
to form a new nonprofit. This involved getting many stakeholders both within and adjacent to
downtown to meet and get on board with the project. The bylaws of the new association are crafted
to explicitly require the association to work with the URD and be a partner with the City. They also
have a very carefully crafted board makeup that includes representation from the City, the Chamber
of Commerce, the two largest employers citywide, and various arts, culture, and preservation
interests. Representatives from the business community are to be voted on by the businesses, and
property representatives are similarly voted on by area property owners.

Pendleton has an urban renewal district that encompasses downtown plus expansion areas. They
did have a merchants association but it faltered many years ago.

Redmond was discussed under cities with similar budget sizes, above.

Roseburg has an urban renewal district that encompasses its downtown as well as various
expansion areas, including the airport. There are also two separate business associations within the
URD, the Roseburg Town Center Association, and the Downtown Business Association. Neither
receives funding from the City.

The Dalles has urban renewal encompassing downtown and other areas. They also have an
association, the Downtown Business Association. DBA is freestanding and receives no City funding.

Overview

In the cities listed above, when both a URD and an association are present, in very few cases did the
associations provide any meaningful impact on urban renewal efforts. It is only Corvallis that stands
out as an example where the association had a direct hand in the formation or implementation of
urban renewal.

Cities with successful and established downtowns such as Ashland and Lake Oswego have weak or
nonexistent downtown associations, but so too did cities with unfocused downtown efforts, such as
Beaverton. Common to these cities is a reliance on capital investment and centralized control.

Cities actively pursuing the establishment of an association tended to be cities with significant
difficulties in achieving redevelopment goals, such as Oregon City and Springfield, or cities with very
young programs, such as Springfield (again) and Redmond.

McMinnville has a very strong downtown program that takes the lead in downtown matters. This
seems to be an aberration, with most programs being either weak and freestanding, or a smaller
scope partner in a URD, such as with Albany.


Key example cities to watch

Albany. Although larger by many times than Tigard’s efforts, Albany has a similar land use mix within
its URD and is focusing on similar URD goals. Their association focuses just on the smaller traditional
downtown rather than the entire URD.

Springfield. Similar in population to Tigard, Springfield hosts a URD with a similar land use split,
including the concentration of the traditional downtown on a single, 6-8 block long strip within the
URD. Springfield’s URD is also a fairly new one, and they are dealing with many of the same outreach
challenges.

Oregon City. Similar in physical size to Tigard, Oregon City has an older URD which has experienced
many challenges over the years. To achieve goals, the City is establishing a new association that is
broad based, with a carefully composed board of directors aimed at ensuring high quality and
cooperation between all parties. Although the historic character of Oregon City is not evident to any
great extent in Tigard, their approach to achieving downtown leadership goals has application to
Tigard’s fractured status.


DIFFERENT MODELS

Research Question:

What are some different models of associations? How do they work?

Association Roles.

Downtown associations perform a variety of roles, but generally most take on economic development
functions for their districts. As Catherine Corner, Economic Development Director for the City of Canby
puts it, an association “can tackle projects that aren’t capital projects. You can’t use urban renewal
funds for promotion or maintenance.” Canby, which currently has an urban renewal district but no
downtown association, is considering the establishment of an association to help with these non-
capital projects.

One way of looking at it is that while a URD can invest in building things over a long period of time,
associations are seen as a way of taking care of day-to-day tasks. “Urban renewal is focused on
larger economic restructuring and major projects,” says Oregon City’s Christina Robertson-Gardiner.
“Urban renewal has the power of the purse, but the association is more advocacy.”

In his white paper, Mead outlines a typical “ideal” association:

The most logical and effective structure is that of a Board of Directors
and a dedicated Association paid staff person. The Board would have
at least one city staff liaison position. The Board, association and city
staff and other stakeholders/members create a vision, goals, and an
implementation strategy and associated tasks.... (Mead, 2008).

According to the web site for the National Trust for Historic Preservation, most programs nationwide
are less than a decade old (63%), affiliated with a statewide program (90%), and organized as a
501c3 (61%), with the next most common organization method being the form of a government
agency (17.4%). Nationally, most programs receive public sector funding via grants or general fund
expenditures from their local municipalities, (38% and 42% respectively), as well as private sector
funding, mostly from memberships, sponsorships, and events. Nationwide, relatively few (16%) utilize
special taxation districts.

Baker City & McMinnville.

Advocates of downtown associations in Oregon frequently point to Baker City and McMinnville as
examples of the strengths of the model. While both cities do indeed have strong associations,
research has shown that these cities are the exception and not the norm. Both cities are county
seats of non-urban counties with populations between 10,000 and 25,000. Neither city has an urban
renewal program.

Additionally, both Baker City and McMinnville have a strong tourism market, with the former being in
the middle of major recreational opportunities, and the latter being in the middle of Oregon’s “wine
country”. Both cities also have strong historic downtowns consisting of multiple blocks of large vintage
structures. Both began their downtown programs decades ago to combat a plague of empty
storefronts and vacant buildings.

Sadly, research shows that the typical association in Oregon is a standalone association with weak
power, little membership, and poor funding, focused on the occasional public event.


Funding Associations.

Downtown associations achieve their funding in a variety of ways. Most are self-funded, either
through memberships and donations, or through assessment programs such as Economic
Improvement Districts. Very few receive direct funding from their municipal governments.

The predominant form of funding for associations in Oregon is the Economic Improvement District
(EID). This is a form of assessment similar to a tax, assessed against properties within a defined
district. Ids are usually administered by the local municipality, however, the program is usually
instigated by the association. Ids can be made voluntary -- allowing a property owner to opt out if
he/she feels the program will not benefit them -- or involuntary, where all properties in the district must
pay if the EID survives passage.

Adoption of an EID usually consists of an EID proposal being made by an association to their local
municipality. The municipality then handles the paperwork for formation, and notifies the land owners
within the proposed district of the assessment and gives them the option of declining, known as
remonstrance. If property owners representing up to or in excess of 33% of the proposed assessed
value remonstrate, the EID can not be implemented. Surprisingly, very few associations are using
involuntary Ids, and those using voluntary Ids have reported respectable compliance levels.

Another funding method similar to the EID is the Business Improvement District. This is a form of
assessment similar to a business license tax, assessed against businesses within a defined district.
BIDs are usually administered by the local municipality, however, the program is usually instigated by
the association. BIDs can be made voluntary -- allowing a property owner to opt out if he/she feels
the program will not benefit them -- or involuntary, where all properties in the district must pay if the
BID survives passage.

Adoption of BIDs usually consists of an BID proposal being made by an association to their local
municipality. The municipality then handles the paperwork for formation, and notifies the business
owners within the proposed district of the assessment and gives them the option of declining, known
as remonstrance. If business owners representing up to or in excess of 33% of the proposed
businesses in the district remonstrate, the BID can not be implemented. The BID seems to be a less
popular funding choice, perhaps due to the lower dollar amount that is usually assessed by them.

Initial research seems to indicate that few associations are using both EID and BIDs together.

Some cities provide direct stipends to their associations. Oregon City, Albany, Hillsboro, and Corvallis
all provide direct funding, but in almost every case officials from the local governments described this
funding as “a small stipend”, usually ranging between $10,000 and $50,000 annually. Currently,
Redmond is considering a request from their association for a 5-year, $500,000 stipend.

In some cases, the local municipality provides funding assistance to their associations through
indirect means. As an example, Albany allows their association to implement a parking meter program
and retain the profits for their operations. In Grants Pass, the city contracts out visitor information and
tourism services as well as the administration of a downtown historic district program to its local
Chamber of Commerce. Hillsboro has created a Local Improvement District (LID) to fund capital
projects that support the vision of their downtown association.

Many associations receive no stable funding source, relying on memberships and/or donations to
continue operations. Such groups rarely can afford to hire a staff person, and most of their funds
tend to go towards public events. In most of these cases, the association either had no working
relationship with their local municipality, or had a history of conflicts with the municipality.

None of these methods provide significant funding. In most cases, the funding raised is just enough
to cover the costs of association staffing, overhead, and events. Major programs -- including
storefront grant programs -- tend to be paid for through the local municipality.


Membership & Business Associations vs. Downtown Associations.

Membership, as mentioned above, is sometimes relied upon as a funding source for downtown
associations. It should be noted that this is the primary role of membership in such organizations.
Business associations and downtown associations or downtown organizations are not the
same. Unlike a business association, downtown associations exist to represent geographic areas,
not just their members. Although the ability to vote or hold office in the organization is typically tied
to membership, most municipalities will expect that a downtown association will represent the interest
of their entire downtown, not only their paid members.

The term “business association” and “downtown association” should not be used as if they are
interchangeable, due to this fundamental difference.

Main Street Programs.

Associations are welcome to join the Main Street program from the National Trust for Historic
Preservation (NTHP). This program is aimed towards downtowns with a strongly historic character that
have need of both physical and economic improvement. This program provides benefits such as
technical assistance and training. In exchange, the program requires extensive record keeping that
must be submitted to the NTHP, who use it to monitor the performance of the nations downtowns as
well as use it as support for advocacy with national policymakers.

The program consists of the so-called “four points” approach. These four principles are considered
absolutely required by the NTHP, and consist of organization, promotion, design, and economic
restructuring.

Baker City’s Don Chance notes that their historic district had been very successful in partnering with
the city and disbursing grant money to renovate the city’s downtown. Many of the structures in the
area were empty or derelict when the district began its efforts more than twenty years ago.

In Oregon, the program is currently administered by the Oregon Economic & Community
Development Department (OECDD). The program had a good track record of many years, but fell
victim to budget cuts in the late 1990s. Governor Kulongoski’s 2007-2009 budget has provided
money to reestablish the program.

The reaction of various cities in the state has been mixed. While some cities are embracing the new
program, others -- such as Lake Oswego -- are choosing not to. Partly this is due to the fairly rigid
structure of the national program, and its focus on historic matters.

The Oregon program, however, is somewhat more flexible. Program coordinator Gary Van Huffel
indicated that he is open to modifying the state’s program to meet the needs of individual
communities. Although cities with a modified program would likely not meet the requirements of the
full national program, they would still enjoy certain advocacy and support benefits with the state.
Oregon City’s highly tailored version of the Main Street program -- mentioned earlier -- is an example
of such a modification. With many towns lacking a surviving historic center, as well as some cities
(such as Damascus) starting from scratch, such flexibility will be needed.

Leland on Other Models.

Leland notes that there are numerous other models besides the Main Street program. Other models
include public/private economic development associations. Another idea that was suggested was to
include the 99W corridor businesses in a broader organization, as this would allow pooling of
resources. (Memo from Sean Farrelly to CCAC, dated 7 July 2008).


Additional Models of Note

A number of cities both in and outside of the region are notable examples of differing approaches
and may warrant further investigation. The following list includes links to profiles for these cities, for
further reading:

Holland, MI: Main Street/Downtown Development Authority
http://www.mainstreet.org/content.aspx?page=6075&section=3&kbentry=1700

New Bern, NC: Swiss Bear, Inc.
http://www.mainstreet.org/content.aspx?page=7132&section=3&kbentry=1706

Pittsburgh, PA: Pittsburgh Cultural Trust
http://www.mostlivable.org/paying-for-it/pittsburgh-cultural-trust.html

St. Paul, MN: Lowertown
http://www.mostlivable.org/leadership/lowertown.html
http://www.lowertown.org/

Sonoma, CA: Sonoma County Business Environmental Alliance
http://www.mostlivable.org/paying-for-it/sonoma-county-business-environmental-alliance.html
http://www.sonoma-county.org/bea/

Winston-Salem, NC: Winston-Salem Alliance
http://www.livable.com/prgms_model/leadership/Winton_Salem.html


URD ONLY MODELS

Research Question:

What are other cities (of any size/make-up) doing that have urban
renewal but do not have an association?

URD Without Associations.

A number of cities utilize urban renewal programs to enhance their downtowns without using a
downtown association component. These towns tended to be small and rural, as in Brookings,
Coquille, and Pendleton -- or suburban, as in Canby, Keizer, and Tualatin. In interviews with
members of city staff in these communities, each city had a strong urban renewal program, or had a
strong economic development department. A significant financial commitment towards infrastructure
from the city was a common feature of these models.

When a city did have both urban renewal and a downtown association, there was rarely any
coordination between the association and the city. Few Oregon associations receive funding from
their local municipalities, and many were described by city staff as being “in existence” but “not doing
much”; rarely was an association described as a vital or highly active partner.

Regarding the use of urban renewal and downtown associations, Don Chance, planning director at
the City of Baker City had some interesting comments. He mentioned that, in retrospect, they wish
they had not gone the historic downtown association route, and had instead concentrated on urban
renewal. According to Chance, there are a number of streets within downtown that are adjacent to
the historic district but not included within it. The city is considering the use of Urban Renewal to
finance and revitalize these streets. Said Chance: “we’ve been wondering if we had just included all
this in one urban renewal district years ago rather than going the historic district route if we could
have just done all this under one umbrella”.

Non-URD, Capital Intensive Programs.

Some cities have neither an association nor urban renewal, but still have a financial commitment to
their infrastructure or to historic preservation efforts. In Beaverton’s case, the city has invested
significant funds into their downtown through direct expenditure, without using urban renewal; this is
the result of a city charter that forbids the use of urban renewal financing. (Currently there is an effort
to rewrite or remove this provision.) At the opposite end of the spectrum is Ashland, which has no
urban renewal and which has concentrated on historic preservation. In Ashland’s situation, the
historic preservation program is coordinated entirely “in house” at the city in a topdown approach.


WEB SOLUTIONS

Research Question:

How many associations utilize web-based solutions, and how?

General Comments.

As a general statement, most associations have some form of web presence, but rarely do these
presences go beyond a simple web site. There are many different web-based tools -- such as e-mail
lists and online forums -- that would be available to an association, but their use does not seem
common at this time.

Further research into this subject would be of use to an existing or prospective association, however,
such research was precluded due to a shortage of time for this report.


FAILURES

Research Question:

What are some examples of cities with associations that failed, and
what are the reasons for such failures?

Typical Failures.

Over the course of this research, it is undeniable that more associations in Oregon have experienced
or are experiencing failure than are not. As a clarification, such failure tended to be defined as:

• Inadequate funding to continue operations
• Inadequate membership
• Lack of leadership from more than one individual within the association
• Lack of leadership in general in the association
• Lack of association vision or purpose
• Poor organization

Such features are typical of most associations in the state. Only a very few associations have
remained strong enough to avoid such failures. They have tended to be associations in historic,
stand-alone cities such as Baker, McMinnville, or Albany.

The most common problem encountered surrounded leadership issues. Springfield, for example, had
a strong association, but it was built around the leadership of a single individual. When that individual
passed away, the association failed. Sometimes, leadership failure occurs when personalities
become stronger than issues. In Grants Pass, for example, personal conflicts came between the
leadership of the association and members of city staff, disagreements that were not resolved until
there were personnel changes on both sides.

Leland on Association Leadership.

Leland echoes these concerns, noting that leadership -- along with funding -- are crucial to
maintaining an association’s health. Leland points out as an example Bellingham, Washington. “The
City provided seed money for a couple of years, but after that was phased out there was no stable
funding, since a BID was never formed. There was early committed leadership, but when that person
left, the organization declined.” Leland further notes that there needs to be not just a single
individual, but a pool of people capable of providing leadership (Memo from Sean Farrelly to CCAC,
dated 7 July 2008). This sentiment is echoed by Oregon City, whose efforts to create a very broad-
based board of directors is an attempt to engineer an environment that will promote a healthy
spectrum of leadership.


APPENDIX

The following are summaries taken from Main street renewal: A handbook for citizens and public
officials. This book is an extremely valuable resource, and cannot posibly be sumarized in only three
pages, however, the following material stood out as particularly relevant to this fact-finding mission.

Ten Myths of Downtown Revitalization

Myth Reality

1. Build it and they will come! (Physical Need a market analysis & business plan
improvement approach). implemented by newly formed partnership of
city hall and businesses.
2. Demolish it and they will come! (Clean it up Building preservation combined with intensive
approach). business recruitment does attract developers.

3. Complete a major project and they will Sucess requires multi-faceted effort
come! (Build in isolation approach). addressing all of downtown’s key issues.

4. Need a department store to anchor the Redefine anchors as government complexes,
downtown! (Traditional anchor approach). cultural/entertainment facilities, tourist draws,
housing units, specialty retail, office buildings.
5. If there is no department store, then no Specialty retail works. Bringing pedestrians
retail of any kind can flourish. (Big retail or downtown requires a mix of services, retail,
no retail approach). and dining/entertainment facilities that adress
needs of customers.
6. Competition is bad business. (Head in the Sucessful commerical districts have similar &
sand approach). compatible businesses in groupings (clusters
such as antique stores, furniture, clothing,
auot, personal services, professional services,
etc....)
7. Downtown must keep uniform business Not advantageous to retailers as hours
hours. (Lets pretend we’re a mall should be “market driven” to serve needs of
approach). targeted customers. Shift to different hours
rather than keep longer hours.
8. Be lenient or developers won’t do business Developers will do business in communities
with us. that demand quality projets as their
investments are protected.
9. Be tough as possible or developers will Unreasonably stringent & demanding
take advantage of us. communities cause developers to locate
projects elsewhere.
10. If we had more parking, they would come! Successful businesses found you need to
(Scapegoat approach). provide what the customer wants (special
products, great service, unique atmosphere)
in order to get customers to come downtown
and use the parking.


Seven Secrets of Success

• Form partnerships among businesses, with the public sector, civic organizations, and
community residents.
• Have a defined clear vision of where you want to go shared by all in body.
• Be market driven! Who are your customers, potential customers, & what do they want today
and what will they want tomorrow? Provide for them!
• Create & use a business Plan! City could help businesses to develop business plans (as well
as the commissioned body having a written visionary plan) with 5, 10 & 20 outlooks.
• Dare to be different. Carve a market niche in the marketplace, so you don’t compete with
malls and descanters.
• Focus! Concentrate resources in well-defined focus areas as resources are scarce. Results
will become more visible quickly. What resources are already available for you to share? See #1.
• Follow the “5 M’s”
Management of downtown should be like a business.
Marketing campaigns for downtown
Maintenance of private and public property
Market knowledge to create niche
Money for ongoing enhancement

Lessons from Birmingham

The following are key points from the Birmingham, Alabama “Beacon” project:

• Revitalize active merchant’s associations
• Reduce blight caused by existing businesses and vacant space
• Preserve the historic character of the neighborhoods
• Recruit new tenants that enhance the quality of the neighborhoods
and promote cohesiveness
• Encourage development transactions within the districts
• Assist entrepreneurs in opening local businesses
• Receive, buy and develop key properties

For more information on the Beacon project, see:

http://www.livable.com/prgms_model/place/BEACON_Initiative.html
http://www.mainstreetbham.org/


Goals & Vision

Some possible goals for an association might include:
• Vision – 5, 10 & 20 year plans
• Economic Stability
• Use Current Business Management & Research Techniques
• Strategic Economic Development to build solid foundation
• Sound Priorities:
a) quality jobs
b) quality education
c) economic development
d) housing

The larger question is, how does Tigard see its downtown as relating to local, state, national, and
international economies? As shown by the needs analysis section of this report, non-retail uses are
predominate in the URD. In the global economy of the 21st century, many of these companies do
business not just locally. but regionally, nationally, and beyond. What are their needs and how might
downtown Tigard be relevant to them?

One of the factors that town centers use to compete for business is the “quality of life” factor. This is
especially true of areas where housing is a key aspect of the downtown mix. Quality of life, however,
has many definitions. Nationally, the term is usually defined as a loop that starts with jobs and
economic development, linked to quality education, which then links back to jobs. In the Pacific
Northwest, quality of life is usually seen as a trifecta of housing, education, and employment.

A key goal of an association in downtown Tigard might be to define what quality of life means for this
specific place. Such a definition might include housing, access to healthcare, culture & cultural
amenities, the environment, and transportation.


BIBLIOGRAPHY

Farrelly, S., City of Tigard. memo to City Center Advisory Commission dated June 2, 2008.

Farrelly, S., City of Tigard, memo to City Center Advisory Commission dated July 7, 2008.

Kemp, R. Main street renewal: A handbook for citizens and public officials (2nd ed.). Jefferson, North
Carolina: McFarland & Company, 2006.

Leland Consulting Group. (October, 2007). Development Strategy for Downtown Tigard.

Marcus Mead / City of Tigard. (April, 2008). Summary of Research on Downtown Associations:
Structure, Funding, Effectiveness.

National Trust for Historic Preservation Main Street Program (Web site), Retrieved from
http://www.mainstreet.org/

Oregon Department of Revenue. (April, 2007). Oregon property tax statistics: Fiscal year 2006-2007.

Population Research Center, Portland State University. (December 15, 2006). PRC Certified Cities.

State of Oregon. Oregon Blue Book Online (Web Site). Retrieved from http://bluebook.state.or.us/

U.S. Census Bureau. (2000). Oregon -- place GCT-PH1. Population, housing units, area, and
density: 2000. Washington, D.C.

Zahas, C., Leland Consulting Group. Letter to Tigard City Council, dated November 19, 2007/

ACKNOWLEDGMENTS

Many people helped in the creation of this report. it is not possible to thank them all, but the following
individuals should be acknowledged for their contributions:

Jacki Yoder, Oregon Economic Development Department
Arthur Fish, OEDD
Linda Ludwig, League of Oregon Cities
Stephanie Foley, LOC
Gary Van Huffel, OEDD

Don Chance, City of Baker City
Catherine Comer, City of Canby
Sean Farrelly, City of Tigard
Courtney Griesel, City of Springfield
Christina Robertson-Gardiner, City of Oregon City
Chris Zahas, Leland Consulting Group

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