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HomeMy WebLinkAbout09/30/1987 Meeting M I NUT E S e Eugene City Council McNutt Room--City Hall September 30, 1987 11 : 30 a. m . COUNCILORS PRESENT: Debra Ehrman, Freeman Holmer, Jeff Miller, Rob Bennett (12 noon - 1:40 p.m.), Cynthia Wooten, Emily Schue, Ruth Bascom. COUNCILORS ABSENT: Roger Rutan. The adjourned meeting of September 28, 1987, of the Eugene City Council was called to order by His Honor Mayor Brian B. Obie. 1. ITEMS FROM THE MAYOR AND COUNCIL A. Public Power Week Ms. Schue said that during the week of October 5, the Eugene Water and Electric Board (EWEB) will have "Public Power Week.1I She suggested that the Mayor and City Council write a letter to EWEB expressing support for the e event. She also said that this raised the issue of public versus private power. She suggested that staff give the council a short briefing on this issue. The council supported both of these suggestions. B. Entrance Beautification Ms. Bascom said that in area east of Rax Restaurant along the south side of Franklin Boulevard there are a number of unattractive parking lots. She said that recently, improvements were made in this area without a permit. She said staff is working to determine whether the Entrance Beautification Study can be cited to require the property owners to make the area more attractive. C. Ozone Layer Mr. Holmer said the Berkeley, California, City Council recently took action against the use of styrofoam and other plastics that contribute to the deterioration of the ozone layer. He asked that staff provide the council with information on the specific ordinance and on the general issue. D. The Gut Ms. Wooten said that there has been some shift in cruising activity from South Willamette Street to part of West 11th Avenue that is in her ward. She said she has been receiving complaints. City Manager Mike Gleason said staff would e MINUTES--Eugene City Council September 30, 1987 Page 1 arrange for Ms. Wooten to speak to the lead staff person on gut issues, Christine Donahue. He added that the City has been examining whether an anti- e cruising ordinance--such as the one used by Portland--could be used to address the problems caused by Eugene's gut. E. Eugene Celebration Ms. Ehrman said the Celebration went well. Mayor Obie said the Celebration Steering Committee is low profile, but hard working. He said the council should invite the committee to one of its lunch work sessions in order to express thanks to the committee. F. Kakegawa Trip Ms. Ehrman said she would leave for Kakegawa, Japan, Eugene's Sister City, on October 5 and return October 18. In response to a question, she said the six other members of Eugene's delegation will bear the cost of thei r tri ps individually. She said Kakegawa's delegations to Eugene have been larger because the cost of their trips have been subsidized. She said the City is examining whether the cost of future trips could be subsidized in order to increase the size of Eugene's delegation. Mr. Holmer suggested that future Eugene delegation trips to Kakegawa be timed to correspond with either the council's August or spring break. G. Financial Process Mayor Obie said he recently spoke with Mr. Gleason and expressed a desire to e have staff reground the council in the City I s financial situation, particularly what the City's deficit is projected to be in upcoming years. He said he would like staff to suggest where budget cuts might be made. He suggested that the council dedicate a Saturday to discuss its priorities and to give some direction to staff. Mayor Obie outlined in general terms how this session might proceed: the council woul d be updated on the City's financial situation; it would determine what the City's basic services are (a large number of votes, perhaps seven, would be required to place an item on the list of basic services); the cost of providing these basic services could be determined; then, the council would go through another process, during which a reasonable number of votes, perhaps five, would be required to place other items on the list of basic services that would receive funding. Mayor Obie asked councilors to comment on this general proposal. Mr. Holmer suggested that the Budget Committee be present to observe this council's discussion of its financial priorities. He also said the council should not vote on whether the broad City programs should be on the list of basic services. Instead, the general categories should be subdivided (perhaps into the list of the City's 100 or so service packages), and the council should decide whether these components are basic services. In response to a question from Ms. Wooten, Mr. Holmer said he did not think this would mean the council would be discussing the budget with line item specificity. Mr. Holmer added that staff, in addition to proposing budget cuts, should also suggest possible additions to the budget. e MINUTES--Eugene City Council September 30, 1987 Page 2 Mr. Miller said that instead of simply stating that a particular item is a basic servicet the council should indicate what level of service is considered e basic. Ms. Schue said she was not sure how much the council should focus on service levels. She said the question is not what service levels the City would like to providet but what services it can afford to provide. Mayor Obie said he thought the council could reach a consensus on what the basic services are. He said that over the yearst the City's budget has acquired many additional itemst all of which have constituencies. Mr. Holmer said that if councilors are allowed to cast an unlimited number of "yes" votes duri ng the process t they probably wi 11 generate an unlimited budget. He suggested that some procedural device be used--e.g't a limit on the number of "yes" votes that each counci lor may cast--to force counci lors to discipline themselves and to make actual choices. Mayor Obie agreed. Ms. Wooten said the processt as discussed so far by the council, would not take into account new ideas or programatic changes the council might develop in its goals sessiont and would not allow any flexibility because it would only deal with service levels of existing programs. She suggested that the process be held aftert or as part oft the council's goals session. Mayor Obie agreed. Ms. Wooten also said the council should consider not only the expenditure side of the City's budgett but also the revenue side. e Mayor Obie said he thinks the community is about at its limit in terms of additional City revenue. He said it may be possible to generate some revenue with user fees; howevert he did not think the community will accept any significant tax increases. Ms. Ehrman said that after the council goes through the process of establishing financial prioritiest it should solicit feedback from the public. Mr. Gleason made the following suggestion: go through the priority-setting process as an exercise; evaluate this process and hold the goals session; then, go through the priority-setting process a second time as a decision- making mechanism. He said that sometimes with processes like theset decision- makers spend a lot of time guessing about the mechanics of the process and trying to predict the outcome rather than focusing on the policy choices. He said that going through the process as an exercise will familiarize councilors with the mechanics; after thist councilors will be able to focus on actual policy choices and compromisest rather than worrying about what accidental compromises might result from the process mechanics. e MINUTES--Eugene City Council September 3D, 1987 Page 3 II. WORK SESSION: URBAN RENEWAL PLAN UPDATE (DISTRICT EXPANSION, DEVELOPMENT PROJECTS, AND FINANCING) e Mr. Gleason introduced the item. Eugene Development Department (EDD) Director Abe Farkas gave the first staff presentation. He said this would be a continuation of the previous council discussions of the Urban Renewal Plan update. A follow-up work session is scheduled for October 28, at which time the Will amette redesign will be di scussed. The counci 1 is tentatively scheduled to take action on the plan on November 16. Mr. Farkas said several staff reports would be given: tax increment financing as a policy tool; Urban Renewal as an element of the regional economy; the objectives and accomplishments of Eugene's Urban Renewal District; the options for the future of downtown, particularly expansion of the district; and Hult Center improvements. A. Tax Increment as a Policy Tool Mr. Farkas said tax increment is one of a limited number of tax tools that can be used to stimulate development, and one of the few tools available to stimulate downtown development. It is used in 30 states and 16 Oregon cities. He said that in Eugene, the policy tool has: generated 6,000 parking spaces, 2,000 of which are in garages; helped construct a conference center; helped assemble land for development; contributed to major public improvements; and provided a climate for the stimulation of rehabilitation and new construction. He said the net cost of using tax increment financing is about three cents per $1,000 of assessed value. He explained this as follows: the cost of retiring the existing tax increment bonds is about 68 cents per $1,000 of assessed value; if the improvements that were made using tax increment had been e financed with another mechanism (i.e., General Obligation bonds), the cost of retiring these bonds would have been about 65 cents per $1,000 of assessed value; the net cost of using tax increment financing is the difference between the two figures, three cents per $1,000 of assessed value. Mr. Farkas said these three cents go toward various programs, small improvements, loan programs, and the administrative element of tax increment financing. Mr. Farkas said the legislative intent of tax increment financing is two-fold: to eliminate slum and blight, and to encourage private reinvestment. Mr. Farkas said it is important to examine the use of tax increment financing within the context of the regional economy. He said downtown's position within Eugene is much like Eugene's position within the region: downtown is the most densely developed part of Eugene, and Eugene is the most densely developed part of its region; both downtown and Eugene are home to diverse uses in close proximity with each other; the cost of doing business in Eugene is higher than the cost of doing business in other parts of the region, and the same is true for the costs of doing business in the downtown, where land, rents, and supports for the quality of life are costlier than in other parts of the city; and finally, Eugene is a major employment center for the region, just as downtown is for Eugene (employment figures for Lane County, Eugene, and the downtown are 94,000, 63,000, and 12,000, respectively). Mr. Far ka s said that in order to maintain Eugene's and the region's competitiveness, the strength of downtown must be maintained and built upon. He added that one e MINUTES--Eugene City Council September 30, 1987 Page 4 should consider the necessary stimulus the public sector provides to encourage private sector reinvestment. e B. Objectives and Accomplishments of Urban Renewal Greg Byrne, an EDD staff member, referred the council to a document that stated the objectives of the 1968 Urban Renewal Plan: a. Reorganization and consolidation of the main commercial area by providing expansion possibilities for existing retail operations; b. Provision of adequate parking to meet existing and future demand; c. Consolidation of parking into major facilities located around the edge of the retail core; d. Improving access and circulation; e. Creation of traffic-free pedestrian precincts; f. Provision of assembled sites for new office, retail, service, and other commercial uses; g. Creation of an appropriate setting for the proposed Auditorium- Convention Center; and e h. Installation of public improvements that will stimulate private investment in new developments to protect the existing economic base and to bring about an increase in tax income to the City and County. Mr. Byrne said significant accomplishments have been made: the construction of 30 new buildings, with a total value of about $40 mill ion; 22 rehabilitations totaling about $10 million; over $6 mill ion in public investments; the creation of the Hult and Conference Center; the creation of pedestrian precincts; the assembly of sites for development; and the development of new infrastructure. However, he said the effort is still incomplete (e.g., items (b) and (c)). Also, about one-third (5.5 acres) of the property that the urban renewal Agency acqui red is still in pub 1 i c ownership. Mr. Byrne said this property is being actively marketed. He also said that goals (h) and (d) were driving reasons behind the proposed expansion of the Urban Renewal District and redesign of Willamette Street from 8th to 10th avenues. Mr. Byrne said that in recent months, considerable analysis has focused on comparing the assessed value in the Urban Renewal District to that of other taxing districts, and claiming that downtown growth has been slow and the accomplishments of urban renewal disappointing. He said staff disagrees with such claims, because such comparisons need to be viewed within the context of urban renewal theory and practice. Urban renewal begins with an area that is e MINUTES--Eugene City Council September 30, 1987 Page 5 in a declining state; buildings are demolished and some property ;s taken out of pri vate ownershi p, both of whi ch tend to depress assessed values; e furthermore, urban renewal deals with a fixed area, whereas other taxing districts can expand through annexation. Mr. Byrne referred the council to a chart comparing the growth in assessed value of property within four taxing districts (Lane County, 4J, Eugene, and the Urban Renewal District). From the first year of the Urban Renewal Plan (1968) through 1973, the increase in total assessed value for the four taxing districts was as follows: 50 percent for Lane County, 52 percent for 4J, 43 percent for Eugene, and 1 percent for the Urban Renewal District. Mr. Byrne said a small increase in assessed value is typical of the initial years of renewal districts. He said that in year 7 of the plan (1974) new buildings were constructed, property began moving back into private ownership, and assessed values began to increase downtown. From 1974 through 1986, the increase in assessed value for the four taxi ng districts was as follows (using 1974 as the base year): 157 percent for Lane County, 190 percent for 4J, 213 percent for Eugene, and 172 percent for the Urban Renewal District. Mr. Byrne said the assessed value of the Urban Renewal District was $46 million in year 1 of the plan (1968) , $51 million in year 7 (1974), and $138 million in year 19 (1986). In response to a question, Mr. Byrne said these figures (for all four districts) included the value of the Hult and Conference Center, even though this property is nontaxable. He said that not to include this would undervalue what the community has invested in the downtown. Mr. Byrne added that 1974 to 1981 was a period of extremely rapid residential expansion; this growth increased the assessed values of the other three districts but did not increase the assessed value of the downtown. Ms. Schue questioned the methodology of including the Hult and Conference Center values in the comparison while not including the values of other public e investments in the four taxing districts. Mayor Obie said the data on assessed values are very unreliable. Mr. Gleason agreed, but said this is the best data available; furthermore, values are assessed for every lot, so when the individual numbers are added, the individual assessment errors cancel each other to some degree. Mr. Bryne referred to a graph that illustrated the assessed value of the Urban Renewal District as a portion of the assessed value of Lane County over the life of the Urban Renewal Plan. In 1968, this ratio was decreasing fairly rapidly at a rate of about 6 percent. Beginning in 1973-74, this trend began to change; since then, the assessed value of downtown has been increasing as rapidly as (even somewhat more rapidly than) the assessed value of the county. Mr. Bryne said staff believes that had urban renewal not been used, the declining trend would not have been changed. Mr. Gleason said the past years of urban renewa 1 have been spent demolishing buildings in poor condition, buying and assembling properties for deve 1 opment, returning some of the property to private ownership, and building an infrastructure; all of this has poised downtown for future growth, but the job of urban renewal is only partially completed. Mr. Holmer said the Urban Renewal District worked well for the City; this, however, is not the primary issue. He said the question is whether the district should be expanded and whether urban renewal should be used for e MINUTES--Eugene City Council September 30, 1987 Page 6 another 20 years; whether, in other words, the next 20 years of urban renewal will benefit the City also. Mr. Holmer said that in his comparison of the e assessed values of different taxing districts, he did not include the value of the Hult and Conference Center; including it in the data has a much greater percentage i nfl uence on the Urban Renewal District than on other taxing districts. Also, the boundaries of Lane County did not expand during the last 20 years. He said that since 1968, Lane County's assessed value has more than quadrupled, whil e the assessed value of the Urban Renewal Di stri ct has increased 125 percent. He said this does not mean that urban renewal was not beneficial; rather, it means that the growth in assessed value was not as great for downtown as it was for Lane County. He said this analysis indicates that the City should not be too optimistic about what urban renewal will accomplish over the next 20 years. (Mr. Holmer's analysis was contained in a June 22, 1987, memo from him to the Mayor and City Council.) Mr. Gleason said he envisioned a slightly different question before the council: urban renewal has been used to reverse a declining trend in the downtown; so, should the use of this tool be continued in order to finish a project that has established a significant foundation but ha s not been completed? Mr. Obie said the trend data cited by staff included the demolition and acquisition of property that occurred from 1968 to 1974; he said these actions made the declining trend from 1968 to 1974 greater than what the actual trend was prior to the beginning of Urban Renewal. Mr. Gleason said the buildings that were demolished were the ones in poorest condition; so this demolition di d not significantly exacerbate the declining trends. He said downtown Eugene in 1968 was characteristic of almost all cities that reach an age of e about 100 years: the oldest and poorest buildings begin to be a major detriment and the assessed value of the entire core begins to decline rapidly. Mr. Byrne outlined the two basic options envisioned by staff for the development of downtown. Without tax increment, downtown development would be of lower intensity (lower floor-area ratios), would rely more on surface parking or small underground lots serving individual buildings, and would depend more on automobile use and less on mass transit. With tax increment, a higher intensity development would occur with parking structures and mass transit to support this intensity. Mr. Byrne said the consistent policy direction over the past 20 years has been toward the latter type of downtown. He said this policy vision cannot be realized without the tool of urban renewa 1 . C. Tax Increment and the Overall Tax Rate In response to a question, Mr. Farkas said the annual tax increment revenue is about $1.9 million. He said that if this increment revenue were returned to property taxpayers, they would receive a tax reduction of about 68 cents per $1,000 of assessed value. Mr. Bryne said that if the decision were made to terminate the district, about seven years would be required to defease the bonds. At this point, property taxpayers would receive a tax reduction of about 89 cents per $1,000 of assessed value (the current 68 cents would be inflated over seven years to about 89 cents). e MINUTES--Eugene City Council September 30, 1987 Page 7 Mr. Gleason said an additional point should also be considered by the council. A basic reason behind forming the Urban Renewal District was that the area was e blighted and that values were declining; if this was correct, then a real cost would have been imposed on property taxpayers if the commun ity had done nothing to counteract the blighted conditions (total assessed values would have decreased and the tax rate would have increased). D. Future Development Projects Mr. Holmer asked whether staff knew of a specific project in the Urban Renewal District that is ready to be funded. Mr. Gleason said staff knows of three; he said he would discuss these in further detail during an executive session. Mr. Holmer asked whether the necessary funding could be provided under the existing Urban Renewal Plan. Mr. Gleason said it could. He said the value of the new projects plus the existing value of the district should be sufficient to carry the new projects; however, the new projects would not occur at all without the existence of urban renewal. He added that expansion of the district would not be required for these projects to occur. Mr. Holmer asked whether any amendments to the current plan are absolutely needed. Mr. Farkas said the absolutely necessary amendments are simply "housekeeping" changes. Mayor Obie said that if the City uses surface lots in public ownership and strutured parking to leverage a development, the Downtown Commission and City Council will have to withstand the political pressure of businesses that do not want to lose immediately available surface lots. Ms. Ehrman said that if new development occurred on one of the surface lots, the lost parking would e have to be replaced elsewhere. E. Use of Tax Increment Funds for Business Loans Mr. Holmer expressed concern about one of the uses of tax increment funds-- namely, providing loans to private businesses. He said these legal issues should be investigated. He suggested that he and Mr. Bennett work with staff and the legal counsel to phrase the correct questions for the legal investigation to pursue. City Attorney Tim Sercombe said the City Attorney's Office has done considerable research on tax increment financing and delivered three or four major opinions on the subject in the last year. He said that for not very much cost, his office was prepared to provide its legal opinion on the issue raised by Mr. Holmer. City Attorney Kay James added that the office has done enough research on the matter to know the the answer is not completely clear. She said there is no definitive court case or Attorney General's opinion on the issue. Ms. Wooten said she was not sure she wanted Mr. Holmer and Mr. Bennett to be involved in the process of delivering a legal opinion. Mr. Holmer said members of the council should be involved, not to deliver the opinion, but to ensure that the questions of the legal investigation are phrased correctly. e MINUTES--Eugene City Council September 30, 1987 Page 8 Ms. Wooten said that while the legal question may be an important issue in its own right, she was not sure that it was relevant to the council's e consideration of the updated Urban Renewal Plan. Mr. Bennett said the most important questions are: Should the downtown occupy a unique and important place in the community on a continuing basis, and should special development tools be available for downtown? He said councilors need to address this fundamental question before getting bogged down with specific legal questions about tax increment financing. Mr. Bennett said his answer to the fundamental question was that downtown does occupy a special place and that it is worthy of special consideration. The question, therefore, that he would ask the City Attorneys is: How can the City position itself so that it will be able to use tax increment (or some other type of financing) for the development of downtown? Mayor Obie asked Mr. Sercombe to have the City Attorney's Office deliver an opinion on the issue raised by Mr. Holmer. In response to a question later in the meeting, Mr. Byrne said the loan program spends about $50,000 of the annual $1.9 million tax increment revenues. F. Tax Increment and the Overall Tax Rate, Continued Mayor Obie said that although the downtown occupies a special place in the community, the use of tax increment financing is costing taxpayers 68 cents per $1,000 of assessed value. He said this must be weighed against other community priorities and values. e Ms. Wooten said that if the use of tax increment financing were stopped, all of the 68 cents per $1,000 of assessed value would not return to the General Fund budget. Mr. Gleason said none of it would; rather, the overall tax rate would be lower. Mr. Bennett said tax increment financing (or a tool like it) is so important because it does not generate the tax until development occurs; this makes the use of tax increment funds much more accountable. He said that i f tax increment had not been used and if no development had occurred downtown, no one would have received the 68 cents per $1,000 of assessed value anyway. Mr. Gleason expressed strong disagreement with the statement that the use of tax increment financing is costing Eugene taxpayers 68 cents per $1,000 of assessed value. He said this is true only if one assumes that downtown would be as developed as it is today if the City had done nothing; this, however, would not have been the case if the City had done nothing. Therefore, the question is, what would have been the cost of running the City if downtown had remained at its old assessed value? Mayor Obie said this assumed that the development would not have occurred elsewhere in the city (i .e., not in the downtown core). e MINUTES--Eugene City Council September 30, 1987 Page 9 Mr. Gleason said that if the development had occurred elsewhere, it might not have occurred in the city at all. He said that unique things happen in a e downtown core--activities that are crucial to the strength of the regional economy. He said that if a region's core is losing strength, those activities will not move elsewhere within the region; rather, they will move to cores in other regional economies. Mr. Gleason added that, contrary to claims that are often made, Eugene is not a high-tax city; it is a high property tax city, but Eugene's overall taxes are low relative to those paid in other cities. G. Public Versus Private Sector Office Development Ms. Bascom said that in his June 22 memo to the Mayor and council, Mr. Holmer discussed the amount of downtown office space being rented by governmental and public agencies and implied that this was somehow less valuable than if this office space were being rented by the private sector. She said she disagreed with this implication, because having a governmental center is one of the important goals for downtown. Mr. Holmer said his point had been in response to a claim that downtown occupancy has been increasing. Although downtown office occupancy by the public sector has increased by about 30,000 square feet, occupancy by the private sector has decreased by about 13,000 square feet in the last 18 months. He said this is somewhat disturbing--and the council should keep it in mind when considering whether to expand and continue the Urban Renewal District--because public sector offi ce development generates no tax increment. H. Updating the Plan and Other Development Districts e Ms. Wooten said that in the same way that the City must set priorities in its capital budget and general fund, it also will have to set priorities in the way it finances various projects and activities. She said perhaps the council should consider not beginning the Riverfront District if the City is still midway in the urban renewal project. Mr. Holmer said that he supported both of these projects, and that downtown deserves the special focus discussed by Mr. Bennett. However, Mr. Holmer's concern was why the City needs to rewrite the Urban Renewal Plan and expand the di stri ct before deci di ng about the future 1 i bra ry , about Willamette Street, and about the location of future parking structures. He said that to do this would be to act prematurely. He said the tools of the existing Urban Renewal District are still available to be used to the full extent allowed by law. In response to a question, Mr. Gleason said the existing Urban Renewal Plan has no termination date; the proposed updated plan has a 20-year termination date. 1. Expansion of the Urban Renewal District Mr. Hibschman said the thrust of the proposal to expand the district is to improve the expansion area's infrastructure, to provide loans, and to provide parking for future development in the area. e MINUTES--Eugene City Council September 30, 1987 Page 10 Ms. Schue asked why staff believes that development wi 11 occur in the expansion area if infrastructure improvements are made. Mr. Hibschman said e that when selecting the expansion area, staff and the Downtown Commission did not spend too much time trying to predict where development would occur; rather, the area was selected because of its blighted conditions and because of policy direction in the Downtown Plan and Urban Renewal Plan. Mr. Hibschman added that staff's discussions with property owners in the expansion area indicated that the urban renewal too 1 swill be used by owners in the area. Mayor Obie outlined the following scenario: instead of expanding the district now, the City could wait until it knew of a specific development that was ready to occur outside the Urban Renewal District boundary; then the City could expand the district1s boundary in order to use the urban renewal tools to facilitate the development. He asked whether such a boundary change could be made in a timely enough fashion to respond to future developments. Mr. Hibschman said that changing the district's boundary would be at least a four- to six-month process. Mr. Hibschman referred the council to a chart showing ten-year cumulative projections for revenue and expenditures of the Urban Renewal District if the district is expanded. Cumulative Revenue from FY88-97 Existing District Area: $ 44.9 mill ion Expansion Area: 5.4 million (tax increment only) $ 50.3 mill ion e Cumulative Expenditures from FY88-97 Existing District Area: $ 45.5 million Expansion Area: 3.2 mi 11 ion (does not include costs for rehabilitation loans or development financing) $ 48.7 mill ion Mr. Hibschman said that after the costs for rehabilitation loans and development financing in the expansion area are included in the expenditures, the ten-year cumulative revenues and expenditures of the expansion area are roughly equal. The Urban Renewal District can be expanded no more than 20 percent beyond its initial size. In response to a question, Mr. Hibschman said the proposed expansion area is about an 18 percent expansion (this would leave about a quarter-block for future expansion of the district). Mr. Holmer asked staff to discuss at a future meeting why the recommended plan update did not call for an expansion of the entire 20 percent. Mayor Obi e asked staff to provi de more information on how the proposed expansion area was selected, and on the interviews that were done of property owners in the expansion area. He also asked staff to provide any information e MINUTES--Eugene City Council September 30, 1987 Page 11 it has about Lane County's intentions for the parking lot on Oak between 6th and 7th. ~ Mr. Miller wondered whether expansion would work against the past efforts of the Urban Renewal District, and whether expansion would attract development toward the expansion area and away from the existing district. Mr. Farkas said the densest new development will be likely to occur near parking facilities and the mass transit core. He said he did not expect a proliferation of dense building to occur in the expansion area within the near future. Mr. Miller pointed out that the expansion area is near one of the downtown parking structures. Mr. Gleason said the time frame for removing blight, assembling property, and developing this property is from 10 to 20 years. He said the existing district is in the midst of this cycle, and the expansion area will be just beginning the cycle. Mr. Gleason added that one of the most crucial things for a core area, even more than retail development, is job density. This density, as reflected in vacancy rates, tends to follow a boom-bust cycle in most downtowns. He said there will be several of these cycles before significant development occurs in the expansion area; however, if the initial preparations are not made, the significant development will not occur at all. Mr. Miller asked whether Bancroft financing.could be used to make the initial preparations for development in the expansion area. Mr. Gleason said it could be used; however, this tool is much more effective for new development than for redevelopment. Mr. Bennett said he shared Mr. Miller's concerns about expansion of the ~ district. He said there are some types of development, particularly in the ... area of retail, that could occur in the expansion area and compete with the existing district. Mr. Bennett said that the current district has not yet reached the "critical mass" of development intensity that will be necessary for the development momentum to continue by itself. He said he was worried about whether expansion would work against the effort to reach this "critical mass" in the exi st i ng di stri ct. Ms. Bascom said the expansion area is very much part of the downtown core. Mr. Gleason said staff will work on this issue and try to respond to the council1s concerns at a future meeting. He said staff will also address the council's questions about Hult Center improvements. At 1:40 p.m., Mayor Obie adjourned the meeting. ~~ ~ . 1___ Mic eal Gleaso City Manager (Recorded by Monty Hindman) e MINUTES--Eugene Ci ty Counci 1 September 30, 1987 Page 12