Fairview council reviews MUPTI incentives, staff seeks time to finalize Heart of Fairview deal

Fairview City Councilors spent a work‑session portion of their April 16 meeting reviewing a proposed Multiple Unit Property Tax Exemption (MUPTI) program aimed at encouraging mixed‑use development in the Halsey Corridor and advancing the Heart of Fairview project.

Sarah (city staff), who led the presentation, told council the program would replace the existing vertical housing tax exemption and narrow eligible locations to priority areas such as Fairview Village and parts of Halsey Street. She said the draft program pairs a 10‑year exemption on the value of improvements (not land) with minimum public‑benefit requirements, annual reporting and a program agreement that would be signed by the city and the developer to “memorialize the benefit commitments.”

The nut of staff’s proposal is to make incentives conditional on defined public benefits and enforceable through an agreement: projects must provide at least one priority use that generates customer activity, at least one enhanced storefront design feature, and meet the program’s point minimums. According to staff, the agreement would require annual certification that public benefits remain in place and would allow termination of the exemption if developers fail to cure noncompliance. Staff said Oregon statute that governs the MUPTI program prescribes specific remedies for deed‑restricted affordable units; clawback of prior years’ tax benefits is limited to those circumstances.

Allison Platt, senior associate with Cascadia Partners, presented national examples and market context. She described a Bend, Oregon project supported by a MUPTI program: a seven‑story, 311‑unit mixed‑use development with roughly 16,000 square feet of commercial space. Platt said the Bend project’s total improvement value was estimated around $120–$130 million and that the tax exemption was estimated at about $10.6 million over 10 years; she added the project also generated about $5 million in system development charge (SDC) revenue for the city and would still provide some property tax revenue during the exemption period.

Platt and staff emphasized the current market headwinds for mixed‑use projects — higher interest rates, materials and labor costs — and urged council that incentives are more important in the present environment to move projects from planning into construction.

Councilors asked detailed questions about where MUPTI could apply and what would prevent token compliance. Councilor comments pressed for firm controls on the size or type of ground‑floor commercial that would qualify: one councilor asked whether a “broom‑closet” storefront could meet the requirement; Sarah said the program’s scoring rubric allows council discretion to score minimal commercial space low enough to deny qualification, and staff noted certain zoning districts already limit ground‑floor residential so a trivial storefront would not easily satisfy code. Allison Platt said the program does not require a fixed commercial square‑foot minimum unless the zoning district does, but argued that activation measures (extended pedestrian zones, plazas, enhanced streetscape) are part of the public‑benefit mix that can make modest commercial spaces meaningful.

Staff also reviewed likely candidate parcels — vacant or under‑utilized lots along the Halsey corridor, a parcel at Fairview Village near the library, and a parcel off I‑84 they labeled informally the “Pell free” parcel — and reminded council that the exemption has a statutory sunset and limited time window for use.

On the Heart of Fairview project, staff said the memorandum of understanding (MOU) between the city and the developer was originally extended previously and now expires in May. Staff recommended another extension to give the city time to finalize budget questions and provide the developer with more certainty on the incentive package before entering a disposition and development agreement (DDA). Staff outlined a tentative timetable: city budget and program work through the end of the year, developer updates and land‑use processing next year, and a target to execute the DDA by August 2026. Sarah cautioned the market remains difficult and that even with incentives developers are expecting delayed financial return.

After discussion, council signaled general comfort with staff bringing the MUPTI ordinance back for adoption and asked staff to return with a proposed extension of the Heart of Fairview MOU so the parties have time to finalize details.

Ending note: staff asked council whether they were comfortable with staff returning the MUPTI program for formal adoption; councilors indicated they were, and staff said it will be brought back on a future agenda for a formal council decision.