HomeMy WebLinkAboutResolution No. 5247COUNCIL RESOLUTION NO. 5247
A RESOLUTION APPROVING A MULTIPLE -UNIT PROPERTY TAX
EXEMPTION FOR RESIDENTIAL PROPERTY LOCATED AT 6TH
AVENUE AND PEARL STREET, EUGENE, OREGON (APPLICANTS
OBIE COMPANIES, INC. AND GORDON LOFTS, LLC).
PASSED: 5:3
REJECTED:
ABSENT:
CONSIDERED: October 17, 2018
RESOLUTION NO. 5247
A RESOLUTION APPROVING A MULTIPLE -UNIT PROPERTY TAX
EXEMPTION FOR RESIDENTIAL PROPERTY LOCATED AT 6TH
AVENUE AND PEARL STREET, EUGENE, OREGON (APPLICANTS
OBIE COMPANIES, INC. AND GORDON LOFTS, LLC).
The City Council of the City of Eugene finds that:
A. Gordon Lofts, LLC (296 E. 5"' Avenue, Suite 300, Eugene, Oregon), intends to
enter into a Lease Agreement for the lease of real property located at 61' Avenue and Pearl Street,
Eugene, Oregon (Assessor's Map Number 17-03-31-11, portions of existing Tax Lots 2800 and
3200) ("the Property") which is owned by Lane County, Oregon (125 E. 8t' Avenue, Eugene,
Oregon).
B. Obie Companies, Inc. and Gordon Lofts, LLC ("the applicant") submitted an
application pursuant to the City's Multiple -Unit Property Tax Exemption Program (Sections 2.945
through 2.947 of the Eugene Code, 1971 ("EC")), with respect to residential units and commercial
space to be constructed on the property ("the project").
C. The proposed project consists of the development of 69 studio units, 53 one -
bedroom units, and five two-bedroom units, for atotal of 127 residential units, none of which will
be for transient use or vacation occupancy, and will also include approximately 10,000 square feet
of commercial space. As proposed, the project is not designed for the leasing of individual rooms
or beds, for transient or vacation uses, or otherwise designed primarily for individuals attending
college.
D. An independent outside professional consultant was retained and reviewed the
project's financial pro -forma. A Review Panel was convened and reviewed the independent
consultant's conclusions, and also reviewed the application in order to make a recommendation as
to whether the application met the criteria in EC 2.946. The Review Panel's recommendation was
submitted for the City Manager's review.
E. After considering the Review Panel's conclusions and recommendation, the
Executive Director of the Planning and Development Department ("the Executive Director") as
designee of the City Manager, prepared the Report and Recommendation attached to this
Resolution as Exhibit A and incorporated herein by reference. The Report and Recommendation
sets forth findings demonstrating that the project meets the criteria described in EC 2.946 and the
conditions set forth in Multiple -Unit Housing Property Tax Exemption Rule R-2.945 ("Rule R-
2.945").
F. Based on the findings in the Report and Recommendation, the Executive Director
recommends that the application be approved and the exemption granted. In making that
recommendation, the Executive Director found that the applicant submitted all required materials,
Resolution - Page 1 of 4
documents and fees as required in EC 2.945, EC 2.946, and Rule R-2.945, and the applicant is in
compliance with the policies contained therein.
G. City Council has concluded that the criteria described in EC 2.946 and Rule R-
2.945 have been met.
NOW, THEREFORE,
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF EUGENE, a
Municipal Corporation of the State of Oregon, as follows:
Section 1. Based upon the above findings which are adopted, and the City Council's
review of the Report and Recommendation of the Executive Director of the Planning and
Development Department attached to this Resolution as Exhibit A and incorporated herein by
reference, the City Council approves the application of Obie Companies, Inc. and Gordon Lofts,
LLC for an ad valorem property tax exemption under the City's Multiple -Unit Property Tax
Exemption Program for the residential units and commercial space to be constructed at 61' Avenue
and Pearl Street, Eugene, Oregon (Assessor's Map Number 17-03-31-11, portions of existing Tax
Lots 2800 and 3200), subject to the following conditions:
1.1 Compact Urban Development. The project will consist of the development of 69
studio units, 53 one -bedroom units, and five two-bedroom units, for a total of 127
residential units, none of which are for transient use or vacation occupancy. The
ground floor will contain approximately 10,000 square feet of commercial space.
The project will be built in the C-2 Community Commercial Zone, which has no
minimum density requirements for mixed-use projects. A schematic drawing
showing the site plan and major features and dimensions of the proposed
development, and a schematic drawing showing side, front, and back elevations of
the proposed development are attached to this Resolution as Exhibit B.
1.2 Green Building. The project will perform at least 10% more efficiently than the
performance established in the Oregon Energy Efficiency Specialty Code.
Applicant will provide to the City of Eugene's Building and Permit Services an
energy model with applicant's permit application.
Within 18 months after receiving a Certificate of Occupancy, the applicant shall
submit to the City a commissioning report pursuant to Section 1.2 of Rule R -945-
C demonstrating compliance with this requirement.
For the duration of the tax exemption, Gordon Lofts, LLC, either alone or with
others, or its successor (herein after referred to as "the owner") will report multi-
family occupancy energy use data to the City of Eugene's Building and Permit
Services.
1.3 Local Economic Impact Plan and Compliance with Laws. The applicant submitted
a plan demonstrating that more than 50% of the dollar volume of professional
Resolution - Page 2 of 4
services and construction contracts will be from a business organization or
individual residing or doing business primarily in Lane County. After construction,
the applicant will submit a list of the home city or zip code of the construction labor
workers.
The owner will ensure that qualified minority and women business enterprises have
been given an equitable opportunity to compete for development related contracts
by: (1) accessing lists of such enterprises from the Oregon State Office of Minority,
Women and Emerging Small Business Program website; (2) search for Qualified
Rehabilitation Facilities from whom to procure products and services via the
Oregon State Qualified Rehabilitation Facilities Program website; and (3) advertise
in general circulation, trade association, and minority focused media about prime
subcontracting opportunities.
The applicant will post information about the City's Rights Assistance Program in
English and Spanish on the job site during construction of the project.
The project shall be in conformance with wage, tax and licensing laws.
The applicant will have in place methods for ensuring that all contractors
performing work are licensed and performing in compliance with state law.
The applicant will provide the City's Building and Permits Services a list of all
contractors performing work on the project. Prior to performing work on the
project, contractors must have valid, current licensing, insurance, bonding and
workers compensation coverage, and be on the list of contractors provided to the
City.
The applicant will require that each contractor provide an affidavit attesting to the
fact that (1) the contractor, owner, or responsible managing individual for the
contractor does not have any unpaid judgments for construction debt, including
unpaid wages; and (2) the contractor is in compliance with Oregon tax laws.
1.4 Moderate -Income Housing Contribution. The applicant will pay a fee to be
dedicated to moderate -income housing. The fee will be 10% of the total exemption
benefit for the 10 -year benefit.
1.5 Project Design and Compatibility. The design elements include aground floor with
a residential entrance to the east and commercial storefronts to the south. Upper
levels are regular bays of openings grouped vertically and punctuated by balconies.
The building has a roof deck above the sixth floor, and the residential units are
characterized by large windows. Building materials are primarily brick and stucco,
with metal and glass storefronts and metal balconies. These design elements, as
well as the actual square footages, reviewed at the time of approval of this
application and included in Exhibit B shall be adhered to unless the City Manager
approves a deviation from the plan pursuant to EC 2.946(2)(e)2.
Resolution - Page 3 of 4
During the design process and before the final design drawings are completed, the
owner shall hold at least one neighborhood engagement opportunity to allow
members of the Downtown Neighborhood Association to provide comments on the
proposal. At least one of the applicant's principals shall attend that meeting.
After the final design is completed and before it is submitted for permits, the final
design shall be submitted to the City to review for conformance with the design
approved by Council resolution. In addition, the City shall allow the neighborhood
an opportunity to review and comment on the final design. After the comment
period, the City shall determine if the design is consistent with the requirements of
this Resolution, and if not, whether the City Manager will approve a deviation
pursuant to EC 2.946.
1.6 The project shall be in conformance with all local plans and planning regulations,
including special or district -wide plans developed and adopted pursuant to ORS
Chapter 195, 196, 197, 215, and 227.
1.7 The project shall not contain any units for transient use or vacation occupancy.
1.8 The project will be completed on or before January 1, 2022, unless an extension of
the deadline is requested by the property owner and approved by Council resolution
pursuant to EC 2.947(5).
1.9 The public benefits of the project that will extend beyond the period of the tax
exemption include Green Building (energy performance), Project Design and
Compatibility, and Compact Urban Development.
Section 2. Subject to the conditions in Section l of this Resolution, 100% of the
residential units and newly constructed commercial space described in Section 1 are declared
exempt from local ad valorem property taxation beginning July 1 of the year following issuance
of a Certificate of Occupancy and continuing for a continuous period of ten years unless earlier
terminated in accordance with the provisions of Section 2.947 of the Eugene Code, 1971.
Section 3. The City Manager, or the Manager's designee, is requested to forward a
copy of this Resolution to the applicant within ten days, and to cause a copy of this Resolution to
be filed with the Lane County Assessor on or before April 1, 2019.
Section 4. This Resolution shall become effective immediately upon its adoption.
The foregoing Resolution adopted and effective the 17th day of October, 2018.
City Recorder
Resolution -Page 4 of 4
Resolution Exhibit A
REPORT AND RECOMMENDATION
of the Planning & Development Department
Gordon Lofts Application for Multiple -Unit Property Tax Exemption
The Executive Director of the Planning & Development Department of the City of Eugene Finds
that:
1. The Gordon Lofts apartments will be developed on real property located at 6th Avenue and
Pearl Street, Eugene, Oregon (Assessor's Map #17-03-31-11-04400 currently portions of tax
lots 03200 and 02800). Lane County is the current owner of the subject property. Obie
Companies, Inc. and Gordon Lofts, LLC submitted an application pursuant to the City's
Multiple -Unit Property Tax Exemption ("MUPTE") Program (Sections 2.945 and 2.947 of the
Eugene Code, 1971), with respect to residential and commercial units to be constructed on the
property. Lane County has expressed support for the application.
2. As the City Manager's designee, I have reviewed the application and find that:
2.1 The project will provide 5 two-bedroom units, 53 one -bedroom units and 69 studio
units, for a total of 127 residential units, none of which will be for transient use or
vacation occupancy. The ground floor will contain a total of approximately 10,000
square feet of commercial space.
2.2 The project is not designed to be student housing, meaning it will be leased by the unit
(rather than by individual rooms or beds) and the unit configuration does not include
several bedrooms with individual bathrooms and sparse common space or include
amenities and location selected primarily for individuals attending college and offer
limited viability as potential housing for the general population. Additionally, the
project does not designate any of the units for transient use or vacation occupancy.
2.3 Construction is expected to be complete on or before January 1, 2022.
2.4 The project is located in the downtown area described in subsection (1) of Section
2.946 of the Eugene Code, 1971.
2.5 The applicant submitted all materials, documents and fees required by the City as set
forth in Section 2.945 of the Eugene Code, 1971, and the administrative rules adopted
by Administrative Order No. 53-18-03-F.
2.6 The applicant has responded to the Required Public Benefit criteria as follows:
2.6.1 Compact Urban Development. The project will be built in the C-2 Community
Commercial Zone, which has no minimum density requirements for mixed-use
projects. The proposed, mixed-use project includes 127 residential units, with
a density of 254 units per net acre.
2.6.2 Green Building Features. The project will utilize the City of Eugene Building
and Permit Services Pathway in order to meet MUPTE green building
requirement and exceed the 10% energy efficiency benchmark. Gordon Lofts
will be required to submit an energy model with their permit application and
a commissioning report due 18 months after certificate of occupancy is issued.
As the project does not include onsite parking, the project will not include
installation of conduit for future electric vehicle charging stations.
2.6.3 Local Economic Impact Plan. A plan is in place for more than 50% of the
project's dollar volume of professional services and construction contracts to
be local to Lane County (estimated at 71%). The applicant is committed to
promoting open competitive opportunities for Minority, Women, and
Emerging Small Businesses, and is committed to complying with wage, tax, and
licensing laws.
2.6.4 Moderate -Income Housing Contribution. The project will pay a fee to be
dedicated to moderate -income housing. The fee will be 10% of the total
exemption benefit for the 10 -year benefit.
2.6.5 Project Design and Compatibility. The project will address basic design
concepts in the context of the project location and will be designed and
permitted for construction as shown in the resolution (should City Council
approve the MUPTE). The building is constructed as one component of a
larger development with a mix of uses. It is 7 stories, with a relatively narrow
street frontage on Pearl Street. The ground floor is retail and commercial
space with upper levels of residential. The design elements include a tall first
floor with a row of urban storefronts facing south on to the proposed Market
Alley and a residential entrance with a lobby facing east on to Pearl Street.
Upper levels are regular bays of openings grouped vertically and punctuated
by balconies. The building has a roof deck above the sixth floor, and the
residential units are characterized by large windows. Building materials are
primarily brick and stucco, with metal and glass storefronts and metal
balconies. The building meets City requirements for vehicle parking (no
minimum) and bicycle parking, and will utilize existing lots owned or under
contract by the developer for additional parking need. The basic design
concepts include the scale, form, and quality of the building; the mix of
project elements; the relationship to the street and surrounding uses; and
parking and circulation.
The project design is designed to contribute to its downtown Eugene
context. The development is designed for the human scale, will add a needed
mix of uses, promote active transportation modes, support a more vibrant
pedestrian realm, and increase safety through additional activity and "eyes on
the street."
2.6.6 Historic and Existing Housing Sensitivity. The project is adjacent to three
properties with the historic locale definition, but they are not affected by the
Gordon Lofts redevelopment. The project includes no direct, structural
Page 2 of 4
Resolution EXHIBIT A - Report and Recommendation
impacts, such as alterations or demolitions, to any of the identified resources.
Furthermore, each locale will maintain its setting and special relationships
that characterize each property." No historic structures or existing housing
were demolished or removed from the property in the 2 years prior to the date
of application.
2.6.7 Project Need. The project's pro -forma and financial information was analyzed
by PNW Economics, an independent, real estate economics consultant who
found that the project as proposed could not be built but for the benefit of the
tax exemption. The financial information Gordon Lofts submitted in their
application is based on projections prior to finalizing financing, construction,
and tenanting. It includes assumptions regarding rents, vacancy rates,
operating costs, lender underwriting criteria, interest rates, and reasonable
rate of return. PNW Economics, the Review Panel, and staff reviewed the
assumptions. The PNW Economics analysis concludes that the project would
not be viable without the availability of the MUPTE, using the reasonable
assumptions outlined and concludes that MUPTE is critical to the success of
the project from a financial feasibility perspective. See Section 4 below for the
Review Panel's conclusions.
2.6.8 Public Benefit beyond Period of Exemption. The public benefits of the project that
will extend beyond the period of the tax exemption include Green Building (energy
performance), Project Design and Compatibility, and Compact Urban
Development.
2.7 A presentation on the Gordon Lofts project was given to the Downtown Neighborhood
Association on March 28, 2018.
2.7.1 Future Neighborhood Engagement. Prior to completing final drawings,
Gordon Lofts will meet with the Downtown Neighborhood Association. Before
submitting for permits, Gordon Lofts will submit the design to staff to review
conformance with the design attached to the MUPTE resolution (should City
Council approve the MUPTE). Staff will also allow the neighborhood an
opportunity to review and comment on that final design.
3. A display ad soliciting recommendations or comments from the public regarding this project
was published in the Register -Guard on July 14, 2018. The period for comment expired on
August 13, 2018 and resulted in 26 written comments. Additional comments were submitted
to staff or directly to City Council after the official comment period. All 26 comments received
as of October 8 were provided to City Council with the materials for the October 17 work
session.
4. The community member MUPTE Review Panel considered the project application, including
compliance with program criteria and the independent consultant's financial review, during 3
meetings held on August 23, September 10, and September 20. The Review Panel concluded
that the project meets the Required Public Benefit criteria. The Panel noted that Project Need
Page 3 of 4
Resolution EXHIBIT A - Report and Recommendation
involves many variables that are hard to predict. The Panel concluded that project need was
demonstrated. The majority of the panel members agreed that a. ten-year exemption was
warranted. Some members agreed that only a three-year exemption was warranted. See
Attachment C of the October 17 Agenda Item Summary for the full Review Panel conclusions.
Therefore, based upon the above findings, the project is, or will be at the time of completion, in
conformance with all applicable local plans and provisions of the Eugene Code, 1971, planning
regulations, the Metropolitan Area General Plan, and the criteria set forth in the City's adopted
administrative rules, and I recommend that the application be approved conditioned upon the
project moving forward as proposed.
Dated this/ Q day of
De y Braud
Executive Dire or AIC
Planning & Development Department
Page 4 of 4
Resolution EXHIBIT A - Report and Recommendation
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