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6A • March 9, 2018 | Cannon Beach Gazette | cannonbeachgazette.com Planning Commission says no to industry suggestions Commissioners question efficacy of proposed changes By R.J. Marx Cannon Beach Gazette CITY OF CANNON BEACH Housing stock in Cannon Beach as presented by the Cannon Beach Af- fordable Housing Task Force. Members of the Cannon Beach Planning Commission recognize the city needs workforce housing. But zoning amendments brought before them Feb. 27 are not the way to do it, they decided. The commission recommended the City Council reject the changes intended to reduce barriers for pri- vate developers seeking to build af- fordable housing. The amendments were intended to meet housing needs by reducing construction costs and subsequently reducing rental costs to tenants, wrote Martin North Vice President of Oper- ations Dave Norstedt in January. Mike Clark, owner of Coaster Properties, with former city planner Rainmar Bartl, proposed to amend parts of the code. Amendments focused on reducing parking requirements to maximize the number of units on a property and increasing height restrictions in the R3 zone, which is designated for multifamily housing. By raising the roof-line limit from 28 feet to 32 feet, developers could build three stories to include more units, intended to drive down rents for tenants. Reduced landscaping area re- spaces harder to find, he added. “Lowering the parking in the units downtown where there’s already a premium for parking, lowering those standards doesn’t make any sense.” Commission Chairman Bob Lundy said statutes should stand as written, with variances to create workforce housing considered on a case-by-case basis. The commissioners recommend- ed rejection of all amendments by a 7-0 vote. “We’re looking for another al- ternative to this,” Kerr said after the meeting. “It’s not just a blanket ‘no way.’ I just don’t see any outside controls on this. Outside developers coming in and charging $1,600 for an apartment — that’s not affordable housing anymore.” quirements and changes to condo- minium conversion rules for multi- family dwellings were also among proposals. “To me there’s nothing in this that would assure this would be afford- able housing,” Commissioner Lisa Kerr said. “The proponents are all people involved in development and commercial endeavors. That’s fine — but the way it’s written here is a disaster waiting to happen. I don’t think how any of this could lead to affordable housing.” Commissioner Darryl Johnson objected to proposed roof-height changes. “Moving the height to 32 feet reminds me of going to Sea- side,” he said. “We have a different feel in the city.” Parking changes could make Cannon Beach explores ways to redirect tourism money Tax from Page 1A The Astoria City Council voted last year to increase the lodging tax from 9 percent to 11 percent, with the intent to use some of the money for maintenance at city parks known to have heavy tourist traffic. Bend voted to reduce the percentage of lodging tax designated for tourism promotion in order to pay for road repairs, a move that is being legally challenged by the Oregon Restaurant & Lodging Association as a vi- olation of state law. Opponents say lifting re- strictions on the tax money ul- timately defeats the purpose, which is to promote tourism that generates revenue for cit- ies in the long term. In Cannon Beach, Greg Swedenborg, the president of the chamber’s board, said the chamber is open to the idea but needs more specifics. “I think it addresses an area that Cannon Beach has a need for. But it’s not just buying the school. You have to consider operating costs before you can make a decision,” Swe- denborg said. “Whether it’s used for the arts or as a con- ference center, sure, we could use that. But will it benefit year-round business? Is it do- ing what the intent of the law is, which is making it a place that regenerates that transient lodging tax?” ‘Loved to death’ A state law passed in 2003 imposed a 1 percent lodging tax increase, with 70 percent of the revenue collected re- stricted to tourism promotion and tourism-related facilities. As a fundraising mecha- nism, the law has done its job. The Oregon Department of Revenue collected more than destination that’s no longer a destination because it’s been loved to death?” Return on investment COLIN MURPHEY/EO MEDIA GROUP Cannon Beach city councilors might turn the former ele- mentary school into an event center. $145 million in revenue as of 2015. Cannon Beach in 2016 alone received $3.8 million in lodging tax revenue. But Wendy Johnson, an in- tergovernmental relations as- sociate with the League of Or- egon Cities, said some cities are having a hard time keep- ing up with the demand that tourism promotion creates. “A lot of communities are spending a lot on market- ing and are getting loved to death,” Johnson said. “Cit- ies rely on tourism for their economy and they want to be a welcoming place. But they also have a strapped budget, and they want more flexibili- ty to use those revenues. This law is one size fits all, and ev- ery city has different expendi- tures and needs.” A survey done by the league asked 46 cities how each would prefer to spend lodging tax revenue. John- son said the top responses were city beautification, pub- lic safety and transportation improvements — all issues related to a booming tourism industry. “We just disagree with what tourism-related means,” Johnson said. “You don’t have a good event if you have a traffic jam or not enough cops to keep it safe. They won’t come back.” In the last legislative ses- sion, Johnson said she pushed to broaden what can be con- sidered a tourism facility, which is defined as a confer- ence center, convention cen- ter, visitor information center or other property with the sub- stantial purpose of supporting tourism. “Right now the law says it has to be real property, and has to have a use of 10 years. So maybe you can’t cover flowers, but maybe you could fix a light post,” she said. “We think it should help with beau- tification issues, but the defi- nition is too narrow. We think it should include anything that makes the experience better for the tourist.” The proposal didn’t make it out of committee in Sa- lem. Johnson said she hopes to continue working with the lodging industry to find a solution. “The growth in Oregon has been great,” she said. “But at what point do you have a Jason Brandt, CEO of the Oregon Restaurant & Lodg- ing Association, argues a city already can use 30 percent of the lodging tax on general city needs, and that public infra- structure isn’t a reliable metric to help define tourism-related facilities. Redirecting the tax money to capital projects or main- tenance takes away from the “big picture” of what it takes to support Oregon’s second-larg- est industry, Brandt said. “The reality is, whenever we don’t put that dollar out for promotion, and instead for a local investment for a capital improvement, in a way we are shooting ourselves in a foot,” Brandt said. “We are using a long-term investment strategy for a short-term challenge a community may be facing.” That investment, Brandt said, is supported by a report from Longwoods Internation- al, which shows for every $1 invested in tourism promotion, $237 is generated in economic impact and $11 in tax revenue to the benefit of Oregon resi- dents. The concept of “how much tourism is too much tourism” looks different for each com- munity and should be solved on a local level, Brandt said. But investing in tourism over time is a greater benefit to city’s general fund, he said. “I can’t emphasize how strong the tourism economy can be if we focus on tourism promotion and less on mainte- nance backlogs,” he said. In Cannon Beach, since the Chamber of Commerce has been the recipient of 70 per- fore the contract the city would see maybe 4 percent or 6 per- cent growth. When we started you are seeing around 16 per- cent or 10 percent increases (in the lodging tax revenue). We think we have something to do with that.” cent of the lodging tax dollars, the amount of taxes paid to the city has increased by double digits almost every quarter. “We can’t claim it all,” Swedenborg said. “Good weather, good economy goes into growth, as well. 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He also was concerned that keeping this section of the ordinance could lead to a similar unintended consequence as the mixed- use building question, where property owners would opt to convert what otherwise would be some form of housing into a solely commercial enterprise. “If someone paid commer- cial value for this property, are taking away that value?” Vetter asked. “This could end up back- firing like the original problem we were trying to solve.” Before revisiting the is- sue in April, City Planner Mark Barnes and City Attor- ney Tammy Herdener plan to evaluate the questions raised by councilors, like a clearer definition of what constitutes a mixed-use building. “You raised good ques- tions. When can a building turn into a mixed-use build- ing? We want to look at this more closely,” Herdener said. “I don’t want to go down an- other slippery slope.” Glut in Oregon marijuana supply, prices ‘plummeting’ Clatsop County sold $8 million in pot products last year By Edward Stratton The Daily Astorian With their lower populations and higher rates of tourism, North Coast counties sold some of the most marijuana per capita in Oregon last year. The 14 licensed marijuana retailers in Clatsop County sold more than $8 million in products last year, part of the nearly $520 million sold statewide. The in- dustry has grown to employ more than 12,000 people, while the state has raked in more than $100 million in tax revenue. There were six marijuana retailers in Astoria, four in Sea- side, one in Cannon Beach, two along U.S. Highway 26 and one in Westport — more than 1 for every 2,800 people. Combined sales equaled $208 per person, the sixth-highest rate in the state during the first full year of rec- reational sales regulated by the Oregon Liquor Control Com- mission. Tillamook County ranked fifth, selling $5.6 million in marijuana products, equal to $214 per person. Lincoln Coun- ty came in third, at $13.6 mil- lion, $284 per person. Stephanie Schlip, who man- ages Oasis Cannabis locations in Newberg, Monmouth and Seaside, said her sales on the Oregon Coast will often outstrip those in the Willamette Valley by 25 percent in the summer and lag behind in winter. “I would say about 1 out of every 20 customers say they’re from another state, and they’ve never been in a dispensary,” she said. Many were Californians before that state recently le- galized recreational sales, she said, Many were from Idaho, the only state bordering Ore- gon where recreational mari- juana is illegal. Curry County, on the border with California, ranked second in sales per capita, selling $310 worth of marijuana per per- son. Rural Baker County, with 16,750 residents and across the border from more than 600,000 people in Idaho’s Treasure Val- ley, sold $16 million worth of marijuana last year, or $960 per person. Multnomah County sold $176 million in marijuana products last year, or $220 per person, the fourth-highest rate statewide. “I think it’s just the begin- ning,” said Don Morse, director of the Oregon Cannabis Busi- ness Council, a trade associa- tion. “I think sales are going to increase, and they’ll certainly get a lot higher as we take away from the black market.” But Morse and others see consolidation coming among the more than 500 retailers and 900 growers statewide. A presentation by New Frontier Data economist Beau Whitney noted the industry was reaching saturation. Retailers need about $125,000 in month- ly sales to be viable, but are av- eraging $92,000 a month in Or- egon, leaving them in distress. Part of the issue is too much marijuana being produced. The estimated maximum canopy being used by growers has gone from less than 10 million square feet in 2015 to more than 20 mil- lion square feet, Whitney said. Between October 2016, when recreational sales started, and November, the retail price of a pound of marijuana dropped from $4,440 to less than $3,000. “It’s no surprise to me that there’s excess supply, or that prices are plummeting,” Whit- ney said, adding many growers are trying to get bought out. Whitney has suggested re- tailers lower their prices to take price-conscious consumers away from the black market. “In general, for every 1 percent or so reduction in price … you’ll increase your demand by 2 to 3 percent,” he said. “That’s conversion over from the illicit market.” 34154 Hwy 26, Seaside, OR P.O. 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