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CC Minutes - 02/27/08 Work Session
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CC Minutes - 02/27/08 Work Session
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City Council Minutes
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2/27/2008
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any funds that were left at that point could be used for other downtown priorities. She added that the project <br />th <br />under current discussion was located at 10 Avenue and Charnelton Street. She reviewed the timeline for <br />acquisitions. <br /> <br />Mayor Piercy asked if there was any difference in getting HUD approval for this project as opposed to the <br />previous project, noting that it had contained a significant housing component. Mr. Braud replied that the <br />City had been approved for the creation of a loan pool, defined by the $8 million in borrowing capacity and <br />the $2 million BEDI grant. He said each individual project had to be approved by HUD in order to meet its <br />underwriting criteria for a specific use. <br /> <br />Mr. Clark observed that much of this was predicated on the agreement with Beam Development and that the <br />security would be the real estate. Mr. Braud stated that because the City was borrowing from HUD it had <br />to meet its underwriting criteria and that HUD’s intent was not to jeopardize the CDBG funds. He <br />emphasized that this was also the City’s intent. He said the real estate would be a source of security for the <br />loan and that the City was in the process of negotiating other security from Beam Development. <br /> <br />Mr. Clark asked what the City’s protection was in case Beam Development did not follow through with its <br />project. Mr. Braud responded that staff was trying to put all of the steps into place to be able to “100 <br />percent assume” that the project was going forward. He indicated that the City’s intent was to sign an <br />agreement with Beam Development that included a non-refundable deposit in the amount of 10 percent of <br />the value of the property. <br /> <br />In response to a follow-up question from Mr. Clark, Mr. Braud confirmed that the length of the agreement <br />had yet to be negotiated. He said the length of the HUD 108 loan was assumed to be 10 years and the City <br />would attempt to structure its agreement with Beam along those lines. <br /> <br />Mr. Clark asked if the project’s success was predicated on having Oregon Research Institute (ORI) for a <br />tenant. Mr. Braud averred that ORI would be a “great tenant,” but Beam Development had indicated that <br />they were talking to other tenants as well. <br /> <br />In response to a follow-up question from Mr. Clark, Mr. Braud clarified that the primary goal was to assist <br />Beam Development in bringing its project to completion. <br /> <br />Ms. Taylor asked how much had been spent in City attorney fees. Ms. Cutsogeorge estimated that attorneys <br />had cost $50,000. <br /> <br />Ms. Taylor asked why the City was not using tax increment funding. Mr. Braud responded that one of the <br />“big carrots” was the possibility of grant funds. Ms. Taylor asked if there was enough money in the urban <br />renewal funds if the grant did not work out. Mr. Braud explained that the City could likely accomplish the <br />acquisition with the funds but the question was then whether there were enough resources for Beam to get <br />the project off the ground. <br /> <br />In response to questions from Mr. Zelenka, Mr. Braud clarified that the City’s agreement was with HUD <br />and the obligation was for the City to repay the loan; Beam’s agreement would be with the City. He <br />explained that the BEDI funds would also be applied to the acquisition and Beam Development would repay <br />the entire acquisition cost to the City directly. <br /> <br /> <br /> <br />MINUTES—Eugene City Council February 27, 2008 Page 6 <br /> Work Session <br /> <br />
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