Item 4 - Ordinance on Downtown Urban Renewal Plan Amendments

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If the advisory committee recommends including public amenities that were not envisioned by the developer in their concept, the result could be higher construc- tion costs and potentially higher costs to the Agency for the public share of the project costs. There is a factor in the concept for the cost of utilities and off-site improvements, such as sidewalks. The developer proposed that the Agency pay these costs. As the scope of these items is refined, there could be additional costs to the Agency. Any cost for transitioning or relocating existing businesses has not been factored into the estimates. There is always a risk of future legislative changes with urban renewal programs. As the West Broadway redevelopment project scope is refined and cost estimates are solidified, the minimal amount for maximum indebtedness increase of $40 million may constrain the Agency’s ability to take on additional project costs or to conduct the property transactions in the most effective manner for the developers and the Agency. The $40 million increase in maximum indebtedness also does not include sufficient authority for the Agency to spend tax increment funds generated by the West Broadway redevelopment projects on any future redevelopment efforts. This means that the Agency will need to revise the maximum indebtedness limit in the future if another development project is to be undertaken with tax increment financing in the district. This plan amendment also includes extending the termination date to June 30, 2030. The reason for the extension is to maximize the district’s financial capacity to undertake a large redevelopment project.Holding all else constant, a shorter district termination date would mean having a smaller debt capacity. Preliminary calculations indicate that the debt capacity reduction could be in the 15% to 20% range.The amount of lower debt capacity could range from $2-$3.5 million, depending on the future revenues of the Agency, interest rates, and lender requirements around debt protection measures. The Agency could respond to by (i) making up for a smaller debt capacity by requesting use of other City resources outside of the urban renewal district; or (ii) pledging additional security for the borrowing, such as a guarantee from the City’s general fund. There is, however, a practical limit to the amount of debt that the Agency can take on based on the level of projected revenues, even if the City guarantees the debt. The timing and amounts for individual project activities will be determined by the Urban Renewal Agency each year during the annual budget process. The Eugene Redevelop- ment Advisory Committee will provide advice on improvements to the district and the expenditure of funds. Completion dates for individual activities may be affected by changes in local economic and market conditions, changes in the availability of tax increment funds, and changes in priorities for carrying out project activities. Report on the Downtown Urban Renewal District Plan – Circulation Draft of July 17, 2007 11