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EUGENE CITY COUNCIL AGENDA ITEM SUMMARY Work Session: Hospital Update Meeting Date: December 6, 2004 Agenda Item Number: B Department: Central Services Staff Contact: Dennis Taylor www. cl. eugene, or. us Contact Telephone Number: 682-5336 ISSUE STATEMENT This item is an update of the progress in discussions between the Eugene Water and Electric Board (EWEB), McKenzie-Willamette Medical Center and the City regarding relocation of the hospital to EWEB's headquarters site. 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 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. Major Development Agreements to Date: Attachment A includes a summary of the major development agreements made between EWEB, McKenzie-Willamette, the City of Eugene and the Urban Renewal Agency (URA) to date. The attachment also sets out the main documents that will need to be executed among the parties in order to formalize those agreements. Attachment B includes an unsigned copy of the initial agreement between EWEB and McKenzie- Willamette for sale of EWEB's headquarters property. This agreement is still being negotiated between the parties and has not yet been signed. The document sets out the timeframe for the property sale, as well as the due diligence period for both EWEB and McKenzie-Willamette to use in evaluating the L:\CMO\2004 Council Agendas\M041206\S041206B.doc