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Hermiston council and urban renewal agency approve $5 million loan for Northeast Aspen Drive
Summary
The Hermiston City Council voted to loan $5 million to the City of Hermiston Urban Renewal Agency for construction and right-of-way acquisition on Northeast Aspen Drive, with the agency later acknowledging the loan and agreeing to repay it over 20 years at 1% using tax-increment revenues.
The Hermiston City Council voted to remove and then approve an intergovernmental agreement (IGA) loaning $5 million to the City of Hermiston Urban Renewal Agency for construction and right-of-way acquisition on Northeast Aspen Drive, and the Urban Renewal Agency subsequently approved the same loan.
Councilors discussed the IGA on March 10 as part of consent-item handling and again when the council convened as the Urban Renewal Agency. Assistant City Manager Morgan said the city issued a $20 million capital improvement bond in 2023, allocating $15 million for city capital improvements and $5 million to be loaned to the urban renewal district because the city could obtain better bond terms. Morgan described the IGA as “specifying that the urban renewal district will pay that loan back over 20 years with a 1% interest rate back to the city using the tax increment from increased value within that district.”
The council and agency emphasized that the loan uses previously budgeted bonded funds and will be repaid from tax-increment financing (TIF) generated by new development inside the district. City planner Spencer and other council members noted the district’s assessed value is roughly $65 million and that incremental growth — for example, new commercial development such as the Popeye’s and Chipotle mentioned in the meeting — would generate the property-tax increases used to repay the loan. Councilor Roberts said he asked to pull the item “just to reassure the public” that the money was already budgeted and would not affect other city services; Morgan confirmed that is correct.
Councilor Meyer, Councilor Kelso and other members expressed support for the project’s potential to connect existing streets and bring business opportunities. The City Council approved the consent motion for items a, c, d and e earlier in the meeting and then approved item b (the Urban Renewal IGA) after discussion. City Council vote: motion to approve item b moved by Councilor Roberts, seconded by Councilor Hayward; vote recorded in the meeting as unanimous (5–0) at the time of the roll call. The Urban Renewal Agency then voted to acknowledge and accept the loan; motion moved by Councilor Meyer and seconded by Councilor Kelso, with the agency vote recorded as unanimous (6–0).
The council and agency did not adopt any new tax or levy as part of the action; officials described repayment as dependent on TIF revenue generated within the renewal district and the IGA as a formal requirement for lending between the city and the urban renewal agency.
The council returned later to other agenda items after the approvals; no additional public testimony on the IGA was recorded.
