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HomeMy WebLinkAboutResolution No. 5437COUNCIL RESOLUTION NO. 5437 A RESOLUTION APPROVING A MULTIPLE -UNIT PROPERTY TAX EXEMPTION FOR RESIDENTIAL PROPERTY LOCATED ON LOT 13 OF THE TOWN RUN PLAT IN EUGENE, OREGON (ASSESSOR'S MAP 17-03-32- 229 TAX LOT 02900) (APPLICANT ERD BLOCK 10, LLC) PASSED: 7:1 REJECTED: OPPOSED: Zelenka ABSENT: CONSIDERED: March 10, 2025 EEugoene RESOLUTION NO. 5437 A RESOLUTION APPROVING A MULTIPLE -UNIT PROPERTY TAX EXEMPTION FOR RESIDENTIAL PROPERTY LOCATED ON LOT 13 OF THE TOWN RUN PLAT IN EUGENE, OREGON (ASSESSOR'S MAP 17-03-32-22, TAX LOT 02900) (APPLICANT ERD BLOCK 10, LLC). The City Council of the City of Eugene finds that: A. ERD Block 10, LLC is the owner of real property located on Lot 13 of the Town Run Plat in Eugene, Oregon (Assessor's Map 17-03-32-22, Tax Lot 02900), also identified as Parcel l0A in the Downtown Riverfront Master Plan ("the property"). B. ERD Block 10, 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 to be constructed on the property ("the project"). C. The project consists of the development of 12 studio units, 20 one -bedroom units, and 44 two -bedroom units for a total of 76 residential units. 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 application as well as the independent consultant's conclusions 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 the 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 materials, documents, and fees required by EC 2.945, EC 2.946, and Rule R-2.945, and the applicant is in compliance with the policies contained therein. G. The City Council has concluded that the application meets the criteria described Resolution - Page 1 of 5 in EC 2.946 and Rule R-2.945. 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 upon the City Council's review and adoption 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 ERD Block 10, LLC for an advalorem property tax exemption under the City's Multiple -Unit Property Tax Exemption (MUPTE) Program for the residential units to be constructed on Lot 13 of the Town Run Plat in Eugene, Oregon (Assessor's Map 17-03-32-22, Tax Lot 02900), subject to the following conditions: 1.1 Compact Urban Development. The project will consist of 12 studio units, 20 one - bedroom units, and 44 two -bedroom units for a total of 76 residential units, none of which will be used for transient use, student housing, or vacation occupancy. There is no commercial space proposed in the building. The applicant did not propose commercial uses as part of the project, nor did the applicant demonstrate that commercial property is a required design or public benefit element of the project. Consequently, any commercial property on the development site is not eligible for the tax exemption. Multiple -Unit Housing Property Tax Exemption Rule R-2.945 ("Rule R-2.945") requires that in order to be eligible for a MUPTE, projects on properties located in the Downtown Area and east of Charnelton Street must provide residential units equivalent to at least 175% of the minimum density applicable to the property's zoning designation. The property on which the project will be built is located in the S-DR Downtown Riverfront Special Area Zone, which does not include a minimum residential unit density. The project will be constructed in accordance with the schematic drawing showing the site plan and major features and dimensions of the proposed development, as well as schematic drawings showing side, front, and back elevations of the proposed development, all of which are attached to this Resolution as Exhibit B. 1.2 Green Building Features. The project will utilize the City of Eugene Building and Permit Services Pathway to meet the MUPTE green building requirement and exceed the 10% energy efficiency threshold. The applicant will submit to the City of Eugene's Building and Permit Services Division an energy model with the applicant's development 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-2.945-C and will report multi -family occupancy energy use data to the City's Building and Permit Services Division Resolution - Page 2 of 5 for the life of the MUPTE tax exemption. The project's on -site parking will include installation of conduit for future electric vehicle charging stations. 1.3 Local Economic Impact Plan and Compliance with Laws. A plan is in place that demonstrates that more than 50% of the dollar volume of the combined professional services and construction contracts are or will be from business organizations or individuals residing or doing business primarily in Lane County. 1.4 Applicant 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 certified minority, women, emerging small business or disadvantaged business enterprises from the Oregon State Office of Minority, Women and Emerging Small Business (recently renamed the Oregon Certification Office for Business Inclusion and Diversity); (2) searching for Qualified Rehabilitation Facilities (now known as Oregon Forward Contractors) from whom to procure products and services via the Oregon State Qualified Rehabilitation Facilities Program (recently renamed the Oregon Forward Program) website; and (3) advertising in general circulation, trade association, and minority focused media about prime subcontracting opportunities. The applicant will ensure that information about the City's Rights Assistance Program in English and Spanish is posted on the job site during construction of the project. The applicant will ensure that the developer and its contractors and subcontractors comply 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 Division with 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 must 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. 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 10-year exemption benefit, or approximately $436,000. Resolution - Page 3 of 5 1.5 Project Design and Compatibility. The applicant shall adhere to the following design elements, as well as the actual square footages and exterior details included in Exhibit B unlessthe City Manager approves a deviation from the plan pursuant to EC 2.946(2)(d)6.b.: The scale, form, and quality of the building responds to the character of the existing architecture within the Downtown Riverfront neighborhood. The five - story residential building uses a varied material palette that prioritizes high quality and durable materials at the most publicly important and visible locations. The building's relationship to the street is handled with the application of brick paired with large storefront metal -framed windows throughout the first floor Metal panel is a prominent material on upper stories. The project provides parking for residents in a surface parking lot located generally behind the building. Metal screening conceals parking where it abuts the street. The design successfully incorporates elements that address 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. 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 and others 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 this Resolution. The neighborhood shall also have 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(2)(d)6.b.. 1.6 At the time of completion, the project shall conform 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 that are applicable at the time the application is approved. 1.7 During all phases of development, the project shall comply with wage, tax, and licensing laws. 1.8 The project shall not contain any units for transient use or vacation occupancy. 1.9 The project will be completed on or before January 1, 2032, unless an extension of the deadline is requested by the property owner and approved by Council resolution pursuant to EC 2.947(5). Resolution - Page 4 of 5 1.10 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 1 of this Resolution, 100% of the residential units 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, 2025. Section 4. This Resolution shall become effective immediately upon its adoption. The foregoing Resolution adopted and effective the loth day of March, 2025. &td)�ak ity Re o er Resolution - Page 5 of 5 REPORT AND RECOMMENDATION Exhibit A of the Planning & Development Department Riverfront Parcel 10A Application for Multiple -Unit Property Tax Exemption The Executive Director of the Planning & Development Department of the City of Eugene finds that: ERD Block 10, LLC ("ERD LLC") is the current owner of real property located on Lot 13 of the Town Run Plat in Eugene, Oregon (Assessor's Map #17-03-32-22, tax lot 02900), also known as Parcel 10 in the Downtown Riverfront Master Plan. ERD LLC submitted an application pursuant to the City's Multiple -Unit Property Tax Exemption ("MUPTE") program (Sections 2.945 through 2.947 of the Eugene Code, 1971), with respect to residential units to be constructed on the property. 2. As the City Manager's designee, I have reviewed the application and found that: 2.1 The project will provide 12 studio units, 20 one -bedroom units, and 44 two -bedroom units for a total of 76 residential units, none of which will be used for transient use or vacation occupancy. There is no commercial space proposed in the building. The applicant did not propose commercial uses as part of the project, nor did the applicant demonstrate that commercial property is a required design or public benefit element of the project. Consequently, any commercial property on the development site is not eligible for the tax exemption. 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), the unit configuration does not include several bedrooms with individual bathrooms and sparse common space, it does not include amenities and location selected primarily for individuals attending college, and it does not offer limited viability as potential housing for the general population. 2.3 Construction is expected to be complete on or before January 1, 2032. 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 asset forth in Section 2.945 of the Eugene Code, 1971, and the administrative rules adopted by Administrative Order No. 53-22-09-F. 2.6 The applicant responded to the Required Public Benefit criteria as follows: 2.6.1 Compact Urban Development. Rule R-2.945 requires that in order to be eligible for a MUPTE, projects on properties located in the downtown area and east of Charnelton must provide residential units equivalent to at least 175% of the minimum density applicable to the property's zoning designation. The project will be built in the S-DR Downtown Riverfront Special Area Zone, which does not include a minimum residential unit density. Report and Recommendation -- Page 1 of 5 2.6.2 Green Building Features. Consistent with the requirements of Administrative Rule R-2.945-C 1.2.2.2, the project will utilize the City of Eugene Building and Permit Services' pathway to meet the MUPTE green building requirement and exceed the 10% energy efficiency threshold. The entity applying for development permits will be required to submit an energy model with their development 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-2.945-C and will report multi -family occupancy energy use data to the City's Building and Permit Services for the life of the MUPTE tax exemption. The project's on -site parking will include installation of conduit for future electric vehicle charging stations. 2.6.3 Local Economic Impact Plan. The applicant has provided a Local Economic Impact Plan (Plan) demonstrating that more than 50% (the Plan estimates 55%) of the project's dollar volume of professional services and construction contracts include businesses based in Lane County as required by Administrative Rule R-2.945-C 1.3.1. The applicant is committed to promoting open competitive opportunities for Minority, Women, and Emerging Small Businesses, and the Plan demonstrates that the applicant will ensure that qualified minority and women business enterprises have an equitable opportunity to compete for contracts and subcontracts as required by Administrative Rule R-2.945-C 1.3.2. The Plan provides that the developer will post information about the City's Rights Assistance Program in English and Spanish on the job site. Finally, the Plan also demonstrates that the applicant will ensure that the developer and its contractors and subcontractors comply with wage, tax, and licensing laws as required by Administrative Rule R-2.945- C 1.3.4. 2.6.4 Moderate -Income Housing Contribution. Consistent with the requirements of Administrative Rule R-2.945-C 1.4, the owner will pay a fee to be dedicated to moderate -income housing. The fee will be 10% of the total 10-year exemption benefit, or approximately $436,000. 2.6.5 Project Design and Compatibility. The project will adhere to the design shown in the resolution and will apply basic design concepts that consider 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 materials shown in the resolution will be adhered to, to the greatest extent possible. The scale, form, and quality of the building responds to the character of the existing architecture within the Downtown Riverfront neighborhood. Together, these buildings and their materials, scale, and form create a cohesive neighborhood composition. Page 2 of 5 Report and Recommendation The mix of elements demonstrates an understanding of the surrounding amenities and environment. As a component of the district, the building's own set of elements and amenities complement the whole neighborhood. The characteristics of the proposed development evoke an industrial, timeless, and durable sense of place. The project when realized will secure these attributes into the built environment. The building's relationship to the street is handled in a contextually appropriate manner with the application of brick paired with large storefront metal -framed windows on the entire first floor (aside from the metal screening installed along Annie Mims to conceal parking described below). On higher floors, metal panel is the dominant material, providing a durable and attractive exterior while controlling costs. These material choices and applications reinforce a high -quality and durable character representative of the district. It meets the sidewalk well and carries through the industrial character. Parcel 10A is located on the north side of Nak-Nak Avenue directly across from the Steam Plant which is set to be redeveloped and brought through the designation process for listing on the National Register of Historic Places. While this work is still in development and at a conceptual level, the proposed design is sensitive to the future development of a historic locale as exhibited through its materiality with brick as a prominent material and programming details such as screening the ground floor parking area. Given the recent evolution of the neighborhood, public transit stops have not yet been implemented. Until transit lines are established, the proposal provides safe and clear pedestrian and other multi -modal connections between the development, transit hubs and stops, and other notable districts in proximity. Parking for the development is provided on the first/ground floor supplemented by detached car ports. The use of metal screening along Annie Mims retains a strong street character while successfully concealing the parking area. The project intends to add to the strength and richness of the Downtown Riverfront. As designed and shown in the resolution, it successfully accomplishes this through design concepts that consider 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. 2.6.6 Historic and Existing Housing Sensitivity The project is adjacent or near to two historic locales, the Ferry Street Bridge and Viaduct and the Steam Plant, but the historic locales will not be affected by the project. The project includes no direct structural impacts —such as alterations or demolitions —to any of the identified historic resources. No historic structures or existing housing were demolished or removed from the property in the two years prior to the date of Page 3 of 5 Report and Recommendation application. The project's design appropriately accounts for preservation of the historic characteristics of the nearby historic locales. 2.6.7 Project Need. The project's pro -forma and financial information were 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 ERD LLC 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 MUPTE Review Panel, and staff reviewed the assumptions. The consultant generally agreed with the assumptions used by the applicant in their financial projections and did not use significantly different assumptions in their own analysis. 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 ERD LLC attended a neighborhood engagement meeting regarding Parcel 10A for the Downtown Neighborhood Association on September 25, 2024. 2.7.1 Future Neighborhood Engagement. Prior to completing final drawings, ERD LLC will hold another neighborhood engagement meeting. Before submitting for permits, ERD LLC 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 give interested parties an opportunity to review and comment on that final design. 3. The Community Development Division published an advertisement soliciting recommendations or comments from the public regarding this project in the Register -Guard on November 12, 2024. The period for comment expired on December 12, 2024, with no written testimony received. 4. The community -member MUPTE Review Panel considered the project application, including compliance with program criteria and the independent consultant's financial review, during two meetings held on December 13, 2024, and January 10, 2025. The Review Panel unanimously concluded that the project meets the Required Public Benefit criteria, that the project's financial need was demonstrated, and that a ten-year exemption was warranted. The Page 4 of 5 Report and Recommendation Panel Conclusions document will be provided to the City Council with the materials for the March 10, 2025, work session. 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 28 day of February 2025. Don\i Brabd IFjb1& as2,s11,a Denny Braud Executive Director Planning & Development Department Page 5 of 5 Report and Recommendation .. x w --AmqmgjjL� m"Ioam- R Onm- - �nnonis •moo Ln N ca w LL b w n. ry U t� W I