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HomeMy WebLinkAbout07/10/1989 Meeting . . C I T Y C 0 U N elL M I NUT E S MINUTES July-December Eugene City Council 1989 Dinner/Work Session B.J. 's Restaurant July 10, 1989 5:30 p.m. COUNCILORS PRESENT: Ruth Bascom, Rob Bennett, Shawn Boles, Debra Ehrman, Bobby Green, Freeman Holmer, Roger Rutan. COUNCILORS ABSENT: Emily Schue. The regular meeting of the Eugene City Council was called to order by Mayor Jeff Mi 11 er. 1. PARKING EXEMPTION ZONE City Manager Mike Gleason introduced the item. He said during the last council work session on the Urban Renewal Plan Update, council directed staff to return with information about the possibility of funding parking . e structures outright as opposed to funding the development of parking through loans. Mr. Gleason said the urban renewal authority is responsible for making this change in policy. Bob Hibschman, Planning and Development Department, reviewed the development projects that may occur within the area proposed for expansion of the parking exemption zone. One expansion project involves the Hilton Hotel; this project will cost between $4-6 million and may occur around 1993. The 5th Street Public Market has indicated a desire to expand on its site; the project cost is estimated to range between $1.5-$6 million. The Oregon Electric Station is planning to construct a brew pub at the end of this year; the project will cost approximately $2 million. Centennial Bank is planning to construct a new six-story, 98,OOO-square-foot office building; the project is slated to cost approximately $8.5 million and would require 230 parking spaces under the current zoning. Mr. Boles noted that the Centennial Bank project may be much smaller. Mr. Hibschman reviewed the parking situation faced by Centennial Bank. He said there is enough room on the site (7th Avenue and Oak Street) to provide 80 underground parking spaces. Given this, the Centennial Bank development would be limited to approximately 30,000 square feet in order to comply with the existing zoning regulations. Mr. Hibschman said the current zoning does allow a business to provide off-site parking within 400 feet of the site. He said under current zoning regulations, Centennial Bank would need to acquire 230 off-site parking spaces in order to develop the 98,000 square foot e MINUTES--City Council-- July 10, 1989 Page 1 Dinner/Work Session ~ -..-.. ~ '.... ~-~_.......;. ---- ~ ._- e building that is envisioned. Mr. Hibschman said if the council wishes to change the code to expand the parking exemption zone, a series of public hearings would be required; this process could take up to five months to complete. Mr. Rutan asked whether it is possible for a business to secure a waiver, allowing it to provide off-site parking further than 400 feet from the site. Mr. Gleason said that this would require expansion of the parking exemption zone or modification of the C-3 zone throughout the city. He said the City is not able to "spot" zone by granting waivers for individual properties. Mr. Gleason said staff will research this issue further. Mr. Holmer said that the parking exemptions recently adopted in the vicinity of 19th Avenue and Agate Street indicate that it is possible to "spot" zone, granting special exemptions to particular areas. Mr. Boles thought it would be helpful to have a variance procedure that would allow parking requirements to be met off-site so that businesses could be credited for reserving spaces in remote lots (e.g., the fairgrounds) where their employees could utilize "park and ride" programs. Mr. Hibschman reviewed the commitment of the current reserves ($4 million) in the renewal district. Of the total, $1.5 million has been committed to the development at 8th Avenue and Willamette Street, $1 million has been committed to the development at 11th Avenue and Willamette Street, $.7 million has been committed to site improvements for both of these projects, - e and $.8 million has been committed to building rehabilitation. Mr. Hibschman said the tax increment generated from these projects could be used to fund other projects in the urban renewal district, including: street redesigns costing between $1.5 million and $2 million; development of a public plaza costing between $.5 million and $1 million; and redesign of the Lane Transit District transfer station costing between $.75 and $1 million. Mr. Hibschman reviewed a chart depicting the amount of tax increment that would be generated annually by the Centennial Bank project. If Centennial Bank were to construct a 98,000-square-foot facility at $80 per square foot, with a tax of $34 per 1,000 square feet and a collection rate of 90 percent, the annual tax increment flow would range between $235,000-$240,000. Mr. Hibschman also reviewed the annual debt service for a parking facility at 6th Avenue and Oak Street. Staff assumed that the air rights for the project would cost approximately $750,000, and that 480 spaces would be developed at $8,500 per space. Given these assumptions, the annual debt service for the project would be approximately $475,000 per year. Mr. Rutan asked what portion of the annual debt service Centennial Bank would need to cover. Mr. Gleason said Centennial Bank would need to pay half of the annual debt service. In theory, the increment generated from the bank's new facility could cover this amount. Scott Luell, Planning and Development Department, reviewed the parking options for the development at 7th Avenue and Oak Street. He said there are e MINUTES--City Council-- July 10, 1989 Page 2 Dinner/Work Session . four categories of options: 1) remain within current zoning limits by constructing a 30,OOO-square-foot facility; 2) construct a 96,000 square foot facility and meet the parking requirements for the current zone by utilizing an adjacent parking facility, building a private parking facility, or securing a variance of the zoning requirements; 3) create an assessment district; and 4) expansion of the parking and renewal districts, constructing a parking facility with either a loan or a grant from the renewal agency. Mr. Holmer asked whether staff believes the development of a 96,000-square- foot facility by Centennial Bank will endanger Pankow Development Company's chances for success. Mr. Gleason said the two projects must compete on equal footing, so the City cannot be concerned about how the Centennial Bank development will affect the Pankow development. Mr. Gleason added that if the council chooses to provide a parking exemption zone and grant parking, then it will have to amend its agreements with Pankow Development Company, St. Laurent Development Company, and Selco, or face the possibility of a cause-of-action suit. Mr. Boles pointed out that the conditions of the Pankow p'roject and the Centennial Bank project are different in that the Pankow project is in the urban renewal distrlct, whereas the Centennial Bank project is not. He did not feel there would be grounds for a cause of action until both projects lie within the urban renewal district. Mr. Gleason disagreed, saying that examples from other cities support his position. Mr. Bennett said in the past, the council has taken the position that it is e impossible to achieve the desired intensity of development in the downtown core by relying solely on the private sector--the public sector must help with toe development of parking. He asked councilors to reaffirm their commitment to expansion of the urban renewal district. All councilors except for Mr. Boles and Mr. Holmer favored expansion of the urban renewal district. Mr. Luell reviewed pro formas for a series of privately owned parking garages. The pro formas were based on the follOWing assumptions: the parking garage would cost $5 million, spaces would rent for $50 per space, and all 600 spaces are rented on the first day of operation. For comparison, Mr. Luell noted that currently the average rate rents for $29 per space. The conclusion from these pro formas is that a privately financed parking structure would never recover its costs. If the facility were privately owned, but publicly financed at a four-percent rate (e.g., the Pankow project), the structure would not recover its costs within 20 years of operation. Mr. Luell said if the interest on a loan were waived, a privately owned, publicly financed parking structure would break even after 20 years of operation. He said that for a project publicly financed at no interest, and with 25 percent of the principal waived, the project would break even after 18 years. If the public sector were to construct a parking facility and give it to a private institution, the parking structure would break even after seven years. Ms. Bascom said these figures emphasize the importance of constructing alternate modes of transportation. Mr. Gleason said the construction of a - MINUTES--City Council-- July 10, 1989 Page 3 Dinner/Work Session e good mass transportation system is important, but cautioned that the private sector will still need to provide parking. He stated that a reasonable level of parking woula'be approximately 2.5 parking spaces per 1,000 square feet. Mr. Bennett supported Mr. Gleason1s position. Mr. Boles stressed the importance of achieving a balance between a well-run public transportation system and privately supplied parking; he felt this balance could be achieved by means of a variance as suggested by Mr. Rutan above. Mr. Luell briefly reviewed information about a hypothetical parking assessment district, and the difference between loaning and bonding the money for construction of parking garages. He also reviewed an urban renewal pro forma. Mr. Gleason said staff recommends that the council loan private companies the money to build parking structures, adjusting the interest rate so that parking rental rates will be competitive. Mr. Rutan said the information presented by staff indicates how expensive it is to construct parking garages and, consequently, how difficult it is to make use of a parking exemption district. In regard to Centennial Bank, Mr. Rutan said that the City should support their developmen~ by granting them a variance on some portion of their required parking in the short term. Specifically, Mr. Rutan suggested that developers be allowed to provide off-site parking at a distance greater than 400 feet from their site, as long as certain performance requirements are met (e.g., a certain percentage of the spaces must be provided on-site). He suggested that this agreement be made void at some point in the future if the City develops another parking structure. Ms. Ehrman supported this position, but felt this option should e be made available to any developer in the C-3 district. Mr. B01es agreed with Ms. Ehrman that the variance should be available to all developers within the C-3 district. He requested that the council address the larger issue of how to make the entire City attractive for development. Mr. Holmer expressed interest in Mr. Rutan's proposal for a variance on parking requirements for private developers, but he did not feel it would be possible for staff to create a generic variance that would address the parking problems of all C-3 developments. Mr. Holmer felt that the variance would have to be arranged on a case-by-case basis. Mr. Bennett did not like the idea that developers might have to rely on the variance forever. He said that parking will have to be provided in the downtown area if development is to occur at the desired intensity. Mr. Bennett said he would favor a more permanent solution by negotiating parking loans in such a way that new, revenue-neutral parking structures can be developed. He said that if the council is not willing to help Centennial Bank finance a parking structure, it should be very clear about this. Mayor Miller summarized the council's position. He said the council wants to examine the C-3 zone to see if it can be expanded so that developers can meet parking requirements by providing off-site parking, with the proviso that the . MINUTES--City Council-- July 10, 1989 Page 4 Dinner/Work Session - parking meet certain performance standards. Mr. Rutan asked that staff also explore methods within the existing zoning requirements to help Centennial Bank meet its parking requirements. The meeting adjourned at 7:35 p.m. .. (Recorded by Tanya Northman) MNCC 071089-530 . e e MINUTES--City Council-- July 10, 1989 Page 5 Dinner/Work Session