Eugene weekly., May 17, 2007, Page 13, Image 13

BY ALAN PITTMAN
Developers Get Downtown
Council puts developers ahead of public process
E
ugene’s downtown may be designed
in Portland after a city council vote
this week to reject calls for a public
process before committing to developers’
proposals.
The council voted 6-2 for developers’
plans for a mall-like conversion of downtown
with about $45 million in estimated taxpayer
subsidies, including future tax breaks.
Critics said they may consider a voter ini-
tiative or referral to overturn the council vote
for a massive public subsidy without public
involvement.
“It’s a huge mistake, and it’s throwing
money away,” said David Monk of Citizens
for Public Accountability (CPA) after the
vote. Monk said the initiative process is
“worth looking at.”
Former City Councilor Paul Nicholson said
if the $45 million developer subsidy were
voted on, “I think it would go down in flames.”
CPA member Mary O’Brien said in deter-
mining whether citizens pursue and/or pass
an initiative/referral, “a lot depends” on if the
developers are actually responsive to public
input.
The council vote included the creation of
a citizen committee to advise the developers
on the project, but it’s unclear whether that
public input will affect the developers’ plans.
O’Brien said the council should have first
involved the public in creating a detailed re-
development plan for downtown and then
found a developer to follow the public’s will.
She called the current process of choosing the
developer first “ass backward.”
Councilor Bonny Bettman said “once
you’ve signed on with the developer, the pub-
lic process part of this is a sham.”
In selecting the developers’ vision for
downtown, “you’ve already made all the im-
portant decisions,” Bettman said. Any citizen
input would be left only to things like choos-
ing the brick color, she said. “It’s ridiculous.”
O’Brien questioned whether the rushed
August deadline for the committee’s recom-
mendations will allow enough time. “They
may be dooming the process to be ineffec-
tive.”
But Councilor Alan Zelenka said he
thought the committee process wouldn’t be a
sham. If the developers ignore citizen input,
the council could still reject final approval of
the project in September, he said. “That
would be tough, but it’s doable,” he said.
Mayor Kitty Piercy backed handing the
planning over to developers and said she
hopes they will respond to citizen input and
“end up with a product that’s truly responsive
to the community.”
But, O’Brien said, “The City Council
should give clear direction to KWG and
Beam that the input of this advisory commit-
tee matters.”
The council selected both Beam and
KWG in part to respond to concerns of creat-
ing a development monopoly downtown, but
it’s unclear if the two Portland developers
will remain separate.
“They have an agreement in principal to
work together,” said City Manager Dennis
Taylor. Taylor said he understood the agree-
ment involves KWG controlling the ground-
floor retail space in Beam’s historic restora-
tion of the Center Court and Washburne
buildings although he didn’t know specifics.
“It may be that they’ll form a limited partner-
ship.”
Other local businesses outside the foot-
print could also suffer. KWG said it wants a
large grocery store across from the library.
Local groceries strongly objected last year
when the council proposed to subsidize a
Whole Foods farther east downtown. That
plan fell through, but KWG has now pro-
posed space for a similar sized grocery store
in its development.
Critics said they may consider a voter initiative or
referral to overturn the council vote for a massive
public subsidy without public involvement.
Nicholson said he suspects the unnamed
grocery is Whole Foods, but the city and de-
veloper are hiding that fact from the public.
“It’s antithetical to open government.”
Nicholson said the subsidy for the
Portland developers isn’t justified since many
local businesses and developers have thrived
downtown without public money. He points
out that the Kiva, Heron Building, Farmers
Union Market Place and 5th Street Public
Market were all built without subsidies.
The estimated $45 million in subsidies for
the KWG/Beam project includes, roughly:
“Once you’ve signed on with the developer, the
public process part of this is a sham.”
— Councilor Bonny Bettman
Beam had appeared more open to local re-
tailers in its proposal to provide “affordable”
space to local and small retailers, businesses
and nonprofits. KWG’s proposal focused on
“national retailers” and said the project will
“seek to upgrade the character” of the area to
make it more “upscale.” KWG said it will try
to accommodate local retailers, but “they will
have to be able to afford the new rent.”
The KWG/Beam redevelopment could
displace many small businesses and non-
profits downtown and provide city-subsi-
dized competition for other local retailers. “I
don’t know that they like being part of a foot-
print,” said Councilor Betty Taylor of plans to
tear down many businesses.
The owner of at least one business in the
project footprint, Luckey’s bar, has said she
will not sell, which could force KWG to ad-
just some of its plans.
Councilor Andrea Ortiz voted for the
KWG/Beam proposal but said she remains
concerned about the high price tag. “It just re-
ally concerns me, the amount of money in-
volved.”
O’Brien said the city should at least try to
include public park space and reduce the
number of subsidized parking spaces, which
violate the city’s sustainability goals.
$16 million for 300 underground parking
garage spaces; $10 million in tax breaks; $8
million in garage interest payments; $5 mil-
lion in utility upgrades; $4 million to subsi-
dize land purchases; $1 million in offsite
costs; and a $1 million subsidized loan, ac-
cording to city and developer documents.
The city plans to waive competitive bidding
requirements for the project.
By comparison, $45 million is about dou-
ble what the county says it may need to make
up for lost federal funding and about $10 mil-
lion more than the downtown library cost to
build.
KWG said it needs the subsidy to guaran-
tee a 13 percent profit on the project and to re-
duce the cost of land. The city has purchase
options on the downtown properties that are
58 percent, or $5 million, over real market
value, based on assessor valuations.
Including loan interest, the $24 million in
underground garages KWG wants will cost
about $80,000 per parking space. Taxpayers
have already paid for thousands of parking
spaces downtown in largely empty garages.
But KWG, using formulas similar to those for
suburban shopping malls, says it needs more.
Zelenka said he might favor above-
ground parking to reduce costs but said
downtown needs the big project. “The neigh-
borhood really needs to fundamentally
change to be successful.”
Supporters of the KWG/Beam develop-
ment said they didn’t want a public process to
delay it. “We need to do something now,”
Mayor Piercy said.
But Councilor Taylor pointed out that the
big project will actually further delay a condo
project to fill the much-criticized pit across
from the new library and a limited Beam pro-
posal for a building in Aster’s hole on
Willamette. City Manager Dennis Taylor said
the library pit project could have been com-
pleted this summer if it hadn’t been put on
hold at the request of KWG.
KWG described its development proposal
as “speculative” in materials sent to the city.
Although the public process will be rushed
into a couple months, KWG said it needs “12
months” to determine if it will commit to any
of the project, depending on the interests of a
movie theater, grocer and other major retail-
ers in renting space.
With all the hurdles, Bettman predicted
KWG/Beam would “die of its own weight”
— and wait. “I see us a year from now presid-
ing over two empty pits and a quagmire.”
If the project fails, Bettman said, she hopes
the city will move forward with a better down-
town renewal, “with the public in the front seat
and developers in the back seat.”
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MAY 17, 2007 13