Agenda Packet 9-11-19 Work Session

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PAGE | 3 6.Were you aware that the development site is about 5-6 blocks from the University of Oregon campus, such that student housing rental rates rather than downtown rates may apply? Yes. 7.The applicant’s Project Cost Summary identifies Total Costs as $8,274,950, and Land Costs as $592,416. App at 44. Costs exclusive of land are thus $7,682,534. The building square footage of the building is stated to be 31,195 sf (App. at 8). Dividing costs by square footage results in costs of $246/sf. Are these square footage costs high? Those costs are not that high in the current market based on recent projects we have reviewed. Construction cost escalation has been very high in the last few years. 8.What is the current average 2019 cost per square foot for this type of apartment building in Eugene, Oregon, and what are your sources? Do you have examples of the average cost per square foot from the Eugene market? I don’t have Eugene data on costs, and they can vary significantly based on the details of the design and construction type. Cost estimating is not in my area of expertise and we relied upon the applicants submitted materials. If you feel an independent review of the cost estimates is warranted there are firms that specialize in this. 9.Your report states that the total costs “reflect a per unit cost of $165,500, which is below what we would expect in the current market.” What information do you rely on for this conclusion, and do you have examples of the per unit cost of studio and 1BR apartments in the Eugene area, of the square footage proposed by the applicant? While cost estimating is not my area of expertise, the delivered cost of units in the Portland area has been closer to $200,000 per door in the last few years. 10.The proposed building seems well designed but fairly straight forward with no parking structure within the building, wood frame construction, no mixed use, and close proximity to the University to be able to attract student renters. What makes the proposed building unique such that it needs MUPTE for construction when other multifamily buildings do not need MUPTE? The assumed costs relative to rents are somewhat high. Costs have risen at a greater rate than achievable rents over the last few years, altering the economics of new projects. I am not familiar with the financial assumptions or performance of recent projects in the area, and therefore am not in a position to assess the marginal differences. 11.How do you account for other apartment buildings being built in Eugene without the need for MUPTE? What about 35 Club Road, 6 story building; Amazon Corner Apts, 5 story mixed use; 747 E. 32nd; 1 Chevy Chase Apts, 5 story, 3230 Kinsrow, etc. I don’t have any details on the financials of those projects and have no basis to evaluate them. September 11, 2019, Work Session – Item 1