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HomeMy WebLinkAboutCC Minutes - 01/09/06 Work SessionM I N U T E S Eugene City Council Work Session McNutt Room—Eugene City Hall January 9, 2005 5:30 p.m. COUNCILORS PRESENT: George Poling, Jennifer Solomon, Betty Taylor, David Kelly, Gary Papé, Bonny Bettman, Andrea Ortiz, Chris Pryor. Her Honor Mayor Kitty Piercy called the January 9, 2006, work session of the Eugene City Council to order. A. COMMITTEE REPORTS AND ITEMS OF INTEREST FROM MAYOR, CITY COUNCIL AND CITY MANAGER Mayor Piercy noted that computer instructions in Spanish were being offered at the library. She thanked staff and councilors for their support at her State of the City address. Mr. Poling asked if the construction at the entrance of the Oakway Mall on Coburg Road was related to a new traffic signal. Public Works Director Kurt Corey replied that it probably was. Mr. Poling said he attended the restaffing ceremonies at Fire Station 9 and returning that engine to service was due to the work of the Budget Committee, councilors, citizens, and federal grant funds. He noted that Springfield was currently conducting a residential land study and the Home Builders Association had contracted with Lane Council of Governments (LCOG) to conduct a residential land study in Eugene. He asked if it was possible to combine those efforts, similar to the joint study of commercial and industrial land, to save costs and achieve efficiencies. He asked staff to explore that possibility. Ms. Ortiz reported that the Bethel Drive walking path had gone out to bid and she hoped the construction phase would begin soon. She said the path would be built along Bethel Drive and greatly improve safety in that area, particularly for children. Ms. Ortiz said the Lane County Human Services Commission recently formed a subcommittee, of which she was a member, to consider ways to reduce Community Health Center costs to better utilize those funds to provide services. Mr. Pryor said the Lane Metro Partnership met on December 15, 2005, and discussed the Royal Caribbean call center, which officially opened and had already hired 350 employees. He said the company would continue to expand its local employment. Mr. Pryor reported that he attended the Springfield State of the City address and was pleased to hear Mayor Sid Leiken mention several joint initiatives and their benefits to the metropolitan area. He said Molecular Probes and Symantec were expanding, Williams Bakery would be building a new facility, and there had been an increase in inquiries by companies, but buildable sites were still an issue in the metro area. He MINUTES—Eugene City Council January 9, 2006 Page 1 Work Session hoped that a buildable land survey would be available as soon as possible. Mr. Pryor said that the use of rail was increasing as the cost of overland trucking rose due to fuel prices. Mr. Pryor said that Lane Metro Partnership Executive Director Jack Roberts was interested in pursuing a Supreme Court position and, if successful, would continue in his current position. Mr. Pryor said the Enterprise Zone Committee continued to develop initial concepts related to standards for types of jobs, training, reporting and investments. He said the 1997 standards were being reviewed for applicability and to determine if they could be updated to benefit the community and enterprise zone businesses. Ms. Bettman said she would provide the council with a report on her attendance at the National Association of Citizen Oversight of Law Enforcement conference. She said she had an opportunity to meet the external police auditors from Portland, Oregon and Denver, Colorado. She said the Police Commission subcommit- tee that was developing a job description and qualifications for Eugene’s external police auditor completed its work and its recommendations would be submitted to the Police Commission on January 12. The council would receive the recommendations at its January 18, 2006, meeting. Mr. Kelly related that he received calls regarding noise associated with railroad crossings and a constituent email noted that the Federal Railroad Administration would conduct no-cost, unannounced monitoring of noise levels to provide solid data confirming or refuting claims that noise levels were increasing or out of compliance. He said a government could request that monitoring service and asked City Manager Dennis Taylor to explore the possibility and respond in a memorandum. He also asked for an update on the results of an earlier council motion regarding quiet zones. Referring to a memorandum from a subcommittee of the Human Rights Commission that reviewed the homelessness action plan, Mr. Kelly asked that the City’s homeless team’s response to that memorandum be provided to the council. Mr. Kelly invited the general public to attend a lecture on peak oil at the Hilton Hotel on January 10 at 7 p.m. Ms. Taylor introduced a visiting city councilor from Casper, Wyoming. She indicated she wanted to see an agricultural land study conducted in cooperation with Lane County. She said she received email regarding the escalation of fines assessed under the new housing regulations and agreed with the complainant that escalating fines for non-payment was unfair. She did not feel that escalating fines served any purpose and asked if the matter could be discussed. City Manager Taylor replied that the item could be set for a work session if a majority of the council wished to do so. He said the purpose of the regulations was to bring property owners into compliance and fines were a way of doing that. He said that in cases where compli- ance was an issue on a daily basis, escalation of fines brought about compliance sooner rather than later. Ms. Taylor asked whether a person would be put in jail if they did not pay the fines. City Manager Taylor said he did not know if jail was a possibility; but, at a certain threshold of noncompliance, the matter would go to Municipal Court. Mr. Papé thanked all those who made it possible to restaff Fire Station 9 and congratulated staff for obtaining the federal grant to support that effort over the next four years. He said he also received constituent calls regarding railroad noise and hoped that the City would pursue free federal monitoring of noise levels. He commented that increased freight traffic hampered passenger rail traffic between Eugene MINUTES—Eugene City Council January 9, 2006 Page 2 Work Session and Portland because the same tracks were used by both. He said that the Oregon Department of Transpor- tation was combining the committees that dealt with passenger rail and freight rail issues into a single committee on rail. He did not know if that change would be beneficial to passenger rail. Regarding McKenzie-Willamette/Triad’s reported interest in the University of Oregon’s Riverfront Research Park, he asked if there was sufficient acreage available to meet the hospital’s needs. City Manager Taylor replied that there were two tax lots available; one had six or seven acres and the other was listed at over 50 acres; but when the riparian area was eliminated, only about 15 acres were developable. Ms. Solomon announced that on January 12, Willamette High School would present a celebration in honor of Dr. Martin Luther King, Jr. and a community celebration would be held on January 16, Martin Luther King, Jr. Day, in the Morse Events Center at Northwest Christian College. She said the guest speaker for the community event would be Stedman Graham. City Manager Taylor thanked the council for allowing him to take time during the council’s break to visit his daughter in Paris, where she was working with the United Nations Educational, Scientific and Cultural Organization (UNESCO) on global HIV/AIDS issues. He was impressed by the truly diverse work environment there, with people from around the world working together. He remarked that 2,000 years of urban mixed-use development were apparent as he traveled around the Paris metropolitan area. He thanked those who attended the State of the City event and noted that the document prepared by staff also contained the first quarterly report of progress on the council’s eight priority goals. He reminded councilors that the council retreat was scheduled for Friday, January 20, 2006. He reported that he met last week with McKenzie-Willamette representatives to review the memorandum of understanding and good progress was made. He hoped to have a memorandum of agreement for the Delta Ridge site before the council on either January 23 or 25. B. WORK SESSION: West Broadway Development Update Mayor Piercy prefaced the item by stating she was pleased with the discussion of a possible West Broadway development and she viewed it as an opportunity for a revitalized downtown. She encouraged both the Opus Group and Conner and Woolley, as developers, to give the public the opportunity to learn about the proposal and ask questions. She volunteered to facilitate that process. City Manager Taylor said the council had been working for some time on ways to place downtown in a position to take advantage of a recovering economy and renewed optimism about what was possible in that area. He introduced Community Development Division Manager Mike Sullivan to present an overview and discuss conceptual elements of the West Broadway redevelopment proposal the City recently received. Mr. Sullivan reviewed the City’s recent downtown policy work, beginning with the downtown vision in 1999 that articulated the community’s ideas and aspirations for an active, vibrant downtown with an entertain- ment and cultural focus, successful retail nodes and commercial areas. The vision also expressed the importance of downtown as a civic gathering space and a place where people could live. He said the vision culminated in the Downtown Plan, adopted in 2004. He described a variety of recent and current downtown projects such as the Lane Transit District (LTD) Downtown Station, Eugene Public Library, Broadway Place, the opening of Broadway, the Aurora Building, the Tate Building, the federal courthouse and th WestTown on 8, all of which totaled $168 million in downtown investment in housing units, public infrastructure and public buildings. He said that still missing from the initiative was significant private MINUTES—Eugene City Council January 9, 2006 Page 3 Work Session investment in retail, market-rate housing, private office development and, until recently, a willing private developer. Mr. Sullivan noted three projects that were in their final planning stages: the Oregon Research Institute (ORI) building, the Whole Foods project, and the Connor and Woolley/Opus proposal. He used an aerial photograph to illustrate the location of the proposed Connor and Woolley/Opus project and said the three projects would go a long way toward completing the build-out of Broadway from west to east as a Great Street. Continuing, Mr. Sullivan stated that 67 percent of the ground floor space along the two blocks of Broadway between Charnelton Street and Willamette Street was vacant and other properties were under-utilized for the street’s potential. He said the building configurations and space sizes were challenging for redevelopment and re-tenanting and would likely require significant demolition. He said the $165 million Connor and Woolley/Opus proposal included 186,000 square feet of retail space, 100,000 square feet of office space, 288 housing units, a 1,600 seat cinema, 743 new parking spaces (455 public) and a hotel. He used a massing plan to illustrate the scale and location of buildings in the proposed development and pointed out that parking was embedded in each of the three new buildings. He said the proposal indicated a total need for 1,854 parking spaces and of that total over 1,100 were currently available in the public parking system; 743 new parking spaces were needed and they would be embedded in the new buildings. He said according to the proposal, 455 of the new spaces would be City-owned and presumably paid for by the City. He listed the outstanding issues: ? public parking – the amount to be provided, cost and financing issues ? potential amendments to the urban renewal plan ? assembly of private property Mr. Sullivan said the recommendation was for staff to continue working with Connor and Woolley/Opus to develop a more detailed proposal related to West Broadway for the council’s consideration. He said the proposal represented positive potential for realizing a fundamental step in the revitalization of downtown. Mayor Piercy called for council questions and comments. Ms. Bettman said she supported downtown housing and saw a role for the City in providing parking but was not certain she could endorse the concept of the proposal because it appeared to include use of eminent domain to consolidate properties, sale of the Atrium Building, national and regional retail stores, public subsidies, and unknown site plan options. She said the $165 million included the City’s investment and questioned at what point a subsidy was considered extraordinary and could not be justified. She noted that other developers and downtown property owners did not have access to the same kind of extraordinary subsidies and incentives that the Connor and Woolley/Opus proposal expected. She said that subsidizing one developer’s commercial and retail created an unlevel playing field and manipulated the free market. She said if the proposed motion included any type of endorsement to move forward with condemning local businesses, she could not support it. Ms. Taylor said she had the same reservations as Ms. Bettman. She asked why the developers did not just ask for a building permit like everyone else. Mr. Sullivan replied that there would be a point at which the developer would need to apply for building permits. He said the development would occur within the downtown urban renewal district and noted that the Downtown Plan encouraged incentives for certain types of development in the downtown core, including retail, mixed-use development, and housing, with parking MINUTES—Eugene City Council January 9, 2006 Page 4 Work Session specifically mentioned as a strategy for pursuing such development. He said the proposal represented a continuation of the work begun by the Downtown Plan. Responding to a question from Ms. Taylor, Mr. Sullivan said the development would include the excavated site of the former Woolworth building. He said because the overall condition of West Broadway was so poor in terms of use value, a comprehensive redevelopment proposal had more of a chance for success than redevelopment of a single property. Ms. Taylor asked if sale of the Atrium Building was the only possibility for obtaining a cinema. City Manager Taylor replied that was the most attractive in terms of the total concept of the developer’s proposal because of its proximity to the LTD Downtown Station as well as its compatibility with ground floor retail. Ms. Taylor asked if the developer expected a tax deferment. Mr. Sullivan said that would have to be worked out in the development agreement. If the developer was proposing the use of urban renewal financing for parking, urban renewal was based on taxes that were paid and those two issues would have to be balanced in the agreement. Ms. Taylor asked about low-cost housing. Mr. Sullivan said that the Aurora Building and soon to be th constructed WestTown on 8 project both included low-cost housing; the Connor and Woolley/Opus development would have market-rate housing, which was one of the goals expressed in the Downtown Plan. He said the proposal did not include an assumption of affordable housing. Ms. Taylor said she would not support eminent domain to take over businesses downtown that did not want to move and she had great doubts about selling the Atrium Building. She was not certain what the proposed motion entailed and was concerned that, in the past, the council thought it was taking action to continue considering something when it actually had voted on the issue. She was also concerned about how the proposal might affect the ORI project and asked if the development might include the former Sears site. Mr. Sullivan said that discussions between ORI staff and the developer had occurred but he was not aware of the nature of those discussions. Ms. Taylor asked if urban renewal funds would be used for the development. Mr. Sullivan said the supposition was that if the City was involved in parking development, urban renewal would be the principal source of financing. Mr. Pryor believed that downtown Eugene was in serious need of redevelopment and revitalization based on a 67 percent vacancy rate along Broadway and the type of structures and uses in the downtown core area. He said opportunities to partner with people who had the resources for that type of development did not come along every day; the developers were two local people who had lived in the area for many years and developed a number of local projects and would be working with another organization. He said the motion before the council would direct the city manager to work on developing a more detailed proposal and he did not see the concerns expressed by others. He thought the developers wanted to know if the City Council was willing to continue discussions about the project before proceeding further along with planning. He supported continued efforts to develop a mutually beneficial agreement. Mr. Kelly saw two separate issues: whether the project was beneficial for downtown and what level of City government participation was appropriate. He found the proposal had exciting potential for downtown and, while there were many positive things occurring in downtown at the present time, the proposal could take that to a new level. He liked the proposal’s housing aspect, as well as the mix of retail that included local MINUTES—Eugene City Council January 9, 2006 Page 5 Work Session retail and a downtown cinema. He said he understood that before more time and money were spent on the proposal staff and the developer wanted to know if it was generally perceived as positive. He said the motion offered no guarantee to the developer about the exact nature of the agreement and proposal, or the council’s reaction to it. He stated that the motion in no way endorsed the proposal; it simply allowed staff to spend further resources developing a more detailed agreement. City Manager Taylor agreed with Mr. Kelly’s understanding of the motion and said the details could also entail revisiting the urban renewal district if that was one of the financing tools. He said that in order for the proposal to be reviewed by the council it had to meet a basic public/private participation ratio of one-to-five. He said attractive features included bringing in significant retail in a coordinated way while providing for housing and related parking. th Mr. Kelly appreciated the inclusion of a parking analysis to confirm the need but asked why the 10 Avenue and Pearl Street public parking facility was not factored into the office use need. Mr. Papé agreed with Mr. Pryor’s comments and the points raised by Mr. Kelly. He said that the downtown area had been in decline for decades, although some notable efforts were made over the years. He said the City should take advantage of the opportunity to revitalize downtown. He said the council had shown the will to reopen Broadway and the next leap would take significant courage because of the risks and City investment that would be involved. He hoped the council would move forward with direction to staff to work with the developer. He said there was considerable risk involved in using eminent domain to buy property and turn it over to a specific developer, based on a recent Supreme Court case. Ms. Ortiz agreed that the proposal was an opportunity waiting to happen. She said it took her breath away because it would change the face of Eugene and the change would be huge. She said she needed much more information on the implications of the proposal and was not certain she wanted to be a part of that change happening, although she would support the motion for staff continuing to develop an agreement. She was not certain how she would ultimately vote on the proposal as she had been contacted by several small business owners who were very concerned. Mayor Piercy called for a second round of comments and questions. Ms. Bettman asserted that the condition of West Broadway was misrepresented as the 67 percent vacancy rate included property owned by Connor and Woolley and she had heard anecdotally that earlier interest in redevelopment by others had been turned down. She said that Connor and Woolley had the ability to manipulate the vacancy rate on that section of Broadway. Referring to demolition, she asked if the developer envisioned phasing the project and if there was a possibility that buildings would be demolished and the sites left vacant for a number of years. Mr. Sullivan replied that only the housing portion of the project had been mentioned for phasing. He said all of the retail would need to occur at once and that meant the first floor would need to be constructed and tenanted, providing complete coverage for the site. He thought a majority, if not all, of the housing would have to be built at once as well. Ms. Bettman noted that the proposal indicated housing might be built later, depending on the market. Mr. Sullivan said the introduction of condominiums caused staff and others some concern; the proposal indicated that initial housing units would be condos and other housing units would be constructed initially as rentals, then converted to condos over time. Ms. Bettman asked if there was a possibility that no housing would be included in the project. Mr. Sullivan said that would be covered in the development agreement and part of the terms of any City involvement; approval of the agreement would be a council decision. MINUTES—Eugene City Council January 9, 2006 Page 6 Work Session Ms. Bettman expressed concern that buildings would be demolished and replaced with surface area parking lots. With regard to the issue of subsidies and the urban renewal district, she commented that the type of retail proposed would result in low-wage jobs. Mr. Kelly declared that it was very important to tie incentives to specific aspects of the project, such as a housing guarantee as part of the development agreement. He thought there was an appropriate role for the City to provide public parking as it would also allow the City to control the rates and policies. He noted the potential for development of public parking on the east end of downtown and asked how that would impact the urban renewal dollars. Mr. Sullivan replied that there were two urban renewal districts and the projects would be in different districts. Mr. Kelly said he was a long way from using eminent domain to support the project and wanted to see the City act as a facilitator and work with the current owners and developer to achieve a “win-win” situation without the need for eminent domain. He wanted to see that arrangement addressed in writing. Ms. Taylor asserted that 25 years ago the downtown area was thriving. She asked how much of the Broadway Place retail space was empty. Mr. Sullivan replied that historically the retail space on Lincoln Street experienced difficulty but the other spaces were filled, although there was some attrition. Ms. Taylor asked what made staff think that the new space would be filled, considering the difficulty in filling Broadway Place space. Mr. Sullivan replied that the Opus Development business plan was to create a critical mass of retail that had a magnetic character and was a destination. He said the critical mass of development would create a destination that did not currently exist in downtown and draw people who might otherwise go to a suburban mall. Ms. Taylor said she had heard the development described as a “theme park.” Mr. Sullivan said that developer would need to work with Eugene’s existing historic street grid and the City would need to see a building type that would endure, not a building type that would go out of fashion. He said the City was looking for an urban form, not a Disneyland. Ms. Taylor asked what changes to the urban renewal district would be needed. Mr. Sullivan responded that the district’s boundaries, plan and policies would not need to be changed, but the total indebtedness would be revised. He said the issue was very complex and required a separate work session to address in detail. Ms. Taylor asked to what extent the public would be involved in the City’s adoption of a development proposal. Mr. Sullivan said that any changes to the urban renewal plan provided an opportunity for public involvement. City Manager Taylor stated that a substantial project such as the proposed development deserved a community conversation and the developers would be encouraged to find useful ways to obtain public input beyond whatever was required as part of an urban renewal plan change. Mr. Poling, seconded by Ms. Solomon, moved to direct the city manager to work with Connor and Woolley on developing a more detailed proposal related to West Broadway development to be brought back to the council. Speaking to the motion, Mr. Poling said he agreed with many of Mr. Pryor’s comments and Ms. Ortiz’s observation that the project would change the face of downtown Eugene. He commended Connor and Woolley/Opus for having a vision and felt that the project was appropriate for the downtown area. He noted MINUTES—Eugene City Council January 9, 2006 Page 7 Work Session that the current and previous councils had, through plans, urban renewal districts, incentives and visions, put the ground work in place for such a development. He strongly supported the motion to develop a more detailed proposal related to the West Broadway development for the council to consider. He thought that facilitated negotiations between the City and unwilling sellers could be a good alternative to eminent domain; but the City should retain eminent domain as a tool and carefully weigh the needs of the unwilling property owner against the rest of the community. Ms. Bettman, seconded by Mr. Kelly, moved to extend the discussion by ten min- utes. The motion passed unanimously. Ms. Bettman proposed a friendly amendment to add the following language: This motion in no way endorses the concepts of the proposal. Mr. Poling and Ms. Solomon accepted the amendment. Ms. Bettman pointed out that the proposal indicated it was the developers’ expectation that the City would acquire all of the listed parcels and sell those parcels to the development team at no cost. She asked what was meant by “all of the listed parcels.” Mr. Sullivan said the development team was involved in discus- sions with all of the private property owners and had not provided a list of individual properties yet. He assumed that the statement meant those properties that the developers were unable to acquire. Ms. Bettman asked if amending the urban renewal district to increase indebtedness meant that the development proposal would consume all of the available funds. Mr. Sullivan replied there was very little room in the existing debt cap for the downtown urban renewal district. City Attorney Glenn Klein explained that what was called “maximum indebtedness” in the urban renewal plan was really a spending cap and the library used most of the spending cap. He said it was the spending cap that would need to be increased. Ms. Bettman said that in terms of using eminent domain to achieve a public benefit, she questioned whether consolidating a huge chunk of downtown in the hands of one property owner was a public benefit. She said a diversity of ownership was a good thing. Mr. Papé agreed with the need for public input and said that if the council entered into a development agreement, it certainly had the right to define the type and extent of public input that would be part of the process. He said when the agreement came back to the council it should describe in detail the type of public process in general as well as the specific process for each phase of the project. He asked about the history of the Atrium Building’s ownership and whether it had seismic problems. Mr. Sullivan said the City purchased the Atrium Building in 1998 at a good price and had significant equity in the building, which represented a substantial amount of cash as a liquidated asset. Mr. Papé stated that he would not be in favor of subsidizing the project with a decreased sales price as had been done for other downtown developments. He said the City should receive market price for that asset if it was sold. Mr. Poling asked if the proposal language about the City acquiring listed parcels and selling them to the development team at cost meant the purchase price plus any legal fees if eminent domain was necessary. Mr. Sullivan said that staff assumed that “at cost” was a fully loaded cost that would include the costs of any acquisition process. MINUTES—Eugene City Council January 9, 2006 Page 8 Work Session Mr. Kelly remarked that he was also interested in a fair recovery for the Atrium Building and any discussion of its sale should take into account the fiscal impact of relocating staff to rented space. The motion as amended passed, 7:1; Ms. Bettman voting in opposition. C. EXECUTIVE SESSION Mayor Piercy called the Eugene City Council into executive session to discuss real estate negotiations pursuant to Oregon Revised Statutes 192.660(2)(e). The council returned to work session at 7:20 p.m. and the meeting was adjourned. Respectfully submitted, Dennis M. Taylor City Manager (Recorded by Lynn Taylor) MINUTES—Eugene City Council January 9, 2006 Page 9 Work Session