03/13/2017 City Council Agenda - Laserfiche WebLink

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effort will cost up to $40,000. KLCC provides a valuable community service, which must be maintained. There are solutions to address this issue and a condition of the MUPTE approval could be conditioned on holding KLCC harmless from the added cost. 2.6.6 Historic and Existing Housing Sensitivity. The project is not adjacent to a historic locale. No historic structures or existing housing were demolished or removed from the property in the 2 years prior to the date of application. 2.6.7 Project Need. The project's pro -forma and financial information was analyzed by Johnson Economics, an independent, real estate economics consultant who found that the project as proposed could not be built but for the benefit of the tax exemption. The financial information Granite Properties submitted in their application is based on projections prior to finalizing financing, construction, and tenanting. It includes assumptions regarding rents, vacancy rates, operating costs, capitalization rate, lender underwriting criteria, interest rates, and reasonable rate of return. Johnson Economics, the Review Panel, and staff reviewed the assumptions. The Johnson Economics analysis concludes that the project would not be viable without the availability of the MUPTE, using the reasonable assumptions outlined and that "inclusion of the MUPTE over a ten-year period would likely make this project viable." Johnson Economics also looked at a scenario where market assumptions for 2018 are changed to reflect optimistic downtown housing market conditions. This scenario would result in a need for a seven-year MUPTE. See Section 4 below for the Review Panel's conclusions. 2.7 A presentation on the Granite Properties project was given to the Downtown Neighborhood Association on March 23, 2016. 2.7.1 Future Neighborhood Engagement. Granite also attended the May 25, 2016 Downtown Neighborhood Association meeting and reviewed project design. Prior to completing final drawings, Granite will meet with Downtown Neighborhood Association. Before submitting for permits, Granite will submit the design to staff to review conformance with the design attached to the resolution (should City Council approve the MUPTE). Staff will also allow the neighborhood an opportunity to review and comment on that final design. 3. A display ad soliciting recommendations or comments from the public regarding this project was published in the Register -Guard on May 10, 2016. The period for comment expired on June 9, 2016 and resulted in 17 written comments. Additional comments were submitted to staff or directly to City Council after the official comment period. All 22 comments received as of July 20 were provided to City Council with the materials for the July 27 work session. 4. The community member MUPTE Review Panel considered the project application, including compliance with program criteria and the independent consultant's financial review, during 3 meetings held on June 27, June 30, and July 18. The Review Panel concluded that the project Page 3 of 4 Resolution EXHIBIT A - Report and Recommendation