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HomeMy WebLinkAboutCC Minutes - 02/28/07 Work Session M I N U T E S Eugene City Council Work Session McNutt Room—Eugene City Hall February 28, 2007 Noon COUNCILORS PRESENT: Andrea Ortiz, Chris Pryor, Betty Taylor, George Poling, Jennifer Solomon, Mike Clark, Alan Zelenka. COUNCILORS ABSENT: Bonny Bettman. In the absence of Her Honor Mayor Kitty Piercy, who with Councilor Bonny Bettman was on official City business in Washington, DC, Council President Ortiz called the meeting of the Eugene City Council to order. A. WORK SESSION: Discussion of Imposing Fees on Unoccupied Downtown Buildings Acting City Manager Angel Jones introduced Urban Services Manager Richie Weinman, who reported that staff had done limited research on the issue of taxing unoccupied buildings. He discussed the upsides and downsides of the concept. Mr. Weinman said that one outcome of such a fee might be that it could increase the amount of space occupied downtown, creating more vitality on the streets. There was also the potential for getting some revenue to support downtown services. On the other hand, there was a concern that such a fee would encourage inactive or marginal uses in downtown. If the fee was not high enough, it might not be a sufficient disincentive to property owners. Mr. Weinman said that because of State tax law, there were limitations on how the City could assess fees to such properties. Split rate taxation was not legal in the State of Oregon, and all must be taxed at the same rate. He suggested some sort of nuisance fee might be a more viable alternative. Mr. Weinman anticipated there would be questions raised about the definition of occupied space versus non- occupied space, and what percentage of the space in question was occupied with what use. He cited the Shafer building and former Bon Marché building as examples. Both are three-story buildings with two occupied floors. In the case of the Shafer building, the bottom and second floor contain office spaces and the third floor is vacant. In the case of the Bon building, the second and third floors are occupied and the first floor is vacant. From the street, the two buildings have very different appearances, but from the standpoint of use, they are somewhat similar. Mr. Weinman invited questions. Ms. Taylor clarified the uses in the Center Court building and suggested that the building was not completely in use as offices. MINUTES—Eugene City Council February 28, 2007 Page 1 Work Session Ms. Taylor determined from Russ Brink of Downtown Eugene, Inc. (DEI) that DEI charged business owners .16 cents per occupied square foot for the downtown service district through an agreement with the City of Eugene. It was possible the collection of a fee on unoccupied buildings could be contracted out to such an entity. Responding to a question from Ms. Taylor, Mr. Weinman suggested that a marginal use depended on one’s point of view, but he cited as a possible example a plasma donation center that operated in the Shafer building in the past. It was a very active use and profitable for the building owner, but it created a street atmosphere that was not very positive in terms of its contribution to the long-term development of downtown. Ms. Taylor suggested the council could make the fee high enough to motivate property owners. She asked about administration of the fees. Mr. Weinman said that was undetermined at this time. Ms. Taylor asked about the reference in the Agenda Item Summary (AIS) to an absorption vacancy. Mr. Weinman posited the example of a new five-story office building where it could take a while for the vacancies to fill. He said the council might need to answer the question of how long a space must be vacant before a fee was charged. Ms. Taylor clarified that staff was suggesting such a fee might discourage new construction in downtown. Mr. Weinman concurred. Ms. Taylor noted that the AIS indicated the fee might encourage higher density, but she did not think the Cit was encouraging that now by leaving all those buildings vacant. Ms. Taylor noted that the AIS suggested the fees and penalties might discourage development, but she thought that was a matter of opinion as the opposite might occur. She recalled hearing a photographer say he would love to locate in downtown but could not afford the rent. She thought it would be very attractive to have a photographer or artists occupying downtown space and placing photographs and art in the windows. Responding to a question from Ms. Taylor about the council’s ability to impose such a fee as it related to property tax law, Mr. Weinman said staff did not have an answer to that question. City Attorney Glenn Klein said that generally, the council could do anything not prohibited by State or local law. The City would have to work within the existing limitations created by ballot measures 5, 47, and 50. He was sure, however, that he could craft something within those limitations. He said the council could call such an assessment a fee or a tax or whatever it wanted; the courts would examine the characteristics of the assessment. He suggested the issue was more of a political than a legal one. Responding to a question from Ms. Taylor, Mr. Klein said the downtown occupancy fee was imposed by the City but the City contracted with DEI to collect it. Ms. Taylor suggested that a fee on unoccupied buildings would not be any more of a tax on unoccupied buildings. Mr. Klein said one difference was that the rationale for the fee on occupied properties was that occupied properties created more of a burden on the City than unoccupied property. However, he said, “that was a long time ago,” and if clarification of that information was important, he would get back to the council. Ms. Solomon believed the concept of charging unoccupied properties a fee was unproductive, punitive, and inconsistent with the City’s downtown planning. She said it was not entirely the fault of property owners that their businesses were not occupied, given the atmosphere that currently existed downtown. There was MINUTES—Eugene City Council February 28, 2007 Page 2 Work Session no surrounding environment to help make businesses prosper. She perceived the improvement of downtown as a partnership between the City and downtown property owners. She said if she was a property owner in downtown charged a fee for having vacant space, she would find a marginal tenant just to fill the space. She reiterated that was counter-productive to what the City wanted to do. Ms. Solomon said the City was on the cusp of making a change, noting the recently issued Request for Qualifications for downtown and the th forward progress of the 10 Avenue and Charnelton Street development. Ms. Ortiz believed the subject was worth discussing because of the frustration expressed by some people in the community who believed there could be a different way for the City to do business with the people who owned property in the downtown. For whatever reason, there were many vacancies downtown and they became an attractive nuisance, and she was anecdotally informed that those businesses took more City resources that occupied buildings. She had supported Ms. Taylor’s request for the work session because it was frustrating to “hear these things in the circles that we go in” that business owners purposely leave buildings vacant, or do business in such a way that people could not rely on them for the longevity of their businesses. She did not know if she would support such a fee, but she thought the City needed to find a way to offer the services downtown needed and that everyone who owned property downtown should pay for those services. Ms. Ortiz referred to the open hole on Willamette Street, and suggested it was a statement by the property owner in question, who had done nothing about the hole for years. She said that there was considerable foot traffic in the area and speculated that no good was occurring in the vicinity, so City resources were being used. She said it was the responsibility of property owners to take care of their space. The City had no resources to do so unless it charged them a fee. Mr. Pryor said he tried to envision the outcome of the council’s discussion and said if it was to encourage development in the downtown and improve the appearance of downtown that was a good outcome. If it was to generate revenue to help downtown, that was also a good outcome, although the AIS was not specific as to what the potential support to downtown services would be. Mr. Pryor said the question he asked was whether the ordinance would have that outcome. He suggested that in the short-term more tenants could be brought to downtown, but the tenant might be worse than the empty building. Mr. Pryor said the question of whether an unoccupied building was more attractive than an occupied building depended on who owned and kept up the building. He noted the nexus pointed out by Mr. Klein in relationship to the current fee and services and thought that a point for the council to keep in mind. Mr. Pryor preferred to take a carrot approach to downtown as opposed to a stick approach. He did not think the City was ready for the stick, given that it was still working on the carrot. Responding to a question from Mr. Zelenka, Mike Sullivan of Planning and Development said staff did not have current vacancy rates in the two-block area between Willamette and Charnelton streets but it appeared to have the most apparent vacancies, about 25 percent. Mr. Weinman added that he believed many of the apparent vacancies were being used for other purposes, such as storage. Mr. Zelenka asked staff to address the perception that property owners left the properties vacant deliberately and refused to do improvements or sign long-term tenant leases. He said long-term vacancies that left storefronts empty detracted from all the positive outcomes he desired for downtown. Whether the vacancies existed on purpose or for lack of caring or lack of trying, Mr. Zelenka did not think they created an atmosphere conducive to getting a better downtown. He also thought the City needed to force the owner of MINUTES—Eugene City Council February 28, 2007 Page 3 Work Session the hole on Willamette Street to do something with that property. He thought it was the role of the City to promote an environment downtown where people wanted to do business. Mr. Zelenka asked why the former Bon Marché building was not included in the Request for Qualifications (RFQ) for West Broadway. Mr. Sullivan said the building and adjacent Kaufman Building were owned by the same ownership group. A portion of the Bon building was being leased. The buildings were not available in same way as other buildings were when the City began to assemble options. Mr. Zelenka was anxious to get on with the RFQ for the area, suggesting that once the area developed, many of the issues of concern would go away. However, that did not address the hole on Willamette Street. Mr. Sullivan said the hole mentioned by Mr. Zelenka was included in the footprint of the RFQ. Mr. Clark pointed out that there were two holes downtown, and one of them was owned by the City. He thought that people watching might be curious about that. He pointed out the City had options on all the properties of concern and had the power and ability to affect the future of downtown without being punitive and without creating an adversarial atmosphere in downtown. He looked forward to a council discussion of desirable outcomes and ways to create new innovative ways to address downtown’s needs. Mr. Clark asked why business owners would invest in downtown when the City had never been serious about providing public safety downtown. He asked why business owners would invest in downtown when the City had created a situation though its inaction that made it almost impossible for businesses to be successful downtown. He cited as an example a man who passed out in a bathroom at the Chevron Station th on 7 Avenue with a needle in his arm, requiring a public safety response. When the man was released without any citation for drugs that he may or may not have had, he stood in front of the business next door and harassed them for the rest of the day. He suggested that downtown had a climate that the City had the opportunity to improve. He wanted the City to partner with the private sector downtown in a more creative and positive way. Mr. Poling agreed with Ms. Solomon’s remarks about the fee as counterproductive to the City’s downtown planning. He agreed the fee was a tax. Mr. Poling said if the City required property owners to fill their vacancies, they would fill them with less desirable options, not with what the City was looking for to create a vibrant and active downtown. He pointed out the City had some incentives in place and had the RFQ process to consider as well. He reiterated that imposing a new tax on unoccupied spaces would be unproductive. Ms. Taylor contended that the unoccupied properties downtown created more need for City services. She suggested that the fee already being charged to occupied properties could merely be extended to unoccupied buildings, which she thought should pay more. Regarding the surrounding environment being unattractive to businesses, she maintained that it was unattractive because of the vacancies. If there were more people in downtown, the undesirable people such as the drug addict mentioned by Mr. Clark would merely fade into the background and become part of the “local color.” Ms. Taylor did not see the fee as being punitive; she perceived it as merely as a way to ensure that the owners of unoccupied buildings contributed their share. Mr. Pryor thought the discussion was helpful but it reinforced for him the need to integrate it into the larger discussion of downtown. He said there may be situations were the stick was more appropriate than the carrot, such as in the case of the hole on Willamette Street, but he wanted to approach those issues on a MINUTES—Eugene City Council February 28, 2007 Page 4 Work Session case-by-case basis. He suggested the discussion be tabled for the time being so the City Council could be more effective with an overall strategy. Speaking to the subject of the City-owned hole, Ms. Ortiz thought the City Council did due diligence with that site in its attempt to locate ORI in downtown. She did not think that nothing had been done. Ms. Ortiz asked if the owners of unoccupied buildings were paying any fee. Mr. Weinman said the fee was charged only to occupied buildings. He clarified that the City collected the fee and contracted for services with DEI. Ms. Ortiz said there was a community perception the City only wanted desirable people downtown and that offended her, as residents from all walks of life were here together as community members. She took offense to comments about undesirable or marginal businesses. Mr. Zelenka did not think it was fair for Mr. Clark to compare the City-owned hole to the hole on Willamette Street, given that the City had tried to bring ORI downtown and was still attempting to secure a use for the space and the owner of the property in question had done nothing to develop it. He also expressed support for the use of incentives and partnerships and that was why he was excited about the Broadway RFQ. If that failed, he wanted to consider the fee. He believed the work session was proposed because of some people’s frustration with the lack of activity on the part of private property owners “sitting” on downtown property. Speaking to Ms. Ortiz’s remarks, Mr. Poling said that when he discussed less-than-desirable tenants, he was not referring to a person or racial group, but was contrasting an active, vibrant exchange of people, such as a coffee shop or theater or retail store versus a warehouse or single-office use. Ms. Ortiz acknowledged Mr. Poling’s remarks. th Mr. Clark said his point in bringing up the 10 Avenue hole was that the general public did not differentiate between the holes or were knowledgeable about the City’s efforts to fill it. He thought it “seems kind of funny” that the City was looking to treat one punitively when the other was the City’s. Mr. Clark expressed appreciation for Ms. Ortiz’s remarks and said when he offered his anecdote he was not commenting about any particular type of person. Mr. Clark said he had once owned an advertising agency that had the Oakway Mall as a tenant, and it had been difficult to market that facility because the mixture of uses did not attract customers. The mall was now very vibrant and attracted people because it was full of businesses and opportunities that created demand. He said that the community’s downtown had done nothing for many years to create demand for people to go there. The City had never done the things that were needed in the way of enhancing public safety downtown that would create the opportunity to bring in someone who could create demand. Ms. Taylor said that when she thought of undesirable people she had been thinking of the person mentioned by Mr. Clark, who could be considered undesirable, but blended into downtown so it did not matter. She said that the downtown needed a mix of people and different types of businesses, not just one type of person th or business. She had objected to the ordinance banning dogs and skateboards on 13 Avenue, which was intended to eliminate those who were considered undesirable people. Instead, those people moved downtown, and were subsequently displaced to a park. The City could not make them disappear. She thought that downtown should be a place for everybody. MINUTES—Eugene City Council February 28, 2007 Page 5 Work Session Ms. Taylor reiterated that the fee was not punitive as it merely treated unoccupied buildings in the same way as occupied buildings; but it might be a small incentive for property owners to secure tenants. She thought any tenant was better than no tenant as occupancy created life on the streets. Mr. Pryor, seconded by Ms. Taylor, moved to consider the issue in the context of an action plan on the council’s Downtown Goal. Ms. Taylor moved to substitute motion Option 1 as reflected in the AIS. The motion died for lack of a second. The motion failed, 4:3; Ms. Ortiz, Mr. Zelenka, and Mr. Pryor voting yes. Ms. Taylor asked Mr. Pryor to repeat the motion and then indicated her desire to change her vote. Mr. Klein indicated that would require the concurrence of the council. If the council did not concur, she could request recognition by the chair and offer a motion. Responding to a question from Mr. Clark, Mr. Klein said that Ms. Taylor was not suggesting she would offer a motion to reconsider, but that she be allowed to change her vote; if the council agreed to that, the minutes would reflect that the vote as 4:3 in support of the motion. If the motion was to reconsider, that would require Ms. Taylor to have been on the prevailing side of the vote. Mr. Klein explained that the council could vote something down 25 times and someone could make the same motion again if the item was back on the agenda. Mr. Poling objected to Ms. Taylor’s desire to change her vote. B. WORK SESSION: Gated Communities—Construction and Maintenance of Private Streets Public Works Director Kurt Corey reported that staff understood the item to be a discussion of how private streets came into being and the maintenance requirements and standards for those streets. He provided some history of the topic, saying that the norm in Eugene was the dedication and construction of public streets. There were about 550 centerline miles of roadway in the city; of those, 34 miles were private streets. The Land Use Code Update had provided more clarification about when such streets would be created. Mr. Corey said that the code now indicated that to the extent streets and alleys were constructed they would be public unless deemed unnecessary to meet the City’s connectivity requirements, which were included in Chapter 9 of the code. Mr. Corey said that private streets must be built to the same structural standard as public streets and certified by a licensed engineer. They must also meet other street standards such as intersection spacing, centerline radius length, street grades, sight distance, minimum paving width, and curb height where curbs were deemed necessary. Private streets were generally chosen by developers to reduce upfront costs. There were also fewer amenities associated with such streets. Homeowner associations were typically responsible for the maintenance of such streets through the Covenants, Conditions, and Restrictions (CC&Rs) associated with the development in question. Speaking to the question of whether the City could assume responsibility for the maintenance of such streets, Mr. Corey said yes, and that would require the homeowners’ association to dedicate the needed right-of-way and bring the street up to current City standards prior to the transfer. He said that an inquiry by staff MINUTES—Eugene City Council February 28, 2007 Page 6 Work Session indicated that there had been a mobile home park in west Eugene whose owner desired to convert to a mobile home subdivision. The right-of-way in that park had been upgraded and dedicated to the City. Mr. Corey had no recommendation to offer as he believed the issue was covered by Chapter 9. His presentation was informational in nature. Ms. Taylor had hoped staff would use the materials she brought back from the National League of Cities Conference for the purpose of further research. She had attended a session on the hazards of gated communities and planned developments and provided some information to City Manager Dennis Taylor to share with staff. She had anticipated the work session would occur later in the year after staff research. Ms. Taylor said that one of the speakers at the session was a professor from the University of Chicago, who suggested that such developments were “disasters waiting to happen,” while another speaker thought they were working out. Her question was about City liability, and what it owed to its citizens even if they made mistakes about where they bought their houses. Ms. Taylor said there were sites mentioned in the session where the streets had collapsed and residents lost egress and ingress. Swimming pools became hazards. She asked if the City was liable, or only the homeowners’ associations. She received calls from Eugene residents complaining about conditions in their housing development and asking if the City was responsible. She said if the City was not responsible, perhaps it needed to be more careful about how it permitted such developments. An example of her concern was Whitbeck Boulevard, where residents paid to upgrade the street and then the City approved the construction of three more houses and refused to take responsibility for the damage done to the road during the construction of the houses and maintenance afterwards. Ms. Taylor suggested there was no point in further council discussion until it had more information from staff. Ms. Ortiz asked how many gated communities there were in Eugene. Mr. Corey did not know; he was personally aware of four. He said that more often than not, streets within gated communities were private but that was not always the case. He did not know what percentage of the 34 miles of private streets that were now in Eugene was in gated communities, but some certainly were. Ms. Ortiz suggested that gated communities were in opposition to the City’s density goals as she believed that such development had larger lot sizes and were not as “infilled as they could be.” She believed that such communities were attempts to create a community, which was good in one sense, but in another sense, it was “keeping out regular folks who maybe don’t have any business there.” She said if the City was paying for the streets, it did not make sense to her that it would encourage “this kind of growth.” Mr. Zelenka was also surprised by how quickly the work session was scheduled and the content of the AIS, which was not congruent with the interest expressed by Ms. Taylor. Mr. Zelenka asked how many miles of private streets were built before the Land Use Code update. Mr. Corey believed most were built before the update. Mr. Zelenka asked what City standard existed currently, and if it included sidewalks. Mr. Corey said that the pavement on private streets must meet the City’s structural design standards for public streets but the street did not necessarily have to include amenities such as curbs, gutters, and sidewalks, which were included in the City standard. He added that the design standards were current criteria for private streets, so a developer could not avoid City grade standards or sight distance requirements, for example, by making a street private rather than public. Mr. Corey reiterated MINUTES—Eugene City Council February 28, 2007 Page 7 Work Session the primary difference between public and private streets was the connectivity standard. Responding to a follow-up question from Mr. Zelenka, Mr. Corey concurred that if private streets built under current standards were “to revert back” to the City, they would not require much in improvements in terms of their structural integrity. However, Mr. Corey pointed out, City assumption of responsibility for such streets would require a right-of-way transfer, installation of curbs and gutters, and the installation of sidewalks, and there might also be drainage issues to address. He believed that those private streets built to current standards did not create an additional liability for those purchasing property in such developments. Mr. Zelenka raised the issue of the potential conversion of mobile home parks to subdivisions, and asked what would happen to the streets when that occurred and the low-income residents had no money to bring the private streets up to standard. Mr. Corey said there would be a cost associated with that and suggested it could involve the creation of a local improvement district. He thought the design standards would be fairly nominal and low-cost. He noted that the City had a low-income grant assistance program for assessments and other mechanisms available to “soften the blow.” Mr. Zelenka asked if the City could exempt such subdivisions from the street standard. Mr. Klein did not know if the current code would allow such an exemption, but suggested the council could amend the code. Mr. Zelenka asked what happened when a private development abandoned its assets, they turned into a nuisance, and the property owner then deferred the problem to the City. He found that to be the most compelling issue in regard to the topic. Mr. Zelenka said he did not mind private development but objected to such a development throwing its problems onto the public. Speaking to Ms. Ortiz’s comments, Mr. Poling said the two gated communities of which he was aware, Quail Run and Lakeview Estates, were built on a limited amount of space and the density involved was much more than a traditional subdivision. The goal of those developments was to increase density. Mr. Poling noted that in the past he had heard the City Manager admonished for not getting something on the council calendar fast enough. There were no items scheduled for the work session until the two items on the agenda came up. He suggested that the manager and mayor were “damned if they do and damned if they don’t.” Mr. Poling said a scheduling opportunity had arisen and the manager had been attempting to meet the council’s needs. Acting City Manager Jones apologized that the item was on the agenda as she had judged it significant enough to get it before the council prior to the March break. The item had been pulled previously, and she considered it a high priority to get it on an agenda soon, and particularly when Ms. Taylor was available. Mr. Clark acknowledged the concern expressed by Ms. Taylor and Mr. Zelenka in regard to the level of the City’s responsibility for private property. He asked how many of the private gated communities had clubhouses and pools. Mr. Corey did not know. He said that the Public Works Department received periodic inquiries, perhaps once or twice yearly, about caring for private infrastructure, but he had not been presented with any requests related to pools or clubhouses. Mr. Clark asked staff if it was the City’s goal to create equal density throughout the community, or if its goal was to create higher densities downtown. Principal Planner Steve Nystrom said that given the choice, he would say downtown was where the City planned to concentrate more density. He said that the City’s planning documents do not take a uniform approach to achieving grow throughout the community. Those plans do identify downtown as a focus. Mr. Clark determined from Mr. Nystrom that it was the City’s policy to create a higher density downtown than at the edges. Mr. Nystrom said the City took a more MINUTES—Eugene City Council February 28, 2007 Page 8 Work Session strategic approach toward densification in other areas. The selection of those areas was a political choice that the council made over time. Mr. Clark said it appeared the City was trying to create greater density downtown than at the edges. Mr. Nystrom agreed. Mr. Zelenka asked about the rest of the city. Mr. Nystrom said that did not mean the rest of the city was treated uniformly, even though downtown might be the highest priority for density. The City made decisions about where other areas should grow at greater densities. For example, the Quail Run and Chase areas were targeted for higher densities than immediate adjacent areas, such as the Harlow area. Mr. Pryor thought there were only a few true gated communities in Eugene with true physical gates. There were private developments that allowed for more easy access, and the streets they contained may or may not be public. In terms of clubhouses, he could think of one gated community with a clubhouse that could potentially be abandoned or walked away from. Mr. Pryor said was also aware of a private playground that was abandoned and another jurisdiction was asked to accept responsibility for it, but the jurisdiction had the option of rejecting it. He thought the question of whether the City was obliged to take over abandoned property was another discussion for another time. Mr. Klein emphasized that the City had no obligation to take over private property or liability, but that did not address the issue of hazard abatement from an abandoned clubhouse, for example. He suggested staff return with written answers to the council’s questions and information about current tools and standards. Ms. Ortiz concluded discussion on the item and recognized Ms. Taylor. Ms. Taylor, seconded by Ms. Ortiz, moved to consider the issue in the context of an action plan on the council’s Downtown Goal. The motion failed, 4:3; Ms. Ortiz, Mr. Zelenka, and Ms. Taylor voting yes. Ms. Taylor thanked Acting City Manager Jones for scheduling the work sessions. The meeting adjourned at 1:10 p.m. Respectfully submitted, Dennis M. Taylor City Manager (Recorded by Kimberly Young) MINUTES—Eugene City Council February 28, 2007 Page 9 Work Session