The Bend City Council voted Wednesday night to approve a controversial development, including a 10-year, $10.6 million multi-use tax break. Killian Pacific is developing the Jackstraw project next to the Box Factory.
People both in favor and opposed to the project spoke at the council meeting.
“Killian Pacific say that they’re community-driven, but they have all these businesses in the Box Factory that they represent right now, and they’re failing to represent them properly,” said one commenter.
“I find casting Killian Pacific as a large corporation solely focused on taking advantage of this community to be misguided,” said another.
The project includes 313 units with a mix of apartments, retail, and services.
“That program is all about helping invest in the tax increment financing area, in the core area,” said Mayor Melanie Kebler. “We’re really trying to get developments happening in the core area. That’s not just the typical, maybe one-story commercial, but it has actual homes and residential built into it.”
The tax break became a highlight after Box Factory tenant Immersion Brewing spoke out about it last week. Other Box Factory tenants told Central Oregon Daily they also had issues with the break.
Developers applied for the City’s Multiple Unit Property Tax Exemption (MUPTE) in June. They started construction in April before the city had a chance to vote on the tax exemption, which is part of the reason they didn’t get unanimous approval Wednesday night.
“We did not understand that there was a discretionary review by all of the task taxing districts, and we did not learn about it until a few months ago,” said a spokesperson for Killian Pacific. “That is why we started construction. We did not perceive that there was going to be an actual risk of us not receiving this tax exemption.”
Part of the qualification for the tax exemption is the projects must demonstrate that they would not be financially viable with the exemption, which is why they aren’t supposed to start construction before approval.
“If we didn’t receive the monthly tax exemption, our lender would not fund the project,” said the spokesperson.
With the information now in hand, the council voted in favor of the development, citing much-needed housing.
“I kind of, I kind of believe your story,” said City Councilor Barb Campbell. “I can imagine just misunderstandings.”
Councilor Mike Riley, who cited how builders jumped the gun on construction, was the only one to say no.
“Approving such a project to me violates the spirit of the article because I don’t think it’s consistent with the financial viability criteria,” he said. “I think it sets a bad precedent for us as the city and the council, and it does not serve the public interest, and we have limited resources.”
The council approved the tax exemption for the Jackstraw Development in a 5-1 vote. But the tax exemption must go before all taxing districts. Deschutes County, Bend Park and Recreation District, High Desert Education, Deschutes Public Library and Central Oregon Community College are all neutral or in favor of the project.
The Bend-La Pine School board votes on the matter next week.
The seven-story multi-use facility project is estimated to open in the fall of 2025.