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HomeMy WebLinkAboutCC Minutes - 03/15/06 Work Session M I N U T E S Eugene City Council Work Session McNutt Room—Eugene City Hall March 15, 2006 Noon COUNCILORS PRESENT: Jennifer Solomon, Andrea Ortiz, David Kelly, Betty Taylor, Gary Papé, Bonny Bettman, George Poling, Chris Pryor. Her Honor Mayor Kitty Piercy called the meeting of the Eugene City Council to order. A. WORK SESSION: Downtown Update—East Broadway Development Projects Assistant City Manager Jim Carlson, Planner Nan Laurence, and Glenn Klein of the City Attorney’s Office were present for the item. Planning Director Susan Muir and Sue Cutsogeorge of Financial Services were also available to answer questions. Ms. Solomon, seconded by Ms. Ortiz, moved to adopt Resolution 4862 granting an exemp- tion from competitive selection requirements for a personal services contract relating to de- veloper services and developer’s selection of a general contractor for construction of a pub- lic parking facility; and approving findings related thereto. Mr. Papé declared a conflict of interest due to his son’s employment with Gerding/Edlen, the developer for the proposed project. Mayor Piercy called on the council for questions and comments. Ms. Taylor noted that she viewed a DVD of the public hearing of March 13, which she was unable to attend. She expressed regret that she missed the hearing and that it had been scheduled at a time when she was unable to attend. She protested the haste with which the hearing was set, which she said occurred to meet to the needs of the developer rather than the citizens. She objected to taking action so soon after the hearing, which did not give councilors time for reflection or to receive additional comments. Ms. Taylor believed the council was proceeding on false or unproven assumptions related to the need, location, and timing of the parking garage. She believed the proposal precluded other alternatives, such as providing support for the Farmers Market, for which the council voiced support in the past and which had come up in testimony at the public hearing. Ms. Laurence responded to questions asked by Ms. Bettman following the hearing. Regarding the question of how much parking the new federal courthouse required, Ms. Laurence said that 240 people would be work at the courthouse but only 70 spaces would be provided, most of them secured and not available to the general public. It was anticipated that most of the courthouse employees would park in the garage. MINUTES—Eugene City Council March 15, 2006 Page 1 Work Session Regarding whether the Oregon Department of Transportation (ODOT) signed off on the access and egress, th Ms. Laurence said ODOT approved a signal at the corner of 8 Avenue and Mill Street, which was where access was proposed to occur. Regarding the potential for building on the Lane County-owned butterfly parking lot, Ms. Laurence said it appeared the structure could be built upon, but pointed out that the block in question was not within the Urban Renewal District. Regarding the competitive bidding for subcontractors and whether savings would be passed on to the City, Ms. Laurence said the developer indicated willingness to consider that and it could be further negotiated. Regarding whether there was a need to increase debt capacity in the district, Ms. Laurence said there was not. The garage project was the first significant expenditure to count against the district’s indebtedness. Regarding the debt to be paid back to the district, Ms. Laurence said that staff anticipated the district’s growth would produce revenues, allowing it to pay back funds to the degree there were excess future funds available. If the district was unable to pay those costs, the City’s Facilities Reserve would pay the costs of the garage project or the council would determine another way to pay the debt. Ms. Bettman said Whole Foods was a business that was welcome to locate anywhere in Eugene. However, she found the two most egregious elements of the proposal to be the exemption from the competitive bidding process and what she termed a “subsidy” to Whole Foods, which she believed placed other businesses that did not have the City building them a parking garage at a disadvantage. With regard to the motion on the floor, Ms. Bettman found the findings to be clichéd and the reasons cited for the exemption to be inadequate and unsubstantiated. She said the findings lacked a cost analysis and relied on the developer’s word that the City would save money and realize a benefit. Ms. Bettman said that “sweetheart deals” such as the one being considered used to be illegal, but now the City could “cram them through” on the slimmest of pretexts. Even if the council supported the project, Ms. Bettman did not think the council should abrogate its responsibility to the public by approving the exemption. She pointed out the developers intended to do competitive bidding for subcontractors to save money, and she questioned why the City would not do the same. Ms. Bettman said as long as the council was willing to spend $11.5 million on the project without adequate substantiation of the public benefit, staff did not have to count the costs; it merely had to count the council votes. Ms. Bettman referred to the requirement that the findings be published statewide to give other construction companies the option of testifying about the issue of public costs savings. She asked about the nature of the publication, and how anyone could challenge the project on basis of costs when the findings did not include information about cost. Mr. Klein said the notice was published in the Daily Journal of Commerce two weeks before the public hearing, which was a common practice. It was also published in The Register- Guard. Anyone interested in the findings could contact the City. Mr. Pryor expressed appreciation to all those who offered testimony to the council on March 13 and for the civility they demonstrated. He said it was what democracy was about. Mr. Pryor agreed with Ms. Bettman that there were two issues that needed to be addressed, one of which was the bidding exemption. He said that such an exemption was allowed in State law, and he questioned MINUTES—Eugene City Council March 15, 2006 Page 2 Work Session how it could be an egregious process if allowed under State law. In this case, he thought the approach was reasonable. He had experience with such contracts and found them to save money and work well. He was pleased that the subcontractor work would be bid. Regarding the suggestion that the parking garage was a subsidy to Whole Foods, Mr. Pryor disagreed. He said Whole Foods was building its own parking facility, and the City garage was being built to help support development in the east end of downtown. He believed that helping downtown was a good thing. Mayor Piercy called for a second round of council comments and questions. Ms. Bettman said it was true that the statute allowed the exemption, but there were specific criteria in the governing statute, and in her opinion the findings failed to meet the State criteria. Staff failed to prove the proposal benefited the public or justified the exemption. She did not support the resolution and hoped it was voted down in favor of designing and locating a garage that fit the public’s interest as opposed to the developer’s interest, and putting it out for competitive bids. Ms. Taylor wondered why the project depended on City action if the City’s contribution was not considered to be a subsidy? Mr. Klein responded to Ms. Bettman’s comments, saying he had not prepared the findings but a lawyer familiar with the State statute had prepared the findings, and believed they were in compliance with State law. Ms. Taylor asked the council to do what was right rather than what it could “get through by loopholes.” The motion passed, 5:2; Ms. Taylor and Ms. Bettman voting no. Ms. Solomon, seconded by Ms. Ortiz, moved to authorize the City Manager to enter into land transaction agreement between property owned by the City and property owned by The Shedd Institute for the Arts, LLC, for the purposes of participating in the East Broadway Development Projects, in substantial conformity with the outline of terms described in At- tachment B. Ms. Ortiz did not perceive the issue in terms of black and white. She said she read extensively on the topic and discussed it with many people, several of who were rude to her. She said it was easier for those who had strong feelings one way or another to make decisions. She was torn between positions on many issues. However, the council gave direction to the City Manager to go forward with the land exchange and he had carried out its direction. She supported the staff recommendation and noted that if this was political suicide, then “so be it.” She could not base her decision today on her next career move. Ms. Ortiz said she could not find anything in the proposal that made her think it was bad for Eugene. She said this was “not the end of the free world as we know it.” Mr. Kelly said the decision was a difficult one for him and he had thoroughly reviewed the testimony and attended several community meetings on the project. He said every project had potential advantages and disadvantages, and at this point he believed the proposal had more advantages. Whole Foods would pay for its own parking and there was value in a public garage on the east end of downtown to support development such as The Shedd and the courthouse. He would not support the proposal if he thought it would give one dollar to Whole Foods. Mr. Kelly believed the public dollars were being used for a good purpose. MINUTES—Eugene City Council March 15, 2006 Page 3 Work Session Mr. Kelly thought the downtown area was not as bad as some believed, but it had a long way to go to be the center of the city. Downtown needed to be revitalized as a means to give Eugene a sense of community. A successful downtown includes magnet destinations, and that means some people will drive to get there. The library was another magnet and he believed there were more to come. Regarding the issue of parking, Mr. Kelly suggested a successful downtown would have neither too much nor too little parking. He did not think the garage felt “out of balance” in that regard. Regarding the issue of the competitive bids, Mr. Kelly pointed out the two structures would share connections and ramps, and he believed the construction project would be much messier if two contractors were involved. Ms. Taylor believed this was a sad day for Eugene. She wanted The Shedd and its music school to succeed and had initially supported the land exchange, but she did not think the matter was urgent. She was convinced by the eloquent testimony of many citizens that Whole Foods was not a good thing for Eugene. Eugene needed food security in the form of local foods. Whole Foods would bring more people to downtown driving cars. She would not vote for anything that would help Whole Foods locate in the downtown. Ms. Bettman said she initially supported the expansion of The Shedd’s music school but was told at that time it did not involve any subsidies to Whole Foods. She said unlike other councilors, she had not met with representatives of the Guistina Family, so she had not known of “this blatant subsidy.” She opposed the motion because it was predicated on the entire development. Ms. Bettman maintained that the council was suggesting the parking garage would result in downtown revitalization but she had heard that message before. The City built five parking garages that were not at full capacity. The City had limited resources and there were many plans worthy of the funding spent on the project. Ms. Bettman believed the council was taking the proposal on faith. Ms. Bettman maintained that shoppers at Whole Foods would use the parking provided by the City. She said that the Whole Foods Web site made it clear that it was a policy of Whole Foods to locate only where close-by parking was abundant. She further maintained that “other, independent” researchers had done studies that indicated Whole Foods would require “a lot more” than the 240 spaces planned. She indicated that she would address the issue of the funding sources for the project, as she believed there were higher priorities for those funds. Ms. Taylor believed Ms. Bettman made good points about the higher priorities for the money involved; for example, she believed it could be invested in the street preservation or the arts. Just that morning The Register-Guard ran an article about the Eugene Opera having to lay off staff. The opera was in trouble while Eugene claimed to be a great city for the arts and outdoors. She thought that the opera would be a good place to invest public money. She thought the City should be investing first in Oregon Research Institute, which she believed was a local, sustainable business. Ms. Taylor saw no demonstrated need for the project. Noting it was not likely she would have to cast a vote on the issue, Mayor Piercy discussed her position. She said she had weighed the pros and cons of the issue and wanted to stand up in support of her colleagues who endorsed the project because she believed they had deliberated in the same manner. She thought their MINUTES—Eugene City Council March 15, 2006 Page 4 Work Session conclusion was the right decision. She said this was just one project and there was much left to be done in downtown and many more decisions facing the council. Mayor Piercy believed the council owed the community a larger, broader, deeper conversation about downtown. She acknowledged the existing Downtown Plan but suggested the community had changed since 2002 and there might be a different vision of where the downtown should be going. She invited all who were concerned to participate. Mayor Piercy expressed pleasure in the civic interest shown in the downtown by the community and residents’ desire to participate in the public process. Mr. Kelly said he previously raised the need for a work session to look proactively at downtown green space, with which the mayor concurred. He asked that Assistant City Manager Carlson attempt to schedule such a session. The motion passed, 5:2; Ms. Taylor and Ms. Bettman voting no. Ms. Solomon, seconded by Ms. Ortiz, moved to authorize the City Manager to enter into a Development Agreement with Broadway & High Associates and Gerding/Edlen Develop- ment Company for the public garage as part of the East Broadway Development Projects, in substantial conformity with the outline of terms described in Attachment C. The Devel- opment Agreement shall include a maximum payment to Broadway & High Associates and Gerding/Edlen Development Company for the garage construction of $7 million. Mr. Kelly clarified that the version the council was voting on was at members’ places and reflected changes agreed to by the council on February 22. Assistant City Manager Carlson further clarified that the version at councilors’ places was labeled Attachment B but should be considered Attachment C for the purposes of the motion. Mayor Piercy referred to page 269 of the packet and asked the source of the $475,000 in the Library Bond Debt Service. Assistant City Manager Carlson said that was General Fund money put aside in 1999 in a reserve fund as a portion of the reserves for the library construction project. The money was not taken from the Library Fund or the local option levy. There was no general obligation bond for the library. It was not library operations money. Staff was proposing to move the funding in question from one reserve to another. The City was coming to the end of the funding for the Library project and had adequate remaining reserves in the Urban Renewal Fund to protect the City from any kind of default in the Library Construction Bonds. He indicated that $400,000 would go into a reserve for the loan related to the parking structure, and $75,000 would be used to underwrite the financing for the loan. Ms. Bettman explained for the public’s benefit that the project would cost $11.5 million. Of that, $8.035 was intended for the construction of the garage, about $1 million would be used for the site itself, and about $2.5 million would be spent on financing for the bonds to provide the funding for the garage. Speaking to the public process, Ms. Bettman said public participation had been phenomenal, even after the public was overlooked in the planning process. The project was about to be approved when the City acknowledged a hearing was needed for the bid exemption. The council and organization were forced to hold a public hearing, or the project would have gone through without public input. Ms. Bettman said it was nice to hear people say they wanted a broader public process, but she was aware of projects being proposed that did not have a public process, and if there was no legal requirement for a public hearing, none would occur. MINUTES—Eugene City Council March 15, 2006 Page 5 Work Session Ms. Bettman noted a council majority that did not include her recently allocated funding for the public process to plan for the replacement of City Hall, and now the council proposed to take an option off the table by “rushing” this project through before that process started. The motion passed, 5:2; Ms. Taylor and Ms. Bettman voting no. Ms. Solomon, seconded by Ms. Ortiz, moved to authorize the City Manager to sign an In- tergovernmental Agreement between the City of Eugene and the Urban Renewal Agency in substantial conformity with the outline of terms described in Attachment E. Ms. Bettman reminded all present about the source of urban renewal funds and maintained it was being redirected from essential services. She termed the amount being redirected to urban renewal throughout the state of Oregon “scandalous.” She said that the council was considering the funding “in a vacuum.” Mr. Kelly said that the council often spoke of the success of downtown Portland and wanting to emulate it. He pointed out that much of what had been accomplished in Portland was done through urban renewal districts. Ms. Bettman did not find the situations in Eugene and Portland were comparable; she asserted that Portland invested its urban renewal dollars in housing instead, which she found an appropriate use of the money. It created the demand for retail. That was not what the City was doing. In addition, she maintained that Portland developments had embedded parking and created their own parking. Portland also had design standards, which Eugene lacked. Ms. Bettman believed the circulating street car also contributed to the success of downtown Portland. Eugene was unable to get a similar project going. Ms. Bettman concluded that one could not state that urban renewal “created the renaissance in Portland” because it was not true. Ms. Taylor suggested that the council consider what urban renewal had done locally in terms of destroying downtown. She had long been opposed to urban renewal because it diverted money from schools and was too easy to use. The motion passed, 5:2; Ms. Taylor and Ms. Bettman voting no. B. ACTION: Resolution 4861 Adopting a Supplemental Budget; Making Appropriations for the City of Eugene for the Fiscal Year Beginning July 1, 2005, and ending June 30, 2006 Ms. Solomon, seconded by Ms. Ortiz, moved to adopt Resolution 4861 adopting a Supple- mental Budget; making appropriations for the City of Eugene for the fiscal year beginning July 1, 2005, and ending June 30, 2006. Ms. Bettman asserted that there was a proposal to use the Brownfield Economic Development Initiative (BEDI) Grant and Section 108 loan funding for the project. She maintained that the source of that money was Community Development Block Grant (CDBG) funding, which was supposed to be used to alleviate poverty and homelessness. She assured the council that when it discussed its council goal of alleviating homelessness, it would hear from staff there was no money to do so. At a time when CDBG funds were already expected to decline, staff intended to take money meant to create resources for homeless people and youth and divert it to build a parking garage. She found that unsupportable. MINUTES—Eugene City Council March 15, 2006 Page 6 Work Session Ms. Bettman said that the crux of the issue for her was that the City never had the money to do the things she believed would be good for the city or to fund solutions to chronic problems, such as homelessness and the need for youth services. However, “all of a sudden” the City had the money for this project. She said in order to fund the garage the council was taking money from the Library Fund, General Fund, and Stormwa- ter Fund, and was eliminating the reserves it had to create a riparian strip in downtown. Ms. Bettman predicted the council would face a backlash from the public which, for the next ten years, would vote down any bond measure the council put forward. Assistant City Manager Carlson clarified that the current proposal in the motion did not include the use of the BEDI grant or the Section 180 loan that would be backed by CDBG dollars. The current proposal used other sources, primarily urban renewal funds, both existing and those expected to be generated by the development. Ms. Bettman maintained that there was a proposal in the AIS for the use of the funds. Assistant City Manager Carlson said that staff would have to return for separate council authorization for the use of those funds. Mr. Kelly responded to the statements made by Ms. Bettman. He said nothing in the proposal employed BEDI grant dollars or Section 108 funding. Assistant City Manager Carlson concurred. Mr. Kelly confirmed with Assistant City Manager Carlson that the council would have to approve the use of those funds on a project-by-project basis. Mr. Kelly recalled that the council and Council Committee on Intergovernmental Relations, of which Ms. Bettman was a member, previously passed the application for the grant and Section 108 funds. Mr. Kelly clarified that the CDBG funds were not the source for the Section 108 loans, merely one of the sources of security for such loans. Assistant City Manager Carlson concurred. He said the loan was ultimately backed by CDBG money, but there was no intent to ever use CDBG moneys to actually pay back the Section 108 loans. Mr. Kelly said if the council heard a proposal for the use of the BEDI grant or Section 108 funds, he would expect to see how those would be covered by something other than CDBG money. Assistant City Manager Carlson agreed that would be the case. Ms. Taylor was not reassured that authorization for the funds would come back to the council because then it would be too committed to the project to stop it in the future. She said “it was just playing with words.” The motion passed, 5:2; Ms. Taylor and Ms. Bettman voting no. Mayor Piercy closed the meeting of the Eugene City Council and convened a meeting of the Urban Renewal Agency. C. ACTION: Downtown Update—East Broadway Development Projects Ms. Solomon, seconded by Ms. Ortiz, moved to direct the Agency Director to enter into an intergovernmental agreement between the City of Eugene and the Urban Renewal Agency in substantial conformity with the outline of terms described in Attachment A, Intergovern- mental Agreement. The motion passed, 5:2; Ms. Taylor and Ms. Bettman voting no. MINUTES—Eugene City Council March 15, 2006 Page 7 Work Session D. ACTION: Resolution 1038 Adopting a Supplemental Budget; Making Appropriations for the Urban Renewal Agency of the City of Eugene for the Fiscal Year Beginning July 1, 2005, and Ending June 30, 2006 Ms. Solomon, seconded by Ms. Ortiz, moved to adopt Resolution 1038 adopting a Supple- mental Budget; making appropriations for the Urban Renewal Agency of the City of Eugene for the fiscal year beginning July 1, 2005, and ending June 30, 2006. The motion passed, 5:2; Ms. Taylor and Ms. Bettman voting no. The meeting adjourned at 12:50 p.m. Respectfully submitted, Dennis M. Taylor City Manager (Recorded by Kimberly Young) MINUTES—Eugene City Council March 15, 2006 Page 8 Work Session