The city’s new urban renewal housing incentive plan may not help contractors who build spec homes, contractor Joe Madden told the John Day City Council Sept. 26.

He said he was concerned that, because of the lag in awarding incentives, benefits could end up going to new owners and not the builders who took the risk to construct new homes or invest in expensive remodeling projects.

The council approved the housing incentives plan June 12 with the goal of seeing 100 new homes built in the 20-year life of the program. To encourage new home construction, the city will waive system development charges for water and sewer service and provide property owners a 7-percent rebate on the increase in the property’s assessed value. The plan also creates an incentive for home remodeling.

According to Elaine Howard, the consultant who helped draft the urban renewal plan, property owners will not see incentive payments until after the next fiscal year starts in 2019. The county assessor will certify tax bills in October based on what occurred in the prior year, she said.

City Manager Nick Green noted that Madden raised valid points and proposed several solutions. He said the incentive program wasn’t designed for spec homes but could be amended.

Negotiating in advance with a buyer would be difficult to make legally binding, and raising the sale price to include the incentive won’t work because banks won’t offer larger loans, Madden said.

Another option was for the city to estimate the new assessed value before the county assessor’s office and to make a payment in advance. Green said the city will accept an assessed value for the incentive program but not an appraised value.

Madden said he was willing to wait for the incentive payment so long as he received it. He also suggested allowing the city and builder to correct an estimated assessment by paying back the difference.

Madden noted that numerous remodeling opportunities exist in John Day. The council agreed to bring the matter to the urban renewal agency board for discussion.

In other city council news:

• Green said the city learned several hours before the council meeting it had been awarded a $70,000 federal Economic Development Administration planning grant. The total project cost for the partnership planning is $142,000.

The award is one of four anticipated planning grants. A grant from Travel Oregon will be announced Oct. 17. The city has been awarded a $50,000 grant from Business Oregon to assist with economic resiliency planning.

The city also received notice from the state Department of Land Conservation and Development that an economic opportunity analysis grant had been awarded to Grant County on behalf of the county’s eight cities. DLCD Community Services Division Manager Gordon Howard said the state will hire an analyst to conduct the work, but there will be coordination with other grant-funded analysis.

Green said the grants will be used to look at a variety of socio-economic conditions related to the city’s economic development projects and inadequate housing stock. He described a demand for single-floor homes for the city’s aging population and new ideas about how neighborhoods could determine building standards.

He also noted that several businesses had passed on coming to John Day and chose Baker City, Prineville or Burns instead. It was important for the city to learn why and be proactive about attracting new business to the area, he said.

• Green suggested a review of the city council’s procedures manual to ensure the council is consistent in how it implements its responsibilities. He said he found specific procedures for what to do but not how to get them done.

Green noted, for example, that the city had a procedure for requesting applications to fill council vacancies but no procedure for how to evaluate and choose applicants. He suggested the councilors review the manual for further discussion.

• Councilor Shannon Adair reported on exploratory discussions she had with local business owners about forming a downtown merchants association. One goal of the association would be to improve the look of downtown and cooperate in decorating the area with flower baskets in spring and holiday decorations for Christmas. These small efforts can make a difference, she noted.

She said she also talked to people in other cities about their merchants associations and discovered how complex the issue could become. With many local merchants already belonging to the Grant County Chamber of Commerce, she suggested John Day wasn’t a large enough community to benefit from a merchants association at this time. Coordinating the city’s economic development efforts with the chamber could be an effective way to move forward, she said.

John Day merchants have been invited to a meeting on the topic at 6:30 p.m. Thursday, Oct. 4, at the John Day Fire Hall.

• Green reported he had received a low bid of $76,000 to remove asbestos and hazardous materials from the Weaver Building on Main Street. He said he will submit the bid to the state Department of Environmental Quality as part of the city’s application for a brownfield grant to pay for the cleanup work.

The city’s goal is to strip the building’s top floor down to the framing in preparation for selling the building to a developer. The first floor could remain retail while the second floor could be remodeled into residential units.