CC Minutes - 04/16/07 Work Session

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happen with strong local participation by elected officials, the public, and communities that lived and worked downtown. Mr. Zelenka asked whether an incremental or critical mass development approach was preferable. Mr. McLaughlan cautioned against a debate on the issue of scale instead of the content of the development itself. He felt a larger scale project could be sensitive to local needs, as could an incremental approach. Ms. Bettman noted that scale was not the only issue; diversity was also critical and one of the proposals would consolidate ownerships. She questioned how diversity could be achieved if there was a monopoly on ownership of downtown property. Mr. McLaughlan replied that even with a single developer, key community goals such as diversity could be leveraged if there was a significant public investment in the project. Mr. Prichard said he had been involved in many development projects in Eugene and discussed the financial imperatives that all projects had to follow. He said that projects needed to meet the same financial requirements, regardless of their nature and those requirements were stringent. He explained how projects developed a construction budget and operating budget; the built value of the project must not be lower than the construction cost or financing would not be available. He distributed a handout titled PPPM 407/507 Real Estate Development - Prichard that described redevelopment costs and financing. He said that for some projects, a gap between construction costs and built value could be filled through various funding sources, depending on project eligibility and that generally required assistance from local government. He encouraged creative public/private partnerships to bridge gaps. Mr. Zelenka asked why it was more expensive to develop in the urban core than outside of it. Mr. Prichard said a number of factors contributed to the higher cost of downtown development and those were detailed in his handout. He said lack of development experience and expertise in Eugene and the challenges of building in a higher density environment were some of the factors. Mr. Zelenka repeated his question regarding a preference for incremental or critical mass development. Mr. Prichard noted that incremental development had been occurring and either approach could work, depending on the situation. Mr. Bowerman remarked that from his perspective money was not the most important factor in development and there were other things that might motivate a developer. He said it was important that jurisdictions recognize that. He believed in the social purpose of development and described his experience with a project in downtown that preserved unique old buildings while creating economic vitality. He said the role of the City was to have good goals that provided a statement of community objectives, development codes, and a permitting process that encouraged redevelopment and economic development financial assistance. He emphasized the need for policies and strategies to be applied uniformly and in a focused manner. He felt that civic vitality occurred with broad participation and liked the idea of diverse ownership and owner/managers who worked closely with tenants to assure compatibility and longevity. He preferred to work with incremental development rather than large projects. Ms. Bettman opined that it was difficult for a developer to address the entire footprint in the City's request for proposals and asked what criteria might be included that would encourage a wider range of developers to respond. Mr. Bowerman said it would be difficult to respond to that question on the spur of the moment and he would get back to Ms. Bettman with his thoughts on the subject. MINUTES—Eugene City Council April 16, 2007 Page 2 Workshop