Title
Approval of Multi-family Housing Limited Property Tax Exemption Agreement for 600 Franklin Street SE
Recommended Action
Committee Recommendation:
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 III LLC (represented by Mr. Walker John).
Body
Issue:
Whether to enter a Multi-family Housing Limited Property Tax Exemption Agreement for the nineteen new residential studio apartments located at 600 Franklin Street SE.
Staff Contact:
Steven Friddle, Principal Planner, Community Planning & Development 360.753.8591
Presenter(s): None. Consent Calendar
Background and Analysis:
Mixed Use Project.
Mr. Walker John converted the former existing two-story state office building into 19-studio residential apartments on the second floor; and, approximately 5,900 Sq. Ft. office and 4,900 Sq. Ft. restaurant on the first-floor with associated outdoor seating. The Land Use, Design Review and Environmental Checklist applications were submitted on October 22, 2013. The Site Plan Review Committee issued the approval and Determination of Non-significance on November 22, 2013. The project is nearly complete and Mr. John seeks the eight-year tax exemption for the "market rate units."
Tax Exemption Code.
The Multi-Family Tax Exemption provisions contained in Olympia Municipal Code Chapter 5.86 was first passed in August 1997 (Ordinance 5713) with a 10-year property tax exemption for downtown multi-family projects. It 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 rehabilitation (or new construction). The exemption does not apply to the land, the existing building or costs associated with any non-housing improvements. The 19- studio 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 must be 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):
There was general support to the project throughout the Environmental, Land Use, Design Review and Building permit process. The mixed use project and quality of improvement is well accepted by business and downtown residents.
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 III LLC (represented by Walker John).
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 existing land and rehabilitated commercial improvements. The property tax exemption applies to only the increased value of the residential rehabilitation portion of the project for eight-years.