AMENDED Agenda Packet 6-10-19 Meeting

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June 10, 2019, Meeting – Item 6 EUGENE CITY COUNCIL AGENDA ITEM SUMMARY Action: Use of Future Property Tax Revenue to Pay Midtown Arts Center System Development Charges Meeting Date: June 10, 2019 Agenda Item Number: 6 Department: Planning and Development Staff Contact: Michael Kinnison www.eugene-or.gov Contact Telephone Number: 541-682-5500 ISSUE STATEMENT This is an action item to direct the City Manager to execute a document that provides for the City’s payment of the Midtown Arts Center Systems Development Charges from future property tax revenue that the City will receive from the construction of the Center. BACKGROUND The Midtown Arts Center is a seven-story, mixed-use condominium project with underground parking located in the 1600 block of Pearl Street. The first two floors of condominium space will be owned and operated by the Eugene Ballet and include 5,300 square feet of office space for nine non-profit arts organizations, over 10,000 square feet of rehearsal spaces designed to increase access to arts education and cultural program development and over 4,000 square feet of public gallery space for permanent installations and temporary curated exhibits featuring local and regional visual artists. Other participating arts organizations include Chamber Music Amici, Eugene Concert Choir, Eugene Opera, Instaballet, Lane Arts Council, Orchestra Next, Oregon Mozart Players and Pacific International Choral Festivals. The top five floors will include 40 market rate condominiums. The Center is being built by local developer Paradigm Properties and scheduled for completion in June of 2020. Generally, a current owner of record who wishes to develop their property must pay an SDC that is imposed when new development, expansion or an intensification of use of property occurs that is served by City infrastructure. The fees are used to fund the non-assessable portion of the construction of infrastructure (wastewater, stormwater, transportation and park facilities) needed to support growth in the community and to recoup a portion of the community’s investment in the infrastructure already in place. To assist the Eugene Ballet with the purchase of condominium space in the project it is proposed that the non-residential portion of the SDCs be paid by the City with future property tax revenue generated by the development. The developer will in turn provide a reduction in the condominium purchase price in an amount equivalent of the SDC reduction. A savings in the cost of acquisition will help the Ballet maintain lease terms and rental fees below market for non-profit and community use of the Center. Eligible SDCs for the non-residential portion of the project are