01/11/1989 Meeting (2) - Laserfiche WebLink

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e explained that the method of financing would be the tax increment flow generated from the building itself. Mr. Gleason added that the City's lease payments would commence three to six months after the date of beneficial occupancy (dbo), or at the same time the City begins to receive tax increment revenue. 6. Tenant Improvements Mr. Mounts estimated that finishing the interior of the Library shell would cost between $3 million and $5 million, to be paid from cash held by the Renewal Agency or financed using the Renewal Agency resources as security. Given the assumptions contained in Mr. Mounts' presentation, the capital net cost to the City was estimated at $4,235,000 over a ten-year period. Referring to expansion of the Library at its current site, Mr. Mounts said the present site lacks the potential revenue streams available as a result of the mixed-use development at the proposed site. Expansion costs were estimated at $16.2 million (excluding construction financing). Mr. Boles asked for an indication of Pankow's commitment to development at the 8th Avenue and Willamette Street site. Mark Perniconi, Pankow Development Company Project Manager, responded that there was a good chance a building would be constructed regardless of the City's commitment to include the Li brary. e Ms. Schue asked for clarification of whether tax increment financing would be available on the existing library site. Mr. Mounts responded that the Urban Renewal District can be expanded up to 20 percent, given certain conditions, but M~. Gleason considered it unrealistic to assume tax increment revenue would be available except on the Charnel ton or 8th and Olive sites. B. Project Questions From Councilors Bob Hibschman, Development Department, referred to a memorandum that contained a discussion of six questions submitted to staff by councilors. 1. Vacancy rate and rent for existing major office buildings Mr. Hibschman pointed out that office vacancy rates for downtown core area office space is approximately 12 percent, but class "A" space vacancy is negligible. Mr. Rutan asked about the impact of additional office development currently being proposed. Mr. Gleason commented that core area office development occurs in cycles and he believed if the downtown area fails to create adequate class "A" space with large enough floor plates, development will be forced to other suburban areas. Mr. Farkas noted the importance of timing and allOWing the Pankow Company to give prospective tenants the date of beneficial occupancy of December 1990 . e MINUTES--Eugene City Council Dinner/ Work Session January 11, 1989 Page 4