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<br />- <br /> <br />e <br /> <br />e <br /> <br />Mr. Fuller said the staff did an excellent job of reviewing financing <br />options. The project may have less risks than it would have had if the <br />original proposals had been approved. The Oregon Bank is proud to <br />participate with the City in the public/private partnership. <br /> <br />Answering a question from Mr. Holmer, Mr. Fuller said the City's <br />participation ($863,000) includes the original purchase price of the land, a <br />$300,000 business development fund loan, and $200,000 and $350,000 in two <br />categories from the Urban Renewal Agency. <br /> <br />Mr. Miller was concerned about the "worst case senario." He asked if the <br />City will be in a better position if the project fails than if nothing is <br />done. Mr. Schwartz said membership in three or four years will indicate if <br />the project will be successful in the long term. Anything done to the <br />building now will be an improvement. About $3.4 million will be spent on <br />improvements to the structure. <br /> <br />Ms. Wooten was also concerned about the "worst case senario." Answering her <br />questions, Mr. Fuller said the break-even point is 1,225 members. There are <br />about 200 members now. If the project fails, the Oregon Bank will take <br />possession of the building. Conversion of the building to office space will <br />cost between $200,000 and $400,000. The Bank would then sell the building. <br />The building will be appraised at $3.8 as an athletic club. It has not been <br />appraised as an office building. <br /> <br />Ms. Wooten emphasized that the City will probably lose its investment if the <br />project does not succeed. Mr. Fuller said the bank considers the developer's <br />guarantee important. The guarantee is to the City as well as to the Bank. <br /> <br />Ms. Wooten asked if capital could be raised so that the City would not have <br />to invest more than the originally anticipated $300,000. Mr. Fuller did not <br />think that could be accomplished now. If it were mandated, the bank would <br />not support the project. <br /> <br />Mr. Gleason pointed out the original proposal was for a much smaller <br />project. Mr. Fuller said the Oregon Bank had originally expected to loan <br />only $1.3 million for the project. Now the Bank is loaning $1.6 million for <br />the building, $525,000 for equipment, and $150,000 for operating expenses. <br />The original project included a $500,000 Federal loan. <br /> <br />Mr. Schwartz answered an inquiry from Mr. Holmer by saying the southern end <br />of the mall does not have an anchor to bring traffic to it now. <br /> <br />Discussing the project, Ms. Wooten said she wants the southern part of the <br />mall to prosper and she is enamored with the Ax Billy Building. She has been <br />concerned about the project because the level of public commitment is great, <br />because of the kind of jobs that will be created, and because the facility <br />will not be open to the public. She would have supported a City commitment <br />of $300,000, but she felt the City's equity position in case of failure is <br />risky now. She supported the disposition of the property. Her concern <br />involved the level of the City's loans. She hoped the City's financial <br />commitment could be decreased to the originally proposed $300,000. There is <br />still a need for other loans in the downtown and this project will deplete <br /> <br />MINUTES--Eugene City Council <br /> <br />February 27, 1985 <br /> <br />Page 8 <br />