Selling alleys to a downtown property owner who may bring a Whole Foods store to Eugene is in the public's interest, the City Council decided Monday night.

Councilors voted 6-2 to sell two alleys for $207,765 to a property investment firm that owns an underdeveloped block at the base of the Ferry Street Bridge, on the east edge of downtown.

Broadway and Pearl Associates want the alleys on the block so it can build a 50,000-square-foot commercial building that could be used for a Whole Foods store.

Councilor Mike Clark said selling the alleys is "obviously in the public interest."

The sale would help "fill a long, empty lot" and contribute to the ongoing redevelopment of downtown, he said.

Joining Clark to sell the alleys were councilors George Poling, Alan Zelenka, Chris Pryor, Claire Syrett and Greg Evans.

Whole Foods, based in Austin, Texas, the nation's largest natural foods grocer, has not confirmed that it will occupy the store. Representatives of Broadway and Pearl Associates, a firm led by Eugene businessman Dan Giustina, say they cannot disclose the tenant.

However, Mayor Kitty Piercy in April told the council that she had discussions with undisclosed people about the possible use of the building by Whole Foods.

Voting against the sale were councilors Betty Taylor and George Brown.

Taylor said the large store wouldn't fit the city's goal of creating a walkable downtown because it would draw many cars to the city center. The store is likely to be occupied by an out-of-town firm that would take money out of the local economy, Taylor said.

Brown, the owner of The KIVA, a downtown grocery store and deli, said a large portion of Whole Foods' sales are from prepared foods. A Whole Foods would hurt every deli, coffee shop, convenience store and restaurant within a wide area of downtown, he said.

"I think it's going to be very harmful to businesses large and small," Brown said.

Brown began his comments by saying that he was advised that, as the owner of a downtown grocery store, he had a potential conflict of interest on the matter. However, Brown said a city attorney told him that having a possible conflict of interest did not prevent him from voting on the alley sale.

With the sale approved, Giustina's firm can proceed with its plans to develop the commercially zoned property once it receives building permits from the city.

The firm's property is on the block bounded by East Eighth Avenue, High Street, East Broadway and Mill Street.

Nine years ago, Giustina and a Portland-based developer proposed a $14 million, 52,800-square-foot store for Whole Foods on the same city block.

The complicated and controversial project involved three landowners, the need for the city to swap land with the John G. Shedd Institute for the Arts, and the city's willingness to pay for a $7 million, 260-space public parking garage.

The proposal fell apart two years later after a community debate that focused on the city's role in the would-be development. Critics complained that the public garage would give an unfair advantage to Whole Foods, which they feared would drive existing local organic grocers out of business.

But major differences between the previous and current proposal may have quelled the debate.

Now, the entire block is owned by Broadway and Pearl Associates, and the firm's plan doesn't include a public parking garage.

The council held a public hearing on the alley sale in April, with most people speaking in favor. In written comments to the council since then, 26 people said they support the sale. Four said they oppose it, mainly contending that it would not be in the public interest.

Associate city planner Becky Taylor told the council on Monday that staff concluded the sale would be in the public interest because it would allow the adjoining land to be used efficiently and would not harm the public transportation system, surrounding areas or emergency access.

The sale price was established by the assessed market value of the alley land.

Broadway and Pearl Associates also will give the city a permanent 5-foot-wide easement on the firm's property along East Eighth Avenue. The city wants the additional public-right-of-way as part of its plan to improve sidewalks leading to the U.S. Courthouse area east of Mill Street.

Broadway and Pearl Associates' concept plan shows a building over one of the alleys, which does not contain utilities. The other alley has underground utility lines. The alley's surface would be used for parking, but the city could retain an easement for access to the underground lines.

In another matter, the council directed City Manager Jon Ruiz to try to buy 26 acres near the Amazon Creek headwaters from property owners Martin and Leslie Beverly.

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