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<br />e council had reviewed the document. He anticipated it taking take three to <br /> four months to prepare the development agreement. <br /> Ms. Bascom asked what projects the City would not be able to do if tax <br /> increment funds were used for the library project. Mr. Farkas said $3 <br /> million would come from what is currently set aside for a Willamette Street <br /> public plaza. He said $1 million in development funds are set aside to <br /> stimulate projects such as this one. An additional $1 million would come <br /> from the tax increment reserve which is not earmarked for any particular <br /> project. The only two projects that would be deferred would be the opening <br /> of Willamette Street and the public plaza. Mr. Farkas said the Pankow <br /> project would generate tax increment itself which would in turn stimulate <br /> other private development and additional tax increment. <br /> Mr. Miller asked for comments on phasing the project. Specifically, he asked <br /> if the shell could be built without tenant improvements. Mr. Farkas said the <br /> shell could be built and tax increment flow from the office tower could be <br /> used to pay for the shell. Mr. Gleason added that tenant improvements would <br /> be a separate act and council would have to bid out tenant improvements <br /> through the usual public bidding procedure. Those improvements would be <br /> owned by the City of Eugene. <br /> Mr. Miller asked about the impact of a recession and the potential loss of <br /> tenants from the building. Mr. Farkas responded that the assessor would then <br /> determine the value of the building. If the assessment goes down, there is <br /> probably enough coverage to absorb some of the tax revenue loss. Even if the <br />e bank assumed ownership of the building, the City would still have a <br /> survivability agreement which gives the City its lease on the shell and its <br /> arrangement on the parking facility. <br /> In the financing proposal, Mr. Gleason said there had been no calculation of <br /> growth in value of the building. If that value increases, the flow will grow <br /> at an average of three to five percent per year. If that occurs, he said a <br /> reserve account could be built against the expenses of a downturn in the <br /> economy. No growth was calculated in the total increment itself, no reserves <br /> were calculated on the lien on the library building itself, and no parking <br /> revenue payments to the reserve account were calculated. Therefore, Mr. <br /> Gleason said there were four places where there should be real money that are <br /> not in the deal. <br /> Mr. Holmer asked if there were restrictions affecting the City's ability to <br /> lease the unneeded 31,000 square feet of space. Mr. Farkas said it could be <br /> leased to the private sector, a non-profit organization, or a City <br /> department. No taxes would be paid if the lessee was a non-profit. The City <br /> would control that space entirely and could convert it to its own use. <br /> Mr. Rutan asked whether the Library Financing Committee had reviewed the <br /> information that had been presented to the council. Mayor Obie explained <br /> that the committee had reviewed the information in separate pieces but had <br /> not seen the entire proposal at once. Mr. Gleason said all the affected <br /> department staffs had reviewed the proposal. <br />e MINUTES--Eugene City Council December 14, 1988 Page 10 <br />