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II. WORK SESSION: URBAN RENEWAL PLAN UPDATE (DISTRICT EXPANSION, DEVELOPMENT PROJECTS, AND FINANCING) e Mr. Gleason introduced the item. Eugene Development Department (EDD) Director Abe Farkas gave the first staff presentation. He said this would be a continuation of the previous council discussions of the Urban Renewal Plan update. A follow-up work session is scheduled for October 28, at which time the Will amette redesign will be di scussed. The counci 1 is tentatively scheduled to take action on the plan on November 16. Mr. Farkas said several staff reports would be given: tax increment financing as a policy tool; Urban Renewal as an element of the regional economy; the objectives and accomplishments of Eugene's Urban Renewal District; the options for the future of downtown, particularly expansion of the district; and Hult Center improvements. A. Tax Increment as a Policy Tool Mr. Farkas said tax increment is one of a limited number of tax tools that can be used to stimulate development, and one of the few tools available to stimulate downtown development. It is used in 30 states and 16 Oregon cities. He said that in Eugene, the policy tool has: generated 6,000 parking spaces, 2,000 of which are in garages; helped construct a conference center; helped assemble land for development; contributed to major public improvements; and provided a climate for the stimulation of rehabilitation and new construction. He said the net cost of using tax increment financing is about three cents per $1,000 of assessed value. He explained this as follows: the cost of retiring the existing tax increment bonds is about 68 cents per $1,000 of assessed value; if the improvements that were made using tax increment had been e financed with another mechanism (i.e., General Obligation bonds), the cost of retiring these bonds would have been about 65 cents per $1,000 of assessed value; the net cost of using tax increment financing is the difference between the two figures, three cents per $1,000 of assessed value. Mr. Farkas said these three cents go toward various programs, small improvements, loan programs, and the administrative element of tax increment financing. Mr. Farkas said the legislative intent of tax increment financing is two-fold: to eliminate slum and blight, and to encourage private reinvestment. Mr. Farkas said it is important to examine the use of tax increment financing within the context of the regional economy. He said downtown's position within Eugene is much like Eugene's position within the region: downtown is the most densely developed part of Eugene, and Eugene is the most densely developed part of its region; both downtown and Eugene are home to diverse uses in close proximity with each other; the cost of doing business in Eugene is higher than the cost of doing business in other parts of the region, and the same is true for the costs of doing business in the downtown, where land, rents, and supports for the quality of life are costlier than in other parts of the city; and finally, Eugene is a major employment center for the region, just as downtown is for Eugene (employment figures for Lane County, Eugene, and the downtown are 94,000, 63,000, and 12,000, respectively). Mr. Far ka s said that in order to maintain Eugene's and the region's competitiveness, the strength of downtown must be maintained and built upon. He added that one e MINUTES--Eugene City Council September 30, 1987 Page 4