The building going up
at 17th & Pearl got a
$1.5-million tax break
DOES
MUPTE
MAKE
SENSE?
City may sunset subsidy for booming
apartment developers
BY ALAN PITTMAN
W
hile many families struggle
to pay their tax bills during
the Great Recession and
government struggles to
aff ord basic services, the city of Eugene last
month gave a booming student apartment
developer a 10-year tax exemption worth an
estimated $1.5 million.
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Why? It wasn’t low income housing. It
wasn’t to help Eugene’s struggling down-
town. It wasn’t just for energy effi ciency,
good design or jobs. It was MUPTE.
Whupte? MUPTE is the city’s controver-
sial but little known Multiple-Unit Property
Tax Exemption that gives 10-year tax breaks
to developers of fi ve or more apartments in
a zone stretching from west of the UO to all
the way out Highway 99 nearly to Beltline
Highway (see map on next page).
The city has handed out two dozen tax
breaks under the program at an estimated
cost of about $1.3 million every year,
according to a recent City Club of Eugene
study. Other examples of recipients include
an estimated $1 million break for a new
six-story, 70-bedroom Westgate project on
13th near the UO; $400,000 for the four-
story, 54-bedroom new Midtown Terrace
apartments near the White Bird clinic
on 12th; and $500,000 for The Register-
Guard’s 58-unit High Street Terrace built
downtown in 1996.
The developer giveaway has been hotly
debated for decades and was suspended
from 1996 to 2001 amid criticism it was
depleting tight city budgets. The city loses
roughly 40 percent of the subsidy money,
state school funding loses about 50 percent
and the county about 10 percent.
Supporters argue that the tax break is
needed to stimulate high quality housing in
the city’s core and prevent urban sprawl.
But critics charge that many of the breaks
just increase developer profi ts and go to
housing that would be built anyway to
serve rising student demand.
The debate over the $1.5 million tax break
last month was similar to the debate over
other projects. The break went to developer
Dan Neal for a four-story, 138-bedroom,
$13 million apartment building at 17th and
Pearl, kitty-corner from Hirons Drug (see
design drawing). At the May 9 meeting last
month, councilors voted 5-3 to approve the
developer subsidy for “Paradigm on Pearl,”
but at least half the council said they may
seek changes in the giveaway at a meeting
scheduled for July 20.
“I’m getting to the point where we have
more than our share of MUPTEs in the
university area,” said Councilor Andrea
Ortiz, a key swing vote on the issue. “I will
support this MUPTE today, but from here on
out, unless they are on the west part of town
where I want to see business growth, people
investing in my side of town, I probably
won’t be supporting them any longer.”
Almost all the MUPTEs in recent years
have gone into the university area where
demand is high for student housing. The
area out Highway 99 in Ortiz’s ward, with
many low-income homes, hasn’t gotten
any new development from the program.
The area outside the city core is supposedly
“transit-oriented” but lacks an EmX line.
Councilors Ortiz, Mike Clark, George
Poling, Pat Farr and Chris Pryor supported
the tax break. Councilors Alan Zelenka,
Betty Taylor and George Brown voted
against the giveaway.
Zelenka said he supported MUPTE
downtown and on Highway 99, but
questioned whether the city was giving
away money for nothing from its general
fund to developers in the university area.
Just outside the MUPTE zone near campus,
“we have seen multiple units redeveloped
between 19th and 20th, about 500
bedrooms.” On the other side of campus
next to the new basketball arena, two other
apartments with 500 units are going up or
are completed, Zelenka noted.
“Those are outside the MUPTE zone,
and got no property tax exemption, and they
dwarf the number of units inside MUPTE,”
Zelenka said. “Over a thousand units have
been developed in the last couple years in
the area, just outside the zone,” he said.
EUGENE WEEKLY JUNE 23, 2011
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