Item A - Civic Center Update - Laserfiche WebLink

Home Browse Search

The City has not use this type of borrowing in the past. The City of Portland used this type of financing for the Public Services Building because COPs financings had not been fully developed in Oregon at that point in time. They have not used that financing method since. Lease Purchase: Municipalities in Oregon can enter into agreements with private developers to purchase buildings through a long-term lease. (The conduit financings described above are essentially a way for a government to enter into tax-exempt lease-purchase financings, when not otherwise allowed.) In a case where a municipality has annual funding available, where it is unable or unwilling to issue debt for a capital project, and where there is no direct access to COPs financing, this could be an appropriate avenue for borrowing. The City has used a lease with the private sector for operation of the Conference Center. The City has also leased office space from the private sector. The City has not used a lease-purchase with the private sector (rather than through the bond markets) as a way to borrow funds for a public construction project, however, because it is more expensive than other direct borrowing methods. Joint Development: This type of public/private partnership is not a borrowing method, but rather a cooperative approach to acquisition or construction of a capital project. The exact form that this kind of partnership can take can vary widely, depending on the parties involved and the type of project being undertaken. This might be a successful approach when there are features in a mixed use development that are more appropriate owned and managed by the private sector, such as retail shops or housing. The mix of public and private uses must be compatible. Historically, the City has used the joint development approach for the Broadway Garage project, where the City paid for and developed the parking and the private sector paid for and developed the housing and retail on top of the parking. The private sector received a tax exemption for the housing, as a way to encourage mixed use development in the downtown. The City also entered into a cooperative agreement with the Hilton regarding the conference center. Joint public/private development was proposed for a new library in the early 1990's, but voters did not approve the plan. Choosing a Borrowing Method The chart on the follow page sets out some factors to consider when choosing a borrowing method. L:\CMO\2004 Council Agendas\M040428\S040428A. doc