HomeMy WebLinkAboutItem B: East Broadway Development Update
ECC
UGENE ITY OUNCIL
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GENDA TEM UMMARY
Work Session: East Broadway Development Update
Meeting Date: February 13, 2006 Agenda Item Number: B
Department: Planning and Development Staff Contact: Nan Laurence
www.eugene-or.gov Contact Telephone Number: 682-5340
ISSUE STATEMENT
This work session will provide information on the Whole Foods Development Project. The
council is asked to provide direction to the City Manager to begin negotiation of 1) a land
transaction with the Shedd Institute for the Arts; and 2) a development agreement and other
related legal documents between the City, Broadway High Associates (representing the G
Group) and Gerding/Edlen Developers (GED) specifying the terms of the development and the
City’s participation. This is the first of two work sessions anticipated for this project.
BACKGROUND
The Downtown Plan promotes a vision for a strong, active, distinctive urban center, and
collaborative public/private projects. The proposed Whole Foods Development Project is a
significant step towards implementation of that vision. The proposed project addresses the
City’s commitment to working with private developers and using economic tools such as parking
to leverage desired development. This proposal will contribute to the revitalization of the east
end of downtown and the Courthouse District. The proposal will also add to the character and
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activity along Broadway and 8 Avenue, both identified as Great Streets in the Downtown Plan.
The project will result in a new downtown destination and additional parking in a key location to
stimulate future investment.
The Whole Foods Development Project will occupy the entire block bounded by High and Mill
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Streets, 8 Avenue and Broadway (Attachment A provides a project location diagram.) There are
three main elements of the project: land assembly, development plan, and project costs. These
elements are discussed below. Based on council action, these will become the basis of a
development agreement between the City, GED and Broadway High Associates and a land
transaction between the City and the Shedd Institute for the Arts.
Land Assembly
Currently, the property proposed for this project is in three separate ownerships: The Shedd
Institute for the Arts, the G Group, and the Oregon Central Credit Union. Gerding/Edlen
Developers, working under the direction of the G Group, negotiated a letter of intent with the
credit union to participate in the project. The G Group has proposed that the City engage in a
land transaction to exchange property owned by the City immediately across High Street with the
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Shedd property. After the Shedd property is under City ownership, it will become the general
location for a publicly financed public garage and associated commercial space.
In anticipation of this land transaction, City staff contracted for two separate appraisals of the
City-owned property and the Shedd property, both of which are 25,600 square feet. The first
appraisal determined a value of $38/square foot for the Shedd property and $39/square foot for
the City property. The second appraisal determined a value of $33.50/square foot for both the
Shedd property and the City property.
Development Plan
The G Group is proposing to build a grocery store structure for Whole Foods, a multi-level
parking garage for the City, and ground floor commercial space for Oregon Central Credit Union
(see Attachment B: Conceptual Development Site Plan). Including the land, the value of the
proposed development is approximately $28,000,000. The major components of the project are
described below.
A. Whole Foods Grocery Store
Whole Foods Grocery Store, a natural and organic foods supermarket, will be the major
anchor tenant of this development. The grocery store has been designed to provide a
pedestrian-friendly, inviting streetscape along Broadway, High and Mill Streets. The design
will contribute to the desired high quality urban environment, with a tall first floor, minimum
setbacks, significant proportion of display windows and major entrances at Broadway and
Mill and Broadway and High (see Attachment C: Conceptual Elevation of Whole Foods).
The store will occupy 52,000 square feet, and employ approximately 250 employees. Two
levels of parking will be constructed above the store, providing an estimated 240 spaces for
Whole Foods customers. The G Group has secured a lease with Whole Foods, which is
dependent on the City’s participation in the development project.
Whole Foods is known for its high quality products as well as its commitment to
sustainability and environmental stewardship. It is the largest corporate user of renewable
energy in the United States, specifically through the purchase of wind energy credits. Whole
Foods is listed as #15 on Fortune Magazine’s list of the 100 best companies to work for. As
a downtown and regional destination, Whole Foods has been credited with providing the
catalyst for revitalization of urban areas, including the Pearl District in Portland.
B. Public Parking Garage and Optional Commercial Space
The public parking garage will provide spaces to support the Federal Courthouse and
adjacent uses, including any future City Hall renovation or replacement. The public parking
garage is also intended to encourage further redevelopment of nearby properties in the east
end of downtown. The need for parking in this area is discussed in Attachment D: Parking
Study Summary. Based on the parking study, there is projected to be a deficit of 500 spaces,
after redevelopment of the Whole Foods site and nearby surface lots. The Whole Foods
Development Project would contribute more than 400 spaces.
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There are four options for configuration of the public parking garage, as follows:
Estimated Commercial Estimated
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Parking Space at 8 Cost of
Option Description Spaces and High Garage
1 Smaller Garage 192 No $4,810,000
Smaller Garage with
2 186 Yes $5,180,000
Added Commercial Space
3 Larger Garage 266 No $6,320,000
Larger Garage with Added
4 260 Yes $6,700,000
Commercial Space
Staff recommends Option 4. This option includes a larger garage which would provide
greater efficiencies and more encouragement for future development envisioned in this area
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of downtown. This option also includes commercial space at the corner of 8 Avenue and
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High Street, to support desired pedestrian activity along 8 Avenue, Eugene’s Great Civic
Street.
C. Credit Union
The G Group has secured a letter of intent from the Oregon Central Credit Union to
participate in the development project. The credit union will occupy approximately 5,000
square feet of privately-owned commercial space. This space will be on the ground floor of
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the public parking garage, at the corner of 8 Avenue and Mill Street, and will be in addition
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to any publicly owned commercial space on the northwest corner of the garage at 8 Avenue
and High Street. The credit union will employ an estimated six people. The design of the
credit union will include a drive-through.
Project Costs
The total cost for public participation in this project is estimated to range between $6.1 and $8.1
million, depending on the size and configuration of the garage. This includes the cost of
purchasing the garage and additional costs for the City’s project-related expenses, such as legal
fees, debt service reserves, utilities, project management, and 1% for art. This amount is in
addition to the value of the land upon which the parking garage will be built.
Riverfront Urban Renewal District funds are the primary source of financing for this project.
Based on the final design and configuration of the garage, the total costs will determine the
details of the financing strategy. If the larger garage with ground floor commercial space is
determined to be the preferred option, funding sources in addition to urban renewal funds will be
required. Attachment E presents the estimated costs and the financing strategy for the project.
Due to the possibility of urban renewal expenditures, the Eugene Redevelopment Advisory
Committee (ERAC) reviewed the Whole Foods Development Concept on December 15, 2005,
and January 18, 2006. ERAC members acknowledged the need for a parking structure in this
location, and voted to support the use of urban renewal funds for that purpose. ERAC members
also supported the inclusion of publicly owned commercial space in the northwest corner of the
City’s parking structure.
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Financial and/or Resource Considerations
The Whole Foods Development Project involves significant financial and resource considerations.
The project requires the use of public land and dollars to construct a public garage as a key
component of the full block redevelopment project.
The use of Riverfront Urban Renewal District funds to build parking is permitted, as described in
Section 600A.6 of the Riverfront Urban Renewal Plan:
6. Public Parking and Public Transportation Facilities
The Agency is authorized to participate in funding the acquisition and construction and
enhancement of public parking and public transportation facilities within the renewal
area. The precise location and type of facilities will be decided after further study.
Timing
In order to meet the current timeline of opening the grocery store, credit union and parking
garage in the summer of 2007, City Council direction to the City Manager to begin negotiating
the terms of the development and the land transaction is requested at this meeting. The final
terms of the land transaction, the development agreement and related legal documents, as well as
the financing strategy will be presented to the council for review and approval at the second
work session for this project, scheduled for February 22, 2006.
RELATED CITY POLICIES
This project addresses implementation strategies and policies from the Downtown Plan, Growth
Management Policies, and Goals and Objectives from the Riverfront Urban Renewal District
Plan. This project does not directly address or affect council goals or priorities.
The Downtown Plan policies emphasize downtown Eugene as a strong regional center and a
diverse, dense, economically strong urban center. Relevant Downtown Plan policies include:
Downtown development shall support the urban qualities of density, vitality, livability
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and diversity to create a downtown, urban environment.
Actively pursue public/private development opportunities to achieve the vision for an
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active, vital, growing downtown.
Facilitate dense development in the Courthouse area and other sites between the core of
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downtown and the river.
The following project is listed in the Downtown Plan as an example of a possible action to
address the Implementation Strategies in the plan:
Construct a new parking garage to support the east side of downtown and the new
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Courthouse district.
Relevant Growth Management Policies include the following:
Policy 1 Support the existing Eugene Urban Growth Boundary by taking actions to
increase density and use existing vacant land and under-used land within the
boundary more efficiently.
Policy 2 Encourage in-fill, mixed-use, redevelopment, and higher density development.
Policy 3 Encourage a mix of businesses and residential uses downtown using incentives
and zoning.
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The Goals and Objectives of the Riverfront Urban Renewal District Plan list the following
applicable goal:
4. To stimulate development activity and amenities near the new federal courthouse.
COUNCIL OPTIONS
City Council options include:
1.Direct the City Manager to negotiate a land transaction, development agreement and related
legal documents for the Whole Foods Development Project with public garage development
Option 4;
2.Direct the City Manager to negotiate a land transaction, development agreement and related
legal documents for the Whole Foods Development Project with a different public garage
development option; or
3.Decline to support the project at this time.
CITY MANAGER’S RECOMMENDATION
The City Manager recommends moving forward with negotiations for the land transaction,
development agreement and related legal documents for the Whole Foods Development Project
based on public garage development Option 4.
SUGGESTED MOTIONS
1.Move to direct the City Manager to negotiate a land transaction between property owned by
the City and property owned by the Shedd Institute for the Arts, LLC for the purpose of
participating in the Whole Foods Development Project, and to bring back final terms for
council approval.
2.Move to direct the City Manager to negotiate a development agreement and related legal
documents with Broadway High Associates and Gerding/Edlen Developers for the Whole
Foods Development Project, based on the public garage development Option 4, and to bring
back final terms for council approval.
ATTACHMENTS
Please refer to the attachments provided with the February 8, 2006, work session agenda.
FOR MORE INFORMATION
Staff Contact: Nan Laurence
Telephone: 682-5340
Staff E-Mail: nan.laurence@ci.eugene.or.us
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