HomeMy WebLinkAboutItem A: Discussion of Imposing Fees on Unoccupied Downtown Buildings
ECC
UGENE ITY OUNCIL
AIS
GENDA TEM UMMARY
Work Session: Discussion of Imposing Fees on Unoccupied Downtown Buildings
Meeting Date: February 28, 2007 Agenda Item Number: A
Department: Planning and Development Staff Contact: Richie Weinman
www.eugene-or.gov Contact Telephone Number: 682-5533
ISSUE STATEMENT
The City Council requested a work session to discuss imposing fees on unoccupied downtown buildings.
BACKGROUND
The Downtown Plan, adopted in 2004, includes policies related to downtown as a strong regional center,
and a place that supports the urban qualities of density, vitality, livability and diversity. A significant
amount of redevelopment activity, including both public and private investments has occurred in the
past five years, although some properties remain vacant or underutilized. To implement the policies in
the Downtown Plan, the City needs a combination of successful strategies to improve the viability of
redevelopment proposals and address those properties which are vacant or underutilized.
Much of downtown is successful, active throughout the day and evening. The most recent survey staff
found regarding this issue was conducted by Duncan and Brown in spring 2005. Although not very
recent, it indicated a downtown retail vacancy rate of 7% and a downtown office vacancy rate of 26%.
Large vacancies such as the Centre Court Building escalate the office vacancy rate. Residential
downtown vacancy was under 1% as of fall 2006.
A fee could take several different formats including a penalty fine, a fee on unoccupied space, or a fee
collected within the existing Downtown Services District program. The Downtown Services District
program collects a per square foot fee on occupied space. Currently, fees are not collected on
unoccupied space. The fees support services provided by Downtown Eugene, Inc. (DEI).
The following are some initial pros and cons associated with the imposition of fees on unoccupied
buildings:
Pros
Potential to increase occupied space.
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Potential revenue to support downtown services.
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Cons
Potential to encourage inactive or marginal uses that do not contribute to the vitality of the
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area.
Fee amount insufficient to motivate building owners.
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Administration cost associated with monitoring and collection.
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May discourage higher density development and redevelopment due to the cost and risk
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associated with standard absorption period vacancy.
Imposition of penalties and fess may detract from a positive downtown business climate.
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Possible legal challenges associated with fees and property tax laws.
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Should council decide to move this discussion from a work session to an action item, several questions
would need to be addressed:
a)What is the definition of “occupied?” (percentage, collecting rent, duration, hours of operation)
b)Is occupancy limited to certain portions of buildings? (ground floors, street fronts, etc.)
c)What is the size of the fee/fine? How is it determined? At what level would fees on unoccupied
buildings positively impact occupancy levels downtown?
d)Would there be exceptions?
e)Will it be possible to legally charge a fee on an occupied but underused space as it relates to
property tax law?
f)What are causes of vacancies? Are the vacancies concentrated in certain areas of downtown?
RELATED CITY POLICIES
The following policies and implementation strategies included in the Downtown Plan consistently
emphasize facilitating and supporting development:
Downtown development shall support the urban qualities of density, vitality, livability and diversity
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to create a downtown, urban environment.
Actively pursue public/private development opportunities to achieve the vision for an active, vital,
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growing downtown.
Use downtown development tools and incentives to encourage development that provides character
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and density downtown
Facilitate downtown development by re-designating and rezoning underutilized properties such as
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surface parking lot, to a commercial land use designation and a commercial zone such as C-2 or C-3.
In addition, the following Growth Management policies similarly encourage downtown redevelopment:
Policy 2: Encourage in-fill, redevelopment, and higher density development
Policy 3: Encourage a mix of businesses and residential uses downtown using incentives and zoning.
COUNCIL OPTIONS
1.Direct staff to perform additional research and bring back a recommendation regarding imposing a
fee on unoccupied space downtown.
2.Postpone the discussion and consider this issue in the context of an action plan on the “Downtown”
council goal.
3.Take no action.
CITY MANAGER’S RECOMMENDATION
The City Manager recommends that council postpone the discussion and consider this issue in the
context of an action plan on the “Downtown” council goal.
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SUGGESTED MOTION
Move to table the discussion and consider this issue in the context of an action plan on the “Downtown”
council goal.
ATTACHMENTS
None.
FOR MORE INFORMATION
Staff Contact: Richie Weinman
Telephone: 682-5533
Staff E-Mail: Richie.D.Weinman@ci.eugene.or.us
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