CC Minutes - 03/10/10 Work Session

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City commit to the purchase of the LCC Willamette Street property for its appraised value of $1.2 million with the caveat that the purchase price would be included in the $8 million in funding assistance provided by a proposed amendment to the City's downtown urban renewal plan. Mr. Braud stated that if LCC were not ultimately to move forward with development of the 1 0th and Charnelton site within a mutually agreed time period, the City and the EUR.A's commitment to purchase the property would be removed. Mr. Braud reported that staff continued its efforts to help LCC complete a feasibility analysis with various consulting firms regarding the downtown development project and that the results of that analysis were expected to be presented to the LCC Board on March 16, with a subsequent report to be made available to the Eugene City Council. Mr. Braud outlined the staff recommendation to the EURA for it to approve the sale of the 1 0th and Charnelton site to LCC at no cost (or $1.00) and to commit to the purchase of LCC's Willamette Street building for the purchase price of $1.2 million included as part of the proposed $8 million in the urban renewal plan amendment. Ms. Ortiz supported the staff recommendation and concurred with staff s assessment that their recommended course of action was necessary to ensure the ultimate development of the IOth and Charnelton project. Ms. Ortiz wondered if it might be better for LCC to put the Willamette Street building up for sale on the open market. Mr. Ruiz responded to Ms. Ortiz's comment and expressed that current real estate market conditions might make it prohibitively difficult for LCC to sell its Willamette Street property outright. Ms. Piercy understood the reluctance to the staff recommendation regarding the purchase of the Willamette Street building, but noted that there were certain timing issues to be considered that could ultimately affect the viability of LCC's plans to develop the 10th and Charnelton site. Ms. Piercy perceived LCC's request and the resultant staff recommendation as part of public partnership efforts to improve level of educational opportunity and economic development in the downtown area. Mr. Clark voiced his support for LCC's downtown development project, but noted his concern about the City "acquiring property when we should be divesting ourselves of it." Mr. Clark stated he was uncomfortable with the City "getting further into the development business" with respect to LCC's Willamette Street building and the City's current surplus properties. Mr. Clark noted his discomfort with the $1.2 million purchase price for LCC's current Willamette Street facility. He believed that the actual value of the property was subject to interpretation and that it would be unwise for the City to enter into a purchase agreement for that amount. Mr. Clark noted he planned to offer an amendment to the staff recommended motion to specify that the purchase for LCC's Willamette Street building be "no more than" the $1.2 million appraised value and to further allow for renegotiation of the final sale price. Mr. Brown supported the first part of the staff motion to provide the l 0 and Charnelton site to LCC at no cost, but believed that the City should not purchase LCC's current Willamette Street property. He believed that the property represented a toxic asset for which it would be extremely difficult for the City to recoup its acquisition costs. Mr. Brown expressed that it would be foolhardy for the City to purchase LCC's current downtown property and believed that no one would be willing to pay $1.2 million for the property in the future. Ms. Taylor agreed with Mr. Brown's comments regarding the City's potential purchase of LCC's Willamette MINUTES Eugene City Council March 10 2010 Page 5 Work Session