Item A: Core Campus - Application for MUPTE for 505 East Broadway

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from the rate of absorption of the large number of proposed units brought into the local student housing market. Core Campus has indicated that their equity investor will require a minimum rate of return of 8.96% in the first year. Without the MUPTE savings, The Hub is projected to generate a 4.7% first year rate of return, which is insufficient to attract the required equity investment. The MUPTE tax exemption would lower annual operating costs by approximately $450,000, which produces higher net operating income and results in a projected 8.7% first year rate of return. Staff and the Loan Advisory Committee reviewed the pro- forma, including assumptions regarding lease rates, operating costs, capitalization rate, lender underwriting criteria, interest rate assumption, and market expected rate of return. The Committee confirmed the financial assumptions used in the analysis and unanimously concluded that the tax exemption is needed to generate a return on investment sufficient to attract the required equity investment. 2.8 Presentations concerning the Core Campus project were given to the Downtown Neighborhood Association on January 23, 2013. The Association submitted a letter indicating that the Downtown Neighborhood Association Steering Committee unanimously took a position of support for the Core Campus project with specific points on safety for pedestrians and bicyclers. 2.9 The project is, or will be at the time of completion, in conformance with all applicable local plans and provisions of the Eugene Code, 1971, planning regulations, and the Metropolitan Area General Plan. 3 A display ad soliciting recommendations or comments from the public regarding this project was published in the Register -Guard on May 4, 2013. The period for comment expired on June 3, 2013 at 5pm. Twenty -four comments were received within that period. Therefore, based upon the above findings and the criteria set forth in the City's adopted Standards and Guidelines, I recommend that the application be approved. Dated this i ; day of June, 2013. Executive Director Planning & Developmen Department Page 4 of 4 Resolution EXHIBIT A- Report and Recommendation