BEAVERTON CITY COUNCIL
REGULAR MEETING
JULY 12, 2004

CALL TO ORDER:

The Regular Meeting of the Beaverton City Council was called to order by Mayor Rob Drake in the Forrest C. Soth City Council Chamber, 4755 SW Griffith Drive , Beaverton , Oregon , on Monday, July 12, 2004 , at 6:00 p.m.

Mayor Drake said concerning Agenda Bill 04154, the Council would adjourn to the First Floor Conference Room and hold a joint meeting with the Metro Council and due to the logistics that portion of the meeting would not be televised. He said the City received a grant from Metro for the development of a Beaverton Downtown Regional Center Development Strategy and the consultant who prepared the report would present a summary of the strategy.

ROLL CALL:

Present were Mayor Drake, Couns. Dennis Doyle, Fred Ruby, Forrest Soth and Cathy Stanton. Coun. Betty Bode was excused. Also present were Chief of Staff Linda Adlard , City Attorney Alan Rappleyea , Assistant Finance Director Shirley Baron-Kelly, Director Tom Ramisch , Operations/ Maintenance Director Gary Brentano , Library Director Ed House, Human Resources Director Nancy Bates , Police Chief David Bishop, City Recorder Sue Nelson and Deputy City Recorder Catherine Jansen.

PRESENTATIONS:

04143 - Presentation of Shields and Swearing In of Eight Officers to the Beaverton Police Department

Mayor Drake welcomed the eight new officers to the City.

Police Chief David Bishop swore in the following eight new Police Officers to the Beaverton Police Department: Nicholas W. Coplin; Bryan J. Dalton; Ryan J. Garbutt; Gregory A. Gottschalk; Michael J. Hanada; Jessica T. Hull; Michael P. Smith; and Christopher R. Warren. He thanked the officers' families and friends for their support.

Mayor Drake presented the shields to the new officers.

CITIZEN COMMUNICATIONS:

Mayor Drake welcomed Tommy Williams, Boy Scout Troop 850, Highland Park Middle School , who explained he was working on his Citizenship-in-the-Community Badge.

COUNCIL ITEMS:

Coun. Soth reported he attended a meeting of the National League of Cities Board of Directors. He said it was a good conference and they discussed advocacy for cities, unfunded mandates, and impacts of legislation on cities' bonding capabilities. He said he appreciated being able to attend the conference.

Coun. Stanton said at the end of the week she would be attending Metro's tour of the east side light rail stations. She said she was interested in seeing what the east side had done with the density issues along the light rail line.

STAFF ITEMS:

There were none.

CONSENT AGENDA:

Coun. Ruby MOVED, SECONDED by Coun. Soth, that the Consent Agenda be approved as follows:

Minutes for the Regular Meeting of June 28, 2004

04144 - Liquor Licenses: Change of Ownership - Mai Thai Restaurant

04145 - A Resolution Certifying that the City of Beaverton Provides Certain Services Necessary to be Eligible to Receive State-Shared Revenues Under ORS 221.760 (Resolution No. 3765)

04146 - A Resolution Expressing the City of Beaverton's Election to Receive Distribution of a Share of Certain Revenues of the State of Oregon for Fiscal Year 2004-2005, Pursuant to ORS 221.770 (Resolution No. 3766)

04147 - Traffic Commission Issues TC 552-555

04148 - Final Order for Traffic Commission Issue No. TC 500 Regarding Left Turn Restrictions on SW Greenway at the Driveway Near Hall Boulevard (Pulled and Carried over to meeting of July 19, 2004 )

Contract Review Board:

04149 - Bid Award - Cardlock Fueling Services

04150 - Waiver of Sealed Bidding - Purchase One Backhoe/Loader From the State of Oregon Price Agreement

Coun. Stanton asked about Agenda Bill 04149 (Cardlock Fueling Services) if there was a market rate and if the bid amount ($2.07 per gallon) was a ceiling.

Operations Director Gary Brentanno explained the procurement provided price fluctuation based on the market price of petroleum; it was tied to a formula and there was a fixed discount. He said the price fluctuated daily depending on the market.

Coun. Stanton asked what would happen if the price went up substantially; would it have to come back to Council or was the $2.07 per gallon a ceiling.

Brentanno replied the $2.07 was not a ceiling and if a change was needed, it would typically come back as part of a supplemental budget.

Coun. Stanton said she wanted to revise the Final Order on Agenda Bill 04148 (Final Order for Traffic Commission Issue No. TC 500 Regarding Left Turn Restrictions on SW Greenway at the Driveway Near Hall Boulevard ), to include the language she added on her original motion which said "the left turn restriction or widening of Greenway could be revisited after 125 th was built." She said in the Final Order it stated : "The turn restriction shall remain in place until such time as SW 125thAvenue is completed and opened to traffic between Greenway and Hall Boulevard ." She said that was part A of her motion and part B was that the left turn restrictions could be looked at again after 125 th was built. She said that was the intent of the motion she made and asked that the audio tape of the meeting be checked.

Mayor Drake pulled Agenda Bill 04148 from the agenda and asked that staff listen to the audio tape concerning this issue.

Question called on the motion. Couns. Doyle, Ruby, Soth and Stanton voting AYE, the MOTION CARRIED unanimously. (4:0)

ORDINANCES:
Suspend Rules:

Coun. Doyle MOVED, SECONDED by Coun. Soth, that the rules be suspended, and that the ordinances embodied in Agenda Bills 04151, 04152 and 04153 be read for the first time by title only at this meeting, and for the second time by title only at the next regular meeting of the Council. Couns. Doyle, Soth, Ruby and Stanton voting AYE, the MOTION CARRIED unanimously. (4:0)

First Reading :

City Attorney Alan Rappleyea read the following ordinance for the first time by title only:

04151 - An Ordinance Amending Ordinance No. 4187, Figure III-1, the Comprehensive Plan Land Use Map and Ordinance No. 2050, the Zoning Map for Property Located South of NW Cornell Road and West of NW 114 th Avenue; CPA 2004-0008/ZMA 2004-0008 (Ordinance No. 4316)

04152 - An Ordinance Renaming SW Millikan Boulevard Between Murray Boulevard and Tualatin Valley Highway to "SW Millikan Way"; SNC 2004-0001 (Ordinance No. 4317)

04153 - An Ordinance Amending Ordinance No. 2050, the Zoning Map, as to a Specific Parcel, From Office Commercial (OC) to Community Service (CS); ZMA 2004-0006 Summit View Zoning Map Amendment (Ordinance No. 4318)

RECESS:

Mayor Drake called for a recess at 6:25 p.m.

RECONVENE:

Mayor Drake reconvened the meeting at 6:38 p.m. in the City Hall First Floor Conference Room.

04154 - Beaverton Downtown Regional Center Development Strategy

The Council held a Joint Dinner Meeting with the Metro Council to hear a presentation on the Beaverton Downtown Regional Center Development Strategy. Metro Councilors present were: President David Bragdon; Couns. Brian Newman, Carl Hosticka, Susan McLain and Rod Park . Also present were consultants Jerry Johnson, Johnson Gardner; Terry Moore, ECONorthwest; Bob Yakas, Group MacKenzie.

Mayor Drake said the Beaverton Downtown Regional Center Development Strategy study was developed and funded by a grant from Metro. He added the study was prepared by Johnson Gardner, Group MacKenzie and ECONorthwest, with assistance from City and Metro staff.

Consultant Jerry Johnson, Johnson Gardner, reviewed the highlights and findings of the Beaverton Downtown Regional Center Development Strategy study. He summarized the components of the Study (in the record). He reviewed the Regional Center area and said there was a great deal of parcelization in key areas, which created a development challenge because of parcel size and multiple ownerships. He added there were some large tracts with low density which were viable but difficult to redevelop. He stated there were several large vacant parcels in contiguous ownership which could help in getting redevelopment to occur. He said there was a low level of improvement-to-land-base in the Center (value of the structure improvement on the land was low relative to the value of the land) which in the long-term provided a higher expectation for redevelopment within the foreseeable future.

Johnson reviewed the key assets of the Center area: The Park/Library/Farmer's Market concentration on the southern edge of the Center; The Round; Transit availability; Stable school district; Diversity of retail uses; Mature trees; Free parking; Central Beaverton demographics; Auto dealerships (were seen as a positive and negative); High level of under utilized property which allowed redevelopment; Character of olde r b uildings; and Central location. He explained the barriers were: Perception of visual appeal; People were unclear where the downtown area was located; Pedestrian environment was very difficult; Congestion on Canyon Road/Farmington; Parking availability; Auto-oriented nature of development; Lack of housing density that limited the type of retail that could be developed; Property configuration (parcelization and fragmentation into odd-shaped parcels); North/south division; Street pattern; and Auto dealerships.

Johnson reviewed the opportunities in the area: Improvements to traffic congestion was seen as a positive; More mixed use development; Downtown advocate within the City for downtown development and businesses; Clarified parking structure; More cohesive district designated as the downtown area; Building on small business concentrations; Packaging opportunity sites to attract development in a proactive manner; Leverage transit linkages and public amenities.

Coun. Stanton asked what "leverage transit linkages" meant.

Johnson explained there were vacant sites near the transit center that were not being utilized, but he felt the properties were amenities. He said an individual parking structure would be difficult to maintain because it would not generate the revenue needed to support the structure. He suggested instead a parking district with publicly-owned garages to deal with the parking. He said without going to structure parking, densities would be kept relatively low; consistent with the existing condition, but not consistent with the objectives of the Regional Center designation. He said the parking was convoluted and surfaced on all sides of the issue.

Johnson said the current office and apartment markets were soft due to overbuild; that would take a few years to change. He said the condominium market was strong. He said one of the problems in this Regional Center area was it was not achieving the significant pricing premium in comparison to nearby suburban areas. He said the hope in the long-term was to develop a higher level and selection of activities in the Center area, which allowed for a pricing premium.

Coun. Stanton asked if the other Regional Centers were achieving the significant pricing premium.

Johnson said with exception of Portland 's Downtown Center and Lloyd Center , this was a common problem. He said there wasn't sufficient population in the Beaverton Center to support a lot of retail; the retailers that were there were auto-dependent. He said the Center area did not have the density needed to support further walk-up pedestrian retail, which was the goal of the Regional Centers. He said the Center area could attract regional-draw retail (auto-oriented), but there was not much to serve the local needs.

Consultant Bob Yakas, Group MacKenzie, reviewed four sites in the Center area (Sites D, H, I and J) and the development opportunities that were possible for those sites to fulfill the obligations of the downtown goals. He explained they worked within the bounds of the City's existing Zoning Ordinance and reviewed the details of the sites and opportunities available (in the record-Chapter 4, Pages 4-45 through 4-49 of Study).

Coun. Soth asked if the consultant considered the possibility of the owners of the small sites getting together as a consortium or partnership to redevelop their area.

Johnson replied assembly was a common problem and they had not approached the property owners on this subject. He said if one of the sites had assembly potential, the first step would be to contact the property owners and determine their level of interest.

Yakas reviewed in detail Site D, a 1.95-acre area bordered by SW Milliken Way/SW Canyon Road/SW Hall Blvd/SW Watson Avenue (in the record).

Coun. Stanton asked why the Conceptual Plan in the study was different from the recommendation for Site D in the Study.

Yakas explained the Conceptual Plan was the first attempt in the study to identify what was feasible under existing zoning. He said the development team and staff then reviewed the Conceptual Plan and that resulted in the final recommendation. The Conceptual Plan was rejected because it was what currently exists on that site.

Coun. Stanton how many stalls were in structured parking for Site D.

Yakas replied 339 stalls, four to five stories in height.

Yakas reviewed in detail Site H, old downtown Beaverton (in the record).

Coun. Stanton asked how many stories there would be in the parking structure on Site H.

Yakas replied it would be two stories.

Coun. Stanton noted there would be a long wall on that structure.

Yakas reviewed in detail Site I, Beaverton old town area/residential site (in the record).

Coun. Soth asked if the proposed development of Site I would serve as an impetus for other developments in that area.

Yakas said it would not because the proposed development matched the current development in Site I; it was not establishing a new type of development. He said the big task would be the land assembly and the property owner already completed most of that. He said a mixed use with higher density would be more helpful in bringing in new development. He said they discussed with developer-focused groups getting a higher level of support from local populations for pedestrian-oriented retail concentration and the south side was seen as the area where that made more sense. He said increasing residential density in the boundaries of the area made increased retail supportable and establishing a retail price point would help. He said Site I was recommended because they were sure it would work if surface parking was included.

Coun. Stanton noted most of the homes on Second Street contained businesses and she thought the residential area began on Third Street .

Yakas said Second Street was residential and the property owner was considering mixed use and possibly Service Office on the ground floor. He said one of the advantages to the older buildings was that the rent was lower than it would be in new construction, so they were not sure new construction was economically feasible.

Yakas reviewed in detail Site J, an 8.5-acre "gateway" site on the east end of the Cente r b ordered by the Max line/SW Canyon Road/Highway 217 off-ramp/114 th Avenue (in the record).

Mayor Drake explained on the southwest area there were discussions when the light rail was being planned about adding a station stop there. He asked if that would enhance the broader area.

Yakas replied a well-planned commuter stop helped enhance and develop an area but the difficulty with this site was its close proximity to the existing transit center; operationally it would be difficult for the Transit District.

Johnson said commuter stops worked well in developments of multi-family residential and office uses.

Coun. Stanton confirmed the structured and surface parking totaled 724 parking stalls for Buildings A, B and C; and Building D had 103 stalls of surface parking.

Yakas said the key findings indicated that condominium units and ground floor commercial space, by themselves, were largely viable. He said the structured parking and rental-rate apartments imploded the yields significantly. He said the pro forma indicated this did not represent attractive returns. He said the primary problem was structured parking because it was impossible to recover the costs.

Consultant Terry Moore, ECONorthwest, reviewed Chapter 5 which covered incentive-based and regulatory-based approaches that could help achieve the Center design (in record). He explained anything that could be done to reduce development costs would make development more likely; however, funding was needed to do this.

Coun. Stanton said she thought providing financial incentives and providing financial assistance to developers were different; one was an incentive, the other was actual assistance.

Moore stated in the context of the Study, the assistance was an incentive and the assistance was in the context of direct financial assistance or doing something for the developers that they would otherwise have to pay for; density could be achieved without structured parking. He said with three spaces for every 1,000 square feet, for 10,000 square feet of building space, you needed 10,000 square feet of parking next door. He said with a 20,000 square foot lot, there would be 10,000 square feet of building and 10,000 square feet of parking; the next step would be to build up. He said the taller the building, the more surface space was used for parking, which was what existed now.

Moore then reviewed regulatory approaches and incentives (in the record).

Coun. Stanton said she was trying to determine at what point this was not just theory. She noted the City was already building at 80% of density. She said if the City required higher density levels, and no one could build because the market would not allow it, then nothing happened. She said buildings lasted for thirty years or more and questioned how something could be done in the interim.

Johnson explained one of the options was phased development which could allow for higher density. He said if sites phased, it could help in the transition stage. He said it was hard to get redevelopment to work if there were existing cash-flowing operations. He noted one of the problems in Beaverton was that there was a lot of vital low-density development and as long as there was positive value to the improvements, it was hard to get redevelopment to occur. He said phasing allowed potential redevelopment with higher intensities without having to remove or lose the value of the improvements. He said most developers preferred this. He agreed this was theory because they had not yet seen Phase 2 of developing Regional Centers.

Mayor Drake said this was where the City was trying to go with the modification of the Regional Center 's zoning and densities five years ago. He said this was shadow platting, where future development would be allowed to modify existing successful businesses but they could not develop in the old patterns. He said that was where the City was today with The Round and part of this Study was acknowledging the City was ready for the next phase.

Johnson stated if it made sense, developers would do this on their own, but sometimes they needed assistance so it would make sense. He said an easy step to take was to not preclude it.

Moore explained their conclusion in Chapter 5 was that the financial viability of the project was the primary obstacle to achieving higher densities. He said the largest obstacle to getting the type of development for the Center was that eventually structured parking was needed. He reviewed tools that could be used to achieve this development, that included tax abatements, direct subsidies, subordinated debt and tax credits.

Johnson explained the tax abatements were currently available for the City and tax credits were through the State. He said both have a significant impact on development. He stressed financial viability of any project was the major problem Beaverton faced and these were the most effective tools.

Mayor Drake asked which tool the development community preferred.

Johnson said there were complications with public taxing districts from a financing standpoint, because banks wanted dedicated parking spaces tied to the loan, so the property space was secure. He said abatements were simple and clean, and developers were used to them. He said subordinated debt was high risk as it was unsecured debt and he would not recommend it. He said tax credits were good because it was Federal money administered by the State; often projects can be put together without any equity in the project, which is a good situation for developers.

Johnson advised the next step for the City was to clarify which tools they were willing to use, so that developers would know what assistance the City was offering. He said it was useful to have an on-going group monitoring what was happening downtown. He said a development advocate was needed to ensure the City was presenting the proper face and doing the proper outreach to the development community. He noted the catalyst projects (the sites reviewed earlier) provided the opportunity for redevelopment. He said collateral (marketing) materials needed to be prepared and matchmaking was needed to help match willing property owners with developers. He said the Center should be "branded" to identify the area and develop a positive marketable image, which would enhance the desirability and achievable lease rates of the area.

Johnson said this was a regional issue for all the centers. He said there was a need for funding and Metro's involvement as it worked to meet its own regional goals.

Coun. Soth asked how to address the perception that existing businesses should have some sort of tax credit, like the new businesses coming into the area.

Johnson explained this was not a subsidy of a developer, it was a subsidy of a development style that made no sense; the City was asking the developer to build something that without the subsidy they would have no return. He stressed this was needed to cover the structured parking.

Johnson said density worked well in Seattle because they had a poor transportation system. Transportation costs effected how far people were willing to commute to work; higher prices were paid to live close to work to avoid the highway congestion.

Coun. McLain said the tools the consultant recommended were good, but she had hoped they would have developed more creative ideas the City could use to attract developers into Beaverton rather than downtown Portland or Kruse Way . She asked what was available other than grants.

Johnson said the catalyst projects make a difference and that was what the Metro project achieved; these projects could be completed and the results firmly established. He said they were called catalysts because they were small projects that could be done and, if successful could act as a catalyst to get other projects started.

Moore said the transit access was exceptionally good in Beaverton and could be used as a "niche" to attract development. He said another factor was that Beaverton was the center of Washington County even though this was not true geographically speaking which was a great benefit. He said another unique factor was that there was a lot of underdeveloped property in the Regional Center.

Mayor Drake explained auto dealers were bound by auto franchise areas. He said there had to be an alternative to relocate the auto dealers to an area where they stay within their franchise area, where the property was developable and it was at a place where the viable business was still viable. He said that made the redevelopment of healthy businesses difficult.

Moore explained over time, if activity and use increased, a more intense use of the property developed.

Coun. Doyle asked if the City should proceed with an aggressive campaign, when the examples showed development would not "pencil out" unless the City solved the Study's perception of the problem.

Moore said he felt the City could achieve redevelopment with other tools. He said the City could probably accomplish residential development in the short term using tax credit and/or tax abatement. In the long term, he said, it would take time to accomplish some goals. He said there were probably some actions the City could take to help the situation. He said between the focus groups, developers and some owners, there seemed to be some informal matchmaking being done that was not being conducted by the City. He added phased developments were viable in the short-term. He emphasized from a market perspective, they were saying "Here is what the market is doing right now and there is a reason the market is doing that; there is a gap. That could change over time, but in the short-run, if you want to make things happen faster, some public money is going to have to fill that gap." He explained since the City could not do this all at once, it could use an incremental approach to first decide what it wanted the Center to look like, then allow incremental growth to come at a workable density but pay attention to what it wanted the Center to ultimately become and make sure that other policies (infrastructure and transportation) take the Center in that direction.

Coun. Stanton said the City as a whole did not have sufficient transit links though the Regional Center had excellent connections. She said Beaverton was not a high-density, traditional urban city. She said she saw some of those components in the area of The Round and she felt the intensity of development belonged in that corridor.

Moore said they felt the areas around The Round would be easy to develop so they were not included in the catalyst site list. He said the catalyst sites that were recommended were to handle specific issues that were being addressed.

There was general discussion about hypothetical regional paid parking issues and market trends and changes.

Coun. Soth commented on the auto-oriented nature of society today and in the future.

Moore said transit planners were not planning on turning automotive transportation "on its head." He said several factors (changes in demographics, oil price changes) could make transit-oriented development a useful and viable concept for a "niche" market. He said transit-oriented development did not mean "no automobiles." He said what it meant was lowering the parking s tand ards for the automobile, as there will be a "niche" market that will only need one automobile per unit. He said some of the densities being discussed still required structured parking.

President David Bragdon thanked Mayor Drake and the Council for hosting this meeting and thanked the consultants for the presentation. He commended the Mayor and staff for being awarded the grant noting there had been strong competition. He made general comments on the costs of development for the entire region.

Mayor Drake thanked the Metro Council for attending and thanked the consultants for their presentation.

ADJOURNMENT

There being no further business to come before the Council at this time, the meeting was adjourned at 8:40 p.m.

APPROVAL:

Approved this 19th day of July, 2004.

__________________________________
Rob Drake, Mayor