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HomeMy WebLinkAbout10/13/1986 Meeting M I NUT E S e Eugene City Council Dinner Work Session Eugene Community Conference Center--Studio A October 13, 1986 5:30 p.m. COUNCILORS PRESENT: Richard Hansen, Emily Schue, Cynthia Wooten, Freeman Holmer, Ruth Bascom, Roger Rutan, Jeff Miller. COUNCILORS ABSENT: Debra Ehrman. Mayor Obie called the work session to order. 1. DEVELOPMENT STRATEGY (URBAN RENEWAL PLAN UPDATE) Greg Byrne of the Development Department said the purpose of an urban renewal plan is to assemble and entitle land and to create a financing method that is not generally available to municipal governments. The fi nanci ng method stabilizes the tax base and finances improvement projects that cannot be financed from the General Fund. He said the purpose of updating the Urban Renewal Plan is to complete some goals of the original Urban Renewal Plan and to implement the Downtown Plan. He said the Downtown Urban Renewal District e contributes about $400,000 annually to the City's General Fund. Answering questions from several councilors, Mr. Byrne said the Urban Renewal District annually contributes about $1.89 million to the Tax Increment Fund. About $1.3 million is used for annual debt service. Mr. Rutan said he would like to know how much the tax increment district costs the average Eugenean annually. Mr. Gleason discussed the assumption that property in the downtown would have increased in value if the tax increment district had not been formed. Replying to questions from Ms. Schue, Mr. Byrne said that taxes on the frozen base of the Urban Renewal District are distributed among the jurisdictions in the usual way but taxes on the added value all go to the Tax Increment Fund for reinvestment in the Urban Renewal District. Answering questions from Mr. Hansen, Mr. Byrne said the tax base that was frozen in 1969 was $39 million. Mr. Hibschman of the Development Department said the assessed value of property in the Urban Renewal District is about $100,000,000 now. Responding to a question from Mr. Holmer, Mr. Byrne said no tax increment funds or other City funds were spent on the widening of 6th and 7th avenues and e MINUTES--Eugene City Council October 13, 1986 Page 1 no Tax Increment Funds. were spent on the construction of the Hult Center. However, the tax increment district enabled land to be assembled for the Hult e Center, the Eugene Conference Center, and the Hilton Hotel. Tax increment funds were used to construct the Eugene Conference Center, the Conference Parking Garage, and the Parcade. Mr. Byrne said the Public Works Department has asked if tax increment funds can be used for overlaying 8th Avenue. Mr. Gleason stated that the Bancroft fund is similar to the tax increment fund because taxes are assessed against the value of property. Summarizing, Ms. Wooten said about $500,000 accrues annually for improvements in the tax increment district. Ms. Schue pointed out that inflation has raised property values everywhere since 1968. Responding, Mr. Byrne discussed the tax rates and Mr. Gleason discussed a comparison of property values in the downtown and elsewhere in the city. He said improvements in the downtown cannot be financed without Tax Increment Funds. Mr. Hansen wondered how the growth in value of downtown properties compares to the growth in value of properties in other parts of the city since 1968. Mr. Byrne said it is difficult to compare properties. The existing Urban Renewal Plan was adopted under Federal guidelines and the Federal program no longer exists. He said the update process will make the Urban Renewal Plan conform to State law. e Mr. Holmer wondered if the increase in the total value of downtown properties resulting from the urban renewal plan has been faster than the increase in property values in other parts of the city. He said he would like a comparison of the increase in property values in the urban renewal area to the increase in another area of the city. Mr. Hibschman reviewed the process for updating the Urban Renewal Plan. He discussed five design options for Willamette Street, a proposal to move the . . Lane Transit District (LTD) transit station, and a possible expansion of the Downtown Urban Renewal District. Answering questions from Mr. Rutan, Mr. Hibschman reviewed the areas into which the Urban Renewal District might be expanded. Replying to questions from Mr. Hansen and Mr. Holmer, Mr. Hibschman discussed the value given existing parking lots when the expansion of the Urban Renewal District is calculated. He said the Downtown Commission did not discuss why the area near the Hult Center did not develop as the downtown commissioners think it should have developed. He said some properties in that area have not been on the market. Answering questions from Ms. Bascom, Mr. Hibschman said the intent of enlarging the Urban Renewal District would be to implement the goal of the e MINUTES--Eugene City Council October 13, 1986 Page 2 . Downtown Plan to develop downtown properties more intensely. For example, property owners could take advantage of City loan programs. e Replying to questions from Ms. Schue, Mr. Hibschman said the Downtown Commission has not discussed specifically what might have developed in the expansion area. He discussed the criteria for expanding the Urban Renewal District and how the proposed areas meet the criteria. Mr. Rutan said he agreed that the area near the Hult Center has not developed as he expected. Mr. Miller said an expansion of the renewal district might drain off money that is needed for improvement projects in the existing area. Ms. Wooten said she hoped the council would discuss how much of the lack of development was due to the recession or false expectations when it discusses the proposed expansion. She also wondered about the relationship of the proposed expansion to the IIdonutll district. Mr. Hansen wondered how an expansion of the Urban Renewal District would stimulate investment in the expansion area more than the investment would be stimulated otherwise. Mr. Hibschman said there is no guarantee that investment will be stimulated more than otherwise. Mr. Gleason added public improvements usually stimulate investment and it is unlikely that public improvements will be made in the downtown unless Tax Increment Funds are used. He said the downtown has been reconstructed in the last 15 years. Mr. Holmer wondered how expanding the borders of the urban renewal district e would increase the intensity of development in the expansion area. He asked for a definition of "intense" development. Ms. Wooten and Mr. Hansen said many comparatively new developments in the downtown are not intense. They mentioned the Benj. Franklin, Lathams, and Selco. Answering questions from Mr. Hansen, Mr. Hibschman said the motivating drive . . to expand the renewal district is the desire to implement the Downtown Plan. He said the proposed area for expansion meets the State definition of a IIblightedll area. He said there was no vote on the establishment of the Downtown Urban Renewal District. Replying to a question from Mayor Obie, Mr. Hibschman said there is no deadline for completing the update of the renewal plan: Ms. Wooten said the Fifth Street area is a unique part of the downtown and will need improvements in the next 10 to 15 years. She said she is not opposed to the expansion of the Urban Renewal District but the proposed area may not be the best. Answering her questions, Mr. Hibschman said the Fifth Street area does not have blight. He di scussed other tool s that could be used for improvements in the Fifth Street area. e MINUTES--Eugene City Council October 13, 1986 Page 3 I, Mr. Rutan said the major issues for the councilors to discuss are what they want to do with the Urban Renewal District and how to accomplish those goals. e Answering questions from Mayor Obie and Ms. Wooten, Mr. Hibschman discussed the criteria for urban renewal areas and present capacities of the downtown and Riverfront tax increment districts. Mr. Byrne said the Federal Tax Reform Act probably will retard the growth of real estate investment. He said tax increment districts can issue taxable bonds. Mr. Byrne reviewed the Report on the Urban Renewal Plan. Answering questions from Ms. Schue, Mr. Byrne said there was no time limit for the existing tax increment district and the debt service extends to 2003. State law requires a specific time period for urban renewal districts. The staff recommends 20 years for the Urban Renewal Plan Update. . Mr. Hansen said he would 1 i ke to know how much property taxes woul d be increased in the renewal district and in the entire community if the Urban Renewal District is expanded. Replying to questions from Ms. Wooten, Mr. Byrne sa i d the focus for development is on the 8th and Willamette site because it is across the street from the Parcade which has excess capacity. The 8th and Willamette site could be developed quicker with less public investment than other sites. The 11 th and Willamette site is also important for redevelopment. The Downtown Commission does not intend to create incentives by land write-downs for other properties. The market will control the speed of development. Mr. Gleason said City-owned properties in the downtown have not been offered for sale for - some time. Mr. Byrne added that the existing tax increment district has no bonding capacity and will not have any until there is additional development in the district. He said additional private development in the downtown is necessary to implement projects in the Downtown Plan. Replying to questions from Ms. Schue and Mr. Hansen, Mr. Byrne said the area proposed for expansion of the Urban Renewal District has potential for development. He said additional parking will be required but bond measures could be used to build parking structures. Answering questions from Mr. Holmer and Ms. Bascom, Mr. Byrne said the report is a technical document to support the Urban Renewal Plan. Each year the counci 1 wi 11 have to decide during the budget process whether to construct projects with the available funds or to float bonds with the funds. Most of the proposed parking structures will have mixed uses. He said the LTD transit station may not be within the Urban Renewal District and, in that case, tax increment funds will not be used for it. Ms. Wooten discussed several of the projects in the report. Answering her questions, Mr. Byrne said the council must decide how it would like the Central Plaza to perform. Another project in the renewal plan is an unspecified large public space. The costs for the public space are high because they include the cost of acquiring two quarter blocks, relocation of tenants, and construction of the public space. e MINUTES--Eugene City Council October 13, 1986 Page 4 Responding to comments from Ms. Bascom, Mr. Byrne di scussed the need to redesign Willamette Street because there are too many fixed structures and too e much empty space where there is no planned activity. Mr. Holmer asked the staff to investigate the section in the renewal plan concerning age discrimination. He wondered if the section would ban construction of housing such as Olive Plaza. Mayor Obie asked the councilors to express their opinions. Ms. Wooten said she wants an important and vibrant downtown. She said the blight to the west of downtown has been neglected but she is not sure if the the urban renewal boundary should be expanded or where it should be expanded. She said perhaps the council should take a long long-range view about the properties immediately surrounding the Hult Center and about more intense development in other a rea s. She said expanding the urban renewal boundary may not solve prob 1 ems. She said she is not convinced that the LTD transit site should be moved or that Willamette Street should be opened to traffic. Mr. Holmer said expanding the Urban Renewal District boundary and wanting more intense development do not seem compatible. He said the focus of the renewal district should remain where it is. He said he is concerned about increasing taxes outside of the tax increment district but probably some kind of Urban Renewal Plan Update will have to be adopted. Ms. Schue said she wishes the council had been involved in the update of the Urban Renewa 1 Plan earlier because the council is keenly interested in the plan. She said the community cares about the urban renewal district and the council needs more information and discussion about it. e Mr. Hansen said people have not decided what the downtown is supposed to be. He said expansion is not necessarily good. He said vacant property does not necessarily indicate blight. He said the citizens should be asked what they think about the renewal district in some way other than a public hearing. Ms. Bascom said two reasons for the expansion of the Urban Renewal District are the need for sidewalks and alley improvements in the area and the empty spaces in the Conference Center Garage. She said she wants more information about the LTD transit station and she has not made a decision about redesigning Willamette Street. She said the process for reviewing the Urban Renewal Plan Update is too hurried. Mr. Miller said there is no consensus about the renewal plan update and the council does not seem to agree about many things in the Downtown Plan. He said the issues are important and much council discussion is needed. Mayor Obie said it is important that the councilors reach a consensus before implementation of the plan begins. He said the basic issue is how downtown development will be financed. He said the councilors need to know why some projects are in the report and not in the Downtown Plan. He is concerned about the process for reviewing the Urban Renewal Plan Update. e MINUTES--Eugene City Council October 13, 1986 Page 5 Ms. Wooten said the process for reviewing the update should be lengthened. Several other commissioners agreed with her. e Mayor Obie adjourned the work session about 7:30 p.m. ReS"~S!'~~t ~~,~/ Michea Gleason , City Manager (Recorded by Betty Lou Rarick) mncc1013 . e e MINUTES--Eugene City Council October 13, 1986 Page 6