12/19/1988 Meeting - Laserfiche WebLink

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e construction costs should not be ignored. He observed that the existing library has already been expanded to the capacity planned when the building was first constructed. Ms. Ehrman commented that enlarging the present library was the third choice of the Future of Our Library Committee and would add costs for additional parking. Answering Mr. Miller's questions, Mr. Gleason explained that the $20 million value of the building was estimated by calculating construction costs of materials and then projecting square footage costs. Ms. Schue wondered if the assessed valuation of the Hilton went down during the hotel's period of financial difficulty. Mr. Farkas answered that it had. He said that part of the agreement with Pankow would specify that appeal was not be be made to the Board of Equalization. Mr. Gleason added that the Hilton had been a joint venture structured around a tax deal and when the tax law changed, the stability of the project was disturbed. The council accepted a risk and as a result there was a major hotel in downtown Eugene. Referring to Mayor Obie's question about reserve money, Mr. Farkas said $500,000 was not usable because it had to be retained as bond assurance and it is prudent to maintain larger reserves. He said the City's ability to respond to other needs downtown was based on the amount of tax increment revenue to be generated. Mr. Farkas answered Mayor Obie's next inquiry by saying projections on the need for office space downtown were based on e private sector information. He said a consultant could provide additional information about the project's potential creation of additional vacancies and whether there could be an accompanying reduction in the assessed value of this and other projects in the area. Mr. Gleason added that leases must be obtained before an assessment could be made. He noted that some tenants are being lost because office space is not available with floor plates exceeding 15,000 square feet. Responding to Mr. Holmer's question, Mr. Farkas said the construction cycle would determine the cash flow required. Mr. Gleason told the council that the first step toward realization of the project would be for the Urban Renewal Agency to instruct management to proceed with negotiations. It would take three to six months to close the deal but no money would be committed until Pankow agreed. A development agreement might be signed in September, but the City still would not assume any risk until construction began. A second resolution before the council would instruct the City Manager to proceed with an agreement with the State of Oregon to relocate utilities. Mr. Gleason hoped that could be taken care of as soon as possible to allow design commitments to be made between February and April. Mr. Bennett observed that if first class downtown office space is available at $1.05 to $1.20 per square foot presently and Pankow offers space at $1.50 e MINUTES--City Council December 19, 1988 Page 5 Work Session