Eugene Weekly : News : 9.27.07

Blank Check Downtown
Voters won’t know what they’re voting on

In November voters will be asked to write developers a blank check for an undefined redevelopment of downtown with an unknown, $50 million or more public price tag.

The City Council voted 6-2 on Monday, Sept. 25 to leave any firm details on exactly what developers will build downtown and with what subsidy until after the November vote on $40 million in urban renewal subsidies for the project.

“There is nothing that comes back to council before the election,” said city Development Manager Denny Braud.

Councilor Alan Zelenka passed a motion to “strengthen” the recommendations of a downtown advisory committee to respond to criticisms that they lacked specificity, a downtown park or protection of historic buildings or local businesses.

Zelenka’s motion added many “shalls” to the recommendation language and specified that the developer provide “at least 300” housing units; “investigate” the possibility of the city paying for less parking; provide a 1/4 to 1/8 block park across from the library; and “consider incorporating” possible historical features of the Shaw-Med and Taco Time buildings into new construction.

Councilor Bonny Bettman dismissed Zelenka’s changes as not binding and little more than “propaganda” to win over critics to vote for the urban renewal measure 20-134.

Controversial elements like a Whole Foods Grocery competing with the Kiva, a $16 million parking garage and an exclusion of local businesses could still be included in the project, Bettman said.

Braud said that after the election, the developers will announce what city proposals they agree to. “It’s not likely they will be able to do every one of these,” Braud said. “It’s going to be very challenging.”

Bettman also said that the council majority is likely to change many of the requirements and recommendations after the election to accommodate the developers.

While voters will be asked to pass the $40 million measure without knowing exactly what the money will go for, they will also not know the project’s real price tag.

Measure supporters have publicly argued repeatedly that the measure will not increase taxes and the city’s ballot title for the measure says the same. But the issue remains unclear.

Bettman asked staff about an April 12, 2007 city staff memo to council that stated that while most urban renewal money comes from diverting tax money from schools and other government services, urban renewal can also result in slightly higher tax rates.

But Bettman could not get a straight answer to her question of whether the memo contradicted “this slogan that it doesn’t raise taxes.” She asked Braud if he provided the memo to council.

Braud: “I did not, if there was a memo.”

Bettman: “Was it [city development manager] Mike Sullivan?”

Braud: “It would have probably come from [finance manager] Sue Cutsogeorge, so it wasn’t something I did.”

Bettman then asked Acting City Manager Angel Jones and City Attorney Glen Klein to respond.

Klein said, “I know you have received a number of memos from Sue, and you cannot answer a question about how urban renewal affects taxes or overlapping taxing districts in 10 seconds. So the only thing I can say is, those memos speak for themselves.”

The April 12 memo states: “Urban renewal nominally affects certain voter-approved local option levies and bonds because the affected district has less property value to levy taxes against, resulting in slightly higher tax rates.”

Councilor Betty Taylor also pointed out that urban renewal may also “indirectly” increase taxes as governments and schools need higher taxes to make up for funding lost to urban renewal. “It’s really deceptive,” she said of the no-tax-increase argument.

Bettman said the actual total price of the subsidies for the KWG redevelopment plan downtown are much higher than the $40 million in urban renewal. Including loan interest, tax breaks, grants and general fund support, Bettman said she totaled “$29 million in additional subsidies and incentives” beyond the $40 million.

The developer could also come back after the vote and demand millions in additional money to follow many of the recommended changes to the project, Bettman said. “It’s going to be no-holds barred,” said Bettman. “It’s going to cost $35 million more than we originally anticipated.”

Bettman noted that the urban renewal plan includes $10 million for “administration.” That percentage of money going to support the city bureaucracy is far higher than many other cities’ administration costs for urban renewal.

Supporters of the big developer subsidy said they’re just doing what the public wants. “For us to turn our backs on what the people have said would be absolutely ludicrous,” said Councilor George Poling.

But Bettman said the recommendations of the downtown committee reflected the wishes of a group “hand-picked by the mayor” rather than the wider public’s view.

If 20-134 fails in November, “this big project is dead,” Taylor said. “That will tell us what the public really thinks.”