05/20/1992 Meeting - Laserfiche WebLink

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e e e a housing project such as this in the downtown core rather than further away, $720,000 of which would be defrayed by the City. Mr. Bowers compared the $9,600 cost to the City per unit with two other projects which also involved the City. The cost per unit for the Tiffany Building project is $15,000 and for the Richardson Bridge project it is $30,000. Mr. Bower said the agreement is for the City to loan the developer $500,000 at 3 percent interest for 30 years, and $220,000 at 0 percent interest for 30 years. He noted that there is a subsidy involved due to the low interest rates. Mr. Bowers explained that the City would be paid from 25 percent of the net cash flow, increasing up to 35 percent later as the project generates more cash. He said that is sufficient to retire both loans if the project performs as expected. Responding to a question from Mr. Boles, Mr. Bowers said the City would be in second position for claim on assets, the bond holders would be in the first mortgage position. Responding to a question from Mr. Nicholson, Mr. Bowers explained the net cash flow as follows: revenue, operating expenses paid, bond holders paid, and then the City is paid. Mr. Boles noted that the developer plans to use the 10-year property tax exemption program, providing a small return to the City. In response to a question from Ms. Ehrman, Mr. Bowers said that 20 percent of the 75 units will be rented to tenants with incomes less than $50,000 and 50 percent to tenants with lower-than-median incomes. Mr. Boles wondered if the proposed design was consistent with the American With Disabilities Act (ADA). The developer expressed his intention to comply with the ADA. Mr. Boles moved, seconded by Mr. Green, to approve the use of urban renewal funds for a below-market-rate loan in the amount of $500,000 for the construction of on-site parking at the Broadway Plaza Project, and a loan in the amount of $220,000 to reflect the value of land. Roll call vote. The motion passed unanimously, 8:0. Responding to a question from Mr. Nicholson, Mr. Gleason said there is not much room to restructure the loan package, because the income stream is not adequate. He noted that if the project performed well, the City would profit by getting paid back quicker. Mr. Boles expressed concern that the project's design has its back turned on the City's downtown. In response to Ms. Ehrman, Mr. Bowers said that approving the funding package would leave a balance of $3,000,000 in uncommitted urban renewal funds. MINUTES--Eugene City Council 11:30 a.m. May 20, 1992 Page 4