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EUGENE URBAN RENEWAL AGENCY AGENDA ITEM SUMMARY Action: Resolution 1032 Authorizing Execution of a Design Finance Agreement Meeting Date: December 6, 2004 Agenda Item Number: 3 Department: Central Services Staff Contact: Dennis Taylor www. cl. eugene, or. us Contact Telephone Number: 682-5336 ISSUE STATEMENT This item is approval for the Urban Renewal Agency (URA) to borrow funds from McKenzie- Willamette Medical Center for the purpose of starting design work on the Patterson Street underpass. BACKGROUND Council Action History: Initial council discussions about hospital expansion and siting in conjunction with PeaceHealth took place in 2001. At a council work session on September 18, 2002, the council directed staff to prepare a draft list of potential sites and inducements for hospital development in Eugene. A continuation of the work session on hospital sites occurred on November 13, 2002. These work sessions were in response to the intent to induce a hospital to locate in Eugene. In early 2003, the council initiated a code amendment to accommodate hospital uses in a wider range of zone districts and subsequently adopted the ordinance (that ordinance is currently at the Court of Appeals). Work sessions were held on several dates in 2004 to update the council on the status of attracting a hospital to Eugene. On January 21, the council directed the City Manager to evaluate three alternatives to extend Agate Street to provide access to a potential hospital located on the Eugene Water and Electric Board (EWEB) site. On June 16, the council authorized the City Manager to inform McKenzie- Willamette Medical Center ("McKenzie-Willamette") that the City would be willing to undertake construction of two transportation projects if McKenzie-Willamette constructed a hospital on the EWEB site with a value of not less than $85 million. On September 22, the council directed the City Manager to pursue a development agreement for the benefit of providing access to McKenzie-Willamette via Patterson Street, contingent upon McKenzie-Willamette's constructing an $85 million hospital development with a substantial Willamette River setback. Design Finance Agreement: The Patterson Street underpass is a critical piece of the puzzle for McKenzie-Willamette's decision to locate a hospital on the EWEB site. In order to ensure that design work on the underpass occurs as swiftly as possible, McKenzie-Willamette has indicated through verbal agreement that it is willing to provide up to $500,000 of funding to complete a portion of the design work. The City (through an intergovernmental agreement with the Urban Renewal Agency) will contract the design work out and expects that design will be 30% complete by September 30, 2005. L:\CMO\2004 Council Agendas\M041206\S0412063.doc