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HomeMy WebLinkAboutItem 2D - Resolution Concerning Patterson House MUPTE ECC UGENE ITY OUNCIL AIS GENDA TEM UMMARY Adoption of Resolution 4859 Extending the Completion Date for Construction of Residential Units Granted a Multiple-Unit Property Tax Exemption Under Resolution No. 4816, as Amended Under Resolution No. 4824 (Arthur C. Carmichael, Jr. and Larry Von Klein) Meeting Date: February 27, 2006 Agenda Item Number: 2D Department: Planning and Development Staff Contact: Richie Weinman www.eugene-or.gov Contact Telephone Number: 682-5533 ISSUE STATEMENT The City Council is asked to approve a resolution granting a one-year extension for the Multi-Unit Property Tax Exemption (MUPTE) for “The Patterson House” at 979 Patterson. BACKGROUND On December 6, 2004, the council approved a MUPTE for The Patterson House. The adopted resolution reflected a provision in the state statutes that required the project to be completed for occupancy by January 1, 2006. Two months later, in a procedural action on February 14, 2005, the council approved a one-year extension that was allowed under the statutes. The extension acknowledged the time it takes to design and construct such a project. The state legislature has since adopted a statute that extends the sunset date by six years. On October 24, 2005, the City adopted the necessary provisions to match the state statutes. The Patterson House project is now requesting an additional one-year extension of its MUPTE . Reason for the Request This project is proceeding toward construction but has experienced delays for two reasons. First, the developers spent time negotiating and acquiring a small piece of adjacent property from Sacred Heart Hospital. This acquisition will enable improved alley access to the apartments. Second, as a result of Hurricane Katrina, construction costs significantly increased as building materials have been in short supply. The builders waited for these costs to stabilize and come down. This will, in the end, prevent the rents from rising to meet the increased financing costs. The builders expect to begin construction this summer and may come close to completion in January 2007, but it is not guaranteed. Therefore, they have requested an extension to January 2008. This action is being placed on the Consent Calendar because it is a minor change from what the council approved. The end result will be the construction of the same housing project that was previously approved. L:\CMO\2006 Council Agendas\M060227\S0602272D.doc The council has a 26-year history of supporting tax exemptions to encourage new housing in the core area. Financial and/or Resource Considerations The City and other local taxing districts forgo revenue when property is exempted from taxes. This project proposes new construction on a property that has been vacant for many years. When the exemption was approved, the council determined that the developer met the test that the project would not be built “but for” the tax exemption. The land will continue to be taxed, so there is no loss of revenue. The improvements will bring substantial revenue after ten years. Timing The extension is important if this project is to proceed. RELATED CITY POLICIES MUPTE is enabled by state statute. The City of Eugene has participated in the MUPTE program since 1978. Since that time, eleven requests have been approved. Encouraging housing in the core area is consistent with numerous adopted planning documents. Examples include: The Downtown Plan Policy V.1: Stimulate multi-unit housing in the downtown core and on the edges of downtown for a variety of income levels and ownership housing. (The Patterson House is inside the Downtown Plan boundary). Implementation Strategy A: Expand the MUPTE program boundary to encourage housing on the edges of downtown. Periodically review boundaries and expand to include areas where additional housing is appropriate. Growth Management Policies Policy 1 Support the existing Eugene Urban Growth Boundary by taking actions to increase density and use on 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 business and residential uses downtown using incentives and zoning. COUNCIL OPTIONS The council may approve or deny the extension. CITY MANAGER’S RECOMMENDATION The City Manager recommends approving the resolution to grant the extension. L:\CMO\2006 Council Agendas\M060227\S0602272D.doc SUGGESTED MOTION Move to adopt Resolution 4859 extending the completion date for construction of residential units granted a Multiple-Unit Property Tax Exemption under Resolution No. 4816, as amended under Resolution No. 4824 (Arthur C. Carmichael, Jr. and Larry Von Klein). ATTACHMENTS A. Proposed Resolution B. Letter from Larry Von Klein FOR MORE INFORMATION Staff Contact: Richie Weinman, Planning and Development Department Telephone: 682-5533 Staff E-Mail: richie.d.weinman@ci.eugene.or.us L:\CMO\2006 Council Agendas\M060227\S0602272D.doc ATTACHMENT A RESOLUTION NO. _______ A RESOLUTION EXTENDING THE COMPLETION DATE FOR CONSTRUCTION OF RESIDENTIAL UNITS GRANTED A MULTIPLE-UNIT PROPERTY TAX EXEMPTION UNDER RESOLUTION NO. 4816, AS AMENDED UNDER RESOLUTION NO. 4824. (ARTHUR C. CARMICHAEL, JR. AND LARRY VON KLEIN). The City Council of the City of Eugene finds that: A. On December 6, 2004, the City Council adopted Resolution No. 4816 approving a multiple-unit property tax exemption for the construction of residential units at 979 Patterson Street, Eugene, Oregon. That Resolution required construction to be completed by January 1, 2006, which was the date required by state law. B. On February 14, 2005, the City Council adopted Resolution No. 4824 approving an extension, authorized by state law and city code, to January 1, 2007, in which to complete construction of the residential units for which the property tax exemption was granted under Resolution No. 4816. C. During the 2005 Legislative Session, the Oregon Legislature amended ORS 307.691 to revise the date by which construction must be completed under the multiple-unit property tax exemption program from January 1, 2006, to January 1, 2012. D. To maintain consistency between the Eugene Code and the amendment to ORS 307.691, on October 24, 2005, the City Council passed Ordinance No. 20350 which amended Section 2.947(5) of the Eugene Code, 1971, to require that construction under the multiple-unit property tax exemption program be completed by January 1, 2012. E. Arthur C. Carmichael, Jr. and Larry Von Klein, have advised that it is not likely that construction of the residential units can be completed by January 1, 2007, due to the escalation of building costs from the local building boom and effects from hurricanes, and have requested an extension to complete the project. The City Council finds that the property owners have been acting in good faith and with due diligence, and the inability to meet the January 1, 2007 construction deadline is due to circumstances beyond their control. L:\CMO\2006 Council Agendas\M060227\S0602272D.doc 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 on the above findings which are adopted, Arthur C. Carmichael, Jr. and Larry Von Klein are granted an extension to January 1, 2008, in which to complete construction of the residential units for which a property tax exemption was granted under Resolution No. 4816 on December 6, 2004. Section 2. The City Recorder is requested to forward a copy of this Resolution to Arthur C. Carmichael, Jr. and Larry Von Klein, and to append a copy of this Resolution to Resolution No. 4816. Section 3 . This Resolution shall become effective immediately upon its adoption. The foregoing Resolution adopted and effective the ___ day of _____________, 2006. ____________________________________ City Recorder L:\CMO\2006 Council Agendas\M060227\S0602272D.doc which yVtU '1"'lJ[7;O j.~ (.r.... ,.rE.-,DS'lC'N..... 1..1(')1 J~-11~' J rL.L I .~. .'\.. ". 1. l'-l.. J,. I 1 . t. S 1.....- 979"0 l. "X""f'r,'D"'('N .S'1'Tfl'r.;f.?"[..' ,> " I, '\ f, i fA"\. 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