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HomeMy WebLinkAbout09/18/1991 Meeting / e M I NUT E S Eugene City Council McNutt Room--City Hall September 18, 1991 11 :30 a.m. COUNCILORS PRESENT: Roger Rutan, Shawn Boles, Ruth Bascom, Bobby Green, Randy MacDonald, Kaye Robinette, Paul Nicholson, Debra Ehrman (until 1 p.m.). The adjourned meeting of September 16, 1991, of the Eugene City Council was called to order by His Honor Mayor Jeff Miller. Mayor Miller announced that the agenda has been amended to place the items from the Mayor, City Council, and City Manager at the end. I. 8TH AND WILLAMETTE PROJECT UPDATE Lew Bowers, Planning and Development Department, updated the council on the status of the 8th and Willamette Street development project and briefly re- e viewed the project time line. He said that in response to instruction from the City Council, the City Manager has negotiated a predevelopment agreement with Lorig Associates, Inc., for the 8th and Wi.llamette site. Lorig Associ- ates, Inc., has signed the predevelopment agreement and the Development De- partment has received the good faith deposit. Mr. Bowers introduced Harris Hoffman and Hugh Prichard, Lorig Associates, Inc., and Lee Bodenhammer, US Bancorp. Harris Hoffman, Lorig Associates, Inc., provided the council with a brief overview of the project. Lorig Associates, Inc., has been developing plans for the construction of an 80,000- to 100,OOO-square-foot office building with US Bancorp as the major tenant. Lorig Associates, Inc., and US Bancorp are currently negotiating a joint venture agreement and a commercial lease agreement, and are prepared to sign the partnership agreement once the pro- posed development meets with Office of the Controller of the Currency (OCC) approval. Mr. Hoffman said that once OCC approval has been obtained, Lorig Associates, Inc., will formally begin efforts to secure financing for the project. Mr. Hoffman commented that the project is continuing to move forward despite the very difficult economic climate. Lorig Associates, Inc., is very commit- ted to the project and is eager to proceed. Mr. Hoffman noted, however, that it is very difficult to predict time lines, particularly in -the cu~rent lend- e - MINUTES--Eugene City Council September 18, 1991 Page 1 - --- ---------- -----~~---- --- e ing environment, and asked that the council remain flexible with the time line dates. Ms. Bascom asked whether the economic climate is as difficult in the North- west as it is in other areas. Mr. Hoffman responded that while the Northwest economy is slightly better than other areas, most of the stringent regula- tions originate at the Federal level and do not take into account differences in regional economies. Lee Bodenhammer, Division Manager for Real Estate at US ~ancorp, said that US Bancorp rem~ins committed to the project. At present, US Bancorp plans to occupy approximately 40 to 50 percent of the building and has structured its present occupancy in Eugene so that it would be able to move into the project once the building has been constructed. Mr. Bodenhammer said that US Bancorp has negotiated a joint venture agreement with Lorig Associates, Inc., and is in the process of finalizing a commercial lease agreement. He explained that the acc is a Federal institution with the authority to govern major decisions of all national bank facilities. Responding to questions from Mr. MacDonald, Mr. Bodenhammer said that Lorig Associates, Inc., has communicated informally with the acc to attempt to determine what it will require within the joint venture agreement. Once the lease agreement has been finalized, both agreements will be sent to OCC for approval; the approval process is expected to take 90-120 days. Mr. Bodenhammer said that while initially the acc expressed its reservations with the project, it has recently been more favorably disposed. It is his feeling e that the acc has lessened its opposition to the project because of US Bancorp's willingness to remain flexible in its negotiations with the OCC to get the project completed. Responding to a question from Mr. Boles, Mr. Bodenhammer said that the acc weighs a bank's Community Reinvestment Act (CRA) performance very heavily in the determination process. Mr. Nicholson asked whether Lorig Associates, Inc., has sufficient prelease commitments which, when combined with US Bank's commitment, would be suffi- cient to go ahead with the project. Mr. Hoffman said that it is difficult to obtain such commitments at this stage of the process and is unlikely that it would obtain many more lease commitment's prior to acc approval. Mr. Rutan asked about other major obstacles to the project. Mr. Hoffman said that the site does have some constraints; Lorig Associates, Inc., will have to work within those constraints to make the project move forward. He said that while less expensive office space will be available in Eugene, it will not be the same quality. Lorig Associates, Inc., has conducted a site analy- sis and is proposing that the building be sited on the corner of 8th and Will amette. It does not anticipate the need to open Willamette Street to traffic. Mr. Boles asked what steps local officials could take to expedite the _ project. Mr. Bodenhammer responded that the OCC is sensitive to community e - MINUTES--Eugene City Council September 18, 1991 Page 2 -- - ------- - ---------- - support of the project, which may have some influence. Mr. Gleason noted that local government could help influence the OCC to determine, as rapidly' as possible, if this is an appropriate project for US Bancorp to participate in. Mr. Bodenhammer also indicated that once the OCC authorizes US Bancorp to sign the joint venture agreement, Lorig Associates, Inc., will be in a position to move more rapidly on the project and to begin to secure other prelease agreements. Responding to a question from Mr. Nicholson about proje~t financing, Mr. Hoffman said that Lorig Associates, Inc., has begun contacting lenders about project financing. One lender has visited the site and might be interested in financing it. Once OCC approval has been obtained, financing is likely to take six to nine months. Mr. Hoffman reiterated that predicting the ability to obtain financing is extremely difficult, particularly in this economic climate. Mr. Rutan commented that this project is a substantial benefit to the commu- nity and said that it would be appropriate for the City, as owners of this site, to assist Lorig Associates, Inc., in any way possible to move the project forward. Mr. Green concurred and said he appreciates the effort that it will take to proceed and secure financing. Ms. Ehrman said that if the OCC does not approve the project, Lorig Associ- ates, Inc., should contact the City as soon as possible. Mr. Boles said, that he hopes. that the participants in the design group would e represent a substantial proportion of the community interest and hopes that Lorig Associates, Inc., would explore the possibility of using pattern lan- guage in the building design. II. LINCOLN SCHOOL REDEVELOPMENT PROJECT UPDATE Mr. Bowers updated the council on the status of the Lincoln School redevelop- ment project. He noted that the project consists of four components: 1) the Lincoln School Apartments, 2) the McNail-Riley house community center, 3) the off-site child care facility, and 4) the community gardens. Discus- sions are continuing with the neighborhood about how to best accomplish their needs for the child care component. Mr. Bowers said that planning for the rehabilitation of the McNail-Riley house is proceeding; the City was recently notified that the annex building adjacent to the house has some historical significance. The plan to demolish this structure may need to be reconsid- ered. Rehabilitation can hopefully get underway in November. He noted that the City will be requesting additional Community Development Block Grant (CDBG) funds to complete the project. Mr. Bowers said that staff recommends that the council authorize the City Manager to proceed with closing the property transfer. This will demonstrate publicly that progress is being made on the building, relieve the City of any - - e - - - MINUTES--Eugene City Council September 18, 1991 Page 3 - - -- ------ ------ e further responsibilities for building maintenance, and allow the City to receive $15,000 toward the purchase price of the property which it will be able to apply to other aspects of the project. Mr. Bowers outlined the agreement under which the project is proceeding. The agreement that is currently in place allows the developer to purchase. the 1 and. In addition, the developer would have twelve months to secure financ- ing and an additional nine months to complete construction. If for some reason the developer cannot complete the project on schedule as outlined, the developer must reconvey the property at the City's request. Mr. Bowers said that the Westside Neighborhood Quality Project (WNQP) has expressed some concerns with the project. They are requesting that the time line for project completion be shortened and that the transfer of the proper- ty be contingent on successfully resolving some concerns with parking. Harris Hoffman, Lorig Associates, Inc., provided the council with an updated time line. He said that progress is being made on the project; Lorig Associ- ates, Inc., remains very committed to getting the project underway. He noted that Lorig Associates, Inc., has spent a good deal of time working with the neighbors to accommodate their needs and concerns. It has also been success- ful in its efforts to place the Lincoln School on the National Register of Historic Places and obtain tax credits for renovation. Mr. Hoffman indicated that Lorig Associates, Inc., has a $2.4 million loan commitment from SeaFirst Bank for this $3.3 million project. In order to complete the project, Lorig Associates, Inc., is looking for a corporation that is interested in using e the tax credits. Mr. Boles clarified that the CDBG funds referred to earlier by Mr. Bowers have already been identified by the Community Development Committee and were being held in reserve for this purpose. He said that in order to use the tax credits in 1992, Lorig Associates, Inc., must have a certificate of occupancy by the last day in 1992. Mr. Boles said that the neighbors continue to ex- press disappointment with the lack of progress on this project. It is very important to the neighbors that the developer agree to six months to secure financing, rather than the twelve months outlined in the current agreement. It is also important that the developer ensure that there will be an adequate buffer between the McNail-Riley house and the project site. With respect to parking, the neighbors have proposed the following: 1) three parking spaces at the southeast of the building be earmarked for exclusive use of the McNail-Riley house, 2) the number of handicapped-accessible spaces be in- creased, 3) parking spaces be assigned to tenants on a one-space-per-apart- ment basis, and 4) as much parking as possible in the southeast lot be desig- nated as visitor parking. Mr. Boles said that the neighbors will be meeting with Lorig Associates, Inc., this afternoon to finalize these negotiations. Mr. Boles said that the neighbors have expressed disappointment that the project could not proceed as rapidly as originally intended. Because the Request For Proposal (RFP) process was closed so early, those who wanted to do a community project did not have enough time to submit a.proposal. _The neighbors have also voiced concern that the City is extending performance e - MINUTES--Eugene City Council September 18, 1991 Page 4 - e deadlines to the privata sector that would have not have otherwise been ex- tended on a community-generated proposal. Responding to question, Mr. Hoffman said that it was his understanding of the neighborhood/developer agreement that Lorig Associates, Inc., would be al- lowed six months to secure financing and twelve months to begin construction. He feels that the proposal, as he outlined, seems reasonable. He noted, however, that it is difficult to predict time lines at this point and said that he would be willing to report back to the council after a year if the project was not proceeding as planned. Mr. Hoffman emphasized that Lorig Associates, Inc., would not proceed with the project if it did not believe that it is workable. Mr. Boles said that it is the neighbors' expectation that the developer would be able to secure financing within six months and the project would be under- way in May 1992 to take advantage of the tax credits. If the developer is unable to meet this obligation, Mr. Boles said that he would have a difficult time supporting the project. Mr. Rutan commented on the many uncertainties that exist around the project. The council should publicly recognize that Lorig Associates, Inc., is a high-quality developer who will pursue this project in a judicious, profes- sional manner. Responding to a question from Mr. Green, Jan Bohman, Planning and Development Department, said that the City had two respondents to the RFP: Lorig Associ- e ates, Inc., and the community organization. There has been no other informal interest in the building. Mr. Green pointed out that there does not seem to be much interest outside of Lorig Associates, Inc., in developing this par- ticular piece of property. Ms. Ehrman inquired about how the historic designation of the property would affect the City's ability to develop the site, if the property were recon- veyed to the City. In response, Mr. Hoffman said that it would be difficult for the City to preserve the tax credits unless it used the same development plans. It would be difficult, but not impossible, to remove the historic designation. If the City was able to demonstrate that it could find no real economic use for the building, it might be able to destroy the building. Ms. Ehrman commented that it was the City's initial intent, in its agreement to preserve the building, that the City would have as few municipal resources involved in the project as possible. Mr. Bowers said that the historic status of the site would severely limit the City's ability to develop the site. The City would no longer be able to tear the building down, unless it was able to remove its historic designation. Mr. Nicholson recognized that the potential time line problems might not be under the developer's control. He noted that the value of the building is not certain at this point and said that it is appropriate for the council to reexamine the agreement after a certain time, if the project cannot proceed as outlined. e -- MINUTES--Eugene City Council September 18, 1991 Page 5 - . Ms. Bascom said that it is too bad that the neighborhood feels that they have been treated unfairly. The developer has made an effort to accommodate their needs. Keeping in mind the long history of this site, the City should en- courage this development as much as possible. Mr. Boles said that the neighborhood is hoping that the development will be completed in a timely fashion. Mr. Gleason provided the council with some history of this issue. He said that many years ago, the Lincoln School site was to be sold to the Fair- grounds for use as a parking lot. The City intervened on behalf of the neighborhood on the condition that the building would be torn down. Mr. Gleason said that the building has little value outside of its tax credits. When making a decision to reconvey, the council should consider that there is little outside interest in this building. Mr. Rutan moved, seconded by Ms. Bascom, to authorize the City Manager to proceed with closing on the transfer of the Lincoln School property to Lorig Associates, Inc., as proposed. Mr. Bowers clarified the terms of the agreement. He said that the existing agreement to reconvey would provide the developer with 12 months to secure financing, initiate construction, and pay the City the remaining $100,000 for the site before the City has the right to take back the site. Mr. Hoffman added that if Lorig Associates, Inc., cannot pay the note, it would be in e default. The City could then proceed with litigation and regain control of the building. He clarified further that if Lorig Associates, Inc., pays the note, the City would still have the right to sue for reconveyahce. Mr. Gleason noted that an automatic checkpoint review of the developer's progress on the plan is different from an automatic reconveyance. The council deliberated at length over what the terms of the agreement should be. Mr. Boles asked for a clarification of the phrase "as proposed" in the mo- tion. Mr. Bowers clarified that the motion, as proposed, would give the City the right to reconvey the property after one year. Mr. Boles moved, seconded by Mr. Nicholson, to amend the mo- tion to shorten the time period for the right of reconveyance from twelve months to nine months. Ms. Ehrman commented that the site has been the source of discontent in the neighborhood. She will support the amendment in hopes of expediting the process. Mr. Nicholson said that it is the City's fiduciary responsibility to the public to make the term of the note as short as possible. The City is-ex- tending an opportunity to Lorig Associates, Inc., to make the property avail- e ......... MINUTES--Eugene City Council September 18, 1991 Page 6 ------------ e able for a fixed price over time. The City will have the opportunity to review the deal after nine months to determine if the project is still feasi- bl e. Ms. Bascom reiterated concern that, in approving the amendment, the council .. would be sending the message that it is not satisfied with the developer. Mr. Hoffman said that if Lorig Associates, Inc., determines at some point that the project cannot be completed, the City will be contacted immediately. The amendment carried, 7:1, with councilor Bascom dissenting. Mr. Boles clarified that neighbors hoped the parking would be resolved and that it is their understanding that the compromise proposal he outlined would be negotiated between the neighborhood, the developer, and the council. The main motion, as amended, carried unanimously, 8:0. Mayor Miller adjourned the meeting of the Eugene City Council and convened a meeting of the Urban Renewal Agency. III. WORK SESSION: URBAN RENEWAL CHANGES AS A RESULT OF BALLOT MEASURE 5 Res. No. .955--A resolution of the Urban Renewal Agency of the City of Eugene amending Section 1300 of the e Urban Renewal Plan for the Central Eugene Project. Mr. Rutan moved, seconded by Mr. Boles, to adopt the resolu- tion. Roll call vote; the motion carried unanimously, 8:0. Res. No. 956--A resolution of the Urban Renewal Agency of the City of Eugene amending Section 1300 of the Urban Renewal Plan for the Riverfront Research Park. Mr. Rutan moved, seconded by Mr. Boles, to adopt the resolu- tion. Mr. Nicholson said that in addition to the clause that stipulates that the City would undertake no new bonded indebtedness after 2005, he would like a clause added to the resolution stipulating that any bonded indebtedness is- sued prior to 2005 would have a term ending no later than October 11, 2010. This would prevent the agency from issuing any new 30-year bonds just prior to the termination date. Mr. Gleason said that if the council approved Mr. Nicholson's suggestion, it might be severely limiting the agency's ability to complete the urban renewal - e MINUTES--Eugene City Council September 18, 1991 Page 7 -- e project. He explained that the interest rate for the bonds would make it impossible to complete a prqject and urged the council to not impose artifi~ cial time lines. Mr. Nicholson said that it is his belief that when the public voted on the Riverfront Research Park plan, it was their intent that the City's financial obligation would not extend 30 years beyond the termination date of the urban renewal plan. They expected that their obligation would be for 20 years of the plan. (Ms. Ehrman left at 1 p.m.) In response to a question from Mr. MacDonald, Bill Gary, City Attorney's Office, said that a future urban renewal agency could change the term of a renewal plan. If it changed the provisions of the plan, it would be required by law to notify either every registered voter, property tax payer, or every rate payer. Mr. Gleason said that the council needs to decide whether it is going to proceed with the plan or not. If it is the council's decision to complete the plan, it should not constrain its ability to do so by imposing an earlier termination date making it very difficult, if not impossible, to complete the plan. Responding to a question from Mr. MacDonald, Mr. Gary clarified that tax increment financing would be an option after 2005 as a means of paying off e the debt of this plan. State statutes would prohibit the agency from trying to discontinue tax increment financing until that debt is paid off. Mr. Rutan said that this matter should be the decision of a future council. Responding to a question from Mr. Boles, Mr. Gary said that the Downtown Urban Renewal Plan stipulates that termination of the plan will be considered after 10 and 15 years with a public hearing and a full analysis. Mr. Nicholson moved that the motion be amended to include the condition that no bonded indebtedness shall extend beyond October 11, 2010. The motion died for lack of a second. The main motion carried 6:1; with Councilor Nicholson dissent- ing. Mr. Nicholson said that the terms of Resolution 955 were not fully clear to him when he voted on the first resolution and asked that the council recon- sider the motion to allow him to change his vote. Mr. Nicholson moved, seconded by Mr. Boles, to reconsider Resolution 955. The motion to reconsider carried unanimously, 7:0. - e MINUTES--Eugene City Council September 18, 1991 .Page 8 --> e Roll call vote; Resolution 955 carried 6:1, with Councilor Nicholson dissenting. Mayor Miller adjourned the meeting of the Urban Renewal Agency and reconvened a meeting of the City Council. IV. ITEMS FROM THE CITY COUNCIL, MAYOR, AND CITY MANAGER A. Springfield Human Rights Commission Mayor Miller announced that Councilor Green planned to attend the September 23 Springfield City Council meeting to urge Springfield not to dissolve its Human Rights Commission. He said that he is also in the process of drafting a letter to the Springfield City Council conveying the need for the two ju- risdictions to continue to work together on human rights issues. Mr. Rutan cautioned the council against becoming involved in an issue which is not its purview. The council should only take a position on this issue if it can demonstrate that there would be specific metrowide impacts in Spring- field's decision that would affect Eugene. Mr. Green said that he plans to remind the Springfield City Council that the human rights program is important to the metropolitan partnership efforts and to encourage them to retain their human rights program. The human rights program is intended to provide Springfield citizens with a vehicle for rais- e ing human rights issues; if Springfield's program is dissolved, the Eugene Human Rights Program would be impacted heavily. Mr. MacDonald acknowledged the importance of this issue. He noted, however, that the perception exists within the community that Eugene often becomes involved in matters that it should not. He encouraged Mr. Green to be sensi- tive to that perception and to limit his discussion to issues such as the impacts of the decision on Eugene and Springfield's shared metropolitan re- spons i bil it i es . Mayor Miller agreed that he would submit the letter on his own behalf. He also agreed to share the letter with the council officers for review. B. Eugene Parks and Recreation Commission Ms. Bascom said that members of the Eugene Parks and Recreation Commission have voiced concern that their input has not been taken seriously with re- spect to the Eugene Decisions process. Specifically, it voiced concern that staff did not include in its strategies, input about the need to solve finan- cial problems by doing things differently. Staff agreed to discuss this concern with the commission. - e MINUTES--Eugene City Council September 18, 1991 Page 9 ------------ . . e C. Sister City Delegation from Irkutsk . ," Mr. Boles said that the current sister city delegation from Irkutsk is in Eugene and encouraged councilors to visit with them. D. Cawood Communication's Public Information Program for Parking Downtown Mr. Nicholson said that at council's request, he has reviewed Cawood Communi- cations' proposed public information plan for parking downtown. He said that he has recommended some extensive changes and agreed to provide the council with copies of his recommendations. If councilors have suggested additions or revisions, they should contact him as soon as possible. The meeting adjourned at 1:35 p.m. Resp~ SUb~ ~~-- Mich al Gleason City Manager (Recorded by Traci Northman) mncc 091891-1130 e - - MINUTES--Eugene City Council September 18, 1991 Page 10 ------------