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HomeMy WebLinkAbout12/08/1986 Meeting M I NUT E S e City Council Dinner/Work Session Eugene Hilton--Bloch Room December 8, 1986 5:30 p.m. PRESENT: Richard Hansen, Cynthia Wooten, Jeff Miller, Emily Schue, Roger Rutan, Ruth Bascom, Debra Ehrman, councilors; City Manager Mike Gleason; Assistant City Manager Dave Whitlow; Development Director Abe Farkas; Elaine Stewart, Greg Byrne, Jerry Gill, Development; Pat Decker, Kirk McKinley, Planning; Public Information Director Barb Bellamy; Dean Runyon, Mark Pangborn, Phyllis Looby, Lane Transit District; Ann Bennett, Downtown Commission; Rob Bennett, Jim Ellison, Sam Frear, guests. I. DOWNTOWN DEVELOPMENT STRATEGY Mr. Hansen opened the meeting. Mr. Farkas said tonight's presentation was a follow-up from November 19. He said staff intended to review Urban Renewal process steps and financing plans. Mr. Farkas also noted that several . councilors had conducted site visits of the existing Urban Renewal area and of the area proposed for expansion. He said a public forum on the Urban Renewal Update was scheduled in February, prior to decisions by the Planning e Commission, the Downtown Commission, and the City Council in April. Mr. Farkas said the Urban Renewal District over the last 18 years had been responsible for about $50 million worth of development. He presented a slide show of the Eugene area. He said many buildings constructed in Eugene in the 1920s had not been intended as permanent structures, and he noted that Eugene structures differed from those in Salem and Portland in the condition of their foundations and in that few here were masonry buildings. Mr. Farkas said an engineering firm in 1968 had been hired to assess the condition of structures within a 17-block area, and he showed a map identifying structures found to be substandard and that would eventually require removal. He said 74.4 percent of available office space downtown had been occupied in 1968, and a total of 470,000 square feet had existed, in addition to a total retail space of about 1.6 million square feet. He added that reta i 1 occupancy rates were not available for that year. Mr. Farkas compared those figures to 1986 data, indicating that 87.5 percent of more than 800,000 square feet of available office space was occupied. He said 1.6 million square feet of retail space had been retained, and the addition of approximately 1 million square feet of usable space downtown had brought the total space available to 3.2 million square feet. He also noted that about 600,000 square feet of the 1 million increase coul d be attributed to public buildings such as the Communi ty Conference Center, the Hult Center, and parking structures. e MINUTES--City Council Dinner/Work Session December 8, 1986 Page 1 Mr. Farkas showed examples of substandard conditions such as exposed wiring, poor drainage, and improper fire escapes, and he cited absentee ownership and e deferred maintenance as causes. He said urban renewal had resulted in the underground installation of many utilities and in the addition of covers over some a 11 eys. He said many buildings on Willamette Street and on Broadway previously had been underutilized or vacant, and parking had been difficult. He said some downtown buildings had been saved and rehabilitated, but others had been beyond repair. He noted the importance of urban renewal resources in saving and rehabilitating historic buildings. Mr. Farkas said about one million square feet of space had been added to downtown, and the existing space had been upgraded to meet codes. He sa i d retail space had been retained, and parking had been added. He also said mass transit now was operating more smoothly, and a better environment had been provided for stimulating and reducing the risk for private investments. A. 20-Year Financing Plans Mr. Byrne reviewed 20-year financing plans for the Urban Renewal Update. He referred councilors to the spread sheets in agenda packets and said detailed information had been provided to clarify assumptions and to show relations between development and expenses. He added that information would be conden sed for the fi na 1 report. Mr. Byrne said the first page described revenues from all sources, the second page described fixed expenses, the third page described pay-as-you-go capital projects, and the fourth page described . assumptions of various bond issues. Responding to Ms. Ehrman's question, Mr. Byrne said the old financial plan had not incorporated planning like that now done. He said State law now imposed requirements that had not been included e under the old Federal program. Mr. Byrne said the primary source of revenue was tax increment funds, which determine the ability to bond. He said the other major source of revenue was proceeds from bond sales, and other sources were incidental. He said the flow depicted assumed an intensity of development as called for in the Downtown Plan, at an average intensity of three floors~ Mr. Hansen asked about current and past average intensities of development. Mr. Byrne said the Centre Court Building was developed to a floor area ratio of about 6:1, and new offices near Valley River Center were about .6:1, or about one-tenth as intensive. He sa i d deve 1 opment called for in the pl an would be somewhere in between, probably lot line-to-lot line and between two and six floors. He added that parking was not considered as a floor. Responding to Mr. Holmer1s question, Mr. Byrne said the assumption of three floors had been chosen based on the market absorption projected by consultants and staff. Mr. Farkas said the three-floor assumption was not a prediction, but a conservative base used for financial purposes. Mr. Hansen asked whether projections had been changed because of plans for retail space. Mr. Farkas said an attempt had been made to incorporate mixed uses into the plan. Mr. Gleason added that the amount of parking originally projected had been reduced in response to expected retail development. e MINUTES--City Council Dinner/Work Session December 8, 1986 Page 2 ~ Mr. Byrne said fixed costs were dedicated primarily to the parking requirement of the downtown Urban Renewal District. Because of the lack of surface e parking, structure parking was essential to achieve the density of development called for in the plan, he said. He noted that bonding costs were tied to development and were timed to be paid with taxes generated by development. Mr. Byrne said the Downtown Commission had run a computer model to indicate the most favorable use of existing resources in the event that development should occur later than projected. He said the analysis i ndi cated that financial resources should be held and protected for dedication to development, rather than spent too enthusiastically in early years on pay-as- you-go capital projects. Responding to questions, Mr. Byrne said parking structures were the major expenses, now that land was owned. He also said the bonds were not backed by users, but by tax-increment flow. He said plans were to develop surface parking lots into mixed-use space, and projected parking was expected to offer about three spaces per 1,000 square feet of building area. He said existing expenses were expected to be repaid completely by the yea r 2005. Mr. Byrne said the third page described capital projects that supported the plan objectives and that were too small for bonding. Mr. Holmer asked about the proposal for a $5.2 million public plaza. Mr. Byrne said the project was included in the Downtown Plan as a design concept. He said a site had not been identified, and costs shown were estimates for acquisition and development of open space. He said the 20-year plan was expected to cost about $13 million, which included both the existing Urban Renewal area and the proposed . expansion. Mr. Byrne showed a model of the effect of the Urban Renewal District on tax e rates. He said improvements to the district had raised property tax rates inside the City and the 4J School District by about 60~/$1,000 of assessed value. He said the impact on property taxpayers outside the City but within Lane County would be about 3~/$1,000. He noted that the future projection was conservative and assumed annual tax base growth of 6 percent, with valuation growth of 3 percent. Mr. Byrne said that based on these assumptions, the tax rate at the end of the 20-year period would be $57/$1,000, which he added probably was unrealistic. Mr. Byrne made a correction to his previous statement about the effect of financing the Riverfront Research Park. He said the rate at the termination of the project was shown in the next-to-the-last line of the Summary Report of Marginal Tax Rates. He also noted that benefits from the Riverfront Project would amount to dollars per thousand over a period of several years, not in the first year after termination. Mr. Byrne said State law required that information used in financial analysis of the Renewal Plan be sufficient to determine feasibility. He said the information presented this evening would be condensed for the final report, and any changes that occurred in the future were expected to fall within acceptable ranges for feasibility. e MINUTES--City Council Dinner/Work Session December 8, 1986 Page 3 B. Proposed Projects e Ms. Stevia. rt reviewed the agenda attachment titled Proposed Projects Relationship in the Renewal Plan Update to the 1968 Renewal Pl an and the Adopted Downtown Plan. She said the Urban Renewal Plan ca 11 ed for consolidation of parking, and the Downtown Plan called for the financial planning necessary to provide new parking structures downtown. She said the Mall Redesign, which included the central plaza, was part of the Urban Renewal Plan and called for pedestrian streetscapes downtown. Responding to Mr. Hansen's question, Ms. Stewart said the business loan program was used to address publicly identified policy issues and to leverage private investment. - Ms. Stewart said the West Park Block Improvements referred to the block at 8th and Oak, containing the fountain with the fish sculpture. Mr. Holmer asked whether the Central Transit Facility included any consideration of future gasoline costs. Ms. Stewart said she did not think gas prices had been considered, but she added that the Public Works Department was leading the study and coul d advise on that. Mr. Gleason said the study assumed substantial growth in transit ridership. Mr. Holmer asked about potential impact on parking facilities. Mr. Gleason said parking projections subsumed greater transit ridership, so any decrease in ridership would increase needs for parking. Mr. Holmer requested background figures on that. Ms. Stewart reminded members that design concepts, like the one for a new public plaza, had not been adopted with the Downtown Plan, but were included as references. e Responding to Mr. Hansen's question, Ms. Stewart said the 1984 Downtown Plan had not addressed the expansion of Urban Renewal boundaries. She added that the plan had addressed linkages to the Fifth Avenue area and to the river. Mr. Byrne said financial assumptions included tax-increment flow on the expanded Urban Renewal area, beginning in about the fifth year. He said no projections currently were available without the expansion. Ms. Schue asked about the process concerning design concepts and the adopted plan. Ms. Decker said the Design Element of the plan had identified five ideas or concepts, which the Downtown Commission and the Planning Commission had deemed worthy of inclusion, but not of actual adoption as policy. She said the concepts were intended to be the subject of future work and study. Ms. Schue noted that the concepts were included in financial analyses, adding that she found the distinction between concepts and adopted policies confusing. Ms. Decker sa i d a similar process was used in neighborhood refinement plans, which could be changed. Mr. Byrne said finances for the concepts were included because the Downtown Commission had done the work for proposed projects to demonstrate feasibility, but it had not yet taken formal action requiring funding. Mr. Gleason said all projects would require council approval, without regard for the plan. Ms. Wooten asked whether the new public plaza assumed that Willamette Street would be opened between 8th and 10th Avenues. Ms. Stewart said the design e MINUTES--City Council Dinner/Work Session December 8, 1986 Page 4 ~ concept in the Urban Renewal Plan assumed that 8th and Willamette would be intensely developed and that the opening of Willamette could affect operation e of the current plaza at Willamette and Broadway. She said part of the space at 8th and Willamette was conceived as public space. Ms. Bascom asked about options for the public space, and Mr. Holmer asked whether deleting the public space item would reduce bond payoffs and tax rates. Mr. Farkas said debt service would be reduced by eliminating the item for public space, which he added was an option. Mr. Hansen and Mr. Holmer requested a financial analysis without the expansion of the Urban Renewal area. Ms. Wooten requested more specific information about how the Business Development Tool Kit and other capital improvements and design concepts might apply to the expanded boundary area. She also requested clarification of expectations about redevelopment and the revenue payback to the district beginning in the fifth year. She added that she generally was supportive of the expansion, although she wanted more information about possibil Hies. Ms. Bascom said she agreed with Ms. Wooten. C. LTD Station Site Mr. Runyon noted that Lane Transit District in the past had found the price of gasoline to be a significant factor in ridership, with price increases reflected in ridership increases. He noted that future trends could differ from past experiences. Mr. Runyon said Lane Transit District had operated downtown for about 14 years, approximately at its current site. He sa i d about 7,500 people currently visited the downtown transfer facility daily. He said about 4,000 e trips per day were to downtown destinations, and he said that figure might compare to about 900 vehicles (or two Parcades) per day represented by LTD ridership. Mr. Runyon said the downtown transit station had been constructed in 1982 and had improved operations substantially, although three blocks sometimes was too far to travel for five-minute transfers. He said two blocks was the maximum recommended length. He also said the opening of Willamette Street had made problems worse, and further reopening would continue to compound safety problems. Mr. Runyon reviewed studies that had been made of the site and said two recommendations had been made: to modify and adapt the current station or to move the site to the County butterfly lot at 8th and Willamette. He said staff members now were evaluating site availability, and results were not expected immediately. Mr. Runyon said the agenda attachment described site criteria intended to increase both short-term and long-term efficiency. He said a study now was being done of downtown riders, and details of that should be available in January. He said LTD staff would review the site selection process according to the studies and hoped to make site suggestions soon after that. Ms. Ehrman asked about City input to the policy statement in the agenda attachment. Mr. Runyon said no specific input had been received from the City. He added that LTD had invested substantially, with the City, in the current station, which he said had been made less effective because of the e MINUTES--City Council Dinner/Work Session December 8, 1986 Page 5 opening of Willamette Street. He said LTD would like to participate in planning processes for downtown to avoid repeating that situation. Mr. Holmer e asked about the process used to deci de on investments 1 i ke the transit station. Mr. Gleason said the decision had been made to pursue an interim solution, which did not meet all the criteria of either agency. Mr. Holmer asked about the potential of the butterfly lot as a permanent solution. Mr. Runyon said the lot had many advantages, including a location off-street and close to governmment offices and other employment. Mr. Pangborn said the LTD board had looked at layout of the site and had concluded that buses could reach the site, with some parking possibly required on 8th Avenue. Mr. Runyon said the concept was for a permanent facility, and he added that any expansion was expected to occur in facilitjes other than a downtown transfer station. Ms. Bascom said she was surprised to hear the butterfly lot mentioned so eas ily and frequently. She expressed concern for the destruction of the area's ambiance and urged more creative analysis of the 10th Avenue site. Mr. Runyon said options were being considered. He added that one disadvantage of the butterfly lot was the high cost. Responding to Ms. Ehrman's question, Mr. Runyon said he anticipated a decision by the LTD Board soon after January. Mr. Mill er suggested that the Urban Renewal Agency make a prel iminary recommendation on feasibility of sites. Mr. Hansen recommended that the LTD Board meet with the City Council after a site decision had been made. Ms. Wooten said she did not think the station necessarily would destroy the ambiance of the area near 8th and Willamette. She said she did not find the e butterfly lot particularly handsome, and she noted the need to review design options before making a final decision. Mr. Holmer said he would prefer the station nearer the Conference Center, the Hult Center, and the Saturday Market. Ms. Schue asked about the role of the City. Mr. Farkas said LTD would decide on the site and present the site option to the City Council as the Urban Renewal Agency. He said action was up to the council, but the land was owned by the County, which would have the final authority regarding the butterfly lot. Mr. Runyon said LTD definitely was interested in participating in City process during the decision. Mr. Hansen urged LTD to make a decision soon and to return to discuss it with the council. Ms. Bennett spoke on beha 1 f of the Downtown Commission. She said she appreciated Mr. Holmer's request for a financial scenario without the expanded Urban Renewal District. She said the Downtown Commission had not asked for that scenario because it had approved the expansion, and she said she hoped information about financing capital improvements would be shared with the council. Ms. Bennett said the Downtown Commission had identified design concepts as features that should be retained as development occurred. She said the Downtown Commission also was waiting for a decision on the LTD site and added that she thought tonight's slide show should be seen by everyone. e MINUTES--City Council Dinner/Work Session December 8, 1986 Page 6 Mr. Gleason said process now would entail deliberations and recommendations by the Downtown Commission and the Planning Commission. He said the City Council e would hear public testimony and make a decision on the Urban Renewal Plan in April. He said he expected two or three work sessions on that before making a decision and adopting the plan in about Mayor June. He said the plan was being adopted to try to align the Downtown Plan, which was larger than the Urban Renewal boundary, with the Urban Renewal document. Mr. Hansen asked whether the expansion of the boundary should be decided now. Mr. Gleason said that was up to the council. Ms. Wooten said she did not favor a premature vote but she was interested in looking at possibilities for redevelopment in the expanded area before making a decision. Ms. Ehrman asked whether tax-increment funds could be used for an LTD station. Mr. Gleason said tax-increment money could be used, although he added that it was somewhat unusual. He said use of General Fund money for construction of transit facilities was even more unusual, and, although possible, he did not recommend it. Mr. Holmer said he favored a vote before proceeding with the Urban Renewal pattern for funding development. He said he had substantial reservations about expanding the district. He said he thought the idea of funding activity in the area at the expense of residents of the rest of the City had gone too far without a vote by the voters. Ms. Wooten said she thought the amount of tax-increment financing for the Riverfront Project was minimal and should not be used to undermi ne 1 everagi ng of funds for the expanded Urban Renewal program or the bus station, or both. Mr. Farkas said the council would have several opportunities to debate each project before adoption of the plan and bonding decisions. Mr. Hansen said government decisions differed from private e industry decisions because they dealt with the faith of the City, etc. Ms. Schue agreed that decisions were political. Mr. Gleason said the City Council acted as a development corporation, as designated by State law. Mr. Hansen said his concern was with the particular contract, not with the involvement in development activities. Mr. Miller said he thought the public plaza should be the central concept, from which the rest of the downtown design would emerge. He compared the Downtown Plan to a Jell-o with a flexible mold. Mr. Rutan said he did not want to restrict planning possibilities, but he thought a general consensus on major components should be sought. Mr. Holmer sa i d he favored a vote on whether the counci 1 approved of continuation and extension of Urban Renewal financing. He added that expenditures for additional parking structures also might come from tax- increment financing. Mr. Hansen said he thought further discussion of the boundary expansion was needed, and he requested scheduling of an additional work session. Ms. Ehrman said she thought further clarification of the policy statement concerning joint funding was needed before proceeding. She added that she was not necessarily opposed to joint funding. e MINUTES--City Council Dinner/Work Session December 8, 1986 Page 7 Ms. Schue commented that she had found the tour quite interesting and useful and she strongly suggested that members take the tour before further - discussions. Ms. Wooten moved, seconded by Ms. Ehrman, that the City Council go on record as supporting tax-increment financing within the boundaries of the Renewal District in Eugene, Oregon. She said the motion was intended to measure support for incurring additional obligations, regardless of boundary expansion. The motion carried 4:2:1, with Councilors Hansen and Holmer opposed and Councilor Rutan abstaining. Mr. ~utan said he felt the motion was too nebulous to vote on. Mr. Hansen said he found no evidence of blight and hoped the expansion would not proceed. The meeting was adjourned at 7:15 p.m. Respectfu ~ ~ Mic eal Gleason City Manager (Recorded by Leslie Scales) e mnccde08 e MINUTES--City Council Dinner/Work Session December 8, 1986 Page 8