LCC gets incentive from city

Mar 9, 2010 — The Register-Guard

Edward Russo

Mar. 7, 2010 (McClatchy-Tribune Regional News delivered by Newstex) -- Eager for Lane Community College to build downtown near the Eugene Public Library, the city is offering an $8 million deal to the college.

City Manager Jon Ruiz and LCC President Mary Spilde have reached a tentative agreement that is meant to help the college build an 80,000-square foot building on what is now the city-owned excavated pit and parking lot on West 10th Avenue, north of the public library.

Under the proposed deal, the city is prepared to give LCC $6.8 million toward the building, which could cost $27 million or more. Also, the city would sell the building site to LCC for $1, then buy the college's antiquated building near 11th Avenue and Willamette Street for $1.2 million.

The city hasn't determined how to raise that money, and options might require seeking voter approval. The proposed agreement will be discussed by the City Council on Wednesday and the LCC board later this month.

City and college officials say the city subsidies and purchase of LCC's downtown building are needed because the college doesn't have all the money it needs for the ambitious project. So far, LCC has secured $17.5 million for the work, excluding the proposed city package. Early estimates have placed the total cost of the LCC project at about $27 million.

Spilde agreed that the city's proposal is generous. However, she said the college's investment will be substantial.

The city's financial contributions "will allow us to build a signature building that we believe will bring people downtown," she said. "And hopefully it will be a catalyst for more development, and the creation of a much more vibrant and robust downtown."

If the council and the LCC board give the deal tentative approval, Ruiz and Spilde will work out the details of the property purchase and sales agreements. Those contracts would need final approvals by the council and LCC board before property changed hands.

LCC wants to move quickly and take ownership of the West 10th Avenue property in April, Spilde said.

LCC-hired consultants are expected to complete a study in mid March that will show if the project is feasible, she said. If it is, college officials will order architectural and engineering studies.

"I don't really want to be investing more than $1 million in architectural and engineering on a site that we don't own," Spilde said.

The city is being asked to buy LCC's existing downtown building so LCC could apply the sales proceeds to its construction project.

A date for the property's sale has not been decided, but LCC needs to sell the building -- a former Montgomery Wards store -- before its new building is constructed, according to a report to city councilors.

That means that the city, after buying the old building, would rent it to LCC for a "nominal amount" until the college can move to the new building, the report said.

After LCC vacates the building, Ruiz said the city could seek proposals from developers to redevelop the site.

"We would want somebody to come in and develop that property so it will contribute to the vitality of downtown," he said.

Ruiz's plan to help the LCC project depends on the City Council authorizing an increase in spending for the city's downtown urban renewal district of between $21.7 million and $26.5 million, depending on the type of funding methods used.

Councilors on Monday will discuss how to raise the money.

Ruiz prefers to rely on tax increment financing to raise $16.1 million of the $21.7 million total during the next nine years, but that choice could become controversial.

Tax increment financing does not raise property taxes, yet some activists dislike the method because it diverts a portion of property taxes from local governments, including Lane County and the Eugene School District, and allows the city to spend the money downtown. The Eugene School District hasn't objected to the financing method because the state would compensate the district for nearly all of any revenue loss due to tax increment financing.

Two years ago, the city went through a divisive election over a proposal to increase tax-increment financing to finance a commercial and housing project on West Broadway, in the heart of downtown. Voters soundly defeated the proposal.

Besides the LCC project, the council has previously indicated support for hiring more police officers to patrol downtown, provide financial help to attract a Veterans Administration medical clinic downtown, and make improvements to the Park Blocks to enhance the Lane County Farmer's Market.

Ruiz prefers to fund the downtown efforts through tax increment financing, partly because it would prevent the need to use city general fund dollars. The funding method also would not require a vote, which could fail.

But on Monday, Ruiz and his staff will discuss with councilors other options for raising the money, including the use of existing city funds or submitting a general obligation bond or local option levy to voters to pay for the LCC and other projects.

Newstex ID: KRTB-0061-42719044