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HomeMy WebLinkAboutCC Minutes - 02/13/06 Work Session M I N U T E S Eugene City Council Work Session McNutt Room—Eugene City Hall February 13, 2006 5:30 p.m. COUNCILORS PRESENT: Jennifer Solomon, Betty Taylor, David Kelly, Gary Papé, Chris Pryor, Andrea Ortiz, Bonny Bettman, George Poling. Her Honor Mayor Kitty Piercy called the meeting of the Eugene City Council to order. A. Committee Reports and Items of Interest from Mayor, City Council and City Manager City Manager Dennis Taylor remarked that his attention had been so focused on developing a memorandum of understanding (MOU) with McKenzie-Willamette Medical Clinic that did not have any subsidies or incentives because it was not within the preferred area that he had erred in not bringing the MOU back to the council for review. He noted that McKenzie-Willamette had a very tight timeline for submission of its certificate of need review and pre-construction activities and asked the council to convene its February 15, 2006, work session 30 minutes earlier to address MOU and other hospital issues. Mayor Piercy determined there was consensus to meet at 11:30 a.m. instead of noon. Mayor Piercy related that she attended a birthday celebration for Bertha Holt at the elementary school named for her, met with the City staff’s green ambassador group to discuss the Sustainable Business Initiative, met with downtown business owners to discuss the Conner-Woolley redevelopment project and participated in a number of community events. She said that the group selecting a facilitator for the West Eugene Parkway process would meet to make a decision on February 18 and announced that the Asian Celebration would occur on February 18-19. Ms. Ortiz thanked Patricia Hadley for her service as a Trainsong neighborhood leader and invited people to attend the neighborhood association meeting on February 15. She reported that she attended the National Association for the Advancement of Colored People (NAACP) dinner and was pleased by the attendance of other councilors and City staff. She said she walked on the new Bethel walking path, which was already being well-used, and hoped to see a new pedestrian island on Roosevelt Boulevard in 2006. She reminded people to check on their eligibility for the Earned Income Tax Credit and take advantage of it, as funds went unclaimed in 2005. Mr. Kelly remarked that the Planning Commission was developing an opportunity siting proposal for the council and he hoped that a joint work session with the commission would be scheduled prior to development of the City’s budget, as the proposals could have budgetary impacts. City Manager Taylor replied that he would confer with Planning staff and a joint work session would be scheduled as soon as the commission had a product. MINUTES—Eugene City Council February 13, 2006 Page 1 Work Session Mr. Kelly said he was on the League of Oregon Cities Community Development Committee, which dealt with land use, parks, housing, economic development, and air quality. He said the committee would meet again on March 10, 2006, to consider whether there were legislative proposals or administrative changes the league wanted to present to the 2007 legislature. He asked councilors and staff to forward any suggestions to him before that meeting. Mr. Poling wished the State of Oregon a happy birthday. Ms. Taylor appreciated City Manager Taylor’s willingness to discuss the MOU at the council’s February 15 meeting. She asked why the City and the Police Department were involved in and pursuing the Perry Patterson event. City Attorney Glenn Klein replied that a memorandum from the City Prosecutor would be necessary as it was a separate office and he had no connection to it or information about the situation. Mr. Pryor reported that the Enterprise Zone Committee conducted a public hearing and comments from those attending were included in the council’s weekly packet. He said the committee would review the comments, develop final amendments to the public benefit draft criteria and forward a recommendation to the council soon. He said the Human Services Commission established a subcommittee to consider long- term stable funding for human services and develop strategies to propose recommendations to the elected bodies. Mr. Papé commented that the Oregon Passenger Rail Committee had been disbanded and combined with the Freight Rail Committee. He was concerned that only two or three of twelve members were involved with passenger rail. He indicated that his first meeting with the McKenzie Watershed Council was very informative with a presentation on dams and flood control from Jeff Ziller of the Oregon Department of Fish and Wildlife. He said the River Road/Santa Clara transition team had excellent community input at a recent meeting with Santa Clara residents. He felt that a joint work session with the Planning Commission was premature until councilors had an opportunity to meet with their respective partners on the commission to discuss opportunity siting. Ms. Solomon announced that the Active Bethel Citizens would meet on February 23, 2006, at 7 p.m. at Kalapuya High School and invited Ward 6 residents to attend. B. WORK SESSION: East Broadway Development Update Mr. Klein said that the following motion postponed from the February 8, 2006, work session was already on the table: “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.” Mayor Piercy commented that the project represented an opportunity to reinvigorate the downtown, prepare for more downtown residents, and stimulate commercial activity at the east end of downtown. She said that more parking capacity was needed at the east end of downtown, particularly with the new federal court- house. She said the land swap would meet both the City’s and The Shedd’s need although the land could not then be used in other ways and the need for open and green space had not been discussed. She was not MINUTES—Eugene City Council February 13, 2006 Page 2 Work Session certain if Whole Foods planned to include a housing component in its development and voiced concerns about the possible negative impact of Whole Foods on small organic stores as well as its position on organized labor, but noted Whole Foods was widely recognized as a good place to work. Mayor Piercy solicited council comments and questions. Ms. Taylor said that opportunities were being cut off, such as extending the Park Blocks to the river and other possible uses for the land. She said that the issue deserved more time and a public hearing before a decision was made. She thought there could also be an impact on larger businesses and the community already had an abundance of organic food suppliers. She said if the development was another theater it might increase the interest in theater rather than hurting other venues, but people would not buy more groceries because there was another grocery store. She said it was a prime location and the City did not know what other opportunities might appear and would be cutting off the possibility of something else. She said if Whole Foods wanted to build a store it should be treated just like any other store. She said that th Market of Choice was building a store at 29 Avenue and Willamette Street and the City was not doing anything special for it and should not do anything special for Whole Foods. Ms. Bettman said she supported the land swap to provide The Shedd with contiguous property with its existing music school. She had concerns with the proposal as presented in terms of subsidizing retail space and because it circumvented the competitive bidding process. She said the City’s provisions regarding competitive bidding and contracts would be circumvented by Whole Foods building a parking garage if it was established that there was a public benefit to the garage. She asked if Whole Foods was subject to fair employment and prevailing wage provisions, plus other provisions related to minority- and women-owned businesses. Mr. Klein said the developer was subject to prevailing wage provisions. He said the parking garage/credit union part of the project would be subject to prevailing wage and related requirements. He would determine whether the other provisions related to a public improvement would apply. Ms. Bettman asked for language for amendments to put the public parking garage out to competitive bid instead of the current configuration of the proposal. She also wanted language that created an option where the commercial retail space was not being publicly built. She suggested combining the square footage being used to accommodate the publicly built retail space, selling it, and using the revenue to help fund a more consolidated public parking garage. She was also concerned that the “Great Street” side of the project would be dead space with a parking garage being at least 50 percent of the frontage. Ms. Solomon stated that she supported the project. She said that nothing special was being done for Whole Foods, which could proceed with the project with or without the City’s involvement. She said the City should take advantage of the opportunity and cost savings provided to it to meet the need for downtown parking. Mr. Pryor said the project was reasonable and he supported it. He did not perceive the parking garage to be built by the City to serve the courthouse area and east downtown to be a subsidy for Whole Foods. He said Whole Foods was pursuing its project and the City was partnering with it, which was different than a subsidy. With regard to the potential market impact, he believed it was unlikely that shoppers at stores such as Kiva or Sundance would switch to Whole Foods; if they did, he questioned whether that was a public policy decision or a market-driven decision. He said Whole Foods should be allowed to build its store and let the market determine where people would shop; that was not a matter of public policy. MINUTES—Eugene City Council February 13, 2006 Page 3 Work Session Mr. Kelly agreed with Mr. Pryor’s comments regarding the parking garage. He stressed that Whole Foods was building and paying for its own parking; the City was building a public parking garage. He said the ultimate policy question was whether the City was in a position to build public parking garages and if there was a need for parking in that part of downtown. He said the answer was yes. Mr. Kelly noted that the code required ground floor commercial space in any public parking garage to prevent blank, boring walls on the street side. He asked if the elevations indicated ground floor commercial space. Associate Planner Nan Laurence said parking was planned for the ground floor in addition to a commercial space at each corner. th Mr. Kelly asked why ground floor commercial space was not required along 8 Avenue. Ms. Laurence said th the developer had been asked to orient as much as possible on 8 Avenue the commercial space now shown along High Street. Mr. Kelly expressed concern about the appearance of the south side of the structure th along 8 Avenue and asked for more response from staff. Mr. Papé agreed with comments from Ms. Solomon, Mr. Pryor and Mr. Kelly. He agreed with Ms. Bettman that there should be a recommendation regarding the other quarter-block instead of just waiting to see what happened with it. City Manager Taylor clarified that the property in question would result in a th corner on 8 Avenue and Pearl Street when the City’s property was split to facilitate a trade. He disagreed with Ms. Bettman’s characterization of a subsidy to Whole Foods. He felt the City was actually receiving the subsidy by obtaining a parking structure at less expense. The motion passed, 6:2; Ms. Taylor and Ms. Bettman voting in opposition. Ms. Solomon, seconded by Ms. Ortiz, moved to direct the City Manager to negoti- ate a development agreement and related legal documents with Broadway High As- sociates 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. Ms. Ortiz asked if partnering with Whole Foods would make it less expensive to build a parking structure. City Manager Taylor replied that the structure would probably cost more if built separately and also have a different design concept than the 260 space design recommended in Option 4. Mr. Kelly proposed a friendly amendment to add the following language: The de- velopment agreement shall include a not-to-exceed limit on the payment to devel- oper of $7 million. Ms. Solomon and Ms. Ortiz accepted the amendment. Mr. Kelly expressed concern about and asked for feedback from others on proposed financing that appeared to take all of the revenues from the entire Riverfront Urban Renewal District to pay for the public parking garage. He acknowledged that the anticipated development in the area could move the increment up quickly but was interested in other financing options that could reduce the impact on urban renewal funds. City Manager Taylor said that would be addressed in the agenda item summary for the February 22, 2006, work session. Mr. Papé stated that his son was employed by Gerding/Edlen Developers and asked if there was any conflict of interest. Mr. Klein replied that there was no actual conflict. Mr. Poling reiterated his support for the project. He said while the project was referred to as the “Whole Foods project” it was actually the East Broadway Development. He said that this part of the project would MINUTES—Eugene City Council February 13, 2006 Page 4 Work Session stimulate other businesses in the East Broadway area and be good for the community. He heard from many people that redevelopment in the area was desirable, as was additional downtown parking. He pointed out that all of the motions required the agreement to be brought back to the council for final approval and that gave staff and the developer time to work on a proposal that would satisfy the council’s interests and concerns. Ms. Bettman stated that she was adamantly opposed to the proposal as construed. She said there were many options to consider once the council had seen the updated parking study. She said that $5.5 million in urban renewal funds, plus a $2.25 City contribution and $2.5 million to finance the bond debt might not necessar- ily be subsidizing Whole Foods but it was subsidizing the developer and the City should know for certain if it was going to save money. She said the way to determine that money was being saved was to put the project out to competitive bid. She said money could be saved if the public was not building retail and illustrated her design concept for reconfiguring the development and use of the property. Ms. Taylor said that if parking was needed it should be a separate issue and based on an analysis of need and location. She said the project was being pushed by Whole Foods. She said that helping The Shedd was a good idea but there was no urgent need to build either a music school or parking. She would not try to stop Whole Foods from building a store but would not help them either. The motion passed, 6:2; Ms. Taylor and Ms. Bettman opposed. C. WORK SESSION: Parks, Recreation and Open Space General Obligation Bond City Manager Taylor said the question before the council was whether to put a Parks, Recreation and Open Space General Obligation Bond on the ballot, when to put it on the ballot and the amount of the bond. He introduced Parks Planning Manager Carolyn Weiss. Ms. Weiss explained that the last parks bond was passed in 1998 and implementation of that bond was almost completed. She used a slide presentation to explain the three potential bond scenarios. She said the scenarios consisted of three funding tiers, which were cumulative and built on one another, and included costs for both capital and maintenance and operation. She described the tiers as follows: Tier 1 - $20 million ? Park acquisition - $7 million ? Natural area acquisition - $3 million ? Renovations to existing parks - $7.5 million ? Partnership opportunities - $2.5 million Tier 2 - $35 million ? Park acquisition - $3.5 million (additional) ? Natural area acquisition - $4.8 million (additional) ? Renovations to existing parks - $5.7 million (additional) ? Partnership opportunities - $1 million (additional) Tier 3 - $50 million ? Natural area acquisition - $5.1 million (additional) MINUTES—Eugene City Council February 13, 2006 Page 5 Work Session ? Renovations to existing parks - $6.7 million (additional) ? Partnership opportunities - $1 million (additional) Mayor Piercy appreciated the opportunity to consider different scenarios. She noted the City Manager’s recommendation that the council place a bond measure on the ballot in 2008 instead of 2006. She commented that if the council decided to take action it should have enough broad support from throughout the community that it would have a chance of passing. Mayor Piercy called for council questions and comments. Mr. Kelly said he was interested in a bond measure in November 2006 and the issue for him was what kind of bond measure. He recalled a council discussion in 2005 about a focusing on the things that were most time-sensitive and suggested a measure that would include funding for land acquisitions for parks and natural areas and the wetlands education center, for a total of approximately $20 million. He asked if some funds remained from the 1998 bond for the Santa Clara Community Park and the additional funds in Tier 1 would supplement the 1998 funds. Ms. Weiss said that was correct. Mr. Kelly asked for an explanation of the Shelton McMurphey Johnson House access project. Ms. Weiss replied that there was a piece of land not owned by the City that was between the Shelton McMurphey rdth Johnson House and the 3 Avenue/4 Avenue connector. She said the City wanted to obtain that piece of property so it did not lose access to the house. Mr. Kelly asked why the school sports field upgrades were considered time-sensitive. City Manager Taylor said that the 4J and Bethel school districts were considering improvements to sports fields that could provide opportunities for joint ventures, such as synthetic turf projects. He said that 4J School District was also considering 2008 for its capital bond. Parks and Open Space Director Johnny Medlin added that there were several 4J projects that could offer an opportunity for partnership and allow the City to leverage 4J funds. Mr. Kelly said he did not think the sports fields were of the same time sensitivity as acquisition of land under development pressure or leveraging federal funds on the wetlands center. Mr. Pryor thanked the City Manager for a prudent and thoughtful recommendation; however, he would probably support an “opportunity” type of bond such as Mr. Kelly described. He noted there was still no project list from the Parks, Recreation and Open Space Comprehensive Plan that had been fully vetted and it would be difficult to link a bond to a non-existent project list. He thought there were projects that could easily be identified in order to move forward. He could be supportive of a 2006 bond that did not exceed the $20 million opportunity level with identified projects. Ms. Taylor said that land acquisition was definitely time-sensitive and the land would not be available if the City did not acquire it. She said that the other projects were not time-sensitive, but she would support all of them and the entire bond could pass. She said the community would vote for parks. She thought the last parks bond should have been larger with more natural area acquisition. She advocated for the entire bond, particularly land acquisition. Ms. Bettman asked if staff had added to the council’s two criteria and that was why there were more projects. Ms. Weiss said that was correct and projects were added to round out the list. MINUTES—Eugene City Council February 13, 2006 Page 6 Work Session Ms. Bettman expressed an interest in a bond measure of about $20 million that focused on acquisition and perhaps leveraging the opportunity for the wetlands education center because development was happening so rapidly it was important to land bank now for future parks. She said that people were willing to spend funds for conservation because they understood the value. She asked that any proposal include funding to contract for a professional agent to acquire the property, instead of having Parks staff negotiate the acquisitions. Ms. Solomon said the council was getting ahead of itself and it would be hard to make a case for new parks when the City was not maintaining the ones it had. She noted the large number of bond measures that would be on the ballot in November 2006 and felt a parks bond measure could wait until 2008. Ms. Ortiz echoed sentiments expressed about the time sensitivity of land acquisition and was supportive of acquiring as much land as possible for future needs. She asked how much money was left for the Santa Clara/River Road park. Ms. Weiss replied it was approximately $800,000. Ms. Ortiz supported Ms. Bettman’s suggestion that a third party negotiator be hired for land acquisitions. Mr. Poling asked if the proposed acquisition for a Willakenzie neighborhood park was the old Willakenzie school site or other properties in the area. Ms. Weiss said the City already owned a portion of the old school site and the acquisition would be of other properties. Mr. Poling noted that was the only addition to the northeast section of the community, which was an underserved area in terms of parks. He wanted to see more land identified and acquired in the north part of the City, particular wards 4 and 5. He was in favor of parks but was concerned about the impact of land acquisition for parks on the buildable land supply. He said he had been told that the purchase of land for parks would not affect the buildable land supply but did not understand how that was possible. He agreed with Ms. Solomon that it would be better to wait until 2008 to place a bond measure on the ballot. Mr. Papé concurred with the suggestion to have an outside professional negotiate land purchases. He said if a bond was placed on the ballot in 2006, he was only in favor of the $20 million level. He felt the project list should reflect only land purchases. He said that before more parks were added to the inventory the City had to determine how to maintain them. He said he had previously been told there was $950,000 in remaining 1998 bond funds available to purchase a Santa Clara area park. Mr. Medlin said over $900,000 was still available for that acquisition. Ms. Solomon, seconded by Ms. Ortiz, moved to direct the City Manager to prepare further for a Parks, Recreation, and Open Space Bond Measure in 2006 to be lim- ited to $20 million for acquisition purposes only. Mr. Kelly offered a friendly amendment to include the wetlands education center while retaining the $20 million cap. Ms. Solomon and Ms. Ortiz accepted the amendment. Mr. Kelly said he would support the motion. Mr. Pryor said he hoped the bond would not be limited to acquisition as there was a significant amount of renovation that could be done. He said the council could still vet a more complete list and the motion could be amended to reflect that instead of limiting the bond measure to acquisition. He noted there was no large- scale plan for land acquisition and the original concept was that the bond would take advantage of MINUTES—Eugene City Council February 13, 2006 Page 7 Work Session opportunities; not all those opportunities were acquisitions. He would have difficulty supporting a bond that was just for acquisition. Mr. Pryor proposed a substitute motion to direct the City Manager to prepare a Parks, Recreation, and Open Space Bond Measure for 2006 in an amount not to exceed $20 million for uses to be determined by the end of March 2006. Ms. Ortiz provided the second. Ms. Taylor opposed the substitute motion and thought that land acquisition was the important thing. She asked the cost of all land acquisition on the list. Ms. Weiss replied the cost was approximately $23 million. City Manager Taylor said that to be successful on the November 2006 ballot it was necessary to demon- strate the City was maintaining level of service in terms of the main library and branch libraries, maintaining its commitment to schools and taking an opportunity approach to parks based on community needs instead of limiting expenditures to acquisition and the wetlands center. Ms. Bettman stated she did not believe that a $50 million bond would pass, but a limited bond for the purpose of acquisition could be successful. She said that library services should be paid for out of the City’s general fund and existing revenue and a levy should not be placed on the ballot. She thought that a parks bond focused on land banking would have a favorable response from the community. Mr. Kelly indicated he would vote against the substitute motion because a measure in 2006 needed to be focused. He agreed that maintenance was important and the project list was well thought out, but acquisition was most important. Mr. Papé said he was willing to continue to move the issue forward but was prepared to fight for parks in the northern area of the City. The substitute motion failed, 7:1; Mr. Pryor voting in favor. Ms. Taylor moved to substitute enough funding to acquire all the land on the list. The motion died for lack of a second. Ms. Taylor reminded everyone that in 1938 when the community had a population of fewer than 50,000 the ridgeline was saved for future generations. She pointed out there were communities that did not save land and were now demolishing buildings to create parks. The main motion as amended passed, 6:2; Ms. Solomon and Mr. Poling opposed. D. WORK SESSION: Downtown Development Update – Oregon Research Institute City Manager Taylor introduced Denny Braud of the Community Development Division to discuss the Oregon Research Institute’s (ORI) proposed purchase and redevelopment of the former Sears building site. Mr. Braud reviewed the history of the council’s selection of the ORI project based on ORI’s longstanding presence in and contributions to the community. He said the Platinum Level LEED (Leadership in Energy and Environmental Design) building proposed by ORI was an impressive undertaking and would be an MINUTES—Eugene City Council February 13, 2006 Page 8 Work Session important building if it could be constructed, as there were only about a dozen Platinum LEED buildings in the world. Mr. Braud said the project had been challenging from a financing standpoint and the City had been willing to exercise patience because of the significant contribution the project would make to downtown. He said ORI had been attempting to fill a financing gap that had widened over time because of loan-to-value limitations associated with appraisals and escalations in construction costs. He said the building would cost approximately $24.6 million to build and would be appraised at $15.5 million. He said the prevailing lease rates in the local market did not support the cost of constructing a building of such significance. He said there was only about $12.4 million in conventional financing available with the 80 percent loan-to-value limitation. He said the new market tax credits could contribute a combination of debt and equity to the project; the debt representing a second loan of about $5.5 million. He said the combination of those two loans was approximately $18 million. He said a bridge loan does not appear to be available for the project and the current financing package includes an estimated financing gap in the range of $5.2 million. Continuing, Mr. Braud said ORI’s purchase and sale agreement expired on January 30, 2006, when ORI failed to meet the closing date obligation. He said options for City-provided financing to assist ORI to move forward ranged from existing economic development loan programs or a Housing and Urban Development (HUD) Section 108 loan coupled with some brownfield grant dollars and possibly other funds such as the facility reserve. He said staff was considering a combination of urban renewal and Community Develop- ment Block Grant (CDBG) loan program funds in the range of $2 million because those were existing loan programs established for a public purpose. Mr. Braud said it was important to recognize that any financing would basically be unsecured and the City would need to rely on ORI’s history of grant fund income for repayment of any loans or financing it provided, although ORI’s grant history and cash flow were very positive. He said staff reviewed a number of financing options, but even with the City providing $2 million in financing, a gap of $3.2 million remained in the project. He said ORI’s strategies to address that included continuing to cut hard costs and possibly cut soft costs by finding a different provider of new market tax credit financing that would put more equity into the project. He said options included various financing strategies for the project, allowing ORI more time and considering other development opportunities for the site. Mr. Braud said the staff recommendation was to consider using the existing urban renewal and CDBG loan programs to provide ORI financing in the range of $2 million, assuming that ORI can demonstrate that the remaining gap of $3.2 million is filled within a reasonable period of time. Mayor Piercy called for council questions and comments. Ms. Bettman noted that the ORI project fulfilled many objectives and was the epitome of sustainable business. She said the City had every reason to support the project and felt the recommendation did not go far enough. She would amend the proposed motion once it was on the table. She said the project had a vast and demonstrable public benefit. Mr. Kelly echoed Ms. Bettman’s remarks about the value of ORI to the community and the building’s enhancement of downtown. He was interested in doing what was necessary to make the project happen but was frustrated by the number of extensions, changes and missed deadlines. He said the project needed to come to closure in one way or another in the near future. He asked if the two loan programs recommended by staff currently had $2.5 million between them. Mr. Braud explained that the total Business Development MINUTES—Eugene City Council February 13, 2006 Page 9 Work Session Fund (BDF) portfolio was about $2.5 million with $500,000 available for the project, although that fund revolved quickly with short-term loans; there was about $2 million currently available in the Downtown Revitalization Loan Program. Mr. Kelly said he was nervous about tying up a majority of funds in those programs for a significant period time. Mr. Kelly said he was interested in motion language that would require any financing package from the City to return to the council for review and approval of terms and conditions before being finalized. He also wanted to see a projection of ORI’s reasonable expectation to repay the loan and over what period of time. Mr. Papé agreed with comments about the value of ORI to the community and would have been more favorably inclined towards the financing options if the discussion was being held in April or May of 2003. He cited Ms. Bettman’s motion on May 12, 2003, regarding ORI’s purchase of the Sears site. He felt the motion should have included a requirement that the site was under contract at the end of six months. He also felt that information had been hidden from the council. He cited council minutes from a June 2004 Urban Renewal Agency meeting regarding the consequences if the deal with ORI fell through and asked about the status of the provisions requiring ORI to reimburse the City for all costs. Mr. Braud replied that a repurchase option was included in the purchase agreement requiring ORI to reimburse for costs, but would have occurred after closing of the sale and in the event ORI did not move forward with the project. He said the sale had not been closed so the repurchase option was not in effect. Mr. Papé commented that the City’s investments in the site were not recoverable. Mr. Braud said the City had added value to the site by demolishing the building. Ms. Solomon stated that she saw no reason to continue with the transaction as the City had done all of the work to-date and had nothing to show for its efforts. She said that ORI should reconsider the size and scope and possibly location of its project if it could not obtain financing. She preferred to see the City start over with another request for proposals (RFP). Ms. Solomon, seconded by Ms. Ortiz, moved to direct the City Manager to pursue a combination of Downtown Revitalization Loan Program and Business Develop- ment Fund financing to provide financing in the range of $2 million for the ORI project, and to encourage ORI to work with its developer and investors to close the remaining financing gap in a timely manner. Speaking to the motion, Ms. Solomon indicated that she vote against it as it was bad business and the City needed to move on with another developer. Mr. Papé stated that he could not support the motion. He said there was momentum for downtown redevelopment and Conner-Woolley had expressed an interest in the site. Mr. Papé proposed a substitute motion to direct the City Manager within 30 days to return with a request for proposals for sale of the Sears site. Ms. Solomon pro- vided the second. Ms. Bettman said that so far no players had come to the table, including Conner-Woolley and Giustina, and indicated that they wanted to do a project but had not asked for a public subsidy. She said that many people MINUTES—Eugene City Council February 13, 2006 Page 10 Work Session redeveloped property in downtown using their own money. She intended to vote against the motion. She said that ORI was dependent on partners and financial institutions that were not meeting the City’s timelines for the ORI project and she felt that the City should have patience. Mr. Pryor said he sensed the frustration with the ORI project but was not ready to halt the current process and start over again. He said ORI was a great organization attempting to carry out a good project but he was not willing to give ORI funds at this point. He would vote against the substitute motion but was not ready to vote in favor of the main motion either. He would be interested in options related to timelines or more opportunity to obtain funding or consider alternatives. Ms. Taylor said she would vote against the substitute motion as there was no better project for the downtown. She said the City had provided subsidies to many other projects. The substitute motion failed, 5:3; Mr. Papé, Ms. Solomon and Mr. Poling voting in favor. Ms. Bettman, seconded by Mr. Kelly, moved to amend the motion to direct the City Manager to pursue a workable combination of the Downtown Revitalization Loan Program, Business Development Fund financing, downtown renewal tax increment financing, and City-provided financing options to address ORI’s financing gap suf- ficient to proceed with the project. In addition, to amend and reactivate the pur- chase and sale and development agreement to facilitate the success of the project and bring the final proposal back to the council. Ms. Ortiz said if ORI was a regular business she would agree with Ms. Solomon, but ORI was a nonprofit and did not have the expertise to move the project along at a different pace. She felt that perhaps ORI should pare down its vision to a more feasible project. Mr. Kelly said he would support Ms. Bettman’s motion because it specified the final agreement would be returned to the council. He wanted the process to continue but was not certain he would support the final product. He said the burden at this point was on ORI to show progress and provide solid financial information to the council well ahead of any final agreement. Ms. Taylor said she would support Ms. Bettman’s motion as there was nothing better for downtown than the ORI project. She said that ORI was a sustainable, clean business with well-paid employees. She said that people who worked downtown shopped downtown and ORI’s project would provide a stimulus for other types of development. Ms. Solomon said she would not support the motion and noted there was no timeline in Ms. Bettman’s motion. Mr. Papé offered a friendly amendment to direct staff to bring the development agreement back within 60 days. Ms. Bettman and Mr. Kelly accepted the friendly amendment. Ms. Bettman clarified that the motion provided the opportunity to select from a combination of short- and long-term financing and provided staff flexibility in filling the financing gap. She asked if the motion needed MINUTES—Eugene City Council February 13, 2006 Page 11 Work Session to specify financing up to $5.7 million. City Manager Taylor said that identifying the additional $3.2 million from funds that would basically be an unsecured loan would be the greatest challenge. Mr. Papé said the council should be frank that the City would be providing the equity funding for the ORI project and taking a risk. He said that buildings typically had between 20 and 40 percent equity, with the rest being borrowed funds and there would be no security for the funds ORI was borrowing from the City. He would not support any proposal that did not have some sort of security and the council would be poor stewards of public resources without assurance of security for the loan, which it was building equity or personal guarantees from the principals of ORI. Mr. Kelly asked if the 60-day timeline was for the terms and conditions of the City’s participation or terms and conditions of all financing sources. Mr. Papé replied it was only for the City’s participation. Mayor Piercy said she approached the matter with support for ORI and the success of the project and skepticism about the ability to fill the funding gap and the City’s risk. The vote on the motion to amend was a 4:4 tie, with Mr. Poling, Mr. Pryor, Ms. Solomon, and Mr. Papé voting in opposition and Mr. Kelly, Ms. Bettman, Ms. Taylor, and Ms. Ortiz voting in favor. Mayor Piercy cast a vote in favor and the motion passed on a final vote of 5:4. The vote on the main motion was a 4:4 tie, with Ms. Solomon, Mr. Poling, Mr. Papé and Mr. Pryor voting in opposition and Mr. Kelly, Ms. Bettman, Ms. Taylor, and Ms. Ortiz voting in favor. Mayor Piercy cast a vote in favor and the motion passed on a final vote of 5:4. The meeting adjourned at 7:30 p.m. Respectfully submitted, Dennis M. Taylor City Manager (Recorded by Lynn Taylor) MINUTES—Eugene City Council February 13, 2006 Page 12 Work Session