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Summary: Potential Capacity of the Downtown Urban Renewal District Approximate for FY10 Amount Remaining Under Maximum Indebtedness Limit $ 0.5 million Additional Cash Available Beyond Maximum Indebtedness Limit 3.7 million Borrowing Capacity – assuming plan amendment & repayment over 14 years 10.5 million Downtown Loan Funds 2.5 million Total Amount Available $17.2 million Downtown District “Maximum Indebtedness”: Oregon Statutes require each district that receives property taxes to include a “maximum indebtedness” limit in their urban renewal plans. The Downtown District amended its plan in 1998 to include a maximum indebtedness limit of $33 million. “Maximum indebtedness” is a spending limit. Certain expenditures of the district are included in the “maximum indebtedness” calculation and certain expenditures are excluded. For instance, interest on debt and downtown loan funds are excluded from the calculation, but administrative expenses or direct cash payments for projects are included in the calculation. About $0.5 million remains under the $33 million limit in the Downtown District. For the district to enter into obligations that exceed the current limit (~ $0.5 million), a “substantial amendment” to the district’s plan is needed. The process is determined by Oregon Statute and the district’s plan. City-wide notice is required for changes in the maximum indebtedness and expansion of the district boundaries by more than 1%. The time necessary to complete the process for this type of special amendment is 100+ days. The major steps are: ? Eugene Redevelopment Advisory Committee (ERAC) may meet to discuss the proposed plan amendments and make a recommendation to the City Council ? City Council meets to initiate plan amendments ? URA submits plan amendments and report on the plan to taxing bodies affected by the district for review and comment ? City sends out special City-wide notice ? URA meets to receive the revised plan and report on the plan ? City Council holds a public hearing on the plan amendment ordinance ? City Council meets to approve ordinance amending the plan Current & Future Debt Obligations: The URA does not currently have bonds outstanding, but must pay the Library Obligations through December 2009 ($2.5 million). If the Downtown District plan is amended, it would be possible for the district to enter into obligations of greater than the $0.5 million allowed under the current “maximum indebtedness” figure. The Downtown District is scheduled to terminate in FY24. If the district entered into a new debt obligation (after substantially amending the plan) in FY10, that would leave 14 years for a debt obligation to be repaid. Assuming a 14 year repayment schedule, a 1.5 times debt coverage ratio, and a projected interest rate for next fiscal year, the Downtown District would have a debt capacity of approximately $10.5 million. It should be noted, however, that the legislature has approved significant changes to urban renewal, and those changes have not yet been analyzed and incorporated into this analysis. Project Examples: Downtown Athletic Club & Eugene Public Library The Downtown Athletic Club (DAC) is one of the most significant anchors downtown, employing 150 individuals and drawing club members and event visitors to the core of downtown daily. The presence of the , DAC is also an attractive amenity for office uses downtown. In the 1970sThe URA acquired the former Ax Billy Department Store building which was built in 1909. The building was mostly vacant and scheduled for demolition. The URA issued an RFQ and selected the DAC proposal. The URA sold the property in 1985 for its appraised value ($213,000), and also provided gap financing in the amount of $150,000 for the renovation. CDBG loan funds in the amount of $300,000 were also used for the initial renovation. The Ax Billy building is now on the National Register of Historic Places. All financing provided for the DAC project has been repaid in