Business View Magazine | December 2018

368 369 youth activities, and recreation options for all ages including boating, cycling, fishing, and golf.The pro- gressive Canby School District has a campus thriv- ing with consistent investment in modern buildings and state-of- the-art technology.The Technical Ed- ucation Center equips students with valuable skills and exposure to many career options. The local economy is healthy and diverse. Bless- ed with some of the best soils in the state, Canby is home to a sophisticated nursery industry of high quality dahlias, tulips, perennials, shrubs, and trees that are sold nationwide.A strong manufacturing base of small to mid-sized companies focuses on precision metals, high tech, and testing equipment sold nationallyand internationally.Major employers in- clude Johnson Controls,Pioneer Pump,ShimadzuUSA, Kendall Floral,Milwaukie Electronics,Wilson Controls Construction,ICCNorthwest,SR Smith,American Steel, Package Containers,andOBCNorthwest. Businesses benefit from excellent highway access, utilities, and an ample supply of shovel-ready indus- trial land at competitive prices.The Union Pacific freight and passenger (via Amtrak) line runs through the center of downtown Canby.Mayor Brian Hodson reports that reactivating the City’s downtown core is an ongoing priority.“Our community established an Urban Renewal District in the 1990’s. Our shared vision for the District included the expansion of our industrial parks and the revitalization of our down- town business corridor.We understood that the expansion of our industrial parks would act as an economic driver in the community and would help to create jobs, but we also recognized the value of the Urban Renewal District in strategically investing in our downtown core.”Finally in 2007, just before the recession hit,we started implementing some of those plans.” Tax increment financing (TIF) from the Urban CANBY, OREGON Many barriers exist to the successful redevelopment of the core areas of small towns. Most historic downtowns have empty or underutilized buildings, often in disrepair, with little new development. These factors create a low tax base and a lack of comparable properties to support loan appraisals. To enable financing for redevelopment, local governments must consider engaging in public-private partnerships. A developer acting alone seeking conventional financing faces enormous owner equity requirements by banks. Additionally, without comparable properties to use as a basis for the redeveloped property’s new value, appraisers generally use a low value based on existing properties. This requires the injection of even more equity into the project to support conventional financing. Even where substantial equity is shown to exist, banks are reticent to lend on a project in an uncertain market with many unknowns, particularly where there is no reliable indicator of rental rates to support the repayment of the construction loan. The added uncertainty of an untested rental market acts to further limit the interest of potential investors with private capital. Similarly, the small businesses that are needed to lease the newly built retail spaces face similar or even more difficulties in obtaining financing since the initial capital required for a new business typically is nonexistent for other than high net worth individuals. It thus becomes incumbent upon local communities to develop mechanisms such as local urban renewal funds to fund new construction and other infrastructure and development costs. Once understood, the long-term tax benefits of new development and the creation of vibrant downtown retail districts become obvious. Even where local governments are largely non-partisan, politics in rural areas can be highly contentious with long-held differences impeding success. Fortunately, public officials in Canby worked collaborative- ly. Finding a trustworthy developer who shares in the community’s vision is also critical to a public-pri- vate partnership. To be successful, the developer needs to form an understanding of the community and its history, not just the bottom line. The development team must establish a quality project compati- ble with both the existing community environment and the requirements of the public investment. Hanlon Development recently sponsored a community forum in Canby which brought 75 residents together to discuss how best the town’s historic core could evolve. Shortly thereafter, dozens of Canby’s aspiring entrepreneurs attended a weekend of business classes. As Canby Civic Block proves, where informed decision making exists, public-private investment can reinvigorate small towns. DEVELOPMENT | BRANDING MEMO