09/18/1985 Meeting (2) - Laserfiche WebLink

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, . MEMORANDUM - September 16, 1985 TO: Mayor and City Council FROM: Eugene Development Department SUBJECT: ELIMINATION OF DDD PROFESSIONAL TAX Background Through this year1s budget process, the Downtown Commission recommended the elimination of the professional tax from the Downtown Development District revenue base. The reduced revenue is to be offset by a voluntary reduction in the Eugene Downtown Association contract. That recommendation was included in the City Manager's budget proposal and was adopted by the City Budget Committee and the City Council in June. This change to the tax requires an amendment to the Eugene City Code. The Downtown Parking Program was adopted in 1973. It has been supported by three taxes: an ad valorem tax, a gross receipts tax, and a tax on professionals. The ad valorem tax-a-ssesse.s all property within the Downtown Development District, the gross receipts tax assesses all retail sales within the district, and the professional tax assesses each professional employed _ within the district. The public hearings before the City Council prior to ~ adoption of the program show that there was substantial opposition to the professional tax at that time. Evaluation Opposition to the professional tax continued, and it is perceived as unfair and detrimental to further development of the downtown as a professional office center. This situation threatens the goal of developing d6~ntown as a balanced retail, services, housing, and cultural center. In the background data, the Downtown Plan notes that the IIprofessional tax is difficult to administer and understand because of the definition of Iprofessional. III The pian text calls for an evaluation of the effect of the tax structure on existing uses and future deveiooment, and a cnange to the tax structure to be lIimplemented during the following buaget year.lI (Strategy 6,2, page 28.) Following that. the plan suggests a restructuring of the free parking program to reflect changes in land use and parking patterns. In evaluating and amending the tax structure, the Downtown Commission Degan with the Droressional tax. The Eugene Downtown Association supports the change, stating that the free parking is most critical for the retail community. An increase in professional office development aowntown is in the long-term interest of retail development. An inc~ease in office aeveiopment will create an increase in the retail customer base. The resultina sales ~ growth will enhance the ODD revenues through the qross receipts tax. Members ~ of the rea! estate inaustry advised tne commission that the professional tax was widely held to be unfair and that it had become so significant a fac~or tha~ it influenced the decisions or professionai firms to establish or relocate outside the district, Brokers stated that property in the district suffers a competitive disadvantage with similar sites outside the ODD,