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HomeMy WebLinkAbout04/07/2014 RegularMINUTES OF THE JOINT ELECTED OFFICIALS MEETING OF THE SPRINGFIELD CITY COUNCIL, AND LANE COUNTY BOARD OF COMMISSIONERS MONDAY APRIL 7, 2014 A joint elected officials meeting with the City of Springfield and Lane County was held in the Library Meeting Room, Springfield City Hall, 225 5`e Street, Springfield, Oregon, on Monday April 7, 2014 at 6:30 p.m. with Mayor Christine Lundberg presiding. ATTENDANCE Mayor Lundberg opened the meeting of the Springfield City Council. Board Chair Farr opened the meeting of the Lane County Board of Commissioners. Present from Springfield were Mayor Christine Lundberg and Councilors VanGordon, Wylie, Moore, Ralston, Woodrow and Brew. Springfield City Manager Gino Grimaldi and other Springfield staff were also present. Present from Lane County were Board Chair Farr and.Commissioners Bozievich, Leiken, Stewart and Sorenson. Lane County Administrator Alicia Hayes, Glenda Poling and other Lane County staff were also present. Glenwood Riverfront Area Development Letter of Intent Springfield Assistant City Manager Jeff Towery presented the staff report on this item Mr. Towery noted that staff was asking Council to authorize the City Manager to sign a letter of intent He referred to a slide showing a sketch of a possible conference center and hotel in Glenwood on the riverfront. The City of Springfield and Lane County jointly adopted an Urban Renewal Plan for Glenwood about ten years ago, and the City and County had jointly adopted a Glenwood Refinement Plan for the entire riverfront area. Staff had been working with interested parties for this type of project in Glenwood for the last few years. Glenwood H &CC, LLC is requesting support and a funding partnership with the City of Springfield and Lane County. Specifically, Glenwood H &CC requests the City of Springfield and Lane County agree to contribute specified funds totaling up to $8.5M through annual payments for up to ten years to assist with and pay for the debt service of loans covering the financing of the `turn-key' cost to develop and open the Glenwood Conference and Events Center. Staff is proposing the use of Transient Room Tax revenues in the amount of $2.5M as the source of payment for the City of Springfield portion of the partnership. Between TRT forecasted revenues and reserves, funds are available to fund this project over l0 years. This partnership would ensure the successful launch of the Conference Center through its start-up, construction, and first few critical years of operation. The proposed development will provide both Springfield and the greater metropolitan area substantial benefits by creating jobs, increasing tourism, conference and events center business, and generating room tax and property revenues for years to come. With the successful signature letter of Intent by both the City and County, City and County staff would work with the investors from Glenwood Hotel and Conference Facility over the next several weeks to negotiate a formal Memorandum of Understanding (MOU). The staff report outlined issues that would April 7, 2014 Joint Elected Officials Meeting Public Hearing City of Springfield Lane County Page 2 of 5 be outlined in the MOU such as roles and responsibilities of all parties including financial commitments and payment periods, commitments for infrastructure improvements consistent with the Glenwood Refinement Plan. Once those details were finalized, the MOU would come back to the City and County elected officials for formal approval. Glenda Poling, Manager of Lane County's Community and Economic Development Division, thanked the City for allowing the County to participate in this joint meeting. The Glenwood Riverfront proposal was a plan to potentially transform the Glenwood area. She was excited to come and talk about this plan that has great potential to move forward. This was a multi- faceted complex and exciting project that presents economic development opportunity, not just for Springfield and Lane County, but for the region as a whole including the State of Oregon. A vibrant high - profile hotel and executive conference center would open the riverfront area and increase tourism. It would add hotel room capacity and increase the much needed meeting space needs. Plans for conference centers had surfaced before and had not been sustained so they were looking forward to this one coming to fruition. An economic impact would be felt immediately with an estimated 250 people employed in construction jobs. These jobs are projected to last more than 18 months. After construction, there would be over 150 full -time jobs when the hotel and conference center are up and running. TRT dollars would increase once the facility was open and would continue to increase. The project is centrally located with easy access to the University of Oregon, and both Springfield and Eugene downtowns. Lane Transit District's (LTD) EraX currently provides public transportation along the route and the State has plans in place to build roundabouts in front of the property for efficient travel. The entire venue is easily accessible to and from 1 -5. Most notably from a visitor's perspective, it would be a welcoming facility with day lighted river views from both the meeting space and hotel rooms. While the hotel and conference center would capture the Glenwood pristine riverfront for hospitality and amenities, they were only part of the larger development picture. There are plans for office and retail space and housing, including affordable housing in partnership with HACSA and Cornerstone Community Housing. For Lane County, the project presents an exciting opportunity. to join with Springfield in a partnership that will further develop our economy, create new jobs and bring new visitors to Lane County. The local project team was virtually a Who's Who of business professionals with years of experience, local folks who possess the know -how to develop projects that make for good public /private partnerships where the entire region can benefit from the capital, efficiency and knowledge and expertise of the private sector and the stability of local government. Mr. Towery introduced Greg Vik, representing Glenwood Hotel and Conference Center LLC (Glenwood H &CC, LLC), and one of his project partners Allen Lonstron. Mr. Vik thanked the councilors and commissioners for their consideration of the plans and funding concept for the conference center in Glenwood on the River, which was the catalyst for the redevelopment of the whole of Glenwood north of Franklin Boulevard. The Glenwood H &CC, LLC had been working on their plans for Glenwood for a number of years, master planning, evaluating development options, negotiating the land parcels, determining financing approaches, and optimizing building configurations. Success is found in a high degree of collaboration among our team — the City of Springfield, Lane County and themselves. This had been shown over the last 6-8 years. This project was about creating a new and vibrant retail, new housing, new office space, and new recreation, with an eye to what actually works in urban settings. Jane Jacobs is a renowned urban planner they had used as the spirit of the direction they were taking. At an outstanding natural location April 7, 2014 Joint Elected Officials Meeting Public Hearing City of Springfield Lane County Page 3 of 5 with a provocative, aesthetic, destination location to live, work, and play, and all the construction and sustained jobs that came with this project. This process wasn't easy and was very challenging. Many metropolitan cities have large expanses of substandard or under - utilized areas. This is because redeveloping these areas is complex, time consuming, and many times ultimately forgotten. It is fraught with inherent delay and land use issues and sequencing. They were aware of the challenge and in the past years had worked hard through the various impediments, but were now at the confluence of all this work to start what could be the pride of our area and region. They understood the grand, but . concealed opportunity to help create an urban community that follows through with their development ideas combined with their understanding of the inherent advantages and uniqueness of this site. There is an important combination of several factors that are available to all of us right now: ten years of pre - development work, recent approval of the Glenwood Refinement Plan, public /private partnerships efforts facilitated by the Glenwood Urban Renewal District, growing market opportunities in the hospitality industry, favorable hotel programs for now, low mortgage rates for now, building costs relatively low for now, and the Glenwood property owners were in concert with the plan. This is a powerful, unique opportunity — now. They respectfully ask for assistance in helping fund the conference center development, which in turn creates a demand generator for the hotel and together provide a catalyst for the overall redevelopment of Glenwood. This is an underutilized site of incomparable beauty, on the river (not above the river or across a road from the river or a ways from the river), but Glenwood on the River. Mr. Lonstron said this wouldn't be just a hotel, but overall redevelopment in Glenwood. It would be kick started with a major project like the hotel, but needed more than the hotel. The concept was to come up with a demand generator. Throughout the country, conference, convention, and expo centers were publicly funded. Two of those locally include the Lane Events Center and the Eugene Hilton and Conference Center. The Valley River Inn was opposed to the Hilton being built, but it actually increased business for everyone. The developers are ready to start this hotel. They couldn't divulge who the hotel company is because they are still in negotiations for the franchise. This alone could not pencil out with a demand generator. Initially, they considered building a small executive conference center. Ten years ago there were four full service hotels with meeting space in the metropolitan area with 899 hotel rooms. He spoke regarding group meeting dynamics. in order to get business from within the state and region, they needed to have the facilities and housing. The majority of rooms in our community are limited service without full food and beverage operations, meeting space, and banquet facilities. That was the one market segment that could bring business into the community, Since 2004, the number of rooms in headquarter -type hotels had decreased, as well as meeting space. They were proposing an executive conference center with top level technology and traditional function space in the bottom portion to feed 1000 people in one room. Conference centers don't make enough money to pay the debt service to build them. They wanted to partner with the City and County and make an investment for the future. The $17M did not touch the operations, and amortized over twenty - five years at 4.5% interest was $28M. They needed help for the community to kick -start this with the debt service until they were stabilized in approximately seven to ten years. He noted the other properties involved in this project that would need to be developed to make this a vibrant, inter - supported community. That would start as soon as the conference center started to be built. There were cycles in the group meeting market. It takes five or six years to work into all of the booking cycles. They did a seven month market substantiation in which they asked hundreds of meeting organizers if they would come to this type of facility and what attributes they needed. Through this, they learned that this conference center would transcend what was needed for a 150 -room hotel. They would need April 7, 2014 Joint Elected Officials Meeting Public Hearing City of Springfield Lane County Page 4 of 5 additional hotel rooms because this could generate 21,000 to 25,000 group room nights a year. That would be part of the development process. It all started right now with this investment in the future. Councilor Wylie said this was one of the most exciting things that had come to the Council. It was something she had been hoping for and envisioning since becoming a Councilor. Glenwood on the River was beautiful and it was thrilling to see the possibility of this development. Commissioner Sorenson asked how they would like to handle questions from the Commissioners, such as anotherjoint meeting with the City Council. He asked if they had written information. Mr. Lonstron said they did have materials. It would be great to have an opportunity to go through all of the steps with the Board. Commissioner Sorenson asked if there was as residual benefit the government received in the arrangements for the Eugene Conference Center or the Florence Conference Center. He asked if it was a co- ownership. Mr. Lonstron said the developers would own the facilities. The developers would go to the lending market to find out what it took to complete this project. The funds needed from the City and County matched the projected room tax funds during that ten -year period plus or minus $12,000. This would bring in 150 jobs once completed. They had to determine that number as part of the requirement for the hotel funding program. Mr. Vik said this was the kick -start for a large redevelopment for the whole area. Commissioner Leiken said the Board needed to give Ms. Hayes direction to go to the agenda team to schedule a meeting to look further at this topic. He asked if the presenters would be available to come to a Board meeting and how much time they would need for that meeting. The commissioners had a lot of significant questions that would take more time. Ms. Hayes said they would like to have direction to get this before the agenda team tomorrow (Tuesday, April 8) and look at the availability on the April 15 Board Meeting or the next week. Board Chair Farr said they could discuss the date and format tomorrow. Ms. Hayes said that would also give Christine Moody a chance to look at finances and provide more in -depth information to the commissioners. Councilor Ralston said the Council was giving the City Manager permission to sign the letter of intent. Mayor Lundberg noted that many years ago Mr. Vik came to the City with a proposal, along with another developer. The City chose the other developer, and she apologized because she felt their proposal was more realistic. They understood the area and the challenges. She thanked him for coming back with this proposal. April 7, 2014 Joint Elected Officials Meeting Public Hearing City of Springfield Lane County Page 5 of 5 IT WAS MOVED BY COUNCILOR WYLIE WITH A SECOND BY COUNCILOR WOODROW TO AUTHORIZE THE CITY MANAGER TO SIGN THE LETTER OF INTENT. THE MOTION PASSED WITH A VOTE OF 6 FOR AND 0 AGAINST. ADJOURNMENT Mayor Lundberg adjourned the Springfield City Council at 6:59 p.m. Board Chair Farr recessed the County Commissioners at 6:59 p.m. Minutes Recorder Amy Sowa City Recorder Christine L. Lundberg Mayor Attest: City Recor er