Title
Approval of a Resolution Authorizing an 8-Year Multifamily Housing Property Tax Exemption Agreement Between The City Of Olympia and Urban Olympia 16A, LLC for Legion and Jefferson Project
Recommended Action
Committee Recommendation:
Not referred to a committee.
City Manager Recommendation:
Move to approve a resolution authorizing an 8-year Multifamily Housing Property Tax Exemption for Urban Olympia 16A, LLC’s Legion and Jefferson Project and authorize the City Manager to sign the Multi-Family Housing 8-Year Limited Property Tax Exemption Agreement.
Report Issue:
Whether to approve a resolution authorizing an 8-year Multifamily Housing Property Tax Exemption for Urban Olympia 16A, LLC’s Legion and Jefferson Project and authorize the City Manager to sign the Multi-Family Housing 8-Year Limited Property Tax Exemption Agreement.
Staff Contact:
Jacinda Steltjes, Housing Division Manager, Community Planning & Economic Development, 360.753.8482
Presenter(s):
None - Consent Calendar Item.
Background and Analysis:
Urban Olympia 16, LLC is requesting an eight-year multi-family tax exemption for a housing project being constructed at 421 Legion Way SE in Olympia’s Downtown residential target area. The project will produce 2,253 square feet of ground floor commercial space with 82,323 square feet of residential units above the commercial space. The remaining 23,367 square feet will be dedicated to parking. The project, known as Legion and Jefferson, will produce a total of 95 market-rate units which are anticipated to become available beginning September 2027. The project will offer 36 studios, 43 one-bedroom units, and 16 two-bedroom units.
The City’s 8-Year Multi-Family Tax Exemption (MFTE) program, which permits market-rate housing units, was revised in January 2024 to reposition the program as a tool intended to increase affordable housing. Olympia Municipal Code 3.57, formerly OMC 5.86, now requires all applicants for the 8-Year MFTE program to pay a fee in lieu of producing affordable housing units, defined as units that cost low-income households whose annual gross income does not exceed 80% of Area Median Income no more than 30% of their income. The fee in lieu of producing affordable housing units is equal to 5% of the anticipated ad valorem tax exemption in Olympia’s Eastside residential target area and Downtown residential target area. The fee is 25% in the Westside residential area. Urban Olympia 16A, LLC will pay approximately $108,000 as a fee in lieu of constructing affordable housing. The fee will be applied toward supporting future affordable housing projects.
Property taxes associated with the value of the residential improvements will be exempted for an eight-year period. The amount of property tax Urban Olympia 16, LLC will be exempted from paying will be determined annually by the Thurston County Assessor’s Office. The annual exemption takes into account the assessed value of the residential building improvements and that year’s property tax rate. Olympia’s MFTE programs operate using a tax shift rather than a tax deferral approach. This means the tax exemption MFTE projects experience is shifted to other Olympia property owners so that all local taxing districts maintain their total anticipated property tax revenue.
Climate Analysis:
The project will feature electric appliances in all units. The project is located .05 miles from Intercity Transit route 94 bus stop and .11 of a mile from Intercity Transit routes 14, 60, and 64 bus stops. The project is a little more than a quarter mile from the Olympia Transit Center. Proximity to transit options encourages residents of the project to use Intercity Transit buses. The project is also located downtown, close to amenities and services.
However, the project also includes dedicated parking for residents. The city does not require any parking for the project and the inclusion of parking stalls encourages auto-centric transportation and an increase in carbon emissions.
Equity Analysis:
The City is currently updating its Comprehensive Plan, to include a Housing Element. The Plan must illustrate how the City of Olympia plans to make housing available to meet the needs of the population growth projected to occur by 2045. The Housing Element of the Comprehensive Plan outlines the need for 14,295 additional housing units in the City of Olympia and its Urban Growth Area in the next 20 years. Of these, roughly 4,350 new units are projected to be needed for households whose annual gross income is 100%+ of Area Median Income. The Legion and Jefferson project will provide 95 market rate units, which can reasonably be presumed will be occupied by households with incomes at or exceeding 100% of Area Median Income.
Lastly, the fee in lieu of developing affordable housing units will be directed toward the production of affordable housing units in Olympia. In this way, the 8-Year MFTE program and the Legion & Jefferson project will help support the creation of affordable housing units in Olympia, of which the Housing Element calls for approximately 7,600 units for households whose incomes are at or below 80% Area Median Income.
Neighborhood/Community Interests (if known):
Housing is a top concern within the community. Additionally, the community expressed strong opinions about the Multi-Family Tax Exemption program at the time the program was being considered for revisions in December 2024. Some members of the community publicly commented that they feel the MFTE program should be used to support and encourage affordable housing units only.
Financial Impact:
There is no direct financial impact to the City of Olympia.
Options:
1. Approve a resolution authorizing an 8-year Multifamily Housing Property Tax Exemption for Urban Olympia 16A, LLC’s Legion and Jefferson Project and authorize the City Manager to sign the Multi-Family Housing 8-Year Limited Property Tax Exemption Agreement.
2. Approve an amended resolution authorizing an 8-year Multifamily Housing Property Tax Exemption for Urban Olympia 16A, LLC’s Legion and Jefferson Project and authorize the City Manager to sign the Multi-Family Housing 8-Year Limited Property Tax Exemption Agreement.
3. Take no action.
Attachments:
Resolution
Agreement