Laserfiche WebLink
621 SW Alder, Suite 605 Portland, OR 97205 503/295-7832 <br />MEMORANDUM <br />DATE: May 15, 2019 <br />TO: Amanda D’Souza <br />Business Development Analyst <br />CITY OF EUGENE <br />FROM: Jerry Johnson <br />JOHNSON ECONOMICS, LLC <br />SUBJECT: Review of MUPTE Application, RNS Management, LLC <br />Johnson Economics was asked to provide an independent review of an application for the City’s Multi-Unit Property Tax <br />Exemption (MUPTE). The application reviewed was submitted by RNS Management, LLC, and is based on a proposed <br />50-unit market rate apartment project on an infill site at 1040-1050 Ferry Street. The site would be created through <br />redevelopment of an overflow parking lot of an existing development that would remain adjacent to the proposed <br />project. <br />The MUPTE is a ten-year property tax exemption. The net impact of the program is a reduction in annual costs for the <br />period associated with property taxes, which provides a substantive boost to project viability. Our analysis included a <br />pro forma evaluation of the project’s viability with and without the MUPTE program. The information used in our <br />analysis was largely derived from materials submitted as part of the application. Appendix A includes a glossary of terms. <br />A.PROGRAM <br />The proposed development program for the site would include 50 rental apartment units, with an average annual rent <br />level of $1,224 in current dollars. This reflects an average annual per square foot rent level of $2.52. <br />SUMMARY OF RESIDENTIAL PROGRAM AND PRICING (2019 $S) <br />The achievable rent levels assumed are quite high on a per square foot basis, and there is little precedent to support <br />the rent levels. The unit sizes are smaller than typical in the market though, which places the absolute rents in a more <br />competitive range. We view the rent assumptions to be very aggressive in this market. <br /># % Mix Size/SF Month PSF <br />Studios 35 70.0%449 $1,156 $2.57 <br />One Bedroom 15 30.0%574 $1,384 $2.41 <br />Two Bedroom 0 0.0%900 $0 $0.00 <br />Total/Weighted Average 50 100.0%487 $1,224 $2.52 <br />Units Proposed Rents* <br />Exhibit A to Attachment F <br />September 11, 2019, Work Session – Item 1