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HomeMy WebLinkAbout11/19/1986 Meeting M I NUT E S e Eugene City Council City Council Chamber November 19, 1986 11:30 a.m. COUNCILORS PRESENT: Richard Hansen, Debra Ehrman (12:00-12:45 p.m.) Emily Schue, Freeman Holmer, Ruth Bascom, Roger Rutan, Jeff Mi 11 er. COUNCILORS ABSENT: Cynthia Wooten. The adjourned meeting of November 17, 1986, of the City Council of Eugene, Oregon, was called to order by His Honor Mayor Brian B. Obie. I. ITEMS FROM THE MAYOR AND COUNCILORS A. Magna Carta Exhibit Ms. Schue said the Magna Carta Exhi bit at the Willamette and Science Technology Center (WISTEC) is excellent. She urged other councilors to attend the exhi bit. e Ms. Bascom said special security was needed for the exhibit. She said she appreciates the positive response by the City staff to her request for assistance with the security. B. Method of Finding Agreements Mr. Miller said he is working with City t'ianager' ;';-;c;I<::"i Gleason to find a way for the counci lors to process and deve lop financial strategi es and to understand the things upon which they agree as a council. C. Council Meeting Sites Mayor Obie suggested the councilors hold dinner/work sessions at some of the retirement centers in the city. D. Meeting With Crime Action Task Force Mr. Gleason discussed the format that will be followed when the council meets with the Crime Action Task Force at 5:30 p.m. this evening. - MINUTES--Eugene City Council November 19, 1986 Page 1 '-~ - II. TAX INCREMENT FINANCING AND THE DOWNTOWN DEVELOPMENT STRATEGY e Mayor Obie sa i d the counc il ors a s ked for a discussion of tax-i ncrement financing so they will understand it better and be able to decide if they want to continue it. He asked Rob Bennett, who will become a councilor in January, to sit at the table. Development Director Abe Farkas introduced the presentation. He said a tour of the tax-i ncrement di stri ct wi 11 be arranged for the counci lors and information will be provided at the December 8 City Council meeting about future projects for which tax-increment financing might be used. He said tax- increment financing is a tool of urban renewal districts. The purpose of tax- increment financing is to stimulate significant private investment in an urban renewal district and the surrounding geographic region benefits from the investment. Comparing the Eugene Renewal Agency to a development company, Mr. Farkas said the City Council, when it sits as the Renewal Agency, is the company's Board of Directors. The Board of Oirectors is charged with the assemblage of land, the disposition of land, and the development of specific parcels within the district. The Board of Directors adopts general policies and develops a financial framework within which the staff works. The Executive Director of the company is the City Manager. The staff is responsible for negotiating IIdea 1 Sll and presenting them to the Board of Di rectors for approva 1. Mr. Farkas said Oregon initiated tax-increment financing in 1960. He compared the land area and assessed value of the renewal districts in Eugene and Salem. He said cities must rely on local tools for stimulating private investment in e downtown areas because Federal funding is decreasing. He pointed out that tax-increment financing is controlled locally. Mr. Farkas introduced Bob Hibschman of the Development Department. Mr. Hibschman discussed the history of the Eugene Renewal District. He said improvements valued at $4.88 million have been made to the infrastructure. He said the City used a grant of $20 million and matching funds to construct the Overpark. Twenty-nine buildings that are valued at $40 million and in which 800 people are employed have been constructed on land assembled by the Renewal Agency. Answering questions from Mr. Hansen and Mr. Holmer, Mr. Hibschman said the Renewal Agency owned all the land on which the buildings were constructed. He said he would investigate how much private investment is included in the $40 million value of the buildings. Replying to questions from Mr. Rutan, Mr. Hibschman said the pedestrian mall, the infrastructure improvements, intensive retail development, and the Performing Arts Center were the incentives for private investment in the downtown that the renewal district provided. Mr. Farkas added that it is very difficult for private investors to assemble land and the land assembled by the Renewal Agency assisted private development in the downtown. Mr. Gleason said land must be assembled to raise the intensity of use. e MINUTES--Eugene City Council November 19, 1986 Page 2 Mr. Hansen wondered if the value of downtown properties has been increased because of the renewal district or if the properties would have increased in e value without the renewal district. Mr. Gleason responded that the downtown is more densely used now than it would have been without urban renewal. He said cities do not have downtowns and deve 1 opment goes outward if an opportunity for dense use is not provided. Mr. Hibschman said 51 percent of the Eugene Renewal Agency land has been sold for redevelopment, 25 percent is in public use, and 24 percent is available for redevelopment now. Twenty-two private buildings have been rehabilitated with Urban Renewal Agency funds. Five buildings within the renewal district have been rehabilitated entirely with private funds. Answering questions from Mayor Obie and Mr. Holmer, Mr. Hibschman said the Conference Center and Conference Center parking structure are examples of land in public use. Mr. Byrne said renewal agencies received low-interest loans from the Federal government to rehabilitate buil di ngs. The loans were dependent upon the existance of a Renewal Agency. Replying to questions from Ms. Bascom and Mr. Hansen, Mr. Byrne sa i d the Renewal Agency did not finance the construction of the Hult Center. City Attorney Tim Sercombe said an urban renewal plan in conformance with State laws would be necessary to re-acquire land in order to increase the intensity of its use. Mr. Farkas introduced Greg Byrne of the Development Department who discussed tax-increment financing. He said the assessed value of property in the tax- increment district is frozen when the district is formed. Taxes on the e increase in assessed value are used to provide services such as parking in the district. Taxes on property outside the tax-increment district are higher than they woul d be if the same 1 eve 1 of development existed without the district. Responding to questions from Mayor Obie, Mr. Bryne and Mr. Gleason discussed the results of disolving the Eugene Renewal Agency. Mr. Gleason said the voters would have to approve retention of the present tax rate outside the renewal district if the district is dissolved and the tax rate is retained. He said the City's General Fund would receive about $2 million in additional revenues if the voters approve the retention. Of that amount, $1.3 million would be set aside to retire tax-increment debt annually. Mr. Byrne discussed potential development on the 11th Avenue and Wi 1 lamette Site. He also discussed the Riverfront Research Park Tax-Increment District and the loans to it from the Downtown Tax-Increment District. Replying to questions from Mr. Rutan, Mr. Byrne discussed the use of tax- increment funds to pay for capital proj ects . He said $2.7 million is the current balance in the fund. Mr. Farkas added that $2.7 million is needed for the current indebtedness. Mr. Hansen wondered what happens when the assessed value of a building in the Urban Renewal District is not as high as expected. Mr. Byrne said bonds are not marketed until the tax-increment cash flow is sufficient to cover them. e MINUTES--Eugene City Council November 19, 1986 Page 3 - Mr. Holmer pointed out that Bancroft funds could be used to finance private investment if a renewal district did not exist. Answering a question from e Mr. Holmer, Mr. Farkas said some states use other tools such as sales taxes and local improvement districts to accomplish what tax-increment funds do in Oregon. Mr. Hansen asked how Eugene1s use of tax-increment funds compares with the use of them in other cities. Mr. Gleason responded that Eugene's downtown is uniquely successful. He said Tacoma, Washington, and Boise, Idaho, have not been able to retain downtown development and do not have successful downtowns. He said the tax-increment funds in Salem are 50 percent more than Eugene1s and Salem has more successful downtown reta i 1 deve 1 opment than Eugene. The Nordstrom Mall was part of the urban renewal. He said Eugene emphasized amen it i es in the downtown mall and he thinks they wi 11 inspire other development. He said benign neglect does not produce a vibrant downtown. Ms. Bascom said the councilors received some erroneous information from a constituent about the effect of an expansion of the Urban Renewal District. Mr. Holmer asked the staff to reconcile the suggestions to decrease the size of the downtown mall and suggestions to increase the urban renewal area when the council considers tax-increment financing again. Mr. Miller wondered about using tax-increment funds for capital needs in the Hult Center. Mr. Sercombe responded that tax-increment funds must be used to accomplish the objectives in the Urban Renewal Plan and the present Urban Renewal Plan indicates that a setting will be prepared for a performing arts center. The plan is being updated now but State law indicates that urban e renewal should be used to remove blight and substandard buildings. Mayor Obie directed the staff to present a plan for using tax-increment funds for improvements to the Hult Center. Responding to a question from Ms. Ehrman, Mr. Farkas said the City's plan to provide awnings in the downtown is not completed. The plan will provide loans which will be forgiven in ten years if the awnings are maintained. Replying to questions from Ms. Schue and Mayor Obie, Mr. Farkas said the council must decide about the length of the Urban Renewal Plan. Mr. Sercombe said State law indicates a tax-increment district will cease when the revenues exceed the expenditures. Mayor Obie directed the staff to discuss ways to terminate the Downtown Urban Renewal District and the advisability of terminating the district when the council considers tax-increment financing again. Mr. Miller asked the staff to discuss ways of tying a retention of the tax rate outside the district to the termination of the district. Mr. Hansen said the school districts in Lane County are interested in the termination of urban renewal districts. e MINUTES--Eugene City Council November 19, 1986 Page 4 Mr. Holmer wondered if a tax-increment bond issue could be referred to the voters for approval. e Mayor Obie introduced Lane County Commissioner John Ball, Eugene Planning Commission President Jim Ellison, Eugene Planning Commission Vice President Gerry Gaydos, Eugene Downtown Commission Chairperson Anne Bennett, and former Eugene Planning Commissioner Betty Niven. Mayor Obie adjourned the meeting at 12:45 p.m. z~- Mic eal Gleason City Manager (Recorded by Betty Lou Rarick) mncc1119 e e MINUTES--Eugene City Council November 19, 1986 Page 5