Title
Approval of a Resolution Authorizing a Multifamily Housing Tax Agreement Between the City of Olympia and Urban Olympia 9 LLC for The Madrone Apartments
Recommended Action
Committee Recommendation:
Not referred to a committee.
City Manager Recommendation:
Move to approve a Resolution authorizing a eight-year Multifamily Tax Exemption with Urban Olympia 9 LLC for The Madrone Apartments and authorize the City Manager to sign the agreement.
Report
Issue:
Whether to a approve a Resolution authorizing a eight-Year Multifamily Tax Exemption with Urban Olympia 9 LLC for The Madrone Apartments and authorize the City Manager to sign the agreement.
Staff Contact:
Christa Lenssen, Housing Program Specialist, City Manager’s Office, 360.570.3762
Presenter(s):
None - Consent Calendar Item.
Background and Analysis:
The Madrone Apartments at 120 Water Street NW will create 60 new units of multifamily residential housing in the Multifamily Tax Exemption (MFTE) Downtown Residential Target Area. The complete application was received by the City on April 18, 2022. Urban Olympia 9 LLC is seeking an eight-year tax exemption for those 60 new market rate units. The tax exemption applies to all qualifying residential units for eight years.
Background on the Multi-Family Tax Exemption in Olympia
The primary purpose of the eight Year MFTE program is to promote construction of housing in key areas of the City where we would like to incentivize housing development. State law authorizes the City of Olympia to adopt a multifamily housing tax exemption program (RCW 84.14). The program provisions under Olympia Municipal Code under 5.86 were most recently amended in 2009 to create an eight and 12 year program for market rate and affordable housing provisions.
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 units in this project meet all the requirements to be eligible for a tax exemption, including:
• The housing is located in the Downtown Target Area, which is one of three designated residential target areas adopted by the City Council;
• 50 percent of the space or more is for permanent residential occupancy;
• Four or more new housing units are created;
• The project complies with the City’s comprehensive plan, building and zoning codes;
• 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):
This project is within the Downtown Neighborhood Association. This project will provide 60 market-rate residential units (16 studios, 28 one-bedroom units, and 16 two-bedroom units). The ground floor will have restaurant and retail space. Onsite parking will be available. The neighborhood has mixed use buildings, other commercial buildings and multifamily residences.
Options:
1. Approve the to a approve a Resolution authorizing a eight-Year Multifamily Tax Exemption with Urban Olympia 9 LLC for The Madrone Apartments and authorize the City Manager to sign the agreement.
2. Do not to a approve a Resolution authorizing a eight-Year Multifamily Tax Exemption with Urban Olympia 9 LLC for The Madrone Apartments or authorize the City Manager to sign the agreement. Provide further direction to staff.
3. Direct staff to take other action.
Financial Impact:
Property taxes will continue to be paid on the underlying property and on non-residential portions of the new construction. The taxed value of the residential improvements will be exempt from Ad Valorum tax for eight years after completion of construction.
Attachments:
Resolution
Agreement