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HomeMy WebLinkAboutCC Minutes - 07/18/07 Work Session M I N U T E S Eugene City Council Work Session McNutt Room—City Hall July 18, 2007 Noon COUNCILORS PRESENT: Andrea Ortiz, Chris Pryor, Betty Taylor, Bonny Bettman, Jennifer Solomon, George Poling, Mike Clark, Alan Zelenka. Her Honor Mayor Kitty Piercy called the meeting of the Eugene City Council to order. She convened the meeting of the Eugene Urban Renewal Agency (URA). Mayor Piercy announced that Ms. Solomon would be slightly delayed. She presented the council with a plaque from a delegation of students visiting from Bahrain. 1. WORK SESSION: West Broadway Memorandums of Understanding City Manager pro tem Angel Jones provided an overview of the West Broadway redevelopment project to- date. She stressed that the Memorandums of Understanding (MOUs) being presented to the council were not final, binding agreements, but rather represented the initial step that would set the City on the path to refine plans for the West Broadway projects. Senior Development Analyst Denny Braud said that separate, but similar, MOUs had been drafted for Beam and KWG. He said the non-binding agreements were intended to establish understandings regarding timeliness and expectations to bring the development from a proposed concept to a future binding agreement. He said while no commitments were required from either party to the MOU, it did provide some assurance about timelines and expectations and that both parties were working in good faith towards a binding agreement. He noted that the MOUs were draft and could be modified by the Urban Renewal Agency (URA). He reviewed the content of the MOUs and emphasized that the URA was under no obligation to exercise purchase options on the West Broadway properties; however, it would make its best efforts to keep the options active. Ms. Bettman asked if there was a legal definition of “non-binding.” Mr. Braud replied that non-binding meant neither party could sue the other. Ms. Bettman asked if the final MOUs would be consistent with the drafts. She asked if the language could be changed. Mr. Braud said the developers had copies of the MOUs and could possibly propose language changes; any material changes would be brought back to the council. Ms. Bettman asked for assurance in the motion that material changes would return to the council for approval. She asked how recommendations from the West Broadway Advisory Committee would be incorporated into the final binding documents. Mr. Braud said the committee would make its recommenda- tions to the council and the council would determine what went into the final agreement. MINUTES—Eugene City Council July 18, 2007 Page 1 Work Session Ms. Bettman asked for clarification of the difference between the final agreement and the formal binding document. She cited language that suggested there would be more than one document. Mr. Braud said the final document would be the development or purchase and sale agreement, depending on what it was called, and the terms of that document would be approved and authorized by the council; it would be the only final document. Ms. Bettman asked if City Attorney Glenn Klein agreed with Mr. Braud. Mr. Klein said the development agreement would be the primary document identifying the roles and responsibilities of the parties, but there was the possibility that other documents, such as an escrow agreement, would be required to implement the formal agreement. He said that any associated documents would be referenced in the development agreement. Ms. Bettman pointed out that item No. 7 in the Beam draft MOU required the developer’s best efforts to cooperate with the URA and committee on a relocation plan for tenants and businesses impacted by the project. She hoped there would be a plan that held local businesses downtown harmless but the language did not appear to require that. Ms. Taylor asked why there was one proposed motion when there were two MOUs. Mr. Braud said that staff had provided one motion because the council had selected both of the developers and directed that an MOU for each be brought back. Mr. Klein added that the council could act separately on the MOUs. Ms. Solomon arrived at 12:15 p.m. Ms. Taylor noted that the Beam draft MOU described a mix of uses that included hotel, cinema, and grocery and asked if Beam was considering any of the uses for its project. Mr. Braud said Beam was not proposing those uses and the intent of the language was to describe what could happen within the entire development area. Ms. Taylor asserted the language was inappropriate since it did not apply to Beam and should be eliminated. Regarding relocation, she asked if Beam could “work around” existing tenants in the Washburn Building, as that building would not be demolished. Mr. Braud said discussions with Beam indicated an interest in retaining the current tenants, although no details of the construction phase were yet developed. Ms. Taylor pointed out other instances of general language, such as a reference to option agreements on “several of the properties along West Broadway,” that should be specifically tailored to Beam’s actual project. She also pointed out that the URA had not hired the facilitator, as she did not recollect that the council had discussed it. Mr. Klein clarified that the term “urban renewal agency” in that context equated to the City and was used to identify the action as one taken by the URA. He said the council acted as the URA board and had provided direction to the City Manager to select a facilitator. Ms. Taylor commented that the council had not specified who or what kind of person should be hired as the facilitator. She asked if the KWG agreement would be more specific about relocation plans for existing businesses. She did not see how businesses could be held harmless if they had to give up their current locations. Mr. Braud replied that the URA directed the committee to work on a transition plan for businesses that would inform the final agreement. He said the intent of the MOUs was to avoid binding agreements on either side; requiring a specific commitment of KWG to enter into a relocation plan would be premature at this point. MINUTES—Eugene City Council July 18, 2007 Page 2 Work Session Ms. Taylor asked what would happen if a business did not want to relocate. Mr. Braud said the City’s commitment was to assist all of the businesses that were affected as part of the project. Mr. Clark said he assumed that tenants would address with their landlords what could be done legally. He understood that the MOUs were non-binding and represented the URA’s expectations of the other parties. He said the MOU expected the developers to participate in good faith with the URA and the committee in the creation of a relocation plan but did not require the developers to assume any specific responsibility for relocation of businesses. Mr. Braud agreed with that statement. Mr. Zelenka observed that the MOUs were virtually the same with the exception of project elements related to properties and established the relationship between developers and the URA. He said that the recommen- dations from the committee would be incorporated into more detailed plans by the developers and those plans would form the basis of the development agreements, which would come before the council for approval. He listed the items the committee had been charged with addressing, including a reloca- tion/transition plan for existing businesses, and stated he did not recall a commitment by the council to hold harmless any businesses. He said that property owners would be fairly compensated, but renters were in a more precarious position; however, there had not been any discussion of an agreement with tenants and it was outside the purview of government to tell renters what to do once owners sold buildings. He said that was the reason the committee was asked to develop a transition plan. He asked what the next steps in the process were. Mr. Braud said the committee would continue to work on the items charged to it and was scheduled to finish that effort in August. He said other processes, such as the HUD Section 108 loan application and urban renewal plan amendment process, were underway. He said the council would review the committee recommendations in mid-September and provide direction to staff on negotiations and deal points for the final development agreements. Mayor Piercy asked if MOUs were binding unless specifically designated as non-binding. Mr. Klein stated it was not the title of the document, but rather the provisions of the document itself that determined whether it was binding. He said that agreement by all parties that the MOUs were non-binding should be explicitly stated in the provisions to ensure that interpretation by the courts. Ms. Bettman noted the MOU reference to affordable housing and asserted that affordable housing was very different than low-income housing and because it was explicitly stated as affordable housing that would appear to preclude low-income housing. Mr. Braud said it was a matter of terminology and the intent was to be clear that the project would include a low-income housing component consistent with the developers’ proposals. Ms. Bettman asked that the MOUs be amended to include both affordable and low-income housing. She would offer that as a friendly amendment when there was a motion on the table. She reviewed project activity to-date and the council’s action at various points in the process. She asked if any more public hearings were planned. Mr. Braud said there were additional opportunities for public involvement through the committee’s public workshops. Ms. Bettman hoped there would be additional public hearings as all of the previous hearings had transpired before there were specific development projects before the council. She acknowledged that the council had not specifically addressed relocation issues or plans, but did not think that holding businesses harmless MINUTES—Eugene City Council July 18, 2007 Page 3 Work Session should be taken off the table; the advisory committee should examine that issue and she hoped it would be a high priority. Ms. Jones said that was an available option and it would be up to the committee to provide its advice on that matter. Ms. Bettman expressed alarm about the cooperation between KWG and Beam and asked what would happen if Beam dropped out because the conditions proposed by KWG were untenable. Mr. Braud said in that circumstance the council would need to revisit its decisions. Mr. Zelenka stated he was committed to an open and transparent public process on West Broadway redevelopment, including holding whatever public hearings were necessary to ensure the community was fully informed. He said that was the purpose of the previous public hearings and the advisory committee. He disagreed with Ms. Bettman regarding the council’s commitment to hold businesses harmless and clarified that the motion directed the committee to create a transition plan so the council could consider transition and relocation options and not leave the obligation entirely in the hands of developers. Ms. Ortiz, seconded by Mr. Pryor, moved to direct the agency director to enter into non- binding MOUs with Beam and KWG for the redevelopment of West Broadway, consistent with the draft MOUs included in attachments B and C and that if there are any material changes to attachments B and C that the agency director bring back those material changes for agency review and approval. Ms. Taylor, seconded by Ms. Bettman, moved to separate the motion and vote on the two MOUs separately. Ms. Taylor said she intended to vote for the Beam MOU, but not the KWG MOU and it was only fair that councilors be given a chance to vote separately on the MOUs. Mr. Clark noted that the council had already selected both developers so moving ahead with both MOUs would seem prudent. The vote to separate was a tie, 4:4; Ms. Taylor, Ms. Bettman, Mr. Zelenka and Ms. Ortiz voting in favor, Mr. Pryor, Mr. Clark, Mr. Poling and Ms. Solomon voting in opposition. Mayor Piercy broke the tie by voting n favor and the motion passed, 5:4. i Ms. Ortiz restated her motion as: “Move to direct the agency director to enter into a non- binding MOU with Beam for the redevelopment of West Broadway, consistent with the draft MOU included in attachment B and that if there are any material changes to attach- ment B that the agency director bring back those material changes for agency review and approval.” Ms. Bettman asked if the motion included her suggestion for a friendly amendment regarding low-income housing. Ms. Ortiz replied that she assumed that was a “given.” The motion passed unanimously, 8:0. Ms. Ortiz, seconded by Mr. Pryor, moved to direct the agency director to enter into a non- binding MOU with KWG for the redevelopment of West Broadway, consistent with the draft MOU included in attachment C and that if there are any material changes to attach- MINUTES—Eugene City Council July 18, 2007 Page 4 Work Session ment C that the agency director bring back those material changes for agency review and approval. Ms. Bettman stated she would vote against the motion as she supported option 2 proposed by staff, which was Beam rehabilitating the Center Court and Washburn buildings and redeveloping the “Aster pit” site, including moving forward with the Kemper 106-unit housing project on the “Sears pit” site. She said that would have allowed citizen input on how best to redevelop the remainder of the downtown footprint. She did not think a range of options had been fully examined. Ms. Taylor said the Beam proposal was less expensive and could be done more quickly and then the City could determine if the housing at the Sears site, which could have been completed by now if the City had not halted the project, could stimulate other redevelopment that did not require City subsidies and cause less disruption to existing businesses. Mr. Poling said he initially favored KWG to be the sole developer of the project as he was not that impressed with the Beam proposal, but in the interests of moving West Broadway redevelopment forward he was willing to agree to both developers for the project. He supported the motion related to Beam and was not willing to scuttle the entire project just because it did not reflect his first choice. He wanted to move forward with redevelopment for the betterment of the City. Mr. Clark said he would support the motion. He was disappointed at the lack of a unified voice from the council. He said it was important to recognize that when the majority spoke it was the will of the body and that will was to move forward with both developers. He felt that the issues that were being revisited had already been decided. Mayor Piercy expressed her pleasure with the direction the City was moving and was supportive of both development proposals, which provided unique opportunities for a part of the community. Ms. Ortiz said that separating the MOUs was not negative and would allow more consideration of an immense commitment of public funds and assure that each step was thoughtfully deliberated. She was in favor of as much public involvement in the process as possible. Mr. Zelenka remarked that the number one issue on the recent City Hall survey was revitalization of downtown. He hoped the West Broadway redevelopment would help achieve that and understood and shared community concern about the cost and impact of the project, which was why it was important to proceed cautiously with a transparent process and public involvement. Ms. Bettman said she felt it was important to speak up when a mistake was being made and she regarded the project as a very large mistake because it had not been determined how the funds, which were intended to benefit low-income people, could be better spent. She felt the funds were being spent unwisely and would oppose it. She hoped the project would fall through and the council could return to option 2. Referring to Table 5 in Chapter 5 of the Urban Renewal Plan report, she said it was supposed to represent project activities and estimated costs. She formally requested that more details be provided for the project activities so she could understand what they meant and how they would be paid for. Ms. Cutsogeorge said the chart was staff's best estimate in March 2007 of the general nature of the development project and as yet no better information on the exact nature of the project was available. She emphasized that it was a plan and not a commitment to those specific activities and estimated costs. MINUTES—Eugene City Council July 18, 2007 Page 5 Work Session Ms. Taylor said she also hoped the project failed and thought the council would regret it if it went forward. She said that current businesses could be lost and possibly new ones would not succeed. She was opposed to destroying things that were doing well. She questioned whether public input to the West Broadway Advisory Committee would make a difference. Mr. Braud replied that it would be up to the committee and the urban design consultant to determine how it would receive and consider public input. Ms. Taylor asked if the council would be told if the public did not want a project. Mr. Braud said that was not the direction the committee had received from the council. Mayor Piercy pointed out that the council had charged the committee with addressing five items: preferred design elements, mix of uses, public open spaces, options for parking and a transition plan for existing businesses. Mr. Zelenka encouraged Ms. Taylor to attend the committee's meetings. He said the consultant had a national reputation and had helped communities across the country work through those same issues. He agreed with Mayor Piercy that the council had not asked the committee to evaluate whether the project should be done, but rather provide recommendations on five elements of the project. He said the committee would not be discussing the merits of the project, but the public was always welcome to comment and could certainly express opinions in opposition and try to sway committee members' opinions. Mr. Clark reiterated that it was difficult to argue that the project was a "done deal and being ramrodded through" while at the same time arguing there was no plan. He said the council was pursuing its goal to involve the public in the creation of the plan to achieve a better outcome. He rejected the notion that downtown was doing well and recent surveys clearly reflected that a majority of the community did not like the state of downtown. His constituents had consistently expressed interest in a downtown they could be proud of and enjoy and he felt the current process and public involvement would help to achieve that. Ms. Bettman hoped that everyone involved in the project would asked themselves whether each component of it was worth a public subsidy or whether there was a better use for the funds than handing them over to private developers. She repeated her request for details of the project activities and funding sources before the council took action on it. Ms. Cutsogeorge said that changes Ms. Bettman requested on July 16 to the ordinance and report had already been made and posted on the City's website. She said the categories in the table were categories included in the Urban Renewal Plan with general descriptions; details of the West Broadway project in terms of all of the funding sources and amounts would not be available until the project plan was more fully developed. She said the City's maximum contribution was $40 million. The motion passed, 6:2; Ms. Taylor and Ms. Bettman voting in opposition. Mayor Piercy commented that the developers themselves did not yet know the details and were involved in determining whether they could collaborate on a viable project; the council would then determine if that was a project it was willing to support. The meeting adjourned at 1 p.m. Respectfully submitted, MINUTES—Eugene City Council July 18, 2007 Page 6 Work Session Dennis M. Taylor City Manager (Recorded by Lynn Taylor MINUTES—Eugene City Council July 18, 2007 Page 7 Work Session