Council members voted 4-1 to move forward with a $33,400 contract with Elaine Howard Consulting to conduct the study, which will examine the area’s annual growth rate, percentage gain in assessed value assumptions and percentage gain in assessed value plus assumptions on the future development of the site of the former Balsiger building.

Mixed uses

The study area contains a mix of zones, according to the city’s management assistant Joe Wall, with heavy industrial zones along the rail corridor.

“This area overall, I think we’ve seen a lot of disinvestment, deterioration,” Wall said. “It was originally plotted as heavy industrial, primarily served by rail corridors. That’s really no longer the case. You have a lot of small lots.”

Tax Increment Financing (TIF) would be generated through redirecting a portion of property tax revenues to the urban renewal district area, according to Howard’s consulting document on the proposed district.

Most taxing districts have approved of the urban renewal district, according to City Manager Nathan Cherpeski. Fire officials have tentatively supported the concept but are still determining whether to approve being part of the district.

Development tool

TIF funds could be utilized for projects, ranging from infrastructure to developer assistance to accumulating parcels and compiling them, according to Wall.

“We just see this as one of the few tools that we have for an area that’s largely languished the rest of the city, and trying to make something happen in that area that hasn’t done much unfortunately,” Wall said.

Councilman Bill Adams, the sole vote in opposition, questioned the use of the urban renewal solely for the purpose of primarily moving forward on a project to build out the former Balsiger site.

“Isn’t really this whole thing really being put together to provide funding to give to a contractor to put a building on the old Balsiger site – isn’t that the main reason for all of this?” Adams asked Wall during the meeting.

“I really object to us spending more money on that property and moving forward with this urban renewal district to try and dig up money to give to somebody else from another area to come in and build this building,” Adams added.

Pivotal point

Wall said, “It’s one of many projects and it would certainly be one of larger value ones, but that said, the city does own the lot, so we have to do something with it.”

“That certainly would be a catalyst site,” Wall said, of the Balsiger. “Probably would give off a lot of tax increment to fund the rest of the area, but that is a discussion we have to have.”

The city is currently in an extended negotiating agreement with Tokola Properties for possible development of The Esplanade, a multi-level apartment and retail complex that would sit on the Balsiger site. A disposition and development agreement would be needed to move forward with the proposed development. The city would need to provide at least $2 million toward the multi-million dollar project, according to Wall.

Councilman Dan Tofell said he understands Adams view, but wants to see something done with the Balsiger site.

“Nothing commits us to moving ahead with the urban renewal district until we see that document and vote on it,” Tofell said.

“Initially, I was somewhat reluctant, but as I’ve stated prior, we have to do something with that end of town. It’s an eyesore as it is right now, and I think for Klamath to move ahead, and to increase our tax base in the downtown area, this is almost vital.”

With approval by council, Howard will compile a proposed feasibility study report that would next go before Klamath Falls Planning Commission and return to council for approval at a later date.