Committee backs agency administering state moderate-income loan fund for local land trust project

The Hood River Urban Renewal Advisory Committee on Nov. 20 voted to support the Urban Renewal Agency administering a state moderate-income revolving loan fund (MURAL) for a proposed Big River Community Land Trust development.

Will, Urban Renewal Agency staff, described the state program (Bill 1537, 2024) as allowing jurisdiction-specific grants sized to the tax increment a development is expected to generate over the next 10 years; the state loans that money on an interest-free basis to the local jurisdiction, which then administers the grant to the project sponsor. Will said eligible moderate-income units may serve households up to 120% of area median income. He told the committee that Big River Community Land Trust’s Avalon Drive project is a planned 45-unit development and that preliminary estimates put a potential grant award in the range of $845,000 to $945,000. If the agency administers the program, the agency could take a 5% administrative fee — roughly $45,000 based on the estimate Will provided.

Committee members asked technical questions about tax treatment for land-trust ownership and how tax increment would be estimated when units are resold under limited-appreciation covenants. Will said the land is currently owned by a church (tax-exempt) and would remain under land-trust structure as nontaxable land; improvements would be taxable, though likely not at full market value, and he said he discounted anticipated sale values when estimating increment and applied the applicable change-in-property ratio. On default risk and program timing, Will said the agency could disburse grant funds in tranches aligned with construction draws so the funds follow built taxable value and reduce the risk that a grant is paid out but no taxable value materializes. He noted that repayment to the state is ultimately tied to tax increment, and that if a project defaulted the remedy would follow tax foreclosure/sale processes.

Committee member (speaker 7) moved that the committee support the Urban Renewal Agency administering the local MURAL program; the motion was seconded and approved by voice vote. Will said the agency’s 5% administrative fee would offset staff time and that administering the program could provide critical predevelopment and construction support to the land-trust project.

Next steps: Staff will pursue additional program details and, if the city and agency opt to administer the grant, will work with Big River Community Land Trust on application timing, disbursement schedules and safeguards to limit downside risk to the agency.