Newport’s 40-year experiment with urban renewal nears an end

The South Beach neighborhood of Newport has traditionally played the role of rural cousin to other parts of this coastal community, with lots of gravel roads, lush countryside and low-density housing.

But 40 years ago, Newport leaders created an urban renewal plan for South Beach, and things changed. The neighborhood is now home to the Oregon Coast Aquarium, the National Oceanic and Atmospheric Administration’s Pacific fleet, Oregon Coast Community College and more. Still, local business owners are split on how much they’re benefiting.

“As far as we can tell, urban renewal has been a good thing,” said Steve Halsey, the owner of the South Beach Fish Market. He uses massive, hand painted signs of crab and shrimp to draw diners.

He said the neighborhood’s first new set of traffic lights, on the corner of Highway 101 and Southwest 35th Street, slow drivers and make it easier for customers to get into his restaurant.

“It has not adversely affected us at all,” Halsey said.

But kitty corner at Off the Hook Bar & Grill, owner Robert Hoefs is not a fan of all the urban renewal work.

“My property value went down,” Hoefs said.

The city paved his parking lot in exchange for taking some of his land to build a turn lane for the new traffic light. But city planners also changed his zoning from light industrial to commercial.

“A light industrial zoning is better because you open a gas station … you could open a hotel. You could do anything on it,” Hoefs said.

Well, not anything. And Hoefs is not planning any new developments right now. But he’s not alone in his skepticism.

Garrett Bush runs Arrow Heating next door. He’s not sure how urban renewal is helping his business.

“That’s the tickle,” Bush said. “As we see this concept of growth take place, we almost get the feeling like, we’re in the way.”

To understand the local ambivalence to the urban renewal effort, it’s necessary to go back to 1983. That’s when Newport labeled South Beach “blighted” so it could be designated as an urban renewal district.

“It was more rural under-developed, lacked urban infrastructure,” said Derrick Tokos, Newport’s current community development director. He was hired in 2009.

Urban renewal works by taking new taxes generated in an area and using them to pay for public services that will help spur economic growth. The idea is that the new businesses and homes will generate more taxes and make the area more prosperous.

Tokos said that back in 1983, few people lived in South Beach so the city started by focusing on creating a critical mass of marine research organizations. Oregon State University’s Hatfield Marine Science Center was already there on Yaquina Bay.

It turned out to be a good idea. Oregon Coast Community College set up in South Beach as did the Oregon Coast Aquarium.

“One of its first major attractions was Keiko,” Tokos said.

Keiko was the orca that starred in the movie “Free Willy.” He came to Newport in preparation for release. But over his three-year stay, millions came to see him and spent plenty of tourist dollars.

Keiko and the aquarium were considered a success, and Newport city leaders funneled more urban renewal money into infrastructure such as fiber optic cable for faster internet, new docks in the bay and a network of bike and walking paths.

Again the investments paid dividends. The National Oceanic and Atmospheric Administration brought a dozen research vessels to town; Oregon State University greatly expanded its marine science center in South Beach; and OMSI opened Grey Camp.

“There are a lot of benefits to the community that you get from these investments, in terms of the additional employment and all that,” Tokos said. “But it’s not a huge tax driver.”

That’s because government organizations like NOAA, OSU and the community college don’t pay taxes.

So the city had to tweak the urban renewal plan to attract housing. Some big developments were built, including the Southshore neighborhood.

“It’s got an East Coast kind of theme to it. All of the homes are various shades of gray with white trim,” said Tokos. “It’s very planned out. A kind of beach access, second home feel to it down there.”

About half of Southshore homes are second homes. But what Newport really needs is low-cost housing. So the urban renewal plan was changed again. In fact, the plan has been tweaked more than a dozen times.

“I think the history with South Beach has been a mixture of success and some stumbles,” Tokos said.

The initial lack of tax income was one challenge. Another involved a failed plan to build an events center.

“You know, you’re never going to make everybody happy,” said Greg Schrock, an associate professor of urban planning at Portland State University.

He said there’s bound to be friction when planners shake things up.

Schrock said it’s also not unusual for urban renewal to change focus over time. In the case of South Beach it was almost inevitable that as prestigious organizations moved in, people would want to start living nearby.

“You don’t just make a plan and expect that it’s going to function for 25 years,” said Schrock.

He said a 40-year timeline is also not unheard of for urban renewal. When pushed, Schrock gave South Beach a positive grade: “I would give it probably a B+ or an A-. They’ve clearly sought to adapt their plans over time.”

That grade is reflected in the feelings of many South Beach residents like Lance Vanderbeck.

“Seeing some of the dilapidated buildings being taken down, seeing that there’s a plan for restoration … all the other buildings people are starting to maintain a little better and stuff,” he said.

Eight new projects remain in the works for South Beach, from maybe a new food cart area to more sewer and water hook-ups. But the district is due to sunset in 2027.

After 44 years, Newport will have spent about $40 million.