10/11/2017 - Packet q Completeness Review
for Boards, Commissions
• � r
and Committee Records
CITY OF TIGARD
TCAC -Town Center Advisory Commission
Name of Board, Commission or Committee
October 11, 2017
Date of Meeting
I have verified these documents are a complete copy of the official record.
Joe Patton,Meeting Secretary
Print Name
(I's fi%�q
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Vignature
November 9, 2017
Date
41 City of Tigard
Town Center Advisory Commission Agenda
MEETING DATE/TIME: October 11, 2017— 6:30 to 8:30 p.m.
MEETING LOCATION: Red Rock Creek Conference Room, 13125 SW Hall Blvd.,Tigard, OR 97223
1. CALL TO ORDER Carine 6:30
2. CONSIDER MINUTES Carine 6:35
3. PUBLIC COMMENT Carine 6:40
4. CAPITAL IMPROVEMENT PLAN PROCESS Lori Faha, 6:45
City Engineer
5. WALKING AND PARKING IMPROVEMENTS Carine 7:15
6. TCAC/TCDA JOINT MEETING PREPARATION Carine and Sean 7:35
7. PROJECT UPDATES Sean 7:50
8. TIGARD URBAN LOFTS FINAL REPORT Sean 8:00
9. TIGARD TRIANGLE AFFORDABLE HOUSING Sean 8:15
10. LIAISON REPORTS Carine 8:20
11. NON-AGENDA ITEMS All 8:25
12. ADJOURN MEETING Carine 8:30
*EXECUTIVE SESSION:The Tigard Town Center Advisory Commission may go into Executive Session to discuss real property
transaction negotiations under ORS 192.660(2) (e).All discussions are confidential and those present may disclose nothing from the
Session.Representatives of the news media are allowed to attend Executive Sessions,as provided by ORS 192.660(4),but must not
disclose any information discussed.No Executive Session may be held for the purpose of taking any final action or making any final
decision.Executive Sessions are closed to the public.
Upcoming meetings of note:
Tuesday,October 17, 6:30 p.m.,Joint TCAC-TCDA Meeting,Town Hall
Wednesday,November 8,6:30 p.m., Regular TCAC Meeting,Red Rock Creek
The City of Tigard tries to make all reasonable modifications to ensure that people with disabilities have an equal opportunity
to participate equally in all city meetings.
Upon request,the city will do its best to arrange for the following services/equipment:
• Assistive listening devices.
• Qualified sign language interpreters.
• Qualified bilingual interpreters.
Because the city may need to hire outside service providers or arrange for specialized equipment,those requesting
services/equipment should do so as far in advance as possible,but no later than 3 city work days prior to the meeting.To
make a request, call 503-718-2591 voice or 503-684-2772 DD-Telecommunications Devices for the Dea .
TOWN CENTER ADVISORY COMMISSION AGENDA— October 11, 2017
City of Tigard 1 13125 SW Hall Blvd.,Tigard, OR 97223 1 503-639-4171 1 www.tigard-or.gov I Page 1 of 1
CITY OF TIGARD
TOWN CENTER ADVISORY COMMISSION
Meeting Minutes
October 11, 2017
Members Present: Carine Arendes (Chair),Tim Myshak, Kate Rogers (Vice Chair), and Richard
Shavey.
Members Absent:Joyce Casey,Josh Kearney, Gloria Pinzon Marin, and Sarah Villanueva (Ex Officio).
Staff Present: Redevelopment Project Manager Sean Farrelly, City Engineer Lori Faha, and Senior
Administrative Specialist Joe Patton.
Others Present: Councilor John Goodhouse, Council Liaison to the TCAC.
1. CALL TO ORDER
Chair Arendes called the meeting to order at 6:30 pm. The meeting was held in the Tigard Red Rock
Conference Room, at 13125 SW Hall Blvd.Joe recorded the roll call.
2. CONSIDER MINUTES
The September 13,2017 TCAC Minutes were approved.
3. PUBLIC COMMENT
None.
4. CAPITAL IMPROVEMENT PLAN PROCESS
Lori explained that the Capital Improvement Program (CIP) includes projects funded in the current fiscal
year as well as projects with anticipated funding in the five following fiscal years. The projects are
$50,000 and above. Projects can include funding from multiple sources. Most projects come from
existing Master Plans. Some are safety projects and Council and citizen Boards and Committees weigh in
on others. Prioritization depends on types of projects. Transportation projects utilize a master list and a
process to determine their ranking. The next fiscal year CIP includes Stormwater Implementation Plan in
the Triangle focused on Red Rock Creek.A Metro planning grant,if awarded,will help prioritize projects
in the Triangle. Each year the forecasted funding is updated for the current and future fiscal years. The
Engineering staff time is charged to each project. Sean noted Community Development plans to hire
Triangle Project Manager utilizing urban renewal funding to oversee projects in that area in coordination
with other departments.
5. WALKING AND PARKING IMPROVEMENTS
Carine discussed the changes from the previous meeting.
6. TCAC/TCDA JOINT MEETING PREPARATION
Topics TCAC will discuss with Council include ongoing projects (Saxony,Urban Lofts),Tigard Street
Heritage Trail, the importance of the SWC to implement both the Triangle and downtown URDs which
both call for light rail,where we've been and looking ahead, third quarter updates and draft
recommendations.
7. PROJECT UPDATES
Sean briefly discussed the updates including the Tigard Street Heritage Trail timeline.
Page 1 of 2
TOWN CENTER ADVISORY COMMISSION
October 11,2017
8. TIGARD URBAN LOFTS FINAL REPORT
Sean discussed the three site options covered by the study.Tigard has requested that TriMet commit any
of the purchased land leftover from the Southwest Corridor (SWC) project for affordable housing. It was
unanimously agreed to endorse the plan to continue to pursue affordable housing as a part of the SWC
project.
9. TIGARD TRIANGLE AFFORDABLE HOUSING
Sean briefly discussed the updates since the last meeting. TCDA approved a resolution'to sign a letter
committing between$100,000 and $200,000 in Re/Development assistance contingent on CPAH
securing other funding.
10. LIAISON REPORTS
A. Kate reported the next Levy and Bond Advisory Task Force meeting is October 19. There is
consensus a Levy is needed.A recommendation to Council is expected in December. The Bond
will be discussed after that recommendation.
B. The last SWC did not have many Tigard related issues. The draft DEIS for the SWC is still
expected in January 2018. TCAC will make a recommendation after the DEIS is issued.
11. NON-AGENDA ITEMS
Tim attended the TDA trip to Milwaukie. Their Chief of Police noted there was not an increase in crime
because of light rail. Sean noted recruitment for TCAC is open.
12. ADJOURN MEETING
The meeting was adjourned at 8:30 pm.
9Q, Eft
Jo atton,TCAC Meeting Secretary
A ES Carine Arendes, Chair
Page 2of2
Agenda Item 5
"As important as parking is, it must always be viewed as subservient to the needs of the functions that draw people
downtown."
-Kent Robertson, Smart Downtown Parking: Core Principles to Support Downtown Development
Walking and Parking Improvement Time
Resource
Strategies Current Additiona Notes / Identified Prerequisites Prior s: Low, Frame:
(Grouped by Type) Status I Actions ity Med, High Near, Mid,
Long
RULES AND REGULATIONS
City has Policy decision about this issue
Change parking requirements and parking Yes Needs a discussion and 1 Low Mid
remove/reduce parking minimums maximu
recommendation
ms
Since, ODOT controls speed
Speed limits on non-residential local streets limits, in order to change a speed
are 30 MPH or below Some Yes limit, the city must send a request 2 Med/High Mid/Long
to ODOT (may req study &
multiple steps
Require pedestrian pathways in off-street Yes N/A N/A N/A N/A
parking lots
Connectivity Standards for new Yes Downto N/A Rules for street connectivity N/A N/A N/A
development & significant redevelopment wn adopted
Design standards for complete streets
• Off-street parking that incorporate
requirements for landscaping, shade,
lighting, seating, etc Yes
• Require off-street parking to be behind Downto N/A Design standards adopted for N/A N/A N/A
buildings wn Downtown streets
• Design standards incorporate traffic
calming methods
• Pedestrian safety considerations are
prioritized
POLICIES
Participate in regional transportation Yes Continue SW Corridor planning
planning to ensure local transit/active to Washington County Coordinating 1 Low Mid/Long
transportation projects get funded & built participate Committee's WCCC
Pedestrian plans— Create pedestrian or Limited In URD
multimodal plans that spell out how to build to River areas & River Terrace Pedestrian Plan 3 Med Med
and improve the street network to Terrace City Wide and Neighborhood Trail Plan
encourage & support people walking
"As important as parking is, it must always be viewed as subservient to the needs of the functions that draw people
downtown."
-Kent Robertson, Smart Downtown Parking: Core Principles to Support Downtown Development
Walking and Parking Improvement Time
Resource
Strategies Current Additiona Notes / Identified Prerequisites Prior s: Low, Frame:
(Grouped by Type) Status I Actions ity Med, High Near, Mid,
Lon
Complete streets policies - all renovated & Policies Council
new streets meet the needs of people to adoption
walking, bicycling, and others of all ages & impleme of a
abilities nt being complete
Example Policies: worked street **Strategic plan and walkability
• Prioritize street improvements that improve on policy/poli goal is currently in place 2 Low Near/Mid
pedestrian safety cies
• Prioritize off-street trails and buffered
ped/bike connections
• Street design addresses accessibility,
sidewalks, lighting
Yes* Continue/ *City wide
Safe Routes to School Expand Secure Stable Funding Source for 3 Low/Med Near
program
Comprehensive plans incorporates active Yes* N/A *City-wide N/A N/A N/A
design
CONDITIONS PRESENT
Existing parking is well-utilized AND Increased awareness/use of off-
Parking for customers available (i.e. not No Yes street & northern on-street 1 Low Near
occupied by employees) options
Employee parking management
Adequate funding is available to fund No Yes Identify Funding Source 1 High Mid/Long
pedestrian safety projects
Yes— Not on
Adequate lighting for people walking Main trails or Willing property owners for off- 1 Low Near
Street off street street parking areas
areas
Ready access to transit connections Downto Yes LRT Funding for SW Corridor 1 High Long
wn
Yes Yes- Frequent directional signage,
Pedestrian connections between areas, Burnha Commerci routes provide shade, safe &
esp. between parking and Main St, are al, Med Near
m & level surfaces, street furniture &
obvious, comfortable and enjoyable Main Scoffins, amenities present
etc.
Chart prepared by Carine Arendes, CCAC Chair and Kate Rogers, CCAC Vice Chair
"As important as parking is, it must always be viewed as subservient to the needs of the functions that draw people
downtown."
-Kent Robertson, Smart Downtown Parking: Core Principles to Support Downtown Development
Walking and Parking Improvement Time
Resource
Strategies Current Additiona Notes / Identified Prerequisites Prior s: Low, Frame:
(Grouped by Type) Status I Actions ity Med, High Near, Mid,
Lon
"Eyes on the Street" /Activity on the streets Improvin Activate Sidewalks- Dining &
fosters a sense of safety & comfort for g on Yes- Off other? Med Mid/Long
people who are walking Main St Main Increased transit throughout
day/night
Improvin Yes-
Desirable, frequent, and convenient g Main & Commerci Similar to Above- need to
destinations Burnha al, encourage more active uses Med Mid/Long
m St Scoffins, throughout day & night
etc
Short blocks and frequent intersections for Street connectivity rules have
connectivity Somewh Yes been put in place. Needs large- High Long
*Redevelopment resources could include at
land consolidation & incentives scale redevelopment to trigger
Off-street or buffered transportation system
supports multi-modal use e.g. trails, Yes - Yes-
buffered bike lanes buffered Incorporate into New Projects High Long
*could occur within pedestrian-orientated off-street uses
projects
Mostly
Direct access to buildings from pedestrian true Yes Triggered by redevelopment High Long
realm Downto
wn
INCENTIVES AND EDUCATION
Outreach to stakeholders regarding Yes
conditions & changes Somewh Yes 1 Low/Med Near
at
Providing learning opportunities for staff,
advisory groups & council regarding ? Yes Staff well-informed/educated Low/Med Near
various listed strategies
Utilize social media to share walkability Yes Yes Room for improvement- hone Low/Med Near
message messages
Grants for Safe Routes to Schools & otherN/A
infrastructure improvements
? Downtow N/A N/A N/A
n
Chart prepared by Carine Arendes, CCAC Chair and Kate Rogers, CCAC Vice Chair
"As important as parking is, it must always be viewed as subservient to the needs of the functions that draw people
downtown."
-Kent Robertson, Smart Downtown Parking: Core Principles to Support Downtown Development
DRAFT
Chart prepared by Carine Arendes, CCAC Chair and Kate Rogers, CCAC Vice Chair
Agenda Item 6 DRAFT
Outline for Joint TCDA/TCAC Meeting
By Chair Carine Arendes
I. Introductions
Thanks
Why here
Points of discussion
• Recap where we've been
• Where we are -Draft Recommendations
• Looking ahead - Next Steps
II. Recap - District Accomplishments
Triangle Urban Renewal passage - more to come
Last briefing w/ singular focus on downtown
Activating Downtown - Both public & private actions
o Projects both public & private: list refer to 3rd Quarter Updates
o Manage public parking Downtown
o Partners- Chamber & TDA
III. Now- Walking & Parking
A. Learning about best practices
1. The good stuff in design construction & policy
2. Good news adopted policies incorporate best practices
➢ Leadership has adopted polices to support Strategic Plan
➢ Staff has done a great job getting us here post-recession
➢ Challenge is Implementation
➢ Public Funding
■ Scarce Dollars
■ New revenues?
➢ Private Development
B. Draft Recommendations
1. Focus on Destinations/Functions That Bring People Downtown.
➢ Continue to invest in projects that activate Main St
■ Frequent destinations & variety of uses
• more reasons to go & at different times
■ More people
• interesting walk environment
• safer place to be
2. Improvements that increase public safety & facilitate access
➢ Lighter Quicker Cheaper program?
■ Lighting (trails & off-street parking lots)
■ Directional signage
■ Parking lot access redevelopment retrofit-maintenance?
3. Capital Improvements
➢ Invest in infrastructure that priorities pedestrian safety city-wide & prioritize pedestrian
access to Downtown
1
Agenda Item 6 DRAFT
■ $119 M sidewalk gap
■ Bonding? Other Options?
IV. Looking Ahead
A. SW Corridor- Mitigating Impacts in short term for shared long term benefits
B. Main Street
➢ Importance & Value of TSHT, strong interest in water feature and restroom
➢ 2nd Phase of Main Street Green Street
C. Triangle - Big Challenges & Big Opportunities
2
Agenda Item 7
10/4/17 Downtown Project Updates
1. Fanno& Main (Saxony) project
• Site cleared and contaminated soil removed.
• Meeting with potential developer week of 10/9
2. Tigard Transit Center/Nicoli redevelopment study(Metro CET grant)
• Urban Financial Analysis and Implementation Strategies report presented to TCAC
3. Parking management
• Municipal Code amendments hearing by end of 2017
4. Developer recruitment
• Draft development agreement being negotiated on Fanno @ Main property
S. Tigard Street Heritage Trail
• 30% Design complete
• Online comment peiod
6. Fanno Creek Park Improvements
• CWS design, engineering underway. Project begins spring 2018
7. Equitable Housing Grant
• SW Corridor Equity+ Housing Advisory Group meetings
• Outreach to affordable housing residents, being coordinated with Metro and TriMet
8. Community Engagement
• Website updates
9. Urban Renewal Improvement Grants
• Joint committee met on October 5th to make recommendations on new grant
Tigard Street Heritage Trail
Task Dates
Consultant Notice to Proceed May 4, 2017
Community Engagement Meeting#1 June 29, 2017
City Council Update July 11, 2017
Community Engagement Meeting#2 July 27, 2017
30% Design August 9, 2017
CCAC Update August 9, 2017
Community Engagement Meeting#3 August 31, 2017
Web survey October 1, 2017
Our Town Grant Application October 2, 2017
City and ODOT Review of 30% Design October 11,2017
60% Design November 6,2017
City and ODOT Review of 60%Design December 18,2017
90% Design January 18,2018
City and ODOT Review of 90% Design March 1,2018
Permitting October 11,2017-March 7,2018
Final Plans,Specs, Estimate March 15,2018
Invitation to Bid March 16,2018-May 22,2018
Our Town Grant Announcement April 2018
Construction May 24,2018-September 26,2018
TIGARD URBAN LOFTS
DEVELOPMENT OPPORTUNITY STUDY
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SERA Architects
FINANCIAL ANALYSIS
& IMPLEMENTATION STRATEGIES
Prepared for
City of Tigard
April 2017
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JOHNSON N&A CONSTROCTION
ECONOMICS COMPANY
JOHNSON ECONOMICS LLC—621 SW Alder Street,Ste. 605 Portland, OR 97232—503-295-7832
CONTENTS
I. INTRODUCTION....................................................................................... 3
II. SUBJECT SITES......................................................................................... 3
III. CONCEPTUAL SITE PLANS........................................................................ 6
CONCEPT COMPARISONS 10
IV. FINANCIAL ANALYSIS............................................................................. 10
A. METHODOLOGY 10
B. COST ESTIMATES 12
C. FINANCIAL PERFORMANCE 13
D. COST CONSIDERATIONS 14
E. ALTERNATIVE COST/SUBSIDY SCENARIOS 15
V. FINANCING AND IMPLEMENTATION STRATEGIES .................................. 18
A. GENERAL STRATEGIES AND CONSIDERATIONS 18
B. PUBLIC PARTICIPATION AND FUNDING SOURCES 20
APPENDICES
APPENDIX A- CONCEPTUAL DESIGNS
APPENDIX B- PRO FORMA FINANCIAL ANALYSIS
APPENDIX C- DETAILED COST ESTIMATES
APPENDIX D - MARKET ANALYSIS REPORT
JOHNSON ECONOMICS LLC—621 SW Alder Street,Ste. 605 Portland, OR 97232—503-295-7832
I. INTRODUCTION
This report and its appendices present the findings of the Tigard Urban Lofts Development Study
project. This report summarizes the final design concepts, financial feasibility analysis, and strategies
and tools for moving forward. Appendices to this report provide the full design package, pro forma
analysis tables, and full market analysis report.
JOHNSON ECONOMICS was retained to prepare analysis of three development opportunity sites in
Downtown Tigard, based on design work from SERA Architects, and construction costing provided by
H&A Construction. The project was undertaken in collaboration with representatives from the City of
Tigard,TriMet, Metro and Community Partners for Affordable Housing.
This project was funded by a Community Planning and Development Planning Grant from Metro.
II. SUBJECT SITES
This development opportunity study considered the potential of three sites in the Downtown Tigard
area to support transit-oriented development (TOD) in the future. Given the existing and potential
transit improvements in the area, the centrality of the neighborhood, and the community's vision, it is
prudent to plan for increased density and TOD building forms in the Downtown.
FIGURE 2.1:SUBJECT SITES,DOWNTOWN TIGARD
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CITY OF TIGARD I URBAN LOFTS DEVELOPMENT STUDY-MARKET ANALYSIS PAGE 3
Figure 2.1 presents the three sites studied in this project. They have been labeled Sites A, B, and C.
Each of these sites is adjacent to potential future TriMet transit center improvements, including possible
locations for a future MAX light rail station.
Figure 2.2 summarizes basic characteristics of the three sites, and current zoning requirements. All sites
are located within the Mixed Use Central Business District zone, and within the Downtown Plan District.
Site A is located in the Main-Center sub-area, while Sites B and C are located in the Scoff ins-Commercial
sub-area.
FIGURE 2.2:SUBJECT LOCATION
SITES PERMITTED RES.DENSITY REQ.RES.PARKING
Max Units Units Parking Min
Address Acres Sq.Ft. Plan Area per Acre Permitted Ratio Parking
Site A 12260 SW Main St./ 0.54 23,480 Main-Ctr 50 27 1.0 27
8960 SW Commercial
Site B 8845&8861 SW 0.57 24,850 Scoffins-Com. 80 46 1.0 46
Commercial
Site C 8775 SW Commercial 0.65 28,171 Scoffins-Com. 80 52 1.0 52
Source: City of Tigard,Metro RLIS,Johnson Economics
The conceptual development designs discussed in this report vary from current zoning requirements in
key ways, as discussed more in the next section. This was done in order to test designs that exemplify
good transit-oriented development principles, maximize housing, and provide a catalyst for future
development in the district.
Location
The subject sites are located within a quarter mile, or a few blocks, of each other in Downtown Tigard
(Figure 2.3). Because of the close proximity, these sites do have many similarities in terms of
opportunities and challenges for development. This area has been the focus of intensive community
planning and investment. The city's traditional Main Street and the surrounding area are redeveloping
over time with a strong emphasis on walkability, full mix of uses, increased household density, and new
development forms.
The central location is within roughly 1.5 miles or less of the remainder of the city. Central Beaverton is
located roughly 5 miles to the northwest, and central Portland is 10 miles to the north.
(The appended Market Analysis includes a full discussion of the strengths and weaknesses of the site
locations, and the market viability of prospective land uses. These considerations were taken into
account in determining the development programs for the three conceptual designs.)
CITY OF TIGARD I URBAN LOFTS DEVELOPMENT STUDY-MARKET ANALYSIS PAGE 4
FIGURE 2.3:SUBJECT LOCATION
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Beaverton `
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Tigard Study , ,
Sites
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Source: RLIS,Johnson Economics
CITY OF TIGARD I URBAN LOFTS DEVELOPMENT STUDY-MARKET ANALYSIS PAGE 5
III. CONCEPTUAL SITE PLANS
This project produced three development concepts (one for each site) prepared by SERA Architects. The
concepts include a site plan, development program, and conceptual building elevations. Massing
diagrams were also prepared for Site A. The concepts are summarized below, and presented in full in
Appendix A.
FIGURE 3.1:CONCEPTUAL SITE PLANS
Site A Site B Site C
Total Building Size (s.f.): 63,633 57,345 80,026
Construction: 5 floors 5 floors 5 floors
Type V(wood),over Type V(wood),over Type V(wood),over
Type I (concrete) Type I (concrete) Type I (concrete)
Building Height(ft.): 55 52 52
RENTAL HOUSING
Housing Units: 50 56 72
Density(units/acre): 92.8 98.2 111.3
Leasable Res.Space (s.f): 42,067 46,300 65,992
Residential Parking: 27 45 44
Parking Ratio: 0.5 0.8 0.6
RETAIL SPACE
Leasable Retail Space (s.f.): 4,200 2,281 1,902
Retail Parking: 6 6 5
Parking Stalls/1,000 s.f.: 1.4 2.6 2.6
Source: SERA Architects,Johnson Economics
In keeping with the goals of this project, the concepts are designed to represent dense transit-oriented
development, with an emphasis on rental housing over ground-floor commercial space. They are
intended to serve as pioneering examples of dense, more urban forms in Downtown Tigard and catalysts
for future mixed-use development in the area.
In general, these concepts deviate from current zoning requirements in two key ways: they exceed the
currently permitted residential density in these planning sub-areas, and they do not meet the required
residential parking ratio of 1.0 parking space/unit. These variations were included by design, based on
discussions of preliminary findings and project goals with staff. Increased residential density and
reduced parking ratios are key design goals of successful transit-oriented development, which aims to
bring more households within walking distance of transit and mixed use amenities, while reducing
dependence on cars.
A sample of the designs are presented below. Please see Appendix A for the full design package.
CITY OF TIGARD I URBAN LOFTS DEVELOPMENT STUDY-MARKET ANALYSIS PAGE 6
FIGURE 3.2:SITE A CONCEPT
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Site A—Upper Residential Floor
Source: SERA Architects
CITY OF TIGARD I URBAN LOFTS DEVELOPMENT STUDY-MARKET ANALYSIS PAGE 7
FIGURE 3.3:SITE B CONCEPT
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Site B—Upper Residential Floor
Source: SERAArchitects
CITY OF TIGARD I URBAN LOFTS DEVELOPMENT STUDY-MARKET ANALYSIS PAGE 8
FIGURE 3.4:SITE C CONCEPT
RESIDE TIAL
TOWNHOMES
PUBLIC RETAIL �.ESIDENTIAL
SPACE LOBBY -Utz[V E
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Site C Longitudinal Section Diagram—View towards NE
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Site C—Site Plan
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BEDROOM- BED�OOY BEDRDOM LIVE-WORK LFVE-WORK LPJE4VORK LIVE-WORK TWO BATH
TWO BATH -3.S, -3i LF S= —A E_ E= 3H SF
—927-
Site C—Upper Residential Floor
Source: SERAArchitects
CITY OF TIGARD I URBAN LOFTS DEVELOPMENT STUDY-MARKET ANALYSIS PAGE 9
CONCEPT COMPARISONS
The concepts developed for the three sites are similar in some ways but differ in others.
■ All designs call for four floors of wood-framed residential uses, over ground floor uses under a
concrete podium (Type V construction over Type 1).
■ The ground floor uses are a mixture of retail commercial space and common area uses for the
residences above.
■ All concepts include some parking underneath the concrete podium, combined with some
uncovered surface parking. All concepts include a driveway/lane under the podium to provide
access to the parking.
■ All concepts include a six-foot set back over the third floor, as required by code.
■ The space provided by the setback, combined with balconies and rooftop access/amenity for
residents, meets the code requirements for open space and landscaping on the sites.
■ The concepts all include a mixture of one bedroom units, two bedroom units, and three
bedroom units. All of these units are located on upper floors. Site C also includes four-bedroom
townhome and/or live/work units with direct access from SW Commercial Street.
■ Site A accommodates the fewest residential units at 50, while Site B accommodates 56 units.
Site C allows for the largest development,with 72 total units.
■ Site A and C are determined to need minimal site work, while Site B would require a greater
level of excavation.
IV. FINANCIAL ANALYSIS
Each of the three concepts was evaluated using pro forma and cash flow analysis to assess the financial
feasibility any potential viability gap that exists between the cost and expected return. This section
presents the methodology and basic assumptions used in this analysis and presents the findings.
Detailed pro forma sheets, and cost estimates, are presented in Appendices B& C.
A. METHODOLOGY
Each development and individual components were evaluated using a ten-year cash flow, with a
reversion value at the end of the period.1 The scenarios assumed fee simple ownership of the property
by the developer and conventional financing.
Planning level estimates of construction costs were provided by H&A Construction based in Tigard. The
numbers assumed by developers may vary substantially, depending upon variations in design and finish
quality. H&A Construction presented a range of potential costs ranging from low to high. The pro forma
1 An estimated sales price at the end of the period.
CITY OF TIGARD I URBAN LOFTS DEVELOPMENT STUDY-MARKET ANALYSIS PAGE 10
analysis presented here used the per-square-foot cost estimates from the low end of the spectrum. Soft
cost and contingency costs equal 30%of hard costs.
The estimated current land value of the sites was determined from a City-provided appraisal
(1/31/2017) for Site A. And estimated real market value (RMV) of the Washington County Assessor's
office for Sites B and C. While RMV was used as a proxy for acquisition cost in this analysis, the actual
cost to acquire the sties may vary.
Financial assumptions were made with respect to lending terms. As with other market-based
assumptions, these reflect the current and near-term market trends and are likely to change over longer
time frames. The following is a brief summary of financial assumptions common through this analysis:
FIGURE 4.1:FINANCIAL ASSUMPTIONS
Variable Assumption
Capitalization Rate (Residential): 5.0%
Capitalization Rate (Commercial): 7.0%
Minimum Debt Coverage Ratio 1.25
Loan to Value Ratio Max 80%
Construction Loan Interest Rate 5%
Permanent Loan Interest Rate 5%
Threshold Return on Cost: 6.3%
Source: Johnson Economics
Income and sales assumptions were based upon the professional opinion of JOHNSON ECONOMICS,
reflecting surveys of properties in the market area. These assumptions necessarily assume a fairly
generic product. These included the following:
FIGURE 4.2:INCOME ASSUMPTIONS
Product Type Income Assumption
Rental Apartments Mo. Rent Rent s.f.*
One bed/one bath $1,300 $1.90
Two bed/one bath $1,500 $1.80
Two bed/two bath $1,800 $1.71
Three bed/two bath $2,100 $1.66
Four bed/two bath townhome $2,500 $1.09
Average*: $1,566 $1.70
Retail Lease Rates(NNN,Annual): $18/s.f
*Average rents differs somewhat among the sites due to differences in the average size of
each unit type.
Source: Johnson Economics
CITY OF TIGARD I URBAN LOFTS DEVELOPMENT STUDY-MARKET ANALYSIS PAGE 11
While we feel that these numbers are appropriate baseline assumptions, developers evaluating project
feasibility may vary in their assumptions, which would either increase or decrease the perceived viability
of the project.
The analysis assumed threshold requirements in terms of a minimum return necessary for market rate
development to occur. Return on Cost is defined as the net operating income (N01) during the first
stabilized year divided by the total project cost. The yield that an individual developer or investor may
be willing to accept can vary significantly, and these measures should be viewed as guidelines.
B. COST ESTIMATES
Preliminary cost estimates were developed based on the conceptual site plans. These planning-level
cost estimates reflect the detail available in the development concepts, and were used to as the cost
assumptions for the pro forma financial analysis.
Figure 4.3 presents the estimated cost range for each site, from least cost to highest cost. The greatest
factors influencing eventual building cost will be the quality of materials and finishes applied to the
building, and also the availability of labor and whether the current trend of escalating labor cost
continues.
(NOTE: JOHNSON ECONOMICS has altered the cost estimates prepared by H & A Construction in two key
ways: The original estimates included two contingencies allowances of 10% each, one on hard costs,
and one on the project total, including hard costs. This has been replaced with a single 10% contingency
rate, now included in soft costs. In addition, the original estimates included placeholder estimates for
the cost of system development charges (SDC's) for these projects. These have been replaced with
more accurate, higher estimates of SDC's. These changes are reflected in the pro forma analysis. The
cost estimates found in the appendix present the full unrevised cost estimates of H &A Construction.)
FIGURE 4.3:COST ESTIMATES,CONCEPTUAL DESIGNS AT SUBJECT SITES
SITE Site A Site B Site C
Est.Acquisition $750,000 Est.Acquisition $1,250,000 Est.Acquisition $1,350,000
Least Highest Least Highest Least Highest
Cost Cost Cost Cost Cost Cost
Floors 1thru 5 $ 9,379,690 $ 10,639,869 $ 8,818,935 $ 9,953,695 $ 12,575,670 $ 14,198,440
Sitework $ 699,200 $ 981,920 $ 707,034 $ 993,396 $ 834,476 $ 1,133,797
General Conditions $ 1,034,240 $ 1,292,800 $ 1,034,240 $ 1,292,800 $ 1,034,240 $ 1,292,800
Subtotal $ 11,113,130 $ 12,914,589 $ 10,560,209 $ 12,239,891 $ 14,444,386 $ 16,625,037
Mark Ups/Contingencies/Ins. $ 822,344 $ 983,333 $ 790,393 $ 942,513 $ 1,025,385 $ 1,207,815
Building Construction Subtotal $ 11,935,474 $ 13,897,922 $ 11,350,602 $ 13,182,404 $ 15,469,771 $ 17,832,851
Developer Soft Costs $ 3,580,642 $ 4,169,376 $ 3,405,180 $ 3,954,721 $ 3,867,443 $ 4,458,213
System Development Fees $ 591,936 $ 533,062 $ 723,482 $ 668,528 $ 903,907 $ 833,014
Project Total(no off site work) $ 16,108,052 $ 18,600,360 $ 15,479,264 $ 17,805,654 $ 20,241,120 1 $ 23,124,078
Source: H&A Construction,Johnson Economics
• This analysis applies the least cost estimate. Given the achievable rent levels in this market
area, rental housing is not assumed to be built to the luxury level. Either market rate or
affordable housing can aim for cost savings while providing a quality development.
CITY OF TIGARD I URBAN LOFTS DEVELOPMENT STUDY-MARKET ANALYSIS PAGE 12
• The Site B concept features the lowest estimated costs, while providing more units than Site A
(56 vs. 50). This is because the Site B concept is the most compact and efficient of the designs.
• The Site C concept has the highest estimated costs but is also the largest development. The
estimated cost is comparable on a per-unit basis, and slightly lower on a per-square-foot basis.
• Some of the major factors impacting the estimated costs of these concepts are discussed in
more detail in the following section of this report.
• See the appendix for detailed cost estimate data.
C. FINANCIAL PERFORMANCE
JOHNSON ECONOMICS performed pro forma analysis including 10-year cash flow analysis on the conceptual
site plans, based on a number of market-based and cost assumptions as discussed above.
The initial analysis assumed that the project would offer market-rate (i.e. not subsidized) rental units
using the "least cost" estimate of development costs. Based on these assumptions, none of the
concepts are estimated to achieve a market value equal to the cost to build them (Figure 4.4).
FIGURE 4.4:FINANCIAL PERFORMANCE&FEASIBILITY MEASURES
CONCEPTUAL DESIGNS AT SUBJECT SITES MARKET RATE,FULL COST)
Site A Site B Site C
Land Cost: $750,000 $1,250,000 $1,350,000
Construction Cost: $11,935,474 $11,350,602 $15,469,771
Soft Costs: $3,580,642 $3,405,180 $3,867,443
System Development Fees: $591,936 $723,482 $903,907
Project Total: $16,858,052 $16,729,264 $21,591,120
Cost/s.f.: $271 $270 $253
Resid. cost/unit: $300,897 $265,421 $274,445
Estimated Project Value: $13,856,545 $14,892,842 $19,338,200
Val ue/Cost: 82% 89% 90%
Target Return on Cost: 6.3% 6.2% 6.2%
Actual Return on Cost: 4.5% 4.8% 4.8%
Estimated Viability Gap: $4,808,883 $3,778,966 $4,775,294
Gap as%of Cost: 29% 23% 22%
Source: Johnson Economics,H&A Construction
• As a market-rate development, each is faced with a probable "viability gap" between the cost of
development and the targeted return on the investment.
CITY OF TIGARD I URBAN LOFTS DEVELOPMENT STUDY-MARKET ANALYSIS PAGE 13
• The estimated project value is derived from the achievable net operating income and assumed
cap rate. In short, the amount of rental revenue these buildings could generate from the
programmed uses is not yet high enough to justify the high cost of construction.
• The gap differs from concept to concept (as a percentage of cost) from 22%for Site C to 29%for
Site A. There are a variety of measures which might help reduce or close this gap, which are
discussed more below.
D. COST CONSIDERATIONS
The findings indicate that one significant challenge to feasibility is the relatively high cost of developing
these types of structures, combined with general escalation of construction costs in recent years. This
creates an imbalance between cost and the projected operating income, even though achievable rents
have also been climbing steadily in Tigard.
The following are some aspects of the cost challenge faced by these concepts as market-rate
developments:
• Labor Availability: Currently the apartment construction market is likely in or nearing the high
point in the current cycle, with apartment production increasing across the Metro area since
roughly 2012. The Metro area saw an estimated 6,500 units produced in 2016, and this is
projected to grow to as many as 9,000 units in 2017. As the number of projects in the pipeline
has increased, the availability of regional construction companies and labor have become more
and more limited. This has increased construction labor costs markedly over the last few years,
and this may increase depending on the continuation of this current development cycle.
It is currently uncertain when this cycle will turn. There are some indications that rents are
leveling off and more concessions are being offered to prospective tenants in central Portland
where the majority of construction has been taking place. At the same time, Portland has
introduced an inclusionary zoning program which might further deter some new development
projects. Many suburban markets, including Tigard, have not seen as much development yet
this cycle, and it is possible that construction activity may shift to these markets and therefore
maintain the pace of recent years. H & A Construction estimates that continuation of the
current tight labor market may increase construction costs at 5% per year going forward, until
the cycle moderates.
• Construction Form: The proposed building form of four stories of Type V wood construction
over Type I concrete construction (five stories total), entail some increased costs over buildings
with fewer floors. Additional floors add some costs in structural elements to support the extra
weight and allow for settling. Logistically, the larger project will likely require a larger general
contractor with experience in this type of construction, which likely have higher fees and
overhead. In addition,the taller construction requires a tower crane which may be avoided with
shorter buildings.
However, in reducing building size there are straightforward trade-offs in the number of units
that can be accommodated on-site and how well the building meets goals of transit-oriented
development.
CITY OF TIGARD I URBAN LOFTS DEVELOPMENT STUDY-MARKET ANALYSIS PAGE 14
• Required Building Step Back: Tigard Municipal Code that the street facing facade of a building
in the Downtown Plan District feature a six-foot step back above the third story (18.610.030
A.1.b). The intent of this rule is to reduce the sense that buildings are looming over the
streetscape and allow for additional light into local street corridors. While this rule is well-
intentioned, it creates greater costs for wood-framed buildings because it means that the frame
must essentially provide support for two facades. The second, step-back fagade also requires
support members extending from the podium to the top floor, as if it were the external fagade.
• Structured Parking: All concepts use some combination of parking under the concrete podium
and surface parking. This is largely necessary to strike a balance between sufficient residential
density to meet the goals of the project, and accommodate enough parking, even at a reduced
parking ratio. Reliance solely on surface parking would greatly constrain the footprint of the
built structure on site, limiting the number of residential units and commercial uses.
• Site Size and Configuration: Site work may be more expensive on sites this size because they
are not quite large enough to accommodate larger excavation equipment and vehicles. Smaller
equipment means increased time for site preparation.
• Finishes and Materials: The third-party cost estimates assumed a "mid-grade" finish level for
this project and the residential units. Finishes and the exterior envelope are approximately 20%
of the building cost. Adjusting the assumptions for the finish level can impact the overall project
costs by roughly 5%.
• Preliminary Nature of Designs: Cost estimates for this project were supplied by a third-party
construction contractor with experience in building these types of projects. The accuracy of
such estimates varies depending on the specificity of the design plans the contractor has to
work from. Plans at this level of specificity require significant assumptions on the part of the
construction contractor to estimate cost. In JOHNSON ECONOMICS experience, this sometimes
leads to conservative estimates which depict the costs as somewhat higher than could actually
be achieved. This is a prudent approach for the estimator to take,faced with a lack of specificity
and uncertainty about future market conditions.
A second, more generic cost calculator estimate conducted by the third-party contractor also
projected costs at nearly 10% lower than those in the detailed cost estimate. Therefore, for
planning purposes we believe it is suitable to assume that project costs may be somewhat
lower. (This is reflected in the "revised cost estimate"scenario discussed below.)
E. ALTERNATIVE COST/SUBSIDY SCENARIOS
This project assumes that the subject sites have a high potential to participate in some form of
public/private partnership for development. This is because the sites are likely to be developed in
conjunction with major transit station improvements in the area. Depending on the eventual design and
location of a transit station in the area (this is currently unknown), one or more of these sites may come
under the ownership of TriMet, meaning the agency can steer the planning and development of the
site(s) to meet public goals such as the provision of quality T.O.D., affordable housing, and/or other
public goods which make the most of these catalytic sites.
CITY OF TIGARD I URBAN LOFTS DEVELOPMENT STUDY-MARKET ANALYSIS PAGE 15
In order to test the impacts of various potential public/private funding mechanisms, JOHNSON ECONOMICS
used the pro forma model to test various scenarios which could impact the cost/return equation for
potential developers:
• Revised Costs: This scenario assumes that the project can be developed at a lower cost than the
fully projected cost. This would be accomplished through a series of less-expensive finishes and
materials, but also assumes that the full estimated cost may be conservatively high. This
scenario assumes that hard costs are 7.5% lower than the full cost projection. Soft cost
percentage and SDC estimates remain unchanged.
• Land/SDC Waiver: This scenario assumes that the cost of the land to the developer may be
eliminated through some combination of land donation, or waiver of SDC costs up to the
estimated value of the land. This mechanism has been used on a prior project in the area.
• Vertical Housing Tax Credit (VHTC): This building is located in Tigard's Vertical Housing
Development Zone which allows for a tax exemption on new construction of up to 80% per year
for ten years. This scenario assumes use of this tax credit.
• VHTC+ Land/SDC Write-down: This scenario assumes use of both of the above options.
Figure 4.5 presents the findings of this alternatives analysis. While in none of the scenarios is the
viability gap completely eliminated for a market-rate project, it does fall significantly with use of the
VHTC and reduction in the cost of the land.
The concepts for Site B and C also achieve an estimated project value that exceeds project cost with the
use of these programs.
FIGURE 4.5:FINANCIAL PERFORMANCE&FEASIBILITY MEASURES
CONCEPTUAL DESIGNS AT SUBJECT SITES(ALTERNATIVE SCENARIOS)
Feasiblity Gap
30% 29%
Site A
25% 23% 22�° 23% Site B
20% 19%
17% 17%° 17% Site C
1$% 13%
10% 11% 10%
10%
5% 3% 4%
0% J 1
Market Rate Market Rate Market Rate Market Rate Market Rate
(Full costs) (Revised costs) (Land/SDC write (VHTC) (VHTC&Land/SDC
down) writedown)
Source: Johnson Economics
CITY OF TIGARD I URBAN LOFTS DEVELOPMENT STUDY-MARKET ANALYSIS PAGE 16
FIGURE 4.5 CONT.):FINANCIAL PERFORMANCE&FEASIBILITY MEASURES
CONCEPTUAL DESIGNS AT SUBJECT SITES(ALTERNATIVE SCENARIOS)
Site A Value/Cost Ratio
140%
■Site B
120io 0 Site C -
104% 103% 104% 103%
0 95% 96% 95% 96%
100% 89% 90% 88% 93°/a 88% 93%
82%
80% _
60% —
40%
20% — —
0% —
Market Rate Market Rate Market Rate Market Rate Market Rate
(Full costs) (Revised costs) (Land/SDC write (VHTC) (VHTC&Land/SDC
down) writedown)
Source: Johnson Economics
CITY OF TIGARD I URBAN LOFTS DEVELOPMENT STUDY-MARKET ANALYSIS PAGE 17
V. FINANCING AND IMPLEMENTATION STRATEGIES
The findings of the financial analysis suggest that buildings on the scale of those envisioned in these
conceptual designs may be infeasible for the foreseeable future as market-rate rental housing. While
achievable rents in this market area have increased significantly in recent years, development costs have
as well. While mid-rise buildings are becoming ever more feasible in the Downtown Tigard submarket, a
viability gap still persists.
Given the key location of these sites adjacent to major planned transit improvements, and likely to be
controlled by public agencies, creating catalytic transit-oriented development is a reasonable public
goal. The following are some general approaches to consider in increasing the feasibility of these
projects.
A. GENERAL STRATEGIES AND CONSIDERATIONS
1) Affordable Housing
Developing one or more of these sites as affordable housing rather than market-rate rental housing,
may help negate some of the market considerations which help make the project infeasible.
Affordable housing projects have the ability to tap into other sources of equity and financing for
development, and affordable rents are not expected to provide a market-level return on
investment.
The estimated project costs remain high, even assuming subsidies for affordable housing such as tax
credits. Applying for and administering tax credits increases both development soft costs and
operating costs over time for affordable housing. Additional expectations for green building,
accessibility and other requirements add additional cost. In practice, development of affordable
housing is often more costly than the development of market-rate housing.
Private affordable housing developers can benefit from state provisions that allow them to avoid
paying prevailing wages for the project, which can mitigate construction costs by roughly 15%. Two
aspects of the proposed conceptual designs complicate this: one is that prevailing wage is required
for projects over four stories; the second is that prevailing wage is required for projects which
include a commercial component. Refining the design to be four stories in height, and residential-
only(not permitted at Site A) may allow this significant source of cost saving.
JOHNSON ECONOMICS modeled applying LIHTC to the site concepts, assuming successful application to
the maximum allowed tax credit allocation for a single project. As expected, tax credits can greatly
subsidize the initial development costs of a project. However, the remaining equity needs were still
sizable — up to 50% of cost in some cases. It is likely that additional layers of subsidy or financing
would be necessary to fully fund such a development.
Each affordable housing project is unique, often involving a complex partnership of multiple
agencies, programs and investors to fully finance a sizeable project. Despite challenges, the
CITY OF TIGARD I URBAN LOFTS DEVELOPMENT STUDY-MARKET ANALYSIS PAGE 18
affordable housing approach, combined with other considerations discussed below, is likely the best
strategy to develop a demonstration project at one or more of the subject sites that meets the
public goals for T.O.D. while addressing displacement concerns.
2) Regulatory Changes
The City should consider adopting changes to the Municipal Code requirements for the Downtown
Plan Area to further facilitate T.O.D. and achieve the types of development envisioned in the
conceptual site plans. This project has demonstrated that in order to achieve the types of built form
envisioned here, the current code provisions for maximum residential density and residential
parking ratio are too restrictive.
Residential Density: The current maximum residential density is 50 units/acre in the Main-Center
subarea (Site A), and 80 units per acre in the Station Area Overlay (Sites B and Q. The conceptual
designs achieved residential densities of 92 to 112 units per acre.
Parking Ratios: The current code calls for 1.0 off-street parking space for each multi-family unit
with some provisions to lower the ratio with an Adjustment. In order to achieve the building forms
envisioned in this project, the concepts assumed a ratio of 0.5 spaces per unit. Sites B and C were
still able to achieve 0.8 and 0.6 spaces/unit respectively.
A relaxation of these standards would facilitate development at greater densities and meet the
T.O.D. goals of increased housing and less dependency on cars in transit station areas.
Fourth-floor Building Step Back: This requirement was specifically identified as an added cost factor
by the third-party cost estimator. In a wood-framed building, he step-back necessitates the
construction of redundant structural elements for each of the street-facing facades.
3) Go Larger or Smaller
Unfortunately the three subject sites studied are an inopportune size (0.5 —0.65 acres) for this scale
of construction. While the five-story construction form brings greater attendant costs, the sites are
not large enough to allow for the number of units that help mitigate those costs through economies
of scale. Site C, being the largest, begins to demonstrate these benefits by allowing 72 units
(compared to 50 and 56), and featuring lower estimated soft costs as a percentage of hard costs.
These economies can allow larger sites to generate higher returns that begin to balance out
construction cost increases.
In the absence of larger sites, project partners should consider more modest building designs when
this project moves forward. Buildings of three stories total provide the greatest cost savings, as
construction simplifies and elevators are no longer required. However, a building that is four stories
(either with full podium, or with simpler tuck under parking) can also achieve cost savings from
easier framing, use of smaller general contractor firms, and no need for a tower crane.
CITY OF TIGARD I URBAN LOFTS DEVELOPMENT STUDY-MARKET ANALYSIS PAGE 19
B. PUBLIC PARTICIPATION AND FUNDING SOURCES
There are several key ways in which public agencies can help facilitate desired development types such
as T.O.D. and affordable housing. In general, these amount to reducing costs and lowering process
barriers such that previously infeasible forms become feasible.
The following is a summary of major categories of public intervention in the development process.
Tigard currently or has in the past implemented many of these ideas.z
CATEGORIES OF PUBLIC INTERVENTION
• Ensure Code Consistency with Public Goals: Because development codes are complex and
multi-faceted, it is often possible for some provisions in the code to be working at cross
purposes with the community's vision for the development types it would like to see. Often
developers themselves, or planning projects such as this, can identify individual provisions which
may be complicating or even preventing some development types.
• Pre-Development Assistance: This may include modest grants or loans to assist with pre-
development soft costs such as project feasibility studies, design and engineering documents,
site and environmental studies. This assistance can help smaller developers and property
owners decide if development is feasible.
• Streamlined Permitting and Review Process: Any efforts to reduce the time it takes for public
review of projects reduces costs to the developer. Clear and objective standards help
developers design permit-ready projects from the outset and avoid delays. Pre-application
conferences with knowledgeable staff can also help expedite the process.
• SDC and Fee Waivers/Subsidy: This is one of the most direct ways that local jurisdictions can
reduce the costs of new development and the viability gap. System Development Charges
(SDC's) and other permitting and process fees can add up to a significant expense to the
developer.
• Land Acquisition and Control: Land acquisition ensures that a public agency has control over
the site and that it will be used to meet public goals. Control of the land allows the agency to
dictate what will occur there, and is a valuable asset which can be used as an incentive for
developers.
• Equity Gap Financing: Gap financing usually takes the form of grant or loan that is directly
applied to help overcome the viability gap, most commonly for affordable housing.
Demonstration of local funding commitment can also help non-profits secure tax credits or
other state funding. A source of funding must be identified to provide this financing, and
amounts may need to be sizable in order to make a difference on large projects.
Z The 2016 "Tigard Affordable Housing Strategies"report provides an in-depth discussion of the use of many of
these strategies over the last decade to encourage and facilitate affordable housing. Many of these strategies can
also be applied to development which meets T.O.D.goals,though there are more plentiful sources of funding for
affordable housing.
CITY OF TIGARD I URBAN LOFTS DEVELOPMENT STUDY-MARKET ANALYSIS PAGE 20
• Tax Exemptions: Tax exemptions provide an on-going reduction in operating costs in return for
meeting specified public goals. Affordable housing projects can utilize tax savings to help defray
the often increased cost of staffing at these properties. The trade-off is that in an Urban
Renewal Area,the project will generate lower or no tax increment during the abatement period.
FUNDING SOURCES
Successful public/private projects are often an amalgam of multiple programs and funding strategies to
make the development feasible. Many of the funding sources described below can be used in
combination to reduce costs or otherwise bridge the viability gap.
Note that commitment of public funds of$750,000 or more may trigger prevailing wage law for market-
rate developers,though not necessarily for affordable housing developers.
FIGURE 5.1:MAJOR FUNDING SOURCES FOR T.O.D.AND AFFORDABLE HOUSING
Program Source Description Potential Uses
Equitable Housing Metro Tigard has secured a grant to provide pre- • Pre-development
Planning and development analysis to address a range of assistance for A.H.
Development Grant affordable housing and anti-displacement issues.
Will include analysis of opportunity sites.
Tax Increment Tigard The subject sites are located within the Tigard City • Pre-development
Financing(TIF) Center Urban Renewal Area. Urban renewal assistance
generates TIF revenue that can be used for qualified • Land acquisition
projects in the URA. TIF is often the largest source of • Gap financing
funding for public/private partnerships that meet
public goals.
Vertical Housing Tax Tigard Tigard has established a Vertical Housing • Tax abatement for
Credit(VHTC) Development Zone which includes the three subject TOD
sites. This program can provide an incentive to
market-rate developers to locate in this area. The
program provides a tax abatement of 20%per floor,
up to 80%total,over ten years.
Metro Transit- Metro This Metro program offers financial incentives for • Gap financing for
Oriented public/private partnerships for T.O.D. This may take T.O.D.
Development(TOD) the form of purchasing a T.O.D. easement, land
Program discounting,or other approach. This funding may be
sufficient incentive for market-rate developers to
build to higher T.O.D.standards,or can supplement
other sources for affordable housing.
Low Income State The LIHTC program remains the main source of • Equity financing for
Housing Tax Credit funding for new affordable housing construction. Affordable Housing
(LIHTC) Qualified projects may be awarded 9%tax credits Gap financing
through a competitive process,or 4%credits through
a non-competitive process. The tax credits are then
sold to investors to provide development capital at
the outset of a project. Available tax credit funding is
limited by the competitive process, and the total
state funding pool each year.
CITY OF TIGARD I URBAN LOFTS DEVELOPMENT STUDY-MARKET ANALYSIS PAGE 21
FIGURE 5.1(CONT.):MAJOR FUNDING SOURCES FOR T.O.D.AND AFFORDABLE HOUSING
Program Source Description Potential Uses
HOME Program County This program provides low-interest loans for • Primary or gap
affordable housing projects. It is often used as a financing for A.H.
supplemental source of financing in combination
with other programs such as LIHTC.
Oregon Affordable State This program provides a tax credit which is applied • Primary or gap
Housing Tax Credit to affordable housing loans. The lender reduces financing for A.H.
interest by up to 4%with the full benefit going
towards reducing rents at the property.
Community Tigard This program can be used to make off-site and • Public projects
Development Block other public improvements around qualified associated with
Grant(CDBG) projects. These off-site improvements can reduce qualified development
costs to developers who may otherwise be projects
responsible for them.
Construction Excise Tigard The City may consider adopting a local CET to be • Pre-development
Tax(CET)- Potential applied towards affordable housing and/or T.O.D. assistance
CET revenues could be used directly,or as a way to . Land acquisition
recoup funds foregone through a SDC's or fee • Gap financing
waiver program.
Transit-Oriented Tigard This is an optional state administered program • Tax abatement for TOD
Development Tax similar to the VHTC which provide a 100%tax
Exemption (TOTE)- abatement on residential improvements for a
Potential qualified project. Cities establish a program and
determine the coverage area. This program
provides more local control on what qualifies,and
the 100%exemption provides a higher incentive to
developers. However, individual projects require
approval of taxing jurisdictions representing 51%or
more of the combined tax rate on the property.
CITY OF TIGARD I URBAN LOFTS DEVELOPMENT STUDY-MARKET ANALYSIS PAGE 22
City of Tigard
Memorandum
To: Chair Arendes and the Town Center Advisory Commission
From: Sean Farrelly, Redevelopment Project Manager
Re: Agenda Item 9: Urban Renewal Investment in Triangle Affordable Housing
Development.
Date: October 5, 2017
Community Partners for Affordable Housing (CPAH), a non-profit affordable housing
developer and service provider serving Tigard, Beaverton and S.W. Portland, is putting
together financing for a site they own at 11090 SW 68th Parkway in the Tigard Triangle
Urban Renewal District. The project will help address the shortage of affordable units in
Tigard.
The $14 million Red Rock Commons project would provide 48 units serving a mix of
tenants, including people making 0-60% of median family income. CPAH is investigating
partnerships that would benefit their tenants such as Luke-Dorf and Portland Community
College (PCC). Financing affordable housing is complex, and CPAH is currently assembling
funding from many different sources, including Federal HOME funds, state Local
Innovation and Fast Track (LIFT) Housing Program funds,Low Income Housing Tax
Credits, Metro and Washington County.
In planning for its sources of funds and development costs, CPAH has projected a gap in
financing of approximately $420,000. This gap is largely attributable to the costs of
construction, particularly labor,which have skyrocketed over the past few years. The site
also has a slope which adds to development costs.
CPAH has identified other potential sources to fill the gap, such as charitable foundations. It
has also requested the Board of the Town Center Development Agency to consider an
investment of Triangle tax increment funds to partially fill the project gap. Demonstrating
local investment will improve the project's ability to obtain HOME funds. In order to secure
funding, the HOME application must show all of the sources of financing for the project.
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Tigard Triangle Urban Renewal Plan
The voter-approved Tigard Triangle Urban Renewal Plan ('TTURP) includes goals and
objectives that are supportive of investment in housing, including affordable housing. Goal
5 states: "Provide financial and technical assistance to new and existing businesses and housing
developments that contribute to the Area's diversity and vitality and hep it transform into a mixed-use and
pedestrian-oriented district."
Two Plan objectives specifically support urban renewal investment in affordable housing:
5.3. Support the development of mixed-use buildings that-provide a variety of housing types and
storefront spaces for a range of community and commercial needs.
5.4.Assist in the development of affordable and workforce housing.
The Triangle UR Plan authorizes the Re/Development Assistance and Partnerships project
that includes "partnerships that facilitate housing and mixed use developments." The Report
Accompanying the Urban Renewal Plan anticipated a Re/Development Assistance and
Partnership project in FY 18-19.
The maximum indebtedness of the Plan over 35 years is $188 million. The Report
Accompanying the Urban Renewal Plan projects the following TIF in the first five years of
the district:
Fiscal Year Projected TIF
FY18-19 $382,689
FY 19-20 $587,044
FY 20-21 $800,595
FY 21-22 $1,023,756
FY 22-23 $1,256,959
Currently the only planned near-term Tigard Triangle Urban Renewal expenditure is to pay
for a staff Project Manager for Tigard Triangle projects (approximately $100,000).
The TCDA Board approved a resolution at their October 3rd meeting authorizing the
Executive Director of the TCDA to sign a letter committing to a contribution between
$100,000 and $200,000 in Re/Development Assistance, contingent on CPAH securing other
financing and review of their updated financial need. CPAH will include this letter in their
application for HOME funds.
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