“I’m puzzled that all this development is
occurring in the area outside the MUPTE
zone, far outstripping inside the MUPTE
zone, yet we’re continuing to give property
tax exemptions for people to build inside
that area when it’s absolutely simply not
needed.”
With the council divided, Mayor Kitty
Piercy’s tie-breaking vote could decide
the fate of millions of dollars of developer
profi ts. Piercy has generally supported
MUPTEs in the past, but did not take
a clear stand on whether they should
continue in the area near the UO.
“When I was in conversation with Mr.
Neal about this project,” Piercy said, “what
he said to me was that they are going to
build with or without MUPTE. It’s a
question of what they are going to build.
It’s a question of the quality of what they
are going to build.”
Piercy asked, “how do we incentivise the
kind of building we want to have happen as
opposed to just any kind of building? I have
no doubt that Councilor Zelenka is correct,
because I drive over in that area, and I see
the multitude of multiple-unit housing
being built over there. My only question is
are we trying to create something that gets
to a higher standard that meets all of our
goals in Envision Eugene, and if we are not
going to do it this way, how are we going to
try to do it?”
One free option would be through infi ll
standards in the city code, but the council has
balked at regulating developers in the past.
Zelenka pointed out that buildings going
up just outside the tax break zone also
have good quality and meet environmental
goals. “The Courtside housing that
was just fi nished this last year near the
Matt Knight Arena is seeking LEED
(Leadership in Energy and Environmental
Design) certifi ed outside the MUPTE area
zone without any subsidies,” he said. “We
should investigate how they can do it
without any subsidies.”
Kevin Matthews of Friends of Eugene
testifi ed that quality development in the city
core was important. “If you build density
without quality, there is a good chance you
are building slums,” he said. But Matthews
criticized the 17th and Pearl project’s
quality. “This building is grotesque,” he
said, faulting the design for apartments
lining long corridors and an in-facing
U-shape design that lacks open space. “It
really is a mistake as it stands now,” he said.
City staff recommended passing the tax
break for the Pearl project and awarded the
building a high score under code criteria.
But that score was mostly for adding
parking for 105 cars — a questionable
environmental measure.
The cars stored in an underground
garage may reduce competition for
parking spaces and won praise from the
neighborhood association board. But the
abundant parking will also increase traffi c
in the area and reduce the incentive to
walk, bike or use transit, contrary to the
goals of city plans and LEED’s efforts to
reduce carbon pollution.
Increasing transit use is listed in the
state law authorizing MUPTE as a goal
of the program. MUPTE has appeared to
promote closer-in, less car-oriented student
housing than the large apartment buildings
near Autzen Stadium. Giving the subsidies
in the UO area, however, may detract from
14
JUNE 23, 2011
EUGENE WEEKLY
efforts to use MUPTE to attract student
housing to Eugene’s struggling downtown.
Councilor Taylor questioned the
fairness of the tax break. “There are people
who are having a real struggle to pay their
taxes in other parts of the city, who when
they hear about something like this, they
say, well, you give me a tax break and
maybe I can remodel my house.”
“We run the city with taxes,” Taylor
said. “If we want people to build better
buildings and give them tax relief, why
don’t we do it everywhere? It’s certainly
not needed in this (university) area.”
Taylor said she heard from neighbors
next to the Pearl building that oppose the
Portland requires 25 percent affordable
housing for its MUPTE (called NMUH
there) subsidies. Eugene required affordable
housing payments from developers in the
past but dropped them in 2004.
“It should be a real advantage to the city
if we are going to give a tax exemption,”
Taylor said. She said developers already
have enough incentives. “I would hope that
they would want to build a good building
because they want to attract buyers, renters,
and because they want to do the right thing
for the community,” Taylor said.
Councilor Brown said that the council
appears to have a “double standard” when
it comes to developer subsidies. Brown
‘I’m puzzled that all this development is occurring in the
area outside the MUPTE zone, far outstripping inside the
MUPTE zone, yet we’re continuing to give property tax
exemptions for people to build inside that area when it’s
absolutely simply not needed.’
— Councilor Alan Zelenka
big structure shadowing nearby small
houses and destroying privacy. “They are
not pleased at all,” she said. “They are
going to have balconies looking into their
back yard.”
Taylor pointed out that the city is now
struggling to provide basic services in the
recession. At the same meeting, Willamette
Family Services appealed to the city for
help in funding a detox and sobering center
threatened by county budget cuts. “This is
a train wreck,” said director Bob Richards,
warning that drunks could fl ood streets and
ER rooms.
The developer of the Midtown MUPTE
on 12th has complained that the city
already isn’t doing enough about homeless
people near his tax-free project.
said that when citizens trying to save Civic
Stadium were asking for $100,000 to help,
“several councilors said, ‘Oh my gosh,
where are we going to fi nd $100,000? We
would take that away from social services.”
Brown called for a review of the MUPTE
program. “It’s outlived its usefulness and
is no longer necessary, and I think the city
really needs the money,” he said.
But other councilors strongly supported
the developer handout in the university area.
Councilor Clark, who has worked for a
developer seeking a MUPTE exemption,
supported the tax breaks. “One of the
unintended consequences of building density
is that we could end up with tenements or
slums,” he said, arguing that the subsidies
“create the greatest quality possible.”
Clark questioned whether the Matt
Court developers were able to make a
profi t without a city subsidy because they
had more cost effi cient, larger buildings.
But the completed Courtside apartment
building actually has fewer square feet
than the 17th and Pearl building.
“I really like it,” Councilor Poling said,
arguing that the Pearl apartment was a big
improvement over the older homes torn
down to make room for it. “It looks like a
great project.”
Councilor Farr noted that the ground
fl oor of the building will include some
commercial space required by city code
that will still be taxed. “This is a net
increase in taxes” for the site, he said.
But that commercial revenue from
such MUPTE projects could end in the
future. The council approval for the 17th
and Pearl project required the developer to
rush to fi nish the project by the end of the
year when the state MUPTE program was
to sunset. But last month the Legislature
voted to extend the program for another 10
years and include commercial space below
apartments in the tax break.
While parents begged this year for money
to save kids from brutal school budget cuts,
the Legislature approved the developer
subsidy overwhelmingly, costing $4 million
a year statewide, and Gov. John Kitzhaber
quickly signed the handout into law.
Neal and his contractors lobbied the
council forcefully for their tax break at
17th and Pearl.
Neal’s project manager Mark Bruer of
Essex construction told the council he had
a “selfi sh reason” to support the subsidy. “I
want to keep my job.” Bruer said, “hundreds
of others might work on this project.”
“This project is awesome,” said Neal’s
LEED consultant Eli Volem. If the council
doesn’t give the tax break, “the fi rst things
to go are the energy effi ciency, the indoor
air quality,” he said.
Neal, who also got a MUPTE subsidy
for Westgate and other student apartment
projects, said his newest apartment building
“will help transform the character of this area
into a more vibrant place.” He said, “without
this (MUPTE) support we will need to build
a very different project, certainly without
LEED or underground parking.”
But a project without LEED or under-
ground parking could still generate many
jobs without the subsidy. Just 10 blocks
away at 18th and Alder, Neal’s Paradigm
company boasts “abundant” garage park-
ing and high quality and environmental
standards at its similar-sized new Sonja
apartments without a MUPTE subsidy.
Councilor Pryor said he wanted to
talk about changing MUPTE next month,
but supported the $1.5 million tax break.
“Having the conversation about how we
want the money spent is where we need
to go, but we don’t need to have that here
around this project.”
“I don’t believe in changing the rules as
people are playing the game,” Ortiz said of
the 17th and Pearl project.
But Zelenka pointed out that “the rules
about MUPTE do not say once you put in
an application and follow the rules, we’ll
give you the incentive. It says if it’s in the
public interest to do so. A long time ago for
me, because this incentive was no longer
needed to build in this area, it ceased to be
in the public interest for me.”
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