viewpoint
The Shedd Institute
BY PAUL CONTE
www.theshedd.org - 541-434-7000
Musings from
Down South
The Capstone guys are probably laughing at us
Hugh Laurie
May 31 (sold out)
P
ounding a few ice-cold pints of Snake Handler Double IPA down at Dave’s
Pub in Birmingham.
I’d be celebrating, too, if my company were just handed $3 million
more in profi t than even we had said was required to build a spa-like enclave for
wealthy students in downtown Eugene.
And I sure as hell would lift my frosty mug to the city’s Community Development
Division staff who did their best to bamboozle councilors into a rushed decision
that gave up far more than was necessary and got much less than the community
deserved.
Then, I’d regale my buddies with each step of the almost surreal sequence of
events by which the local staff hoodwinked their own elected offi cials to muffl e
community voices and stuff more cash in our coffers.
The story would go like this: “I gotta tell you fellows, the city staff were
marvelous in how they kept our project under wraps for so long. We submitted permit
documents in mid-November of 2011, but the fi rst the community heard about our
plans was in early February. Even then, the city staff kept all the information off
the city’s website and scheduled a council decision without any work sessions or
public events. If that nosy councilor George Brown hadn’t intervened, we would
have had a fait accompli before the community even got wind.
“Well, you roll with the punches. Fortunately, staff were still able to convince
councilors that if they didn’t rush the decision we would take our mega-project to
some other, more accommodating town. It was almost unbelievable how councilors
bought into staff’s story — even after we submitted two permit applications in
March and April changing our target completion date for Phase I from 2013 to
2014. If councilors had found out about that, the rush-rush gambit would have
been over.
“Phasing ... you gotta love how that concept played! Our original plan, as
described in the November permit document I mentioned, was always to have
two phases. But to get the tax exemption for both phases, we applied for the tax
exemption as if the project wasn’t phased. Not only did staff go along — even
though they’d worked with us on traffi c analysis that was based on a phased
approach; when the opportunity arose, staff went right along with our story that
we were breaking the project into phases at the request of the community. Staff
even backed our claim that this ‘new’ approach would cost millions more than the
‘unphased’ approach, which had always been just a ruse.
“Of course, the key to the lock on this tax exemption was the ‘but for’ (oddly
suggestive term that city staff coined) criterion. We had to convince councilors that
only by avoiding payment of $9 million in tax obligations could we generate the 9
percent return on investment that our lenders demanded. So we cobbled up a silly
little one-year ‘pro forma’ that no serious investor would have considered for a
second and then left it to staff to sell the story to councilors.
“We had a near miss, however, when in the last week before the council vote
a pesky community member provided councilors a pro forma — using our own
data — showing that only seven years of tax exemption would provide at least a 9
percent return and 10 years exemption would just give Capstone an additional $3
million in excess profi ts — every dollar taken from what otherwise would provide
much needed revenue for the city and local schools.
“Anyway, thankfully city staff came to our rescue once again. They put together
a presentation on the day of the council vote and claimed that limiting the tax
exemption to seven years would reduce the development’s value by $14 million.
When I watched the staffer say that on the webcast, I almost spewed coffee at my
iPad screen. But man, it worked!
“I waited for some councilor to call staff on the fabricated number — I mean,
it was so absurd. By even the most pessimistic analysis, the difference would be
less than $3 million. But even that Alan Zelenka guy who’s always spouting about
how much he knows about large projects swallowed staff’s bogus number. I had to
laugh when Zelenka helped our case even more by explaining how there were risks
to our project, as if the risk factor wasn’t already completely accounted for by the
9 percent return criterion.
“Well, we got by that close call. We were just lucky no one ever got around to
providing the council with a valid analysis of our projected return, which is gonna
be — get this — 12 percent or more per year. I’ve heard some local folks have now
produced that analysis, but it’s too late to change the council’s vote. Whew!
“Well guys, all we need to make this story complete is for Jimmy Fallon to
read one of his thank-you cards for us: ‘Thank you Eugene, for being the plumpest
turnips that ever fell off the turnip truck.’”
Led Kaapana
June 2
Dorothy Fields - Cy Coleman - Neil Simon - 1966
Siri Vik
Sweet Charity
Where Or When
June 14, 15, 16 - 7:30 pm, June
pm
The 17
Life - & 2 Lyrics
Mike &
Nancy Oft Rose
Dan Hicks June 8
& The Hot Licks
of Lorenz Hart
Starring Laura Sue Hiszczynskyj, Dylan Stasack
& Chas King
Fri, May 18
Directed & choreographed by Richard Jessup
Sun, May 20
Music direction by Robert Ashens
Paul Conte is a 35-year resident of Eugene’s Westside Neighborhood who has received local and national
recognition for his community service on behalf of neighborhood residents.
WWW.EUGENEWEEKLY.COM
EUGENE WEEKLY MAY 24, 2012
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