In light of the controversy around the MUPTE (multi-unit property tax exemption) program I want to share my reasons for supporting the Core Campus project which received approval for a tax-exemption from the Eugene City Council in June.
First it must be pointed out that the Core Campus project is not receiving any fee waivers or direct financial support from the city. The MUPTE program is an exemption of future property taxes (for up to 10 years) not a direct payment of any kind to developers.
I have decided to consider each MUPTE application on the individual merits of the project rather than take an ideological stand on the program itself. This tax-exemption program was created by the state of Oregon to provide cities with a tool for urban planning that can be used to encourage certain types of development in areas that the commercial market would not create on its own. Right now it is one of the few ways the city can have any influence on what kind of housing or development occurs in the city. I believe there are times when a city needs to play a role in planning and development especially if we want to grow without sprawling outside of our urban growth boundary.
As I considered the pros and cons of the Core Campus application I determined it would result in a net gain for the city. This particular project has very dense housing – much denser than would be allowed in another location due to the zoning; once it comes fully on the tax roles it will provide significantly more tax revenue than would be realized with a different project; it will bring new housing to an area that straddles downtown and the campus area thereby bringing more people closer to downtown which is a goal the city has for economic development that doesn’t add to sprawl; and lastly the Core Campus developers added to the public benefit of the project by agreeing to make cash payments directly to the city starting in year six of the tax-exemption period. These cash payments will add up to over 1 million dollars over the last four years of the exemption.
This last item was influential in my decision as it provides the city with unrestricted revenues that we can use for a currently unmet need. I was successful in adding a provision to the resolution approving the application that will dedicate some portion of this money to building emergency and temporary shelter.
I also considered the views of my constituents who contacted me about the project. The Downtown Neighborhood Association supported it and a number of my constituents asked me to support it as well. In addition the project will lead to additional development and economic activity nearby (Core Campus is already planning to lease a currently vacant city lot which will provide new revenue to the city); it will pay hundreds of thousands of dollars in system development fees for all the water and sewer hooks up it requires; it is a brown field redevelopment along a transit corridor; and it will result in over a hundred construction jobs. Core Campus has pledged to implement a local hiring plan and testimony from other Core Campus project contractors indicates they have a solid history of local hiring.
MUPTE critics maintain that this project could have happened without the tax break. I don’t believe that is true. It would not be built without it. The critics say something else would be built there instead. That is likely but it wouldn’t have been a project that would generate the amount of taxes this project will when it comes on the tax roll. Lastly critics think there is already enough student housing and that we shouldn’t subsided more. I understand why some people don’t want to subsidize student housing but for me that was a minor strike against the project overall.
The fact is student renters put a lot of pressure on the housing market in Eugene and drive up the price of rentals overall. This is one of the factors in our local challenge regarding relatively low wages and high housing costs. I do not believe we have “too much” student housing. But I would not support tax breaks for student housing without other compelling reasons. This project had those other compelling reasons in my view.
I supported the Core Campus MUTPE application because I saw it as a smart investment with zero risk to the city that will help us meet several important goals – dense housing near downtown, income the city can use to address our homeless population needs and future tax revenue we would not otherwise receive.
I will continue weigh the pros and cons of each project as it comes before the council. I encourage my supporters and constituents to share their views with me as well as they are important in my consideration of these complex issues.