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Urban renewal presentation outlines tax-increment projects, MUPTI impacts and downtown housing tools
Summary
City staff presented an overview of Eugene's two urban renewal districts, recent amendments increasing spending limits, tools to support downtown housing (including a $3 million Downtown Fee Assistance pilot) and the MUPTI (multi-unit property tax exemption) program and its local tax impacts.
City development finance and community development staff briefed the Budget Committee on May 21 about urban renewal activity and the multi-unit property tax exemption (MUPTI), describing recent plan amendments, projects in the pipeline and how tax increment affects overlapping taxing districts.
Amanda D'Souza, development programs manager, explained that Eugene has two urban renewal districts — a Downtown District and a Riverfront District — and that recent amendments increased the districts' spending limits by $50 million (downtown, June 2023) and $75 million (Riverfront, January 2024). Based on projections presented to the committee, the Downtown District is expected to last about 17 more years and the Riverfront District about 24 years.
Key program tools and projects
D'Souza described a Downtown Core Housing Initiative whose first tool is a Downtown Fee Assistance pilot to pay government fees (SDCs, permits) for qualifying new housing; the proposed budget includes $3 million to implement that pilot. The agency also acquired the North Butterfly Lot for redevelopment and will soon solicit development teams.
Notable projects discussed included 1059 Willamette, a planned 133-unit mixed-income redevelopment with 68 units at 80% of area median income (the city is contributing land at no cost and $400,000 of MUPTI fee funds; the agency allocated about $1.4 million to the project). The downtown riverfront affordable housing "Parcel 2" project — a partnership between Homes for Good and Atkins Dame — is expected to include at least 75 units affordable to households at 60% AMI; the agency approved up to $7.5 million for that project earlier this year.
Tax and revenue impacts
Maurizio Badalico reviewed how tax increment revenue reallocates existing property taxes to the urban renewal agency rather than creating a new tax. Staff estimated total tax increment for both districts at about $5.8 million per year; roughly $2.9 million per year is reallocated from the City's General Fund. Badalico explained that urban renewal reduces compression in the education tax category and, on balance, benefits School District 4J under Oregon's school funding formula.
On MUPTI, staff summarized recent activity and provided a comparison showing that expired MUPTI projects now generate roughly $2.0 million in tax revenue this year compared with about $200,000 if prior uses had remained — an indication that MUPTI projects on net have increased assessed value in the tax rolls over time. Staff noted five projects currently with active exemptions and highlighted the difficulty of building downtown housing without a suite of public investments.
Ending
Councilors asked clarifying questions about verification of developer pro formas for MUPTI applications, potential incentives to encourage ground-floor commercial with housing above, and whether urban renewal tools could be applied to other corridors. Staff recommended planning-first approaches followed by targeted tools. The committee will take the presentation under advisement as it completes budget deliberations.
