Agenda Packet 12-10-18 Meeting - REVISED

Home Browse Search

CITY OF EUGENE, OREGON Notes to Basic Financial Statements continued (5) Other Information, continued (I) Tax Abatements, continued Multi-Unit Property Tax Exemption, continued Multi‐unit redevelopment housing projects with five or more units that are newly constructed, additions to existing multi‐unit housing, or structures converted in whole or in part from other use to dwelling units are eligible for MUPTE. The commercial portion of a project is eligible for an exemption if deemed a public benefit by City Council. The land and improvements not exempted by City Council continue to be taxed during the MUPTE period. To be considered for MUPTE approval, projects must provide the following public benefits: compact urban development, green building features, local economic impact plan, moderate-income housing contribution, project design and compatibility, historic and existing housing sensitivity, and project need. The abatement applies to real property taxes, which are reduced through a reduction of the property’s assessed value. The MUPTE program offers a property tax exemption on the new structure or incremental change in the property value of the building that comprises the project for a maximum of ten years. These tax abatement agreements do not include any provisions for recapturing any abated taxes. Property Tax Differential The tax differential program is designed to encourage annexation of property to a municipality. Annexations of property in the City are typically initiated by the property owner to obtain a service or right that the City provides. Typical services requested include sanitary sewer, Eugene Water and Electric Board electric and water, city police or fire protection, library services, and the ability to vote in city elections. The City Council must approve all annexations in the City. In certain unique circumstances, the City will enter into an annexation agreement with a property owner that reduces the City’s property tax rate on the annexed property by a specific percentage for a period up to ten years. These Property Tax Differentials are enabled by ORS 222 and City Resolution No. 5015 and 5068. The abatement applies to real property taxes, which are reduced through a reduction of the property’s tax rate. The City determines a percentage applied to reduce the City’s property tax rates. Only the tax rates of the City are reduced. As part of the tax abatement agreement, the property owner must repay the tax differential amount if the property owner does not annex to the City in a timely manner. The City may agree to other commitments when providing incentives for annexation. Under current agreements, the City has reduced or waived the City annexation application fee and paid the County annexation fees. In 1991, the City developed an annexation and urban services policy agreement for the Industrial Corridor Community Organization designed to encourage annexation of the entire area and ensure that all properties would be served by sewers by the year 2000. That agreement set out a number of commitments designed to result in an orderly transition from rural to urban services in the area, such as initiating a refinement plan, agreeing to not force annexation of any property, reviewing city policies related to sanitary sewers, parking lot and sidewalks, and lobbying for beneficial legislation. West Eugene Enterprise Zone The West Eugene Enterprise Zone is enabled by ORS 285C and City Ordinance No. 20368. The Zone was established to stimulate economic success by providing tax incentives for employment, business, industry and commerce and by providing adequate levels of complementary assistance to community strategies for such interrelated goals as environmental protection, growth management and efficient infrastructure. The West Eugene Enterprise Zone offers a three to five year tax exemption period. For the basic, three-year enterprise zone exemption period, the business needs to: • Increase full-time, permanent employment of the firm inside the enterprise zone by the greater of one new job or ten percent; • Enter into first-source agreement with local job training providers; • Maintain employment levels during exemption period; • Have no concurrent job losses more than 30 miles from the zone; and • Satisfy local additional conditions, imposed in the West Eugene Enterprise Zone. The Zone Sponsor may waive required employment increase for investments of $25.0 million or more. 85 December 10, 2018, Meeting - Item 2D