The city of Ashland will spend $30,000 to $35,000 on a feasibility study to see whether urban renewal could be used to jump-start economic development at the former Croman Mill site east of Tolman Creek Road, along the railroad tracks in central Ashland and downtown.

The city of Ashland will spend $30,000 to $35,000 on a feasibility study to see whether urban renewal could be used to jump-start economic development at the former Croman Mill site east of Tolman Creek Road, along the railroad tracks in central Ashland and downtown.

The City Council approved the spending on a 4-2 vote Tuesday night. State law requires a feasibility study prior to establishing urban renewal districts.

Urban renewal districts typically are established on property that lacks infrastructure, is contaminated with pollutants or has aging buildings. The current assessed value of the property is identified. Property taxes on that base value continue to go into government coffers as usual.

Based on predictions of what the future value of the improved property could be, a city borrows money to fund roads, utilities, pollution clean-up, building rehabilitation and other improvements that could pave the way for economic development.

As the improved property gains in assessed value through the public and private investment that follows, those property tax gains pay off the debt the city took on to make the improvements.

Since the property tax gains would be going to pay the urban renewal debt, they could not be used to fund operations such as police and fire service, park maintenance and street repairs in other parts of town.

Urban renewal districts typically sunset after 20 to 25 years. At that time, the property tax gains flow into government coffers — ideally at far greater amounts than they would have done without the urban renewal improvements.

"You do the public investment to trigger the private investment," City Administrator Martha Bennett said.

Bennett said the city doesn't have funds to pay for roads and other infrastructure improvements that would encourage businesses to move to the former Croman Mill site.

The mill site as well as land along railroad tracks near A Street are the two largest blocks of underdeveloped property in Ashland.

In August, the City Council approved a Croman Mill site redevelopment plan that details infrastructure needs and shows where light manufacturing, office, retail spaces, restaurants and housing could be located.

Development along the railroad tracks has been stalled because the ground is contaminated with pollutants from decades of railroad use.

City Councilman Greg Lemhouse, who voted for the feasibility study, said he would like the city to also consider enterprise zones that would waive property taxes temporarily to encourage businesses to build in underdeveloped areas.

"We need to look at everything that's out there," he said.

Bennett said the city will explore a variety of tools for spurring economic development.

Enterprise zones typically waive property taxes on new development for a relatively short period of time, such as five years, according to Don Burt, a former director of the Medford Urban Renewal Agency who is now Central Point's planning manager.

Lemhouse said he could support urban renewal districts if they help Ashland remain economically competitive into the future.

Council members Eric Navickas, Kate Jackson and Russ Silbiger also voted to pay for the feasibility study.

Silbiger said he does have concerns that the urban renewal process can be onerous.

"This is a bureaucracy's dream. You're putting in a whole other layer of government meetings," he said.

Bennett said an urban renewal district is more appropriate for land that has large up-front infrastructure needs. Enterprise zones are better for encouraging businesses to construct buildings.

Council members Carol Voisin and David Chapman said they had too many concerns about urban renewal and voted against paying for a feasibility study.

Voisin said Ashland already has unused buildings for businesses, based on the number of commercial vacancies she sees around town.

"Why are we developing more when we have so many vacancies?" she asked.

Chapman said it's not clear to him what kind of improvements could be made to downtown Ashland to increase its value. He said the railroad land is close enough to Ashland's economic core that businesses could start building there soon, but he doesn't expect development on the Croman land for 15 years.

Staff writer Vickie Aldous can be reached at 541-479-8199 or vlaldous@yahoo.com.