Project Bonds

The success of Salem’s Urban Renewal Areas is dependent upon catalytic projects to aid in the development and revitalization of the area. To assist in the feasibility of such projects, the City offers project specific financing in the form of a Project Bond.

A Project Bond may be used to finance both public infrastructure and private development costs of “urban renewal projects” as defined in ORS 457.010(15).  An “urban renewal project” is: 

• a capital improvement project;
• located inside the boundaries of an urban renewal district; and,
• described in the urban renewal plan for the area.

Understanding Project Bonds

The bond is repaid solely from the tax increment revenues of a specific project.  Because Project Bonds are secured by the revenues of a single project: they may not be repaid if the project isn’t completed, or the project is completed but later proves unsuccessful, is abandoned, or destroyed.

Because Project Bonds place a lien only on the revenues of a single project, Project Bonds would normally only be sold or issued to someone directly involved in the project who understands, and can control, the risks associated with completing and maintaining the project.  This would typically be the primary developer of the project.

The biggest variable in establishing a repayment schedule for the Project Bond is the amount of tax increment generated by the development.  The higher the assessed value of the new development, the more tax increment will be collected annually, the larger the amount of Project Bond could be issued.  

The Urban Renewal Agency adopted a resolution establishing guidelines for use of Project Bonds on November 28, 2005.  

• Project Bond Guidelines