EUGENE, Ore. (KMTR) -- Approval from Eugene City Council on Wednesday for a major tax break to help usher in a new student housing project and the largest private development in downtown Eugene's history. With six votes for it and two votes against it, Eugene City councilors passed a 10-year property tax exemption for a proposed 369 unit student housing apartment complex. The complex is proposed to be built in two phases at the site of the old Eugene Clinic / PeaceHealth building on 13th Avenue and Olive Street and 12th Avenue and Willamette Street.
The project is the work of Alabama-based Capstone Collegiate Communities. Locally, Master Development LLC is helping with the project as well.
The tax break that councilors approved in a Wednesday, May 9th, 2012 work session will allow the owners of the property to forgo paying property taxes on the development for 10 years. According to the city of Eugene's projections, the break will save the property owners approximately $8.5 million in taxes.
After the ten year exemption, the city of Eugene will begin collecting property taxes on the complex.
The tax exemption comes from Eugene's Multi Unit Property Tax Exemption Program, otherwise known as MUPTE.
Despite a 6 to 2 vote to approve the MUPTE for the “Capstone” project on Wednesday, there is still a lot of contention and debate between councilors about the project.
Councilors George Brown and Betty Taylor opposed the vote, raising several concerns about the neighborhood impacts of the project during demolition and construction phases. Councilors are also concerned the future tenants at the site. More than 700 college students are estimated to move in to the complex at full capacity.
“We're doing this really big thing almost on the spur of the moment if you consider how big it is and I think we need more time to think about it, more time to let the public think about it,” said Councilor Betty Taylor.
“I believed a mixed housing project would be a far superior way to use this property rather than a transient monoculture of 18, 19 and 20 year olds continually recycling,” said Councilor George Brown.
Brown also raised concerns about the environmental impact analysis for the project. According to Brown, Capstone has refused to provide its environmental assessment of the project to city council and staff, calling it “proprietary information.”
Taylor also raised concerns about noise and air quality nearby senior citizens living in the Olive Terrace high-rise apartment complex on the same block.
Both Brown and Taylor attempted to raise motions dictating rules surrounding air quality and noise ordinances with construction of the project. Both motions failed to gain any support.
Councilors in favor of the Capstone project say its too good of an opportunity to develop downtown to pass up.
“It's not a very good market for people to be doing investments and so if this is the way we can incentivize the type of building that we want in our downtown core, then lets do it,” said Councilor Andrea Ortiz.
“Nobody loses tax revenue when its never collected in the first place and if we don't approve this thing and they don't build it, nothings ever collected in the first place, nothing would be lost,” says Councilor Mike Clark.
“What MUPTE is designed specifically to do is to take a project that otherwise wouldn't happen and push it over the edge so that it does.. and i think that's what we did here,” said Councilor Alan Zelenka.
With MUPTE approval, councilors also voted to give up the right of way property on 12th Avenue, which currently runs through the hospital grounds. Developers will turn that one block strip into an improved bike and pedestrian pathway.
As part of the MUPTE approval as well, Eugene city staff negotiated with Capstone to sign a memorandum of understanding with several stipulations. Some of those include the complex being required to have full time on site management, also, provide access to unused parking, support alternative transit modes through new secure bike racks, space for car sharing programs and electric charge stations.
Capstone will also have to work with EPD on neighborhood behavior expectations and detail their work doing so in an annual report for the first two years.
Developers are planning to build the project in two phases in the next few years.
