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

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Professional offices are more "footloose" than retailers, since they are not e as dependent on traffic, visibility, and proximity to other complementary uses, In addition to this greater mobility, professional office has a broader array of location options than a retail store, The City Zoning Ordinance allows office use in zoning dis~ricts where retailing is prohibited, and encourages appropriate mixing of residential and professional buildings in mixed-use and transitional areas. There is limited information readily available to demonstrate the degree to which the professional tax may have affected office development in the downtown. Factors other than the tax structure may be at work as wel,. However, the revenue history of the ODD does show a marked decline in the number of orofessionals registered in the down~own, Their number peaked in FY 79-80 at 394, In FY 83-84, that number had declined to 351, The tax contributions by professionals to the district declined by more than 15 percent over that period. Compare that with the downtown retail trade, The number of registered non- professional accoun~s peaked in FY 78-79 at 246. By FY 83-84, the number had declined to 204, but the revenue generated had increased by 2.6 percent. This suggests a recovery in the re~ail sector downtown, with fewer but stronger businesses, A review of building permit valuation data shows a significant imbalance in activity in and out of the district. There has been a total of $15 million in office development activity, including new construction, remodels, and. additions, frem the fall of 19~1 to the. spring ~f 1985, Of that total, only e 5.6 percent has occurred within the ODD, and none of that has involved new cons~ruct~on, It should be noted that the proposed elimination of the professional tax is the first major step in a restructuring of the downtown parking plan. as called for in the Downtown Plan (Strategy 6,4, page 28). The additional changes are sCheduled to begin with the FY 86-87 budget. In the intervening year, professionals will continue to contribute to the Downtown Develooment District through the ad valorem tax and payment of rent, which constitutes 40 percent of the projected revenue for next year, Retailers ana other non-professionals will continue to pay both the ad valorem and gross receipts tax, The district will continue to provide free parking for both grouos, and promo,-ionai ac,-ivities which primariiy benefi.. the retaiiers. Recommendation The staff ane City Attorney have oreoared the a~tached findings ana ordinance cnanges. and the Downtown Commission recommends ~ha~ the City Councii review and approve the changes, Action Ameno the cugene City Code to eliminate the profeSSional ~ax from the Downtown Oeveiooment Dis~rict, - SL:ss/0539E ecsiptax At't.acr1r.1en-:.s