Item 5: Beam Development Project Extension

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EURA UGENE RBAN ENEWAL GENCY AIS GENDA TEM UMMARY Action: Beam Development Project Extension Meeting Date: May 26, 2009 Agenda Item Number: 5 Department: Planning & Development Staff Contact: Denny Braud www.eugene-or.gov Contact Telephone Number: 682-5536 ISSUE STATEMENT The Urban Renewal Agency (URA) and Beam Development signed a Purchase and Sale Agreement (PSA) in May 2008, for Beam’s purchase of the Centre Court building and adjacent vacant parcel, and the Washburne Building (the Properties). The PSA includes a requirement that Beam begin construction of the project no later than May 31, 2009. The URA is asked to consider Beam’s request to extend the time for the start of construction. BACKGROUND Beam purchased the Properties from the URA in July 2008, for a total purchase price of $3.6 million (Centre Court $1,946,000, vacant parcel $454,000, and Washburne Building $1,200,000). The URA provided financing to Beam totaling $3.55 million for their acquisition of the Properties. The sources of funds for the URA’s financing included HUD Section 108 loan funds ($2.7 million), Brownfield Economic Development Initiative (BEDI) grant funds ($440,000), and Downtown Revitalization Loan Program funds ($404,000). To date, Beam has made payments as agreed. The PSA includes a provision that construction of the project would begin no later than May 1, 2009, with a provision for up to an additional 30 days, if necessary, due to events or circumstances beyond Beam’s reasonable control. The agreement requires Beam to provide written notice of the extension no later than April 15, 2009, with a statement of the reasons they wish to extend the commencement date. On April 10, 2009, Beam provided written notice of the 30-day extension, citing circumstances related to the economy, including the tight lending market, elevated pre-leasing commitments required by lenders, longer lease-up periods experienced in the market, and uncertainty regarding their previously anticipated historic tax credits. (The letter is included in Attachment A.) In Beam’s request for additional time, they indicated that they are in discussions with a major tenant and would like the URA to consider an extension of the construction commencement date for an additional six months to complete the necessary due diligence. Last week, Lane Community College (LCC) announced that their board directed the President to proceed with formal discussions with the City to explore alternative downtown locations for the new Downtown Center. The location of LCC at Broadway and Willamette Street has the potential to support the vision for a signature building at the intersection of Broadway and Willamette Street, enhance activity in the heart of downtown, support affordable, lifelong educational opportunities, and demonstrate the community’s commitment to sustainable development. Beam has shown strong interest in working with LCC and has provided a Z:\CMO\2009 Council Agendas\M090526\S0905265.doc