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<br />significant portion of the financing for WestTown will expire and potentially expose the project to a <br />higher and more costly interest rate. <br /> <br />City staff has reviewed available resources and determined that it is possible to make up to a $450,000 <br />loan to WestTown using the following City funds: <br />The housing capital project fund, which accumulates resources in order to purchase additional <br />? <br /> <br />landbank sites. $235,000 would come from this fund. <br />The low-income housing fund, which has received payments over time generated through the <br />? <br /> <br />Multiple Unit Property Tax Exemption (MUPTE) program. $135,000 would come from this <br />fund. <br />The downtown projects loan fund, which is a loan pool for use within the downtown area. This <br />? <br /> <br />loan fund is separate from the Downtown Urban Renewal District loan program. $80,000 would <br />come from this fund. <br /> <br />This proposal has been reviewed by a committee of the Housing Policy Board that was empowered to <br />make a recommendation on behalf of the entire board. City staff and the Housing Policy Board <br />th <br />recommend a $450,000 short-term loan to Metro for use in the WestTown on 8 project. The loan <br />would be structured with a three-year term and a three percent interest rate. This action will allow <br />Metro to proceed with the project in its current form and to break ground in early 2007 and also allow <br />the City to recover funds in a relatively short time period. Loan repayment to the City will come from <br />Metro’s revenues from several projects. An analysis of Metro’s balance sheet and cash flows verifies <br />Metro’s capacity to repay the loan and still leave an appropriate cushion for its operations. Metro also <br />plans to explore other funding mechanisms and grants that would allow early repayment of the loan. <br /> <br /> <br />RELATED CITY POLICIES <br />Numerous City goals and policies encourage low-income housing development as well as residential <br />development within the downtown. The Eugene Downtown Plan specifically calls for “multi-unit <br />housing in the downtown core and on the edges of downtown for a variety of income levels and <br />ownership opportunities.” <br /> <br />The City Council has established a Housing Dispersal Policy which seeks to maximize housing choice <br />for low-income families and integrate housing throughout the City of Eugene. WestTown will be <br />located in appropriate Census Tracts according the Housing Dispersal Policy. While WestTown exceeds <br />the recommended limit of 60 units, it is highly unlikely that more than 60 units will be occupied by <br />families with children, based on the occupancy mix of other downtown affordable housing <br />developments. <br /> <br /> <br />COUNCIL OPTIONS <br /> <br />The council has two main options: <br /> <br />1.Approve loan funding as proposed. <br /> <br />2.Decline to approve funding. <br /> <br /> <br />CITY MANAGER’S RECOMMENDATION <br /> <br />The City Manager recommends Option #1: Approve use of City funds for a loan to Metropolitan <br />th <br />Affordable Housing Corporation for the WestTown on 8 project as proposed. <br /> L:\CMO\2006 Council Agendas\M061009\S0610094.doc <br />