Item 5: Resolution Approving MUPTE for Broadway Lofts

Home Browse Search

Public Benefits After reviewing the Broadway Lofts application against the public benefit scoring criteria in the Standards and Guidelines, staff determined that the proposed development earned 150 points. (A minimum of 100 points is required for the City Manager to recommend that council approve an application.) Points were awarded for the project through the following benefits: Density: 50 points (10 points per unit in excess of the minimum code requirement; 50 point max) o Location: 100 points for being located within the Downtown Plan Area o Impact and Need for Tax Exemptions to Encourage Housing and Ground Floor Commercial The City and other local taxing districts forgo revenue when property is exempted from taxes. Broadway Lofts will continue to generate property tax revenue on the land. The submitted application estimates the property tax paid will be $7,100 per year. After 10 years, the entire development will be taxable, generating an estimated $48,400 in year 11. The MUPTE is vital to the development and, if it is denied, the property could not be converted to a housing use. The commercial portion of the project is a public benefit and enhances the feasibility. Ground-floor commercial, including office, but more specifically retail, supports a mix of uses within one building and within an area. The convenience of multiple uses grouped together increases the walkability of the area, which directly supports the area’s vitality. Ultimately, a successful mixed-use area increases the value and likelihood of additional development, resulting in further revitalization, boosting investor and community confidence. Broadway and Willamette is considered one of the most important intersections downtown, a gathering place for special community events. Activating these vacant storefronts will increase pedestrian activity and enhance public safety at this critical area downtown. While ground-floor uses are desired, the costs and financial risks associated with this development form can be an impediment. Mixing uses within one building adds costs from a construction and code standpoint. In addition, desired ground-floor commercial tenants are often difficult to secure, especially in the current economy. Allowing a tax exemption to include the ground-floor area designated for commercial use addresses this impediment and helps to stimulate this desired development form. The City (through its Urban Renewal Agency) provided $500,000 acquisition financing from the Downtown Revitalization Loan Program in 2011 to support downtown housing and to complete rehabilitation of the heart of downtown at Willamette and Broadway. Financial Analysis The applicant demonstrated that the project as proposed could not be built but for the benefit of the tax exemption. Staff and the Loan Advisory Committee reviewed the pro-forma and confirmed this conclusion. (See Attachment E for more information.) Timing This application was submitted on November 30, 2011. The City Manager has 90 days (until February 28) to make a recommendation to the council. If the council has not acted in 180 days, the application is deemed approved. S:\CMO\2012 Council Agendas\M120123\S1201235.doc