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<br /> <br />ECC <br />UGENE ITY OUNCIL <br />AIS <br />GENDA TEM UMMARY <br /> <br /> <br /> <br />Work Session: Downtown Site Development <br /> <br /> <br />Meeting Date: August 11, 2010 Agenda Item Number: A <br />Department: Planning & Development Staff Contact: Denny Braud <br />www.eugene-or.gov Contact Telephone Number: 541-682-5536 <br /> <br /> <br /> <br /> <br /> <br />ISSUE STATEMENT <br />The council is being asked to provide direction on a redevelopment proposal for the vacant parcel <br />owned by Beam Development located at Broadway and Willamette Street and adjacent to the Centre <br />Court building. Given various time constraints, the council is being asked to indicate its general <br />support for the project concept and Recovery Zone bond financing proposal so that the necessary <br />approvals can be considered in September. <br /> <br /> <br />BACKGROUND <br />Bennett Management Company (BMC), a locally-owned property management and real estate <br />development firm, is working with Beam Development and the City to acquire and develop the vacant <br />parcel owned by Beam, directly south of the Centre Court building (“Vacant Parcel”). (See the map in <br />Attachment A.) The conceptual development proposal would provide approximately 50,000 square- <br />feet of new construction including ground floor retail and four floors of commercial office space. The <br />total project cost is estimated at $10 million. <br /> <br />BMC and Beam are in discussions regarding the transfer of ownership of the Vacant Parcel. The <br />consideration for the property transaction would likely be limited to BMC’s assumption of the existing <br />Downtown Revitalization Loan Program (DRLP) loan on the property and restructuring of the loan <br />terms. The primary sources of financing for the new construction would include a bank loan that <br />achieves a tax-exempt interest rate through conduit financing by the City (see additional detail below), <br />BMC equity, and gap financing provided through the DRLP. <br /> <br />BMC has received a preliminary verbal commitment from its bank (to be followed shortly by a written <br />commitment) to finance the proposed project. To meet the bank’s underwriting criteria; BMC will <br />need to achieve specific pre-leasing, loan-to-value, and cash flow coverage requirements. The City is <br />considering assistance as follows specifically directed at helping BMC meet the bank’s underwriting <br />criteria. <br /> <br /> <br />Subordination and restructuring of the existing $404,000 DRLP financing on the Vacant <br /> <br />Parcel. <br /> <br /> <br />Utilization of the City’s Recovery Zone bond authority to allow BMC to achieve a lower, <br /> <br />tax-exempt interest rate on its bank loan. <br /> <br /> <br /> <br />To help meet the bank’s 65%-70% pre-leasing requirement, a City commitment to occupy <br />up to 10,000 square-feet of office space in the new building, and guarantee an additional <br />10,000 square feet of office space. (Similar to the 50,000 square-foot lease commitment <br /> Z:\CMO\2010 Council Agendas\M100811\S100811A and att's A and B.doc <br />