Item 2A: Approval of City Council Minutes

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Mr. Zelenka asked if Beam had another tenant in mind. He understood that ORI was currently a tenant in another Connor/Woolley building. Mr. Braud replied that Beam was talking to other tenants, but none that were on the scale of ORI. Mr. Pryor saw this as a conflict between the City’s willingness to take risks versus its desire to take control of this site. He questioned how much the City was willing to pay for certainty and if it was willing to take on the risk. He surmised that staff was informing the council about the risks involved with the money, because it was public money. He averred that as policy makers they could choose to decide how much risk to take with that money. He commented that he did not want to walk away but he also did not want to risk the public’s money without anything on the table. He felt that Option 2 was far less risky than Option 1. He was concerned about the project, but he could not bring himself to take too much risk with public money. He averred that the public expected the council to be prudent with their money. th Ms. Bettman declared that the RFP on the 10 Avenue and Charnelton Street site would be threatened if the Centre Court project failed. She felt Option 2 would put the fate of the project in the hands of Con- nor/Woolley. She alleged that Connor/Woolley was “courting” ORI by lowering its rent. She agreed that Option 1 needed help, but she believed they should try to move it forward. She asserted that the City could remedy some of the uncertainties. She suggested that the City propose that it was willing to purchase the project by July 8 if Beam Development was willing to put down $475,000 on the property by May 1. Mr. Sullivan said staff had not offered this type of option to Beam because they were working within the council-authorized options. He related that to-date Beam had indicated it was not willing to put the resources forward. Ms. Bettman believed the City would be well-positioned with a non-refundable deposit and the promise of a purchase. Mr. Clark echoed a desire to bring the project to fruition. He also felt the developer’s track record was good and staff had done a great job in working with Beam. His chief concerns lay in potential liabilities, such as a level 2 environmental study revealing more asbestos than had been previously supposed and/or Beam pulling out. He said in this case the City would have purchased a hole in the ground, with no way to fill it, and a building with asbestos. In response to a question from Mr. Clark, Mr. Braud stated that it was not likely that Beam would qualify for $17 million in financing from the bank without a firm commitment from tenants. Mr. Clark noted that he had office space one block from this building that cost approximately $1 per square foot. He was not certain the assumptions of $1.60 and $2 per square foot were realistic. He felt any banker would look at this and ask the same questions. He noted that the positive income margins on the Beam plan were small. He had extrapolated from the recent election that the citizens wanted the councilors to make sensible decisions. He asked if the AIS was accurate regarding a guarantee of a 13 percent profit. Mr. Braud responded that a portion of the BEDI grant would be put into the project as a loan but that portion of the financing would only be repaid if Beam achieved a targeted return of 13 percent. He noted that this was similar to what had been done with other projects. Mr. Clark surmised that the City was saying if market conditions did not work out the City was willing to “take a hit.” In response to a question from Mr. Clark, Mr. Braud affirmed that Beam had not met its milestones, such as attaining financing and commitments from potential tenants. MINUTES—Eugene City Council April 16, 2008 Page 4 Work Session