EUGENE, Ore. (KMTR) -- No decision from Eugene City Council Wednesday as councilors deliberate whether or not to give developers of a proposed 374-unit student housing complex a major property tax break.
The complex would be the largest private development in downtown Eugene's history, located where the old PeaceHealth / Eugene Clinic building is on 13th Avenue and Olive Street.
However, developers don't want to build the complex unless the city grants the project a 10-year property tax exemption - worth about 8.5 million dollars. Capstone Collegiate Communities of Alabama is behind the project, along with Eugene-based Master Development LLC.
Developers say with the property tax exemption, investors would receive a 9% return on their cash stake. Without the exemption, investors would only receive a 6% return, which is not enough to make them want to move forward with the project.
The City of Eugene's Multi-Unit Property Tax Exemption Program (MUPTE) determines tax breaks, based on several criteria that add up on a point scale. Projects scoring more than 100 points are recommended for a MUPTE award. The Capstone housing project scored a 120.
Eugene City Manager Jon Ruiz's office has recommended that City Council approve the tax break; however, councilors are divided.
In a Wednesday, April 25, 2012 Eugene City Council work session, city councilors Andrea Ortiz, Mike Clark and Chris Pryor indicated they'd be willing to vote on the MUPTE award; councilors George Brown, Betty Taylor and Alan Zelenka indicated they'd like more time to consider the vote.
“It's one of the last vacant places we have left in this area and there may be other uses that would be better,” said Councilor Betty Taylor.
“I think it's very subjective for us to say 'that's not the best use for the property'. I have firm beliefs that if someone buys property, it's their decision as to what the property can be used for,” said Councilor Andrea Ortiz.
Councilors have postponed a vote on the MUPTE award until at least May 9, 2012.
NewsSource 16 attempted to speak with representatives of Master Development about the project and work session on Wednesday afternoon. Developers declined the request, saying they did not have enough time to speak on-camera.
As part of the MUPTE process, Eugene City Planners have been working with Capstone on making specific requirements tied to the development of the property. So far, requirements include permanent full-time on-site management for the property - no matter the owner - during the 10-year MUPTE period.
Other provisions of the development agreement include support for alternative transportation programs around the project, construction of a bike-pedestrian path in the nearby 12th Avenue alleyway and tree preservation and management, among other issues.
If the project moves forward, construction of the complex would take place in two phases over the next two years, bringing in a total of 1,200 student residents once complete. The first phase would be built on the site of the old Eugene Clinic building. The second phase would be built on the vacant lot / parking lot across the street.
If the project moves forward to completion, in Year 11 the City would generate an estimated $1.2 million in property taxes.