Item 4: Approval of MUPTE Application for Paradigm on Pearl

Home Browse Search

The property currently has six older rental homes and one modular home on site, with little to no reuse potential; three are vacant. The buildings are not city landmarks nor are they on the National Historic Register. The project is not immediately adjacent or contiguous to a historic structure. Public Comments A display advertisement was published in The Register-Guard on March 22, 2011, soliciting comments for 30 days. The period ended on April 21, 2011. Other than the letter of support from the West University Neighborhood association included in Attachment D, no public comments were received. Public Benefits After reviewing the Paradigm on Pearl application against the public benefit scoring criteria in the Standards and Guidelines, staff determined that the proposed development earned 440 points. (A minimum of 100 points is required for the City Manager to recommend that council approve an application.) Points were awarded for the project through the following benefits: Density: 50 points (10 points per unit in excess of the minimum code requirement; 50 point max) o Green Building Features and Quality of Building Materials: 100 points for LEED-certification o Accessibility: 20 points (10 points per unit) o Parking: 270 points (10 points per code space in excess of the minimum code requirement) o The applicant has also expressed an interest in converting some or all of the housing to ownership in the future and is designing the building accordingly. While there are no additional points added in this application, converting to ownership is viewed as a benefit. Impact and Need for Tax Exemptions to Encourage Housing The City and other local taxing districts forgo revenue when property is exempted from taxes. The Paradigm on Pearl project will continue to generate property taxes on the land and will immediately generate new tax revenue on the commercial space. The submitted application indicates that the 2010 property tax was $12,700 and that upon completion the project will pay $20,000 (land and commercial space). After 10 years, the entire development will be taxable, generating an estimated $165,000 on the housing portion in year 11. The application also indicates that MUPTE is vital to the development and, if it is denied, the property will be developed without the majority of the public benefit features (such as, underground parking, accessible units, and green building features). Financial Analysis The applicant has demonstrated that the project as proposed could not be built but for the benefit of the tax exemption. Staff and the Loan Advisory Committee have reviewed the pro-forma and confirmed this conclusion. (See Attachment F for more information.) Timing This application was submitted on March 8, 2011. The City Manager has 90 days (until June 6) to make a recommendation to the council; if the council has not acted in 180 days (September 4), the application is deemed approved. Additionally, the MUPTE statute expires for all projects unable to be constructed by January 1, 2012. In order to qualify for the exemption, the applicant is required to complete construction prior to January 1, 2012. If the project fails to be completed by the deadline due to circumstances beyond the applicant’s control (such as a natural disaster, bankruptcy of key vendors, or dissolution of the related financial institution), the council has the option to grant a one-year extension. \\Cesrv500\cc support\CMO\2011 Council Agendas\M110509\S1105094and atts A-C and F-G.doc