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Mr. Zelenka asked why HUD would require URA backing for its loan. Mr. Braud replied that if one <br />considered the current state of the property, it was vacant and there was no cash flow. He said the City <br />would have to demonstrate some cash flow/debt service ratios. He stated that the question was whether the <br />project could meet HUD’s underwriting criteria, which included debt service coverage and loan-to-value <br />ratios without additional security. He added that when the project was complete and there was cash flow the <br />equation had potential to change. <br /> <br />Mr. Zelenka asked what happened to the grant amount if the project required URA backing. Mr. Braud <br />responded that the more security the City could provide the more it could borrow. Mr. Zelenka had <br />presumed that there would be some level of subsidy from the City. Mr. Braud reiterated that the preferred <br />method was to loan money rather than to grant money to or invest money in the project. He said the next <br />level of participation to help Beam construct and reconstruct the Centre Court building would be some other <br />financing mechanism, likely using the HUD 108 loan and/or the BEDI grant to put into it. <br /> <br />Mr. Zelenka asked if the City could use the $2 million in the URA loan program for the project. Mr. Braud <br />replied that the URA loan program was historically used for building improvements and projects within the <br />Downtown Urban Renewal District. <br /> <br />Mr. Poling acknowledged that this hinged on the March 10 vote on the Supplemental Budget. He asked how <br />firm this deadline was. Ms. Cutsogeorge responded that the City had to exercise its options by March 24 <br />and the council break was set to begin on March 13. Mr. Poling observed that Ms. Taylor planned to be <br />absent on March 10. He encouraged Ms. Taylor to participate by telephone rather than request the vote be <br />deferred. <br /> <br />Ms. Taylor asked if this vote could be conducted on March 12. Ms. Jones stated that the agenda for March <br />12 was “packed.” She underscored that it was the council’s decision on whether to defer the vote to that <br />date, but the agenda items scheduled for that date were all time sensitive and required action. <br /> <br />Ms. Taylor indicated that she would vote in favor. <br /> <br />th <br />Mr. Zelenka asked where the 10 Avenue/Charnelton Street project would be left if the URA funds were <br />used to back the loan. He was concerned that it would be impacted so that no one in the downtown could be <br />assisted through this mechanism. <br /> <br />Ms. Ortiz remarked that it was the will of the people to keep the limit on the URA funds at the current level. <br /> <br />th <br />Ms. Taylor said the City should make the 10 Avenue/Charnelton Street property into a park. <br /> <br />Mr. Zelenka commented that the Beam project seemed a little sketchy because the City did not necessarily <br />have enough money to make it work. <br /> <br />Ms. Solomon ascertained from Ms. Cutsogeorge that once the URA reached its debt limit the City could not <br />collect anymore tax increment funds. Ms. Cutsogeorge stated that the money could be used to pay off <br />another urban renewal project, such as the library, but could not be applied to new projects. <br /> <br />Mr. Pryor, seconded by Ms. Taylor, moved to direct the Agency Director to include the <br />budget transactions necessary to accomplish the property acquisition in the Supplemental <br />Budget to be considered on March 10, 2008. The motion passed unanimously, 7:0. <br /> <br /> <br />MINUTES—Eugene City Council February 27, 2008 Page 7 <br /> Work Session <br /> <br />