QuickTake:

The Eugene City Council agreed to a property tax exemption for a new 124-unit downtown housing development.

The Eugene City Council agreed Wednesday to a 10-year property tax exemption for a planned 124-unit apartment project in the city’s downtown Market District. 

The council’s 6–2 vote will benefit Station House, a development planned for a 2.15-acre site on the north side of Fifth Avenue at its intersection with Oak Street. Currently, that land is primarily a parking lot in Eugene’s downtown and also has a vacant retail building, which will be torn down for the project. 

Councilors voted during a work session Wednesday to approve the multiple-unit property tax exemption, which is allowed by state law and intended to increase the stock of quality housing in the city’s downtown, preferably near transit services. 

The $62 million project, when finished, will have 163,000 square feet of space with a combination of studio, one-bedroom and two-bedroom units. The ground floor of the six-story building will have more than 7,100 square feet of retail space as well. The developer, Obie Cos. in Eugene, has a portfolio of downtown projects that includes the 5th Street Public Market, Inn at the 5th and the Gordon Lofts.

The tax exemption gets the developers off the hook for any additional property taxes that would result from new construction on the property for the next 10 years. The unimproved property generated about $58,500 in property tax revenues in 2024, primarily from the value of the land. 

During the exemption period, the property owners will continue to pay those tax bills, as they would without building anything on the property. Those taxes are estimated at about $685,000 through 2036.  

After the 10-year tax exemption period ends, the development is required to pay the increased taxes based on the full property value. Those property taxes are estimated at $1.1 million in the first year after the exemption ends in 2036. 

Council members who supported the project said the long-term gain in property tax revenues makes the exemption worthwhile. 

“I’ve run into people all the time that think we are taking money away from services to pay for tax relief and that is just not the case,” Councilor Randy Groves said, adding the downtown needs more residential space.

Councilor Mike Clark said the exemption makes financial sense because without it, the project wouldn’t be built, and wouldn’t be generating additional revenue for the city after a decade. He called it a “simple choice for the city.”

Councilors Alan Zelenka and Matt Keating voted against the exemption.

Zelenka said he’s unconvinced projects like this one would not be built without the exemption. He said other factors, like the city’s budget deficit and the fire service fee, make it hard to think of a “worse time for a tax exemption giveaway.”

Keating said he has concerns about the project obstructing views of Skinner Butte, adding he’d much rather see the exemption program go toward work along Highway 99.

The city’s multiple-unit property tax exemption has aided the development of more than 1,600 units in the city center since 1978. No housing in the downtown core has started without that program or another property tax exemption since at least the 1950s, according to the city’s summary.

City seeks plans for downtown lot  

Another downtown development project is in the pipeline.

Eugene councilors, acting as the Eugene Urban Renewal Agency Board, approved plans last week to seek proposals for a 0.67-acre lot at the southwest corner of East Seventh Avenue and Oak Street. A key goal, in part, is for the project to have at least 80 housing units. 

The city acquired the property from Lane County in 2019, planning to put a city hall building on the northern half next to the Farmers Market Pavilion on the southern half. 

The pavilion was finished in 2022, but officials scrapped plans for city hall to be located there now that city hall is in the former Eugene Water and Electric Board Headquarters.

The property is currently a vacant gravel parking lot, and city officials see potential there. They’re initially asking for the urban renewal agency to establish a pool of qualified development teams through a request for organizations to submit their qualifications.

The goal is for those responses to be due in mid-July. From there, an evaluation team will identify qualified applicants and recommend a preferred development team. Under the tentative timeline, the board would sign off on the preferred team and staff would start to work with them on the proposal.

From October to December, the agency would negotiate and work with the team to develop its proposal and determine what, if any, public funding would go toward the development. 

The goal is for the urban renewal agency to vote on the full project proposal in January 2026. 

Ben Botkin covers politics and policy in Lane County. He has worked as a journalist since 2003, most recently at the Oregon Capital Chronicle, where he covered justice, health and human services and documented regional efforts to combat fentanyl addiction. Botkin has worked in statehouses in Idaho, Nevada, Oklahoma and, of course, Oregon. When he's not working, you'll find him road tripping across the West, hiking or surfing along the Oregon Coast.