A parking structure that was built to help revitalize downtown Medford has developed cracks in the roof and flooding problems in the basement that have contributed to an estimated $535,000 in needed repairs, city officials have discovered.
Another parking structure at Middleford Alley also needs an estimated $280,000 of work.
The 10-year-old, $7 million Middleford building, at Riverside Avenue and Sixth Street, and the four-year-old, $10.2 million Evergreen parking structure, at Main and Fir streets, have not been fully maintained by the Medford Urban Renewal Agency. MURA officials said they understood they could not use their main source of revenue — tax-increment financing — for maintenance work.
City Manager Mike Dyal, however, said Thursday the city's attorney has found no state statutes that would prevent MURA from maintaining a building with tax-increment dollars that are specifically designed to fight blight and improve urban areas.
"If you ignore maintenance, you are contributing to blight, which is one of the purposes of the urban renewal agency in the first place," he said.
The tax-increment financing used by MURA and other urban renewal districts creates operating revenue from new property taxes resulting from improvements or construction within the districts.
The city discovered the maintenance problems in the parking structures during negotiations to take over a downtown parking district from MURA.
The city and MURA are in negotiations over who will foot the bill for the structures and are continuing to discuss whether tax increment money can be used for maintenance.
"There is a difference in interpretation," City Councilman Chris Corcoran said.
A sump pump has been placed in the basement of the Evergreen parking structure to keep it dry as water seeps through the walls.
Councilman Dick Gordon said, "The concrete on the top level is cracking and coming up."
The Evergreen parking structure at Main and Fir streets was originally designed as the center of a Bella Vita mixed-use complex that was stalled by lawsuits and the economic downturn. Problems with the structure exist in part because an outside layer of residential and commercial units was never built.
The city could offset some of the costs of repairs by performing much of the work with city crews, but the repairs will still be an expense that someone will have to pay, said Dyal.
"We need to get an understanding," he said. "We're going to look to them to provide the remedy or assist with the remedy, to say the least."
Scott Henselman, a MURA board budget committee member, said he was surprised at the maintenance costs, particularly on the Evergreen structure.
"How can you have repairs of that magnitude on a brand new structure?" he said.
Henselman said he has never encountered any deferred maintenance issues with commercial properties based in the Middleford complex. Henselman owns a commercial real estate management company.
Jackie Rogers, MURA executive director, told the City Council Thursday that tax increment money could not be used for maintenance. She could not be reached for further comment after the meeting.
Deputy City Manager Bill Hoke said, despite the damage, both parking buildings appear to be structurally sound.
Most of the maintenance includes such items as sandblasting, repainting, restriping and crack filling, he said.
"This stuff needs to be done to prevent any further degradation," he said.
The moisture in the basement of the Evergreen parking structure could be the result of the original design of the structure, which was intended to have another building wrapped around it containing residential and commercial space, Hoke said.
Hoke said the city is in negotiations with Ray Kuratek and Jeff Holzman, developers from Bend, to build a residential complex around the Evergreen parking structure.
Hoke said the negotiations are in their early stages, but he expects the developers likely will consider a building of four to six stories in height.
Reach reporter Damian Mann at 776-4476, or e-mail dmann@mailtribune.com.
