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Bend Councilors Approve $11M Tax Break For Jackstraw

BEND, OR -- Bend City Councilors approved a controversial tax break, Wednesday night, for the Jackstraw development, now under construction next to the Box Factory. It's the second project selected for the city's Multi-Unit Property Tax Exemption (MUPTE).

While several people spoke at the Council meeting in support of the additional housing, Kate Hunt worries the community benefit requirement doesn’t ask enough of wealthy developers, "Those standards need to be higher. They cannot just have two affordable housing units out of 313 and get almost $11 million in a tax break."

City staff assured Councilors the project meets the MUPTE requirements. But several councilors took issue with Killian Pacific breaking ground three months before submitting its application. A company representative says it was an error, "We did not understand that there was a discretionary review by all of the taxing districts. And we did not learn of that until a few months ago." She also said the bank would pull the loan if the application is denied, "If we had been aware of that, we certainly would not have started construction. There is no chance that we would have done that. So, we find ourselves in a difficult situation."

Under the city's guidelines, a developer must show the project is not financially feasible without the tax break. Councilor Mike Riley believes the early start to construction proves the development is viable without the MUPTE. "Approving such a project, to me, violates at least the spirit of the MUPTE code, because I don’t think it’s consistent with the financial viability criteria. I think it sets a big precedent for us." He was the lone vote opposed to Killian Pacific's application. "I do not support approval of applications that have already begun construction. A private, sophisticated, experienced business made a decision to begin construction prior to receiving the MUPTE."

Before voting in favor, Councilor Megan Perkins summed up the issues, "Does this project meet the requirements? Yes. Was it less than ideal that construction was started on this project before getting the MUPTE? Yes. Is that the fault of a potentially cumbersome and confusing and lengthy process? Probably, yes. Do we need to take a look at this program and make changes to it in the future? Yes. And, is that what we’re here to do tonight? No."

Council plans to discuss those proposed changes to the MUPTE code at its next work session. 

Councilor Anthony Broadman recused himself from Wednesday's discussion and vote, saying he received two campaign contributions from Killian Pacific. Broadman says he returned that money to the company. Councilor Mike Riley is the Executive Director of the Environmental Center and said Killian Pacific also made an unsolicited $5,000 contribution to the organization. That money was also returned.

Architectural rendering provided by Killian Pacific

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