01/11/1989 Meeting (2) - Laserfiche WebLink

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e e e three percent interest with payments deferred for the first five years during which time interest accrues to the principal. At the end of year five, the loan balance is amortized over 30 years and Pankow begins payments. At the end of year ten the loan is called and the debt is retired. The opportunity cost ($2.28 million) assumes investment of the $2.5 million at current rates over the ten-year period. During the ten-year period, the privately owned parking structure is generating tax increment revenue based on an estimated value of $3 million. The City will also receive loan interest payments. Mr. Mounts anticipated the potential net cost at $1.1 million. Benefits the City will receive from the parking being privately owned and operated include a savings of approximately $100,000 annually in operating costs and access to parking at no cost in the evenings and on weekends. Mr. Boles noted that the operating hours of the library should be reviewed to maximize the advantage of the available free parking. Responding to Mr. Holmer's request for information on the cost of City-owned parking, Mr. Farkas said current operating costs are $35 to $45 per space per month. Those costs include maintenance, security, and reserves. Site enforcement in the evening would be a City responsibility which Mr. Farkas anticipated being a minimal cost to the City. Mr. Gleason pointed out that a parking fund is not created for investment yield on profit but to purchase additional parking. He considered it advantageous to lend the money and obtain a parking structure that relates to the facility. Stressing that the parking faCility is intended for the mixed-use development, Mr. Farkas observed that if parking were not provided for office tower use during the day, those tenants would occupy Parcade and surface parking that otherwise will be available for library use. Councilors discussed the fact that as downtown development occurs, parking will become more of a problem. Mr. Gleason observed that the City is no longer in a financial position to build additional parking facilities speculatively. Answering Mr. Rutan's questions, Mr. Farkas explained that the addition of a 240-space facility would represent a net gain of 60 spaces. By shifting long-term leases in the Parcade (with 438 spaces and presently at 75-80 percent usage) to the Hult garage (with 515 spaces and presently less than 50 percent occupied by permit parking), he anticipated adequate parking would be available to accommodate the needs of the new structure. Referring to a second level of underground parking mentioned by Mr. Holmer, Mr. Farkas said engineering issues related to the water table being at 15 feet are being addressed. He added that a structural analysis has determined that an additional level with 160 spaces could be added to the Parcade. 5. Library Shell The cost of the Library shell is estimated at $6.32 million. Under the proposal, the City would lease the shell from the developer for the first five years, after which a decision would be made to renew the lease or purchase the shell at cost. In response to Mr. Bennett's inquiry, Mr. Gleason said terms of the lease renewal have not been negotiated. Mr. Mounts MINUTES--Eugene City Council Dinnerl Work Session January 11, 1989 Page 3