City Auditor - City Recorder - Council Resolutions - 36400 Portland Dev Comm South Waterfront Report summary

Summary

South Waterfront Public Projects Funding Proposal

The South Waterfront Central District Development Agreement (DA) identified approximately $122.3 million of Tier 1 (near term) public projects to be funded from public and private sources. This included $40 million for the tram, of which $3.5 million was identified from Tax Increment Financing (TIF). There is over $750 million of private construction currently underway in the central district.

Summary of NMI/OHSU offer as of April 11, 2006 for the agreement among the Portland Development Commission (PDC), Oregon Health Sciences University (OHSU) and North Macadam Investors (NMI).

The following is a revised funding package that: (1) increases the total Tram financing from $40 million to $57.0 million and (2) provides additional funding for the balance of the Phase 1 Public Projects to be completed within the DA. The public funding as proposed below will be deemed to satisfy all of the public funding obligations set forth in the DA. This funding proposal will be subject to approval of the PDC Board, the Portland City Council, OHSU’s Board of Directors, and NMI’s investors.

I. $18.7 million of TIF for Affordable Housing, guaranteed by NMI

A. PDC is proposing $18.7 million in additional TIF funding over the next 5 years to fully fund completion of the Tier 1 Affordable Housing obligation. This sum, together with $7 million in TIF already committed, $25.7 million total, would fund 3-5 sites of affordable housing and fund the completion of the first 200 unit project by ’08-’09.

B. $18.7 million includes the sale of Block 49 for $5 million and designation of NMI or Williams and Dame Development, Inc. owner/developer of the affordable housing project; and funding for acquisition of other sites including air rights for Block 33 for affordable housing.

II. $17 million from project partners for revised Tram construction cost

A. $5.0 million from PDC, TIF, guaranteed by gap payment obligation.

B. $2.5 million from NMI.

NMI will assume an additional $2.5 million assessment for the Tram. Subject to legal approval and underwriting requirements, NMI may be allowed alternate financing of its current LID obligations. (The current LID balance to be assessed against NMI is approximately $3.1 million which, together with $2.5 million for the tram, totals $5.6 million.

C. $9.5 million from OHSU.

The $9.5 million from OHSU, $2.5 million from NMI, and the $5.0 million from PDC, together with an existing $40 million of Tram financing set forth in the DA, increases the total construction funding package for the Tram to $57.0 million. OHSU agrees it will consider additional contributions only in the event of an unforeseeable catastrophic event or act of God.

D. Oversight Committee - A management committee, or such other mechanism as the parties may agree to, is suggested for the purpose of monitoring the project’s progress and costs.

III. $3 million TIF to fund transportation projects, guaranteed by an NMI gap payment obligation.

PDC will fund a transportation infrastructure fund of $3 million to be used to cover shortfalls in transportation projects.

IV. OHSU Block 33 Parking Garage. If OHSU develops projects that produce TIF, 50% of the TIF proceeds created will be made available to OHSU’s for construction of the OHSU parking garage which supports the affordable housing towers. The other 50% will be used by PDC for other urban renewal projects at PDC’s sole discretion.

V. $4.0 million TIF million for Greenway. $2.0 million of additional funding will be sought from Portland Parks and Recreation. This will expedite central district greenway improvements coordinated with private development. NMI will agree to purchase $3 million of Parks SDCs between 3/1/06 and 3/1/09.

VI. $4.0 million TIF for Neighborhood Park. Final construction completion ’08-’09.

VII. Streetcar. NMI’s offer conditioned on executing a contract for the extension of the Streetcar to Lowell Street by August 1, 2006. The obligation to pay the LID assessment on a property may be reallocated to a different property within the LID, subject to underwriting approval, environmental assessments, and other terms acceptable to the City.

VIII. $3.5 million TIF for Economic Development: Bio Science Initiative. PDC agrees to provide a total of $3.5 million for bio-science industry development in the North Macadam Urban Renewal area: $1.5 for a joint PDC/OHSU bio-science recruitment strategy; and $2.0 million for tenant improvements within the North Macadam Urban Renewal District to encourage additional private bio-science business growth.

IX. NMI Gap Payment Obligation (TIF Guarantee)

A. PDC is proposing to accelerate certain Phase 2 Contingent Public Projects.

B. NMI will have a Gap Obligation to support the additional TIF commitment in this proposal equal to $34.7 million.

X. $52.2 million Total DA Funding Package

A. $34.7 million of TIF secured by new Scheduled Project construction, supported by NMI’s Gap Payment Obligation;

B. $3.5 million of TIF not secured by NMI Gap Payment Obligation;

C. $9.5 million from OHSU to fund the Tram;

D. $2.5 million from NMI to fund construction of the Tram;

E. $2.0 million from Parks for the Neighborhood Park and Greenway, guaranteed by NMI’s purchase of $3 million of Parks SDCs between 3/1/06 and 3/1/09.