HomeMy WebLinkAboutItem 3: MUPTE for The Sequoia
ECC
UGENE ITY OUNCIL
AIS
GENDA TEM UMMARY
Action: Adoption of Resolution 4990 Denying a Multiple-Unit Property Tax
Exemption for Residential Property Located at 1367 High Street
(Pearl on Campus LLC)
Meeting Date: November 9, 2009 Agenda Item Number: 3
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 or deny a Multiple-Unit Property Tax Exemption (MUPTE)
for The Sequoia at 1367 High Street.
BACKGROUND
In 1975, the Oregon legislature adopted the enabling statutes for the MUPTE and Transit Oriented
District Tax Exemption program. Since that time, both the state statutes and Eugene’s
implementation ordinance has been amended. The City Council amended Eugene’s code provisions
and boundary in November 2008. To assist both staff and the City Council in evaluating a MUPTE
application, those code amendments included: (a) adoption of approval criteria, and (b) a direction
to the City Manager to adopt a public benefit scoring system (discussed below).
This proposed eight-unit project is at 1367 High Street, which is zoned R-3, high-density
residential. There is currently one house on this .2224 acre site. This house is not a city landmark
nor on the National Historic Register. The applicant has entered into a sales contract with a
purchaser who plans to move the house, in December, to 920 Cheshire in the Whiteaker
Neighborhood. It will be used as a residence.
Public Comments
A display advertisement was published in the Register-Guard on August 23, 2009, soliciting
comments for 30 days. The comment period was extended one week because the applicant submitted
an amended application. The period ended September 29. No written comments were received.
Public Benefits
As noted above, the City Council adopted criteria for review of MUPTE applications, including a
requirement to consider the public benefits to be provided by the development. The council
directed the City Manager to adopt a public benefit scoring system, which the City Manager did as
part of the Standards and Guidelines. As part of that administrative process, the City Manager
determined that unless a proposed development received at least one hundred points, the City
Manager would recommend that the council deny a MUPTE application.
After reviewing this MUPTE application against the public benefit scoring criteria in the Standards
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and Guidelines, staff determined that the proposed development earned only 65 points. Points were
awarded through the following benefits:
Density – Exceeding the minimum (40 points earned for four units over the minimum density - ten
points for each unit in excess of minimum, with 50 maximum points)
Green Building- “Earth Advantage” construction (25 points earned for “Earth Advantage Silver”)
The proposed development also would provide six parking spaces in excess of what is currently
required. If the property were part of the Residential Parking Program, the application would have
earned an additional 60 points. However, the property is not part of that program and the applicant
failed in his attempt to join the program by obtaining the necessary signatures of support from
adjacent property owners and tenants.
An attached letter from the West University Neighborhood Association (Attachment D) addresses
their support for consideration of this issue.
Impact and Need for Tax Exemptions to Encourage Housing:
The City and other local taxing districts forgo revenue when property is exempted from taxes. This
project proposes new construction on a property that is underdeveloped based on the zoning. The
three-bedroom single-family home currently on the site will be replaced by eight apartments with
24 total bedrooms. In December, the house on the site will be moved to the Whiteaker
neighborhood where it will continue to be a taxable asset. After ten years, The Sequoia will
generate new tax revenue, starting at approximately $25,000.
The annual total property taxes on the property are currently $2,602. The portion of the tax
attributed to the land is estimated at $989. The land will continue to be taxed during the exemption
period. Therefore, $1,613 that is currently being paid in taxes on the existing improvement will
come off the tax rolls (at that site) for ten years. This is a total cumulative value of $19,625,
assuming a 2% annual increase in taxes. After the ten year exemption ends, over $25,000 will then
be paid annually in property taxes. Therefore, all exempted revenue will be recovered in the first
year after the exemption ends. This is illustrated in Attachment G.
Timing
This application was originally submitted on August 11, 2009, and amended on August 25, 2009.
The City Manager has 90 days to make a recommendation on the application to the council. If the
council hasn’t acted in 180 days, the application is deemed approved. The 90-day
recommendation period expires on November 9, 2009.
RELATED CITY POLICIES
MUPTE is enabled by state statute. The City of Eugene has participated in the MUPTE program
since 1978. Encouraging housing in the core area is consistent with numerous adopted planning
and policy documents. Examples include:
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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.
West University Refinement Plan
V.9 The City will encourage residential uses in all parts of the plan area.
V.11 The City and the neighborhood shall study ways to encourage a variety or mix of
structure types providing both owner and rental opportunities and appealing to a
diverse population.
COUNCIL OPTIONS
The council may approve the exemption, deny the exemption, or may delay approval in order to
request additional information from the developer.
CITY MANAGER’S RECOMMENDATION
The City Manager recommends denying the exemption because the applicant did not score 100
public benefit points.
SUGGESTED MOTION
Move to adopt Resolution 4990 denying a multiple-unit property tax exemption for residential
property located at 1367 High Street, Eugene, Oregon (Pearl on Campus LLC/applicant).
ATTACHMENTS
A. Resolution Denying a Property Tax Exemption for The Sequoia
B. Resolution Approving Property Tax Exemption for The Sequoia
C. Report from the Planning and Development Director
D. Comments Submitted by West University Neighborhood Association
E. Letter from Applicant
F. Images of Current Property
G. Table Illustrating Tax Projections for Property through Year 11
Note: A copy of the MUPTE application for The Sequoia will be placed in the Council Office for
review.
FOR MORE INFORMATION
Staff Contact: Richie Weinman
Telephone: 682-5533
Staff E-Mail: richie.d.weinman@ci.eugene.or.us
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ATTACHMENT A
RESOLUTION NO. _______
A RESOLUTION DENYING A MULTIPLE-UNIT PROPERTY TAX
EXEMPTION FOR RESIDENTIAL PROPERTY LOCATED AT 1367 HIGH
STREET, EUGENE, OREGON (PEARL ON CAMPUS LLC/APPLICANT).
The City Council of the City of Eugene finds that:
A.
Pearl on Campus LLC is the owner of real property located at 1367 High Street,
Eugene, Oregon, more particularly described in Exhibit A attached to this Resolution. Pearl on
Campus LLC has submitted an application pursuant to the City’s Multiple-Unit Property Tax
Exemption Program (Sections 2.945 and 2.947 of the Eugene Code, 1971), with respect to
residential units to be constructed on the property.
B.
The project consists of the development of two two-bedroom units, four three-
bedroom units, and two four-bedroom units, for a total of eight residential units, which are not
designed for, nor will be used as, transient accommodations.
C.
The project is located within the boundaries of the core area as described in
subsection (2) of Section 2.945 of the Eugene Code, 1971.
D.
The Report and Recommendation attached as Exhibit B recommends that the
application be denied. In making that recommendation, the Director found that the project did not
receive an adequate number of public benefit points to earn a positive recommendation.
E.
Based on the above findings and the Report and Recommendation of Executive
Director of the Planning and Development Department attached as Exhibit B, granting the
application is not in the public interest. In making this determination, the City Council has
considered the number of points awarded based on the public benefit scoring system contained in
the Standards and Guidelines.
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, the City Council denies the
application of Pearl on Campus LLC for an ad valorem property tax exemption under the City’s
Multiple-Unit Property Tax Exemption Program for the residential units to be constructed at 1367
High Street, Eugene, Oregon, and more particularly described in Exhibit A.
Section 2.
The City Manager, or the Manager’s designee, is requested to forward a copy
of this Resolution to the applicant within ten days.
Section 3.
This Resolution shall become effective immediately upon its adoption.
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The foregoing Resolution adopted and effective the ____ day of _____, 2009.
_______________________ ______
Deputy City Recorder
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Attachment A, Exhibit A
Legal Property Description
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ATTACHMENT B
RESOLUTION NO. _______
A RESOLUTION APPROVING A MULTIPLE-UNIT PROPERTY TAX
EXEMPTION FOR RESIDENTIAL PROPERTY LOCATED AT 1367 HIGH
STREET, EUGENE, OREGON (PEARL ON CAMPUS LLC/APPLICANT).
The City Council of the City of Eugene finds that:
A.
Pearl on Campus LLC is the owner of real property located at 1367 High Street,
Eugene, Oregon, more particularly described in Exhibit A attached to this Resolution. Pearl on
Campus LLC has submitted an application pursuant to the City’s Multiple-Unit Property Tax
Exemption Program (Sections 2.945 and 2.947 of the Eugene Code, 1971), with respect to
residential units to be constructed on the property.
B.
The project consists of the development of two two-bedroom units, four three-
bedroom units, and two four-bedroom units, for a total of eight residential units, which are not
designed for, nor will be used as, transient accommodations.
C.
The project is located within the boundaries of the core area as described in
subsection (2) of Section 2.945 of the Eugene Code, 1971.
D.
The project could not financially be built “but for” the tax exemption.
E.
The applicant solicited comments from city-recognized affected neighborhood
associations.
F.
The requirements in the Standards and Guidelines for Multiple-Unit Housing
Property Tax Exemptions adopted by Administrative Order No. 53-09-01-F related to proximity to
historic resources have been satisfied.
G.
The applicant has complied with the provisions of the Standards and Guidelines as
described in the Report and Recommendation attached as Exhibit B to this Resolution prepared by
the Executive Director of the Planning and Development Department (“the Director”) as designee
of the City Manager.
H.
The project will be completed on or before January 1, 2012, and the owner has
agreed to include in the construction one or more public benefits.
I.
The proposed project is, or will be at the time of completion, in conformance with all
local plans and planning regulations, including special or district-wide plans developed and adopted
pursuant to ORS chapters 195, 196, 197, 215 and 227, that are applicable at the time the application
is approved.
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J.
The project is not designed for, and will not be used as transient accommodations.
K.
The Report and Recommendation attached as Exhibit B recommends that the
application be denied. In making that recommendation, the Director found that the applicant
submitted all required materials, documents and fees as set forth in Section 2.945 of the Eugene
Code, 1971, and the Standards and Guidelines, and the applicant is in compliance with the policies
contained therein but did not score 100 public benefit points based on the adopted criteria.
L.
Notwithstanding the recommendation of the Director to deny the application, the
City Council has determined that granting the application is in the public interest. In making this
determination, the City Council has considered the number of points awarded based on the public
benefit scoring system contained in the Standards and Guidelines.
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 the City Council’s review
of the Report and Recommendation of the Executive Director of the Planning and Development
Department attached as Exhibit B, the City Council approves the application of Pearl on Campus
LLC for an ad valorem property tax exemption under the City’s Multiple-Unit Property Tax
Exemption Program for the residential units to be constructed at 1367 High Street, Eugene, Oregon,
and more particularly described in Exhibit A, subject to the following conditions:
1.
The project shall consist of development of two two-bedroom units, four
three-bedroom units, and two four-bedroom units, for a total of eight
residential units, which are not designed for, nor will be used as, transient
accommodations.
2.
The project shall be completed on or before January 1, 2012.
3.
The project shall include all of the public benefit design elements as required
in the Standards and Guidelines and described in Section 2.5 and 2.6 of the
Report and Recommendation attached as Exhibit B.
4.
No later than 18 months after receiving Certificate of Occupancy, the
applicant shall submit to the City’s Planning and Development Department
documentation of Earth Advantage Silver certification.
5.
The project shall be in conformance with all local plans and planning
regulations, including special or district-wide plans developed and adopted
pursuant to ORS Chapters 195, 196, 197, 215 and 227.
6.
The project shall not be used as transient accommodations.
Section 2.
The residential units to be constructed upon the property described in Section
1 above are declared exempt from local ad valorem property taxation beginning July 1 of the year
following certification of completion 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 applicants, and to the other affected taxing districts, within ten days, and to
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cause a copy of this Resolution to be filed with the Lane County Assessor on or before April 1,
2010.
Section 4.
This Resolution shall become effective immediately upon its adoption.
The foregoing Resolution adopted and effective the ____ day of ____________, 2009.
_______________________ ______
Deputy City Recorder
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ATTACHMENT C
(Exhibit B to the resolution)
REPORT AND RECOMMENDATION
of the
Executive Director of the Planning & Development Department
Pearl on Campus LLC Application for Multiple-Unit Property Tax Exemption
The Executive Director of the Planning & Development Department of the City of
Eugene Finds that:
1.
Pearl on Campus LLC is the owner of real property located at 1367 High Street,
Eugene, Oregon, more particularly described in Exhibit A attached to this Resolution. Pearl on
Campus LLC has submitted an application pursuant to the City’s Multiple-Unit Property Tax
Exemption Program (Sections 2.945 and 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 find that:
2.1 The project (named “The Sequoia”) consists of the development of two two-bedroom
units, four three-bedroom units, and two four-bedroom units, for a total of eight
residential units.
2.2 Construction is expected to be complete on or before January 1, 2012.
2.3 The project is located in the core area described in subsection (2) of Section 2.945 of
the Eugene Code, 1971.
2.4 The applicant has submitted all materials, documents and fees required by the City as
set forth in Section 2.945 of the Eugene Code, 1971, and the Standards and
Guidelines for Multiple-Unit Housing Property Tax Exemptions adopted by
Administrative Order No. 53-09-01-F.
2.5 The applicant has responded to the public benefit criteria as follows:
2.1.1Public Benefits:
·Density. The Sequoia is in the R-3 zone on a 9.786 square foot site. The
Code limits this site to a minimum density of four units and a maximum
density of 13 units. Therefore, the project, which consists of eight units, is
more than the minimum and less than the maximum density.
·Green Building Features. Applicant plans to attain Earth Advantage Silver
Certification for the project. (Applicant must submit to the Planning &
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Development Department documentation of Earth Advantage certification no
more than 18 months after receiving a Certificate of Occupancy.)
·Mixed Income. No housing units are dedicated to controlled income and
affordable rental housing.
·Homeownership. No units are designated for home ownership.
·Accessibility. No units will be ADA accessible.
·Historic Sensitivity. There are no adjacent historic structures.
·Location. Project is not located in the downtown core area.
·Parking. Twelve parking spaces will be provided for the project. The
minimum number of parking spaces required by the Eugene Code for this
project as of the date of this Report and Recommendation is six.
·Points Awarded. Based upon the public benefit criteria scoring system in the
Standards & Guidelines, the applicant has been awarded 65 public benefit
points.
2.6 E.C. 2.945(6)(h)2. lists certain public benefits, in addition to those specified
in the Standards and Guidelines, that the City may consider in evaluating MUPTE
applications. That list of benefits includes open space. The applicant has made the choice
to include fewer apartment units in the project than the maximum number allowed by Code
in order to preserve open space on the site.
2.7 No historic structure or potential historic structure has been demolished or
removed from the property with the two years immediately preceding the date of the
application for this project. The vacant rental house currently on the site will be sold and
moved to another location.
2.8 Of the public benefits included in this project, the density of the project,
green features including the use of quality materials, and the number of parking spaces are
the public benefits that will extend beyond the period of the tax exemption.
2.8 The applicant has demonstrated that the project as proposed could not be
built but for the benefit of the tax exemption.
2.9 The applicant has solicited comments from the West University Neighbors.
By letter dated July 7, 2009, the neighborhood association advised that it unanimously
supported The Sequoia project.
2.10 The project will not be used as transient accommodations.
3.
A display ad soliciting recommendations or comments from the public regarding this
project was published in the Register-Guard on August 23, 2009. The period for comment expired
on September 30, 2009. No comments were received in response to the ad.
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Therefore,
based upon the above findings, I recommend that the application be denied. The
application does not achieve 100 public benefit points, which I believe is the minimum amout of
public benefit that should be provided in order to receive this tax exemption. The project is, or will
be at the time of completion, in conformance with all other 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 Standards and Guidelines.
Dated this _____ day of ________________________, 2009.
____________________________________
Executive Director,
Planning & Development Department
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ATTACHMENT F
Recent Photo of 1367 High Street
(Site of The Sequoia)
Z:\CMO\2009 Council Agendas\M091109\S0911093-and att'sABCFG.doc
ATTACHMENT G
VALUE OF VALUE OF VALUE OF TAXES ON VALUE OF ESTIMATED TAXES
EXEMP-TAXES ON CUMULATIVE CURRENT CUMULATIVE PAID BY THE
TION LAND, TAXES ON LAND. IMPROVEMENT IF TAX LOSS BY SEQUOIA AFTER 10
YEAR PAID COLLECTED SEQUOIA IS NOT REMOVAL OF YEAR EXEMPTION
DURING DURING CONSTRUCTED THE EXISTING EXPIRES
MUPTE EXEMPTION IMPROVEMENT
EXEMPTION PERIOD AT THIS
PERIOD LOCATION
1 989 989 1613 1613
2 1009 1998 1645 3258
3 1029 3027 1678 4936
4 1050 4077 1711 6647
5 1071 5148 1745 8392
6
1092 6240 1780 10172
7 1114 7354 1816 11988
8 1136 8490 1853 13841
9 1158 9648 1890 15731
10 1182 10830 1928 17659
11( post-
1206 12036 1966 19625 25,000
exemption)
Z:\CMO\2009 Council Agendas\M091109\S0911093-and att'sABCFG.doc