Item 4 - Ordinance on Downtown Urban Renewal Plan Amendments

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Chapter 8: Financial Analysis of the Plan with Sufficient Information to Determine Feasibility The financial analysis of the plan shown in Table 6 includes the anticipated tax increment revenues and the indebtedness capacity of those revenues. The analysis shows that the anticipated tax increment revenues are based on reasonable projections of new develop- ment and appreciation in existing property values. The projection of tax increment reve- nues is based on the following assumptions: Existing property assessed values will increase by 2% per year. New development assumptions are for an estimated $186 million of investment to be complete by 2010, including a mix of retail, housing, office space, and parking. The housing portion of the development will receive a Multi-Unit Property Tax Exemption for 10 years and a low income housing exemption for 20 years. Tax rates are projected to go down over time, due to the Oregon statute that says that certain urban renewal plans may only collect tax increment on permanent tax rates or bonds and levies approved by voters prior to October 6, 2001.In particular, bonded debt tax rates will be reduced as bonds approved by voters prior to October 6, 2001 are retired. The projections result in total resources between FY2007/2008 and FY2029/2030 of just * under $135 million. These revenues will support $40 million of increased maximum indebtedness proposed under this Plan Amendment. The $40 million maximum indebted- ness figure will not allow for the Agency to spend the total amount of revenue that the district is expected to generate during the remaining term of the district, however. Any additional expenditure in the plan that will be funded with tax increment funds will require a future substantial plan amendment. In addition to the West Broadway redevelopment projects, the revenues will be sufficient to pay for administrative activities, including an allocation of central service overhead costs. Those costs are projected to increase over time due to inflation of 3% per year. The Urban Renewal Agency will also carry a reserve on outstanding bonds until those bonds are fully paid off, as well as a balance equal to two months of operating costs each year, per City of Eugene financial policy. * Note that the proposed plan amendments, including the maximum indebtedness increase, will be reviewed by Planning Commission, the overlapping taxing districts and the general public. After this review, the City Council may choose a different maximum indebtedness figure. The financial effect of a different maximum indebtedness figure would be that either more or fewer projects (depending on whether the new figure was higher or lower) could be accomplished in the out-years of the Renewal Plan. Report on the Downtown Urban Renewal District Plan – Circulation Draft of July 17, 2007 15