The city’s financial strategy for Eugene’s Downtown Riverfront development has shifted due to the COVID-19 pandemic.
The Eugene City Council was set to vote on a supplemental budget to fund the new plan at a remote City Council meeting held over Zoom on April 27, but decided to postpone the action until May 18.
Matt Rodriguez, acting Public Works director, said the latest iteration of the budget proposal lowers the city’s financial risk by breaking the infrastructure package into two building phases and reducing the city’s initial investment.
The Downtown Riverfront development, originally set to begin construction mid-2020, would create urban housing and commercial space and would connect a new riverfront park to the downtown area, according to the city website.
City staff outlined the latest version of the development plan at Monday night’s City Council meeting, and the staff and councilors heard testimony from the community.
Councilor Alan Zelenka expressed concerns that the new strategy puts the city in the role of developer, without an agreement with a private partner.
Zelenka said the new budgetary path “is headed with substantial increase in the risk profile for the city of Eugene.” He added, “If this had been brought initially as the first deal, it would have been D-O-A I believe.”
Denny Braud, director of the Planning and Development Administration, said there is increased risk associated with the project in light of the COVID-19 pandemic, but there is also a risk if the city puts a pause on construction.
“We are building a park and we need access to the park,” Braud said. He added that slowing down might also push out potential developers.
The supplemental budget that was before the council April 27 would fund the first phase of the plan, which would cost $13.5 million. Phase one would provide access and parking for the Downtown Riverfront Park, set to begin construction this spring.
The city’s supplemental budget would grant the city authority to issue $2 million in loans from special assessment funds and $12 million in bond proceeds. According to Twylla Miller, Eugene’s acting budget manager, the loans and bonds are anticipated to be repaid by revenues from the Downtown Riverfront Project over the next several years.
Miller also brought up the Urban Renewal Agency’s supplemental budget, which includes $5.5 million in additional funding for the initial phase of development.
Miller said the supplemental budgets would create the cash flow needed to begin construction.
John Barofsky, a former Eugene Budget Committee member, noted the latest financial strategy for the project has not had a robust public process.
“I believe in the project. I believe staff is moving forward in a responsible manner,” Barofsky said.
Tiffany Edwards, director of business advocacy for the Eugene Area Chamber of Commerce, testified in favor of both supplemental budgets. “Now, more than ever, our community needs this project to move forward as planned, bring jobs, economic activity,” Edwards said. “That will greatly help us with economic recovery efforts.
Councilor Zelenka and Councilor Greg Evans were less optimistic and expressed skepticism about the plan’s viability.
“Nobody knows what’s going to happen with the economy,” Evans said. “There are several industries that are now basically in dire straits, including the development industry.”
The City Council has tentatively agreed to look at the supplemental budgets more closely in a work session on May 13, and to take action on May 18.
Sarah Medary, city manager pro tem, said the extended timeline to vote will not interfere with construction if the council decides to move forward.