Eugene Weekly : News : 3.15.07

Broadway Redevelopment
Council balks at buying a project sight and cost unseen

The Eugene mayor and council balked at a staff recommendation that it choose a single exclusive developer, KWG, for a massive downtown project without knowing the taxpayer subsidy cost or other details of the West Broadway proposal.

KWG Proposal (looking south)

“Picking KWG at this point is almost like a mail-order bride,” said Councilor Bonny Bettman of the vague, tentative proposal from the Portland developer.

The council instead voted 5-4 on March 12 to direct staff to work with both the KWG and Beam development teams to bring back more information on taxpayer subsidies, required parking garages, public involvement, preservation of local businesses and other details of redeveloping Broadway between Willamette and Charnelton streets.

KWG principal Thomas Kemper watched the vote and appeared peeved afterward. “We highly prefer doing it all,” he said about the possibility of sharing the project with Beam. But he said KGW will continue to pursue the project. “We’re just disappointed.”

KWG is demanding a high price for downtown development. The Portland developer wants the city to pay for four new underground parking garages. “Parking is a critical element” for KWG, Kemper said. “It could well cost $15 million to $20 million.”

KWG is also asking the city to exercise its options to potentially buy all the property for the project at a cost of $16 million. KWG also wants 10 years in property tax breaks worth about $10 million. With added utility relocation and possible affordable housing subsidies, estimated taxpayer cost could exceed $50 million. Kemper expects the city to subsidize the project enough to guarantee the developer a 13 percent profit.

Councilor Alan Zelenka questioned how much subsidy the council and community would tolerate. “If it’s $30 to $40 million, are we going to do that? Is the community going to be willing to do that?”

In return for all the subsidies, KWG offers to try to dramatically reinvigorate a downtown core that has suffered for decades. KWG proposed building a lively mix of housing, retail, restaurants, nightclubs, a movie theater and a high-end hotel covering a total of about two square blocks along Broadway. The grocery store space would be almost exactly the same size as the previously failed Whole Foods proposal although the store isn’t named.

Beam, a Portland developer that specializes in historic urban restorations, offers a more modest proposal with fewer subsidies. Beam proposes to renovate and restore the historic Center Court and Washburne buildings on the south side of Broadway with retail and offices and build a one-story building in the hole near Broadway and Willamette. Beam wants the city to spend $5 million to buy the property, with some or all of that money possibly returned after Beam takes its expected profits. But Beam isn’t asking for more parking garages.

The city already has a lot of half- or near-empty parking garages within steps of the proposed downtown development area. The adjacent 729-car Broadway Place garage is 80 percent empty. Combined with three other half-empty garages within two-blocks, there’s a total of 1,556 spaces available.

KWG is asking the city to pay for 700 parking spaces compared to the 455 spaces for the failed Connor-Woolley-Opus redevelopment proposal for the area last year.

Local critics and planning experts have long argued that garages deaden downtowns with ugliness and traffic while increasing car use and costing a fortune. But city staff have stubbornly pushed parking garages as their chief downtown urban renewal tool for the past three decades, with little to show for it.

Although the project could have an enormous impact on the city in cost and downtown character, city staff pushed to proceed with an exclusive development concept before a public hearing or any community involvement.

“I think we’ve got the cart before the horse,” said Zelenka, one of several councilors to call for more citizen involvement before the decision. “One meeting on a decision involving maybe tens of millions of dollars isn’t appropriate,” Zelenka said.

Zelenka argued that by immediately choosing one developer, the city would lose leverage for a better deal and increase the risk of failure. “We’re putting all our eggs in one basket.”

Mayor Piercy said she liked Beam’s historic restoration idea given that most of the historic buildings downtown were torn down to make room for failed urban renewal four decades ago.

Councilor Andrea Ortiz worried that upscale redevelopment will exclude poorer people.

So what will happen to all the existing businesses, nonprofits and people downtown if the city buys their buildings to give to a developer? Will they be able to afford the likely much higher rents and prices in the new or renovated buildings?

“That’s a good question,” said Kemper.