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Gordon Lofts MUPTE <br />Application <br />MUPTE REVIEW PANEL <br />MINORITY REPORT <br />100518 <br /> <br /> The consultant identified “Amenity Income” in the Gordon Lofts application as a key to <br />viability of the project, stating it was “implausibly high”. See II. General G. The following chart <br />shows the impact of full, half and no amenity income, without MUPTE, including all adjustments <br />previously noted (30 year amortization, no housing fee, 5% 1st yr vacancy, adjusted retail <br />income; property tax discount, and 10% limitation on hard cost construction contingencies). <br /> Even without any limita0on on con0ngencies, the half amenity income scenario without MUPTE <br />results in a need for no more than a 3 year MUPTE: <br />* * * * * * * * * * <br />I.Standards for MUPTE Panel Review <br /> Eugene’s MUPTE ordinance provides: “No exemption may be approved * * * unless all <br />of the following criteria are met: * * * (b) The proposal could not financially be built ‘but for’ the <br />tax exemption. The burden is on the applicant to demonstrate that absent the exemption, the <br />project would not be financially viable * * *.” EC 2.946(2).<br /> <br /> “The applicant must demonstrate that the project as proposed could not be built but for <br />the benefit of the tax exemption. The applicant must submit documentation, including a ten- <br />year pro-forma and an analysis of the projected ten-year cash-on-cash rate of return for the <br />proposed project.” R-2.945-C(4) (Administrative Order 53-18-03-F).<br /> <br /> The City Manager is required to “retain an independent outside professional consultant <br />to review the project’s financial pro-forma * * *.” EC2.945(4). The consultant has responsibility <br />“to review the project's financial proforma and report results to the Project Review Panel.” <br />R-2. 945-E (3). The MUPTE review panel has responsibility “to review the application and the <br />independent consultant’s conclusions” and to “make a recommendation to the city manager <br />about whether the application meets the criteria in section 2.946.” The City retained PNW <br />Economics as the Consultant for the Gordon Lofts MUPTE application.<br /> <br />Amenity <br />Income Portion Source NOI Cash Flow <br />Return <br />Return on <br />Equity DCR MUPTE <br />Need <br />$563,211 Full Table 1 $2,375,182 Year 1: 8.7%Year 1: 13%1.30 <br />MUPTE <br />not <br />needed <br />$281,606 Half Table 3 $2,107,657 Year 1: 4.9% <br />Year 2: 6.6% <br />Year 1: 9.2% <br />Year 2: 11.1%1.20 no or 1 yr <br />MUPTE <br />$0 None Table 6 $1,840,132 <br />Year 4: 4.4% <br />Year 5: 5.3% <br />Year 6: 6.2% <br />Year 4: 9.5% <br />Year 5:10.8% <br />Year 6:12.0% <br />1.20 3 or 5 yr <br />MUPTE <br />Amenity <br />Income Portion Source NOI Cash Flow <br />Return <br />Return on <br />Equity DCR MUPTE <br />Need <br />$281,606 Half Table 5 $2,097,289 Year 3: 5.3% <br />Year 4: 6.3% <br />Year 2: 9.3% <br />Year 3:10.5%1.20 1 or 3 yr <br />MUPTE <br />Page