Laserfiche WebLink
Master Development and one from Network Charter School, several parties had requested information <br />about the property. <br />Mr. Zelenka determined from Mr. Braud that the City had not solicited offers for the property since July <br />2009. Ms. Hammitt pointed out that the property had a "for sale" sign posted on it and the City had <br />actively marketed the property since July 2009. <br />Mr. Zelenka agreed with Mayor Piercy that it would desirable if the building was redeveloped as housing <br />but he acknowledged the challenge of that. He believed the MUPTE was most appropriately used in the <br />downtown area rather than in the other areas that it was being used. <br />Mr. Zelenka asked about the difference between the appraised price and the sale price. Mr. Braud said the <br />appraisal was based on a commercial office use rather than a housing use. It would be more challenging <br />to convert the property to housing, which changed the economics of the real estate value. The rents <br />charged for housing would not be more than rents charged for office use, and were generally less. Mr. <br />Braud said staff derived a lower value for a housing project than for a commercial office use. Mr. Zelenka <br />asked why the City was not requiring housing but would still provide the purchaser with $200,000. Mr. <br />Braud attributed it to the market risk involved and suggested the City would not get a market value for the <br />property because it was vacant and a purchaser would be buying a `spec' office building with no tenants. <br />Responding to a question from Mr. Zelenka, Mr. Braud confirmed there was no time limit on the note. <br />Mr. Zelenka asked if staff had done a spreadsheet analysis of the likelihood of receiving that payment. <br />Mr. Braud acknowledged the risk involved and pointed out that it was the same risk the City took in <br />regard to the Beam project. The City lacked a fully fleshed out pro forma because Master Development <br />had not gotten into the building to determine rehabilitation costs or done a market analysis for the rents. <br />He speculated that at some point the building would be sold, which would be a logical time for the money <br />to be paid back to the City. He suggested that it was also possible that, like Broadway Place, rents would <br />stabilize and the City would begin to see payments. <br />Mr. Zelenka likened the note to a zero interest loan. Mr. Braud said the City was a partner in the project <br />as well as a participant in the success of the project. <br />Mr. Zelenka indicated support for the proposal because he believed the City would recover its money. <br />Mr. Clark believed that the City had other assets and properties it should dispose of to support the <br />construction of a new city hall. He asked what City Manager Jon Ruiz planned to do with the $1 million <br />realized from the property sale. City Manager Ruiz indicated he had planned to use it to fund implementa- <br />tion of the strategies that came out of the Envision Eugene process. Mr. Clark strongly suggested the <br />manager add the sale proceeds to the Facility Reserve because he believed the money should be used to <br />defray the cost of renovating or rebuilding a new city hall. City Manager Ruiz said that the sale price <br />would come in as unappropriated dollars, and the council could chose where to appropriate those dollars <br />through either a supplemental budget or through the annual budget process. <br />Mr. Poling was very supportive of the proposal and agreed with Mr. Clark about how to use the money the <br />City received for the building. He believed the council needed to demonstrate to the taxpayers it was <br />trying to offset the costs of a new city hall. <br />MINUTES— Eugene City Council December 8, 2010 Page 2 <br />Work Session <br />