Protestors say city should not subsidize multi-billion-dollar corporation

A handful of citizens told Brookings City Council Monday they aren’t happy about a proposal to give U.S. Borax — a multi-billion-dollar mining company — access to city water and subsidize its sewer and water hookups to its Lone Ranch development north of town.

The project, whose plans include 1,000 homes on 537 acres near Lone Ranch Beach, has been on hold since the Great Recession. Numerous extensions have been granted in the interim, and recently, the city and Borax have re-entered discussions to get building started.

Monday, the city was considering changes to the financial agreement; it was eventually approved 3-1-1, with Councilor Dennis Triglia voting against it, and Councilor Bill Hamilton abstaining, citing his desire for more information.

Changes in the document would mean Borax would no longer pay the 23 percent — $262,000 — of sewer improvements south of Moore Street, and the city would pay for the cost of a lift station using about $628,000 in System Development Charges (SDCs) it has saved — with conditions:

•Borax pays for the construction of a 5,300-foot-long sewer main to hook to existing city pipes and either,

•Borax sells at least one housing neighborhood to a private developer who would begin construction within 12 months, complete at least 15 units in 18 months and 40 within 36 months. Also, a minimum of 20 percent of the 50 housing units must be available to low- and moderate-income households, or

•Borax donates property in one of its neighborhoods to a non-profit housing development agency, which would provide a plan for financing and start constructing at least 40 below-marking homes within 18 months.

Under the current agreement, the city is also to reimburse Borax for 83 percent of the cost of the lift station from SDCs collected from new users of the line north of Carpenterville Road. The current SDC is $11,102 per unit.

In the new agreement, Borax would receive no share of the SDCs for this part of the improvements, said City Manager Gary Milliman, and the city would recover its investment in the lift station through SDCs collected on 63 new homes.

Subsidies and water

Most of those who spoke said they saw no reason to barter with a company that can easily pay for the concessions the city is willing to offer in return for some affordable housing.

“It is insulting to ask our small town to subsidize this giant corporation,” said Candice Michel. “If they can’t figure out how to make a profit on their development, maybe it shouldn’t be built.”

Catherine Wiley pointed out Rio Tinto, the parent company of U.S. Borax, has an international reputation for mining resources from numerous countries and leaving behind contaminated land and rivers.

She gave councilors a packet of information about the company that included its stock share values, articles about fiscal mismanagement and investigations and master-planned communities it built atop contaminated mining tracts.

Wiley also noted that Oregon’s Goal 16 regarding estuary restoration was never addressed, as Rio Tinto’s original plans were to use water on site for homes there. When it was learned that the city charter requires any in-city development to have access to city water, Wiley said, no one ever retraced the steps to consider Goal 16.

“The issue of the charter wasn’t brought up until after the annexation,” she said, noting that an attempt to change the city charter to allow Rio Tinto to use water on its land failed. “Taxpayer money could be better spent by not subsidizing on top of what you have already spent.”

Others didn’t approve of what they believed to be taxpayer dollars — SDCs — going to improve the city’s existing system to accommodate development at Lone Ranch.

One half of residents’ water and sewer bill goes to pay off a loan on the wastewater treatment plant.

“Not one more penny of my hard-earned money goes to a multi-billion-dollar corporation while there are hungry and homeless people in this town,” Michel said. “Not one more penny. It’s your fiduciary duty to take care of us.”

Milliman explained SDCs are paid by developers for infrastructure needed because of their projects, and once their development comes on-line, there are that many more people paying into the system, thus lowering the costs to all.

Alyssa Babin, a fourth-generation Brookings woman, said she was talking to her grandmother about the issue.

“She said, ‘Borax is up to its old tricks again,’” Babin related. “I personally am embarrassed a corporation is asking the city to subsidize anything.”

She and others also argued about the ambiguity of “affordable housing,” saying a $200,000 home, such as what Lone Ranch was originally proposed to feature, is not affordable to most workers in Brookings.

Chetco River water

Many also indicated their dismay upon learning that the developer no longer planned to use water derived from its own property, but city water, which comes from the Chetco River, and wanted to know how 1,000 more residential units would affect the river.

Milliman explained the system the city has does not skim water from the river, but draws it from a 35-foot well under the riverbed. Councilor Ron Hedenskog has also said in years past the amount of water the city uses every day — even in drought years — is a miniscule percentage of what flows through.

Michel pointed out the river is critical to life in Brookings-Harbor, as it is its only water source and is dependent solely on rainfall. She and others expressed concern about an additional 500 homes being on a system, particularly during droughts that have in recent years brought saltwater from the ocean into Harbor’s drinking water.

Additionally, the long-term effects of last year’s Chetco Bar Fire are unknown, she said. Although Brookings had a mild winter and spring, one season does not adequately predict how runoff in the watershed will affect the drinking water for 13,000 people downstream.

“I’m deeply concerned that the effects on the river will be disastrous,” Michel said. “It’s not just drinking water; it’s tourism. It’s salmon. Imagine what the collapse of those industries would look like. To assume there won’t be any impacts is foolish.”

Triglia read a five-page statement addressing concerns he has with the development, most of which aligned with those in the audience.

He said he is worried about true costs, including roads, fire, police and infrastructure maintenance, and suggested using the SDC money the city has saved to build its own affordable housing.

Triglia also noted the inequity of taxes Borax currently pays the county. The real market of the property, he said, is $1.89 million, but the tax bill is $2,316 a year based on a “discounted assessed value” of $228,730 “due to a favorable zoning designation.”

His own taxes on a 0.17-acre parcel in town were $410 more than that.

Triglia also believes the city could be in violation of its own comprehensive plan which says, “New development requiring extension of water mains, pumping and storage facilities will be paid for and constructed by the developer”; the same is said for wastewater facilities.

Explanation

City council listened until tackling each issue — starting with the history of the development, its voluminous files of documents, arbitration and what has been done in the 10-plus years the project has stagnated.

Milliman noted deals made with Borax are intended to attract developers willing to build homes in a community where housing is prohibitively tight and expensive — and get some affordable housing in the mix in return.

“Maybe a developer will reduce the cost (in exchange) for land,” he said. “Maybe they’ll enter into a 20-year agreement (where equity is capped). The number of options become available once it’s known the utilities are going to be available on site.”

Hedenskog, who served as a planning commissioner, then city councilor, mayor and now city councilor again, said he remembers the discussion about water in the early 2000s.

“But we’re not making decisions about water tonight,” he said. “Water has been discussed, studied; water is not an issue in the decision being made by the council tonight.”

He said he didn’t like the use of the word “subsidy,” either, noting money the city has banked from past development will be spent on infrastructure, as will that charged to Borax developers.

Hedenskog also noted when the city took out a $13 million loan for the wastewater treatment plant, growth in Brookings was chugging along at 2.5 percent.

“And in ‘08, we went into that huge black hole and no SDCs were coming in,” he said. “The only thing we could do was increase SDCs to cover the debt. If 1,000 houses are built, you can think what kind of SDCs are going come off of that. Two hundred new houses would cover the debt.”

Councilor Brent Hodges, a local builder, refuted a statement there is “a lot of land in town” on which to build, and noted the proposed development is not something “the council has gone into lightly.

“How much longer do we wait?” he said. “Something has to happen. Standing stagnant and doing nothing is going to get us nothing. Every time we do nothing, we move backward.”

Hedenskog agreed, saying he didn’t think the council was making a “critical” decision.

“This is standard business in the city,” he said. “It is common fare to deal with things like this. We do our homework, do our studies and do our best to make decisions.”

Corporations

Councilor Bill Hamilton said this town lost its say in keeping corporations out when it allowed Fred Meyer to open.

“Then when Dollar General came in, ‘Oh my god; they’re letting another corporation come in,’” he said of the outrage then. “That ship sailed when you all allowed Fred Meyer to come in. That’s when corporations got the stronghold in this community.”

“I understand Rio Tinto is the big, bad mining corporation,” said Mayor Jake Pieper. “They’re not doing this out of the goodness of their heart. They’re doing it to make money like any other developer.”

Hedenskog said affordable housing has been on his radar for years, and cited Curry Health Network medical workers who a few years ago were bunking four to a home awaiting other housing.

“These aren’t people on low income,” he said. “There just isn’t housing. There aren’t enough houses in Brookings to satisfy the needs. Here we sit, with 500 acres of property for development… we’re still trying to get there. We’re still working on it.”

Reach Jane Stebbins at jstebbins@currypilot.com .

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