Title
Approval of Multi-family Housing Limited Property Tax Exemption Agreement for 321 Legion Way
Recommended Action
Not referred to a committee.
City Manager Recommendation:
Move to approve the Multi-family Housing Limited Property Tax Exemption Agreement and authorize the City Manager to execute the agreement with Urban Olympia, LLC (represented by Mr. Walker John).
Body
Issue:
Whether to enter a Multi-family Housing Limited Property Tax Exemption Agreement for 36 new residential apartments located at 321 Legion Way.
Staff Contact:
Leonard Bauer, Deputy Director Community Planning & Development, 360.753.8206
Presenter(s): None - Consent Calendar Item.
Background and Analysis:
Mixed Use Project.
Urban Olympia, LLC is constructing a 3-story residential building on the site of a former surface parking lot on the southwest corner of Legion Way and Adams Street SE. The project consists of 36 market-rate residential apartments in a building of approximately 27,000 sq. ft. The land use, design and environmental reviews were completed and approved by the Site Plan Review Committee on August 11, 2015. The building is currently under construction. Urban Olympia, LLC seeks the eight-year tax exemption for the 36 market rate units.
Tax Exemption Code.
State law authorizes the City of Olympia to adopt a multi-family housing tax exemption program (RCW 84.14). The Multi-Family Tax Exemption provisions contained in Olympia Municipal Code Chapter 5.86 were first passed in August 1997 (Ordinance 5713) with a 10-year property tax exemption for downtown multi-family projects. The ordinance was amended in December 1997 (Ordinance 5734) to add new residential target areas. The State Legislature revised the 10-year exemption into an 8-year market rate or 12-year affordable housing tax exemption. On January 26, 2009, the City Council adopted the 8- and 12-year provisions along with refinements to the residential target areas (Ordinance 6618).
The primary purpose for the law is to provide added incentives to promote construction of housing in key target areas defined within the ordinance. The property tax exemption applies to only the increased value of building housing (new construction). The exemption does not apply to the land or costs associated with any non-housing improvements. The 36 apartments meet all the requirements to be eligible for a tax exemption, including:
• The housing is located in the downtown which is one of three designated residential target areas;
• 50 percent of the space or more is for permanent residential occupancy;
• More than 4 new housing units are created;
• The construction/rehabilitation will be completed within three years of approval of the application;
• The property was vacant at least 12 months prior to application; and
• No tenant displacement occurred.
Neighborhood/Community Interests (if known):
The project is within the Downtown Neighborhood Association and Olympia Downtown Association areas, and is of general interest city-wide.
Options:
1. Move to approve the Multi-family Housing Limited Property Tax Exemption Agreement and authorize the City Manager to execute the agreement with Urban Olympia, LLC.
2. Remove this item from the Consent Calendar and provide further direction to staff.
Financial Impact:
Property taxes will continue to be paid on the underlying property. The value of the residential improvements (estimated to be $5,653,562) will be exempt from ad valorum tax for eight years.