HomeMy WebLinkAboutMulti-Family Property Tax Exemption for Targeted Areas (12/15/2003) CITY OF RENTON, WASHINGTON
ORDNANCE NO. 5 0 h 1
AN ORDINANCE OF THE CITY OF RENTON, WASHINGTON,
AMENDING CHAPTER 1, ADMINISTRATION AND ENFORCEMENT,
OF TITLE IV (DEVELOPMENT REGULATIONS) OF ORDINANCE NO.
4260 ENTITLED "CODE OF GENERAL ORDINANCES OF THE CITY
OF RENTON, WASHINGTON" TO ESTABLISH A PROPERTY TAX
EXEMPTION INCENTIVE FOR THE DEVELOPMENT OF MULTI-
FAMILY HOUSING IN TARGETED AREAS.
WHEREAS, in 1995 the Washington State Legislature adopted Chapter 84.14 RCW, to
encourage increased residential opportunities in cities required to plan under the Growth
Management Act, by providing for special property tax valuations for eligible multi-family
housing in targeted urban areas; and
WHEREAS, Chapter 84.14 RCW, as amended, further authorized cities with a
population of at least thirty thousand(30,000)to adopt procedures to implement the special
property tax valuations;and
WHEREAS, other cities throughout the state, including the City of Seattle and the City
of Tacoma,have successfully used the incentives found in Chapter 84.14 RCW to encourage
development of housing in targeted areas;and
WHEREAS,in 1995 the Renton City Council adopted the Renton Comprehensive
Plan, to implement the planning requirements of the Growth Management Act,RCW 36.70A;
and
WHEREAS,the City desires to assist in directing future population growth into the
Center Downtown, Center Village and Urban Center North Comprehensive Plan designated
areas,thereby reducing development pressures on single-family residential neighborhoods; and
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WHEREAS,the City desires to stimulate new construction of multi-family housing in
the Center Downtown, Urban Center North and Center Village Comprehensive Plan designations
to increase housing opportunities; and
WHEREAS, on December 15, 2003,the Renton City Council held a public hearing to
receive public comments regarding proposed designated"residential targeted areas"in the
Center Downtown,Urban Center North and Center Village Comprehensive Plan designations for
the purpose of allowing a limited property tax exemption for qualifying multi-family housing,
pursuant to RCW 84.14.040(2);and
WHEREAS,the Renton City Council desires to adopt procedures for the application
for and approval of property tax incentives for qualifying multi-family housing within the
"residential targeted areas;"
NOW, THEREFORE,THE CITY COUNCIL OF THE CITY OF RENTON,
WASHINGTON, DO ORDAIN AS FOLLOWS:
SECTION I. Findings of Fact.
A. The Center Downtown, Center Village and Urban Center North
Comprehensive Plan designation areas are urban centers, as defined in RCW 84.14.010.
B. The Center Downtown, Center Village and Urban Center Comprehensive Plan
designation areas currently lack sufficient available, desirable, and convenient residential
housing to meet the needs of the public who would be likely to live in the Center Downtown,
Center Village and Urban Center North Comprehensive Plan designation areas if desirable,
attractive and livable places to live were available.
C. The provision of special property tax valuations within the Center Downtown,
Center Village and Urban Center North Comprehensive Plan designation areas will encourage
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construction of new multi-family housing, and that provision of such additional housing
opportunities in the Center Downtown, Center Village and Urban Center North Comprehensive
Plan designation areas will assist in achieving the goals of the City's Comprehensive Plan and
the parallel purposes set forth in RCW 84.14.007.
D. The development of new residential units in the Center Downtown, Center
Village and Urban Center North Comprehensive Plan designation areas will also assist in
reducing development pressures on single-family residential neighborhoods.
SECTION II. Designated Targeted Residential Areas.
The City Council hereby designates the following"residential targeted areas"for the
purpose of allowing a limited property tax exemption for qualifying multi-family housing,
pursuant to RCW 84.14.040(4): the Center Downtown(CD) zone, Residential Multi-Family
Urban Center(RM-U) zone, Residential Multi-Family Traditional(RM-T) zone and Urban
Center North District 1 (UCN-1)zone and, within the Center Village Comprehensive Plan
designation,the Center Suburban(CS)zone,Residential Multi-Family Suburban Center(RM-C)
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zone and Residential 10 du/ac(R-10) zone.
SECTION III. A new Section, 4-1-220,Property Tax Exemption for Multi-
Family Housing in Residential Targeted Areas, of Chapter 1,Administration and Enforcement,
of Title IV (Development Regulations) of Ordinance No. 4260 entitled"Code of General
Ordinances of the City of Renton, Washington"is hereby added, to read as follows:
4-1-220 PROPERTY TAX EXEMPTION FOR MULTI-FAMILY HOUSING IN
RESIDENTIAL TARGETED AREAS
A. Purpose:
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As provided for in RCW 84.14,the purpose of this Section is to provide limited,ten(10)
year exemptions from ad valorem property taxation for qualified new multi-family housing
located in designated residential targeted areas.
B. Definitions:
In construing the provisions of this Section,the following defmitions shall be applied:
1. "Administrator"means the Administrator of the Renton Economic Development,
Neighborhoods and Strategic Planning Department,or any other City office, department or
agency that shall succeed to its functions with respect to this Section, or his or her authorized
designee.
2. "Multi-family housing"means one or more new buildings designed for permanent
residential occupancy, each with four(4)or more dwelling units.
3. "Permanent residential occupancy" means multi-family housing that provides
either owner occupancy or rental accommodation on a nontransient basis. This definition
includes rental accommodation that is leased for a period of at least one(1)month but excludes,
for example, hotels and motels that predominately offer rental accommodation on a daily or
weekly basis.
C. Tax Exemption:
1. Duration of Exemption: The value of improvements qualifying under RMC 4-1-
220.D is exempt from ad valorem property taxation for ten(10) successive years beginning
January l st of the year immediately following the calendar year of issuance of the final certificate
of tax exemption.
2. Limits on Exemption: The exemption does not apply to the value of land or to the
value of nonhousing-related improvements not qualifying under RMC 4-1-220.D,nor does the
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exemption apply to increases in assessed valuation of land and nonqualifying improvements.
This Section also does not apply to increases in assessed valuation made by the county assessor
on nonqualifying portions of building and value of land,nor to increases made by lawful order of
a county board of equalization,the Department of Revenue,or a county, to a class of property
throughout the county or specific area of the county to achieve the uniformity of assessment or
appraisal required by law.
D. Project Eligibility:
To qualify for exemption from property taxation under this Section,the project must
satisfy all of the following requirements:
1. Location: The property must be located in one of the following designated
"residential targeted areas": (i) Within the Center Village Comprehensive Plan designation and
in one of the following: the Center Suburban(CS) zone, the Residential Multi-Family Suburban
Center(RM-C) zone, or the Residential 10 dwelling units/acre (R-10)zone; or
(ii) in the Center Downtown(CD)zone,Residential Multi-Family Urban Center (RM-U) zone,
•
Residential Multi-Family Traditional(RM-T) zone, or Urban Center North District 1 (UCN-1)
zone. If a part of any legal lot is within a residential targeted area,then the entire lot shall be
deemed to lie within the residential targeted area.
2. Size and Structure:
a. If the project is located in the Residential Multi-Family Urban Center
(RM-U)zone or Residential Multi-Family Traditional(RM-T) zone or within the Center Village
Comprehensive Plan designation and in either the Residential Multi-Family Suburban Center
(RM-C)zone or the Residential 10 du/ac(R-10) zone,the project must (i) consist of a minimum
total of ten(10)new dwelling units of multi-family housing, and (ii) be located within a new
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residential structure(s)or a new mixed use development as allowed by the RMC for the specific
zone. At least fifty(50)percent of the space within the project shall be intended for permanent
residential occupancy.
b. If the project is located in the Center Downtown(CD) zone or Urban
Center North District 1 (UCN-1) zone or,within the Center Village Comprehensive Plan
designation and in the Center Suburban(CS) zone,the project must (i)consist of a minimum
total of thirty(30)new dwelling units of multi-family housing and(ii)be located in a new
mixed-use development, unless otherwise waived by the Administrator. If the Administrator
waives the mixed-use development requirement,the multi-family housing must be located in a
new residential structure(s). At least fifty(50)percent of the space within the project shall be
intended for permanent residential occupancy.
3. Special Design Regulations for Projects Located in the Center Village
Comprehensive Plan Designation:
a. If the project is located in the Center Suburban(CS) zone or Residential
Multi-Family Suburban Center(RM-C)zone within the Center Village Comprehensive Plan
designation,the project must also comply with the design standards and guidelines in RMC 4-3-
100 for District 'C', even though the project is not located in the Urban Center North
Comprehensive Plan designation, unless otherwise waived by the Administrator.
b. If the project is located in the Residential 10 dwelling units/acre(R-10)
zone within the Center Village Comprehensive Plan designation,the project must also comply
with the design standards and guidelines in RMC 4-3-100 for District `B,' even though the
project is not located in the Residential Multi-Family Traditional(RM-T)zone,unless otherwise
waived by the Administrator. If the project is located in the Suburban and Neighborhood Center
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Residential District described in RMC 4-30-095,the project must also comply with the
provisions therein.
4. Exception for Existing Residential Structure:. In the case of an existing
occupied residential structure that is proposed for demolition and redevelopment as new multi-
family housing, the project must replace the existing number of dwelling units and provide for a
minimum of four additional dwelling units in the new multi-family housing project. An existing
residential rental structure that has been vacant for twelve (12)months or more prior to
demolition does not have to provide additional dwelling units.
5. Completion Deadline: The project must be completed within three (3)years
from the date of approval of the contract by the City Council as provided in RMC 4-1-220.F.2 or
by any extended deadline granted by the Administrator as provided in RMC 4-1-220.I.
E. Application Procedure:
1. Form: The owner of property applying for exemption under this Section shall
submit an application to the Administrator on a form established by the Administrator. The
owner shall verify the correctness of the information contained in the application by his/her
signature and affirmation made under penalty of perjury under the laws of the State of
Washington. The application shall contain such information as the Administrator may deem
necessary or useful,which at a minimum shall include:
a. A completed City application form, including information setting forth the
grounds for tax exemption.
b. A brief written description of the project, and schematic site and floor
plans of the multi-family dwelling units and the structure(s) in which they are proposed to be
located;
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c. Floor and site plans of the proposed project, which plans may be revised
by the owner provided such revisions are made and presented to the Administrator prior to the
City's final action on the exemption application;
d. A statement from the owner acknowledging the potential tax liability
when the property ceases to be eligible for exemption under this Section;
2. Fee: At the time of initial application under this Section, the owner shall pay to
the City an initial application fee of five hundred dollars($500).
3. Deadline: The application shall be submitted prior to the issuance of the building
permit for the project. The Administrator shall approve or deny an exemption application within
ninety(90) days of receipt of a complete application.
F. Application Approval:
1. Approval: The Administrator may approve an application if he or she finds that:
a. The owner has complied with all of the requirements of this Section,
including but not limited to the project eligibility requirements contained in RMC 4-1-220.D and
the application requirements contained in RMC 4-1-220.E;and
b. The proposed project is or will be, at the time of completion, in
conformance with all approved plans, and all applicable requirements of the Renton Municipal
Code or other applicable requirements or regulations in effect at the time the application is
approved.
2. Contract Required: If the application is approved, the owner shall enter into a
contract with the City, approved by the City Council, regarding the terms and conditions of the
project under this Section.
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3. Issuance of Conditional Certificate: Following Council approval of the contract,
the Administrator shall issue a conditional certificate of acceptance of tax exemption. The
conditional certificate shall expire three (3)years from the date of Council approval of the
contract unless an extension is granted as provided in RMC 4-1-220.I.
G. Application Denial:
1. Denial: The Administrator shall deny an application if the criteria in RMC 4-1-
220.F.1 are not met. The Administrator shall state in writing the reasons for the denial and send
notice of denial to the owner's last known address within ten(10) days of the denial.
2. Appeal: An owner may appeal a denial of a tax exemption application to the City
Council by filing a notice of appeal with the City Clerk within thirty(30) calendar days of
receipt of notice of the denial. The appeal before the City Council shall be based upon the record
before the Administrator,and the Administrator's decision will be upheld unless the owner can
show that there is no substantial evidence on the record to support the Administrator's decision.
The City Council's decision on appeal is final.
H. Amendment of Contract:
An owner may request an amendment(s)to the contract by submitting a request in writing
to the Administrator,together with a fee of two hundred fifty dollars($250), at any time within
three(3)years of the date of the approval of the contract as provided for in RMC 4-1-220.G.2.
The date for expiration of the conditional certificate shall not be extended by contract
amendment unless all the conditions for extension set forth in RMC 4-1-220.I are met.
I. Extension of Conditional Certificate:
1. Application: The conditional certificate may be extended by the Administrator for
a period not to exceed twenty-four(24)consecutive months. The owner shall submit a written
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request stating the grounds for the extension together with a fee of two hundred fifty dollars
($250).
2. Approval: The Administrator may grant an extension if the Administrator finds
that:
a. The anticipated failure to complete construction within the required time
period is due to circumstances beyond the control of the owner;
b. The owner has been acting, and could reasonably be expected to continue
to act, in good faith and with due diligence; and
c. All the conditions of the original contract between the owner and the City
will be satisfied upon completion of the project.
2. Denial—Appeal: If an extension is denied, the Administrator shall state in
writing the reason for denial and shall send notice to the owner's last known address within ten
(10) calendar days of the denial. An owner may appeal the denial of an extension to the Hearing
Examiner by filing a notice of appeal with the City Clerk within fourteen(14) calendar days after
issuance of the notice of the denial. The appeal before the Hearing Examiner shall follow the
provisions of RMC 4-8-110.E. The owner may appeal the Hearing Examiner's decision to the
King County Superior Court according to the procedures contained in RCW 34.05.510 through
34.05.598, as provided in RCW 84.14.090(6),within thirty(30) days of notification by the City
to the owner of the decision.
J. Final Certificate:
1. Application: Upon completion of the construction as provided in the contract
between the owner and the City, and upon issuance of a temporary certificate of occupancy, or a
permanent certificate of occupancy if no temporary certificate is issued, the owner may request a
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fmal certificate of tax exemption. The owner shall pay a fee of two hundred fifty dollars($250)
and file with the Administrator such information as the Administrator may deem necessary or
useful to evaluate eligibility for the final certificate,which shall at a minimum include:
a. A statement of expenditures made with respect to each multi-family
housing unit and the total expenditures made with respect to the entire property;
b. A description of the completed work and a statement of qualification for
the exemption; and
c. A statement that the work was completed within the required three (3)
year period or any approved extension.
2. Determination: Within thirty(30) days of receipt of all materials required for a
fmal certificate,the Administrator shall determine whether the completed work is consistent with
the contract between the City and owner,whether all or a portion of the completed work is
qualified for exemption under this Section and, if so, which specific improvements satisfy the
requirements of this Section.
3. Filing with County Assessor: For projects that comply with the requirements of
RMC 4-1-220.J.1,the City shall file a final certificate of tax exemption with the county assessor
within ten days of the expiration of the 30-day period provided in the prior subsection.
4. Recording: The Administrator is authorized to cause to be recorded, at the
owner's expense, in the real property records of the King County Department of Records and
Elections,the contract with the City required under RMC 4-1-220.F.2, as amended under RMC
4-1-220.H, if applicable, and/or such other document(s) as will identify such terms and
conditions of eligibility for exemption under this Section as the Administrator deems appropriate
for recording.
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5. Denial: The Administrator shall notify the owner in writing that the City will not
file a final certificate if: (i)the Administrator determines that the project was not completed
within the required three(3)year period or any approved extension, or was not completed in
accordance with the contract between the owner and the City and the requirements of this
Section, or the owner's property is otherwise not qualified for the limited exemption under this
Section;or(ii)the owner and Administrator cannot come to an agreement on the allocation of
the value of the improvements allocated to the exempt portion of the project.
6. Appeal: The owner may appeal the Administrator's decision to the Hearing
Examiner by filing a notice of appeal with the City Clerk within fourteen(14) calendar days after
issuance of the notice of the denial. The appeal before the Hearing Examiner shall follow the
provisions for appeal contained in RMC 4-8-110.E. The owner may appeal the Hearing
Examiner's decision to the King County Superior Court according to the procedures contained in
RCW 34.05.510 through 34.05.598, as provided in RCW 84.14.090(6),within thirty(30) days of
notification by the City to the owner of the decision.
K. Annual Certification:
Within thirty(30) days after the first anniversary of the date the City filed the final
certificate of tax exemption and each year thereafter, for a period of ten(10)years,the property
owner shall file a certification with the Administrator,verified upon signed affirmation under
penalty of perjury under the laws of the State of Washington. Failure to submit the annual
certification may result in cancellation of the tax exemption. The certification shall contain such
information as the Administrator may deem necessary or useful, and shall at a minimum include
the following information:
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'1410' ORDINANCE NO. 5 0 61
a. A statement of occupancy and vacancy of the multi-family dwelling units
during the previous year;
b. A certification that the property has not changed use since the date of
filing of the final certificate of tax exemption, and continues to be in compliance with the
contract with the City and the requirements of this Section; and
c. A description of any improvements or changes to the property made after
the filing of the final certificate or most recent certification, as applicable.
L. Cancellation of Tax Exemption:
1. Cancellation: If at any time the Administrator determines that: (i)the property no
longer complies with the terms of the contract or with the requirements of this Section; (ii)the
use of the property is changed or will be changed to a use that is other than residential; (iii)the
project violates applicable zoning requirements, land use regulations or building code
requirements;or(iv)the property for any reason no longer qualifies for the tax exemption, the
tax exemption shall be canceled and additional taxes, interest and penalties imposed pursuant to
state law. Upon determining that a tax exemption shall be canceled,the Administrator shall
notify the property owner by certified mail, return receipt requested.
2. Appeal: The property owner may appeal the determination by filing a notice of
appeal with the City Clerk, within thirty(30) days after issuance of the decision by the
Administrator, specifying the factual and legal basis for the appeal. The appeal before the
Hearing Examiner shall follow the procedures set forth in RMC 4-8-110.E. At the appeal
hearing, all affected parties may be heard and all competent evidence received. The Hearing
Examiner shall affirm, modify, or repeal the decision to cancel the exemption based on the
evidence received. The Hearing Examiner shall give substantial weight to the Administrator's
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ORDINANCE NO. 5 0 61
decision to cancel the exemption, and the burden of proof and the burden of overcoming the
weight accorded to the Administrator's decision shall be upon the appellant. An aggrieved party
may appeal the Hearing Examiner's decision to the King County Superior Court in accordance
with the procedures in RCW 34.05.510 through 34.05.598, as provided in RCW 84.14.110(2),
within thirty(30) days after issuance of the decision of the Hearing Examiner.
3. Change of Use: If the owner intends to convert the multi-family housing to
another use,the owner must notify the Administrator and the County assessor within sixty(60)
days of the change in use. Upon such change in use,the tax exemption shall be canceled and
additional taxes, interest and penalties imposed pursuant to state law.
M. Sunset of Exemption for Applications for Conditional Certificates:
The City shall not accept new applications for conditional certificates as provided in
RMC 4-1-220.E after December 31, 2006,unless extended by City Council action. Incomplete
applications for conditional certificates as of December 31,2006, shall be returned to owners.
Notwithstanding the above,the City shall process(i) pending complete applications for a
conditional certificate as of December 31, 2006, and(ii) applications for an extension of the
conditional certificate and/or a final certificate received after December 31, 2006, as provided in
this Section under Sections RMC 4-1-220.D through RMC 4-1-220.J. Sections RMC 4-1-220.0
and RMC 4-1-220.J through RMC 4-1-220.L shall continue to apply to all properties that have
been or are issued a final certificate of tax exemption under this Section until expiration,
termination or cancellation of the tax exemption.
SECTION IV. Severability.
The provisions of this ordinance are declared separate and severable. The invalidity of
any clause, sentence, paragraph, subdivision, section,or portion of this ordinance or the
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ORDINANCE NO. 5 061
invalidity of the application thereof to any person or circumstance, shall not affect the validity of
the remainder of the ordinance, or the validity of its application to other persons or
circumstances.
SECTION V. Ratification.
Any act consistent with the authority and prior to the effective date of this ordinance is
hereby ratified and affirmed.
SECTION VI. Effective Date.
This ordinance shall be effective upon its passage, approval, and five (5) days after its
publication.
PASSED BY THE CITY COUNCIL this 22nd day of December , 2003.
Bonnie I. Walton, City Clerk
APPROVED BY THE MAYOR this 2 2nd day of December , 2003.
4
Jesse T.`(er, Mayor
Ap ved as to form:
Lawrence J. Warren, City Attorney
Date of Publication: 12/26/2003 (summary)
ORD.1 088:12/8/03:ma
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December 22,2003 New' Renton City Council Minutes Page 482
Resolution#3681 A resolution was read authorizing the Mayor and City Clerk to enter into an
Utility: Soos Creek Water& interlocal agreement with the Soos Creek Water and Sewer District to modify
Sewer Boundary Agreement the interlocal agreements between the City and Soos Creek Water and Sewer
Addendum District related to the establishment of service boundaries. MOVED BY
BRIERE, SECONDED BY CORMAN, COUNCIL ADOPT THE
RESOLUTION AS READ. CARRIED.
The following ordinances were presented for second and final reading and
adoption:
Ordinance#5060 An ordinance was read adopting the 2003 amendments to the zoning
Zoning: 2003 Annual Update classifications of properties located within the City of Renton. MOVED BY
of Zoning Book&Wall Map BRIERE, SECONDED BY CLAWSON, COUNCIL ADOPT THE
ORDINANCE AS READ. ROLL CALL: ALL AYES. CARRIED.
Ordinance#5061 An ordinance was read amending Chapter 1, Administration and Enforcement,
Planning: Multi-Family of Title IV(Development Regulations)of City Code to establish a property tax
Property Tax Exemption exemption incentive for the development of multi-family housing in targeted
areas. MOVED BY BRIERE, SECONDED BY CLAWSON, COUNCIL
ADOPT THE ORDINANCE AS READ. ROLL CALL: ALL AYES.
CARRIED.
Development Services: Real Councilwoman Briere explained that due to concerns from the property rental
Estate Sign Code Amendments community, second reading of the ordinance regarding the real estate sign code
amendments will be postponed until 1/12/2004.
NEW BUSINESS MOVED BY CORMAN, SECONDED BY NELSON, COUNCIL SET A
Council: Special Meeting, SPECIAL MEETING ON 1/05/2004 AT 6:30 P.M. FOR THE PURPOSE OF
Swearing-In of Elected SWEARING-IN THE NEW ELECTED OFFICIALS. CARRIED.
Officials
Council: Outgoing Describing how overwhelmed he was as a newly elected Councilmember in
Councilmember Comments 1996, Councilman Parker indicated that he soon understood the government
(Parker) process and learned to work within it. He stated that the job has been
challenging and rewarding,and expressed his gratitude for having had the
opportunity to serve his community in this way. Councilman Parker
commended City of Renton staff, Administration, and fellow Councilmembers
for working very hard to do their best for the community. Additionally, he
thanked his wife for all of her support.
Councilmembers expressed their appreciation to Mayor Tanner and
Councilman Parker for their many years of service to the Renton community.
ADJOURNMENT MOVED BY PARKER, SECONDED BY NELSON, COUNCIL ADJOURN.
CARRIED. Time: 8:44 p.m.
^ r &a
BONNIE L WALTON,City Clerk
Recorder: Michele Neumann
December 22, 2003
December 15,2003 `"" Renton City Council Minutes *✓ Page 471
Zoning: 2003 Annual Update An ordinance was read adopting the 2003 amendments to the zoning
of Zoning Book&Wall Map classifications of properties located within the City of Renton. MOVED BY
BRIERE, SECONDED BY CLAWSON, COUNCIL REFER THE
ORDINANCE FOR SECOND AND FINAL READING ON 12/22/2003.
CARRIED.
Planning: Multi-Family An ordinance was read amending Chapter 1, Administration and Enforcement,
Property Tax Exemption of Title IV(Development Regulations)of City Code to establish a property tax
exemption incentive for the development of multi-family housing in targeted
areas. MOVED BY BRIERE, SECONDED BY CLAWSON,COUNCIL
REFER THE ORDINANCE FOR SECOND AND FINAL READING ON
12/22/2003. CARRIED.
Development Services: Real An ordinance was read amending Chapter 1, Administration and Enforcement;
Estate Sign Code Amendments Chapter 4, Citywide Property Development Standards; and Chapter 11,
Definitions; of Title IV(Development Regulations) of City Code regarding real
estate signs. MOVED BY BRIERE, SECONDED BY CLAWSON, COUNCIL
REFER THE ORDINANCE FOR SECOND AND FINAL READING ON
12/22/2003. CARRIED.
Planning: Downtown Core An ordinance was read amending Section 4-4-080, of Chapter 4, Citywide
Off-Street Parking Property Development Standards, of Title IV (Development Regulations)of
Requirements City Code by creating parking standards for development in the downtown
core. MOVED BY BRIERE, SECONDED BY CLAWSON, COUNCIL
REFER THE ORDINANCE FOR SECOND AND FINAL READING ON
12/22/2003. CARRIED.
The following ordinances were presented for second and final reading and
adoption:
Ordinance#5049 An ordinance was read providing for the 2003 year-end Budget adjustments in
Budget: 2003 Year-End the total amount of$9,176,407. MOVED BY PARKER, SECONDED BY
Adjustments CORMAN, COUNCIL ADOPT THE ORDINANCE AS READ. ROLL CALL:
ALL AYES. CARRIED.
Ordinance#5050 An ordinance was read adopting the annual City of Renton Budget for the year
Budget: 2004 Annual City of 2004 in the total amount of$146,500,500. MOVED BY PARKER,
Renton SECONDED BY NELSON, COUNCIL ADOPT THE ORDINANCE AS
READ. ROLL CALL: ALL AYES. CARRIED.
Ordinance#5051 An ordinance was read increasing the 2004 athletic field light fees. MOVED
Community Services: Athletic BY PARKER, SECONDED BY NELSON, COUNCIL ADOPT THE
Field Light Fees ORDINANCE AS READ. ROLL CALL: ALL AYES. CARRIED.
Ordinance#5052 An ordinance was read increasing the 2004 boat launch fees at Gene Coulon
Community Services: Gene Memorial Beach Park. MOVED BY PARKER, SECONDED BY NELSON,
Coulon Park Boat Launch Fees COUNCIL ADOPT THE ORDINANCE AS READ. ROLL CALL: ALL
AYES. CARRIED.
Ordinance#5053 An ordinance was read amending Chapter 5-1, Fee Schedule, of Title V
Community Services: Henry (Finance and Business Regulations)of City Code by setting the admission fees
Moses Aquatic Center Fees for the Henry Moses Aquatic Center. MOVED BY PARKER, SECONDED
BY NELSON, COUNCIL ADOPT THE ORDINANCE AS READ. ROLL
CALL: ALL AYES. CARRIED.
December 15,2003 err Renton City Council Minutes Page 470
• Transportation (Aviation)Committee: Marcie Palmer, Chair; Randy Corman,
Vice Chair; Terri Briere, Member.
Utilities Committee: Dan Clawson, Chair; Terri Briere, Vice Chair; Marcie
Palmer,Member.
MOVED BY PERSSON, SECONDED BY BRIERE,COUNCIL CONCUR IN
THE COMMITTEE REPORT. CARRIED.
Finance Committee Finance Committee Chair Parker presented a report recommending approval of
Finance: Vouchers Claim Vouchers 221648 -222156 and two wire transfers totaling
$3,882,436.65; and approval of Payroll Vouchers 47838 -48179,one wire
transfer and 573 direct deposits totaling$1,888,261.51. MOVED BY
PARKER, SECONDED BY PERSSON, COUNCIL CONCUR IN THE
COMMITTEE REPORT. CARRIED.
Councilman Corman expressed his appreciation for Councilman Parker's work
on the Finance Committee, which he has chaired for the past five years.
Planning &Development Planning and Development Committee Chair Briere presented a report
Committee recommending concurrence in the recommendation of staff that Council adopt
Planning: Multi-Family an ordinance to establish the property tax exemption for multi-family housing
Property Tax Exemption in residential targeted areas in the Urban Center-North, Center Downtown, and
Center Village Comprehensive Plan designation areas. The Committee further
recommended that the ordinance regarding this matter be presented for first
reading. MOVED BY BRIERE, SECONDED BY CLAWSON, COUNCIL
CONCUR IN THE COMMITTEE REPORT. CARRIED. (See page 471 for
ordinance.)
ORDINANCES AND The following resolutions were presented for reading and adoption:
RESOLUTIONS
Resolution#3676 A resolution was read authorizing the Mayor and City Clerk to enter into an
Planning: Airport Compatible interlocal cooperative agreement with the Washington State Department of
Land Use&UC-N Community,Trade and Economic Development for managing a$45,000 grant
Designation, CTED Grant to complete the Airport Compatible Land Use Program and the development
standards for implementation of the Urban Center-North mixed use
development Comprehensive Plan amendments. MOVED BY CLAWSON,
SECONDED BY NELSON, COUNCIL ADOPT THE RESOLUTION AS
READ. CARRIED.
Resolution#3677 A resolution was read declaring a moratorium on the development of surface
Planning: Primary Use Surface parking lots as a primary use,establishing a public hearing date of 1/12/2004,
Parking Lots Development and establishing a termination date for the moratorium of 6/15/2004. MOVED
Moratorium BY BRIERE, SECONDED BY CLAWSON, COUNCIL ADOPT THE
RESOLUTION AS READ. CARRIED.
Resolution#3678 A resolution was read authorizing the Mayor and City Clerk to enter into an
EDNSP: Regional Affordable interlocal cooperative agreement with King County regarding the distribution
Housing Program(SHB 2060) of funds under the Regional Affordable Housing Program. MOVED BY
Funds), King County NELSON, SECONDED BY PARKER,COUNCIL ADOPT THE
RESOLUTION AS READ. CARRIED.
The following ordinances were presented for first reading and referred to the
Council meeting of 12/22/2003 for second and final reading:
W"
PLANNING AND DEVELOPMENT COMMITTEE czT ' r� L
COMMITTEE REPORT
December 15,2003 Date /a/S-e'�dD3
Adopt an ordinance to establish a Property Tax Exemption for Multi-Family Housing in
Residential Targeted Areas
(Referred December 1, 2003)
The Planning and Development Committee recommends concurrence in staff's
recommendation that Council adopt an ordinance to establish the Property Tax Exemption for
Multi-Family Housing in Residential Targeted Areas in the Urban Center North, Center Downtown
and Center Village Comprehensive Plan designation areas.
The Committee further recommends that the ordinance regarding this matter be presented for
first reading.
\4(114`
Terri Brier ,, Chair
Da aws Vice Ch '
in er, Member
cc: Alex Pietsch
Victoria Runkle
Gregg Zimmerman
Neil Watts
Derek Todd
Multi-Family Property Tax Exemption-Committee Report 12-15-03\
December 15,2003 AMP' Renton City Council Minutes `� Page 465
units per net acre)zoning is proposed. Regarding the fiscal impact of the
proposed annexation,he reported that the City will realize a surplus of$44,018
at full development, assuming an increase to 59 single-family homes and an
assessed home valuation of$300,000. He also noted the one-time estimated
expense of$63,000 for the acquisition and development of parks. Mr. Erickson
concluded by stating that the proposed annexation will further City business
goals, is consistent with City policies for annexation, and meets Boundary
Review Board objectives.
Public comment was invited.
Keith and Kristine Childs, 12004 148th Ave. SE, 98059, objected to the
annexation of their property to the City of Renton for the following reasons:
the costs associated with hooking-up to Renton's sewer service,paying for
unwanted City amenities such as libraries and parks, and the increase in
density.
Jon Newman, 8070 Langston Rd. S., Seattle, 98178, stated that his family owns
1.93 acres in the proposed annexation area, and expressed his support for the
annexation.
There being no further public comment, it was MOVED BY PARKER,
SECONDED BY NELSON, COUNCIL CLOSE THE PUBLIC MEETING.
CARRIED.
MOVED BY PARKER, SECONDED BY NELSON, COUNCIL: ACCEPT
THE 10% NOTICE OF INTENT TO ANNEX PETITION,AUTHORIZE
CIRCULATION OF THE 50% PETITION TO ANNEX,REQUIRE THE
ADOPTION OF CITY ZONING ON THE PROPERTY CONSISTENT WITH
THE COMPREHENSIVE PLAN,AND REQUIRE THAT PROPERTY
OWNERS ASSUME A PROPORTIONAL SHARE OF THE CITY'S
BONDED INDEBTEDNESS. CARRIED.
PUBLIC HEARING This being the date set and proper notices having been posted and published in
Planning: Multi-Family accordance with local and State laws, Mayor Tanner opened the public hearing
Property Tax Exempin to consider the designation of residential targeted areas for Washington State's
multi-family property tax exemption provided for under RCW(Revised Code
of Washington) 84.14.
Mark Santos-Johnson, Economic Development Specialist, explained that
utilizing Washington State's property tax exemption means eligible multi-
family housing projects such as apartments or condominiums would be able to
receive a partial property tax exemption for up to ten years as an added
financial incentive for developers to create multi-family housing projects. The
tax exemption applies to the value of qualified new housing construction after
completion, but does not apply to the value of the land, any existing
improvements, or any non-housing related improvements. Mr. Santos-Johnson
stated that the tax exemption also applies to all levels of the ad valorem
property tax, including city,county, state, and local taxing districts; and for
projects in Renton, this amounts to$11.10 per$1,000 of assessed value for
2003. He added that the value of the property tax exemption will vary greatly
depending on the nature,quality, and costs of each multi-family housing
project.
Mr. Santos-Johnson reviewed the proposed residential targeted areas for the tax
exemption as follows:
December 15,2003 Renton City Council Minutes Page 466
• The Center Downtown(CD),Residential Multi-Family Urban Center(RM-
U),and Residential Multi-Family Traditional(RM-T) zones in the Center
Downtown Comprehensive Plan designation;
• The Urban Center-North District 1 (UC-N 1)zone in the Urban Center-
North Comprehensive Plan designation; and
• The Center Suburban(CS), Residential Multi-Family Suburban Center
(RM-C),and Residential-ten dwelling units per acre (R-10)zones in the
Center Village Comprehensive Plan designations.
Continuing,Mr. Santos-Johnson explained that eligible projects must be
located in designated targeted areas; must be new construction rental or owner-
occupied multi-family housing with four or more housing units in each
building; must have a minimum number of housing units (minimum of 10 units
in lower density zones and minimum of 30 units in higher density zones); must
be mixed-used if located in the CD or UC-N 1 zones, or in the CS zone within
the Center Village Comprehensive Plan designation; and must comply with
urban center overlay design standards and guidelines.
Mr. Santos-Johnson described the process applicants must undergo to receive
the property tax exemption, and he reviewed the proposed application fees. In
conclusion,he recommended Council adopt the designated residential targeted
areas for the proposed property tax exemption for eligible multi-family housing
projects, noting that the proposed ordinance includes a provision that projects
will not be accepted after 12/31/2006 unless otherwise extended by the City
Council.
In response to Councilman Clawson's inquiry,Mr. Santos-Johnson confirmed
that if an applicant's project resides in a targeted area and meets the eligibility
requirements,the applicant is entitled to the property tax exemption. He noted
that the Economic Development Administrator is responsible for overseeing the
application process, and Council reviews and has final say for each project.
Councilmembers Clawson, Briere, and Corman expressed their support for the
tax exemption,noting that it will aid in drawing more people to live in the
downtown area, encourage new construction, and benefit the contractors.
Responding to Council comments,Economic Development, Neighborhoods and
Strategic Planning Administrator Alex Pietsch pointed out that several multi-
family housing projects in the downtown area have been proposed, but for
various reasons have not moved forward. He indicated that the property tax
exemption may stimulate those projects.
In response to Council President Keolker-Wheeler's inquiry regarding assessing
tax on mixed-use projects,Mr. Santos-Johnson explained that for the final
application, applicants are required to submit a variety of reports including a
break down of their costs to separate the difference between qualified housing
improvements and non-housing or mixed-use commercial uses. King County
would use that information for determining the value of the exempted property.
Public comment was invited. There being none, it was MOVED BY PARKER,
SECONDED BY NELSON, COUNCIL CLOSE THE PUBLIC HEARING.
CARRIED. (See page 470 for Planning&Development Committee report.)
WNW
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City of Renton
PUBLIC HEARING HANDOUT
December 15, 2003
APPLICATION NAME: Designation of residential targeted areas for a potential limited
property tax exemption for eligible multi-family housing
projects.
PROJECT DESCRIPTION: The Economic Development, Neighborhoods and Strategic Planning
Department proposes to utilize Washington state's multi-family
property tax exemption (provided for in Chapter 84.14 RCW) to help
stimulate construction of new multi-family development in targeted
areas. If adopted by the City Council, eligible multi-family housing
projects (e.g., apartments or condominiums) would be able to receive
a partial property tax exemption for up to 10 years as an added
financial incentive for developers to create multi-family housing in
targeted areas in our community.
As required by state law, the City is holding a public hearing for the
purpose of considering the following three areas (highlighted on the
attached map) as designated residential targeted areas for the
proposed property tax exemption for multi-family housing:
• The Center Downtown (CD), Residential Multi-Family Urban
Center(RM-U) and Residential Multi-Family Traditional (RM-T)
zones in the Center Downtown Comprehensive Plan designation;
• The Center Suburban (CS) Residential Multi-Family Suburban
Center(RM-C) and Residential 10 dwelling units per acre (R-10)
zones in the Center Village Comprehensive Plan designation; and
• The Urban Center North District 1 (UCN-1) zone in the Urban
Center North Comprehensive Plan designation.
RECOMMENDATION: Council adopt the above areas as designated residential targeted areas
for the proposed property tax exemption for eligible multi-family
housing projects.
I'M
11
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Proposed Residential Targeted o isoo 3000
Areas for Multi-Family Property e g000S'
Economic Development,Neighborhoods&Strategic Planning
Tax Exemption •cii5. G.Del R sa Adm nistrator
G.Del Rosario
TO 25 November 2003
Proposed Property Tax
Exemption for Multi-Family
Housing in Targeted Areas
December 15, 2003
City Council
Public Hearing
Proposal
• Utilize Washington State's multi-family
property tax exemption to help stimulate
construction of new multi-family
development in targeted areas
• Provide partial property tax exemption for
up to 10 years as a financial incentive for
eligible new multi-family housing projects
1
What Does the Exemption
Cover?
• The value of the new housing construction
is exempt from property taxes for ten years
after completion of the project
• The exemption does not include the value
of the land, existing improvements or non-
housing-related improvements
What Does the Exemption
Cover? (continued)
• The multi-family property tax exemption
applies to all levels of the ad valorem
property tax, including the city, county,
state and all local taxing districts
• For projects in Renton, this amounts to a
total of $11 . 10347 per $1 ,000 of assessed
value for 2003
2003 Property Tax Rates
[Per $ 1 ,000 Assessed Value (AV)]
City of Renton - General Levy $3.19
City of Renton - Special Levy 0.08865
Total City of Renton property tax rate 3.28
King County 1.34948
Port of Seattle 0.25895
Hospital District #1 0.092.54
Renton School District #403 2.98691
State of Washington School Fund 2.8968
Emergency Medical Service 0.24143
Total 2003 Property Tax Rates $11.10
Example of 30-unit Apartment
Building ($4,000,000 AV)
City of Renton - General Levy $12,755
City of Renton - Special Levy 354
Total City of Renton property tax rate 13,109
King County 5,398
Port of Seattle 1,036
Hospital District #1 370
Renton School District #403 11,948
State of Washington School Fund 11,587
Emergency Medical Service 966
Total 2003 Property Taxes $44,414
3
Potential Property Tax Savings
for Sample 30-unit Apartment
Building
• Based on $3,000,000 AV for the qualified
housing improvements ($100,000 per unit), the
property tax savings would be $33,310 per year
($333,100 over 10 years)
• Owner would pay property taxes of $11,104 per
year on $1,000,000 AV for the land and any non-
housing-related improvements
Proposed Designated Residential
Targeted Areas
Center Downtown
• Center Downtown (CD)
• Residential Multi-Family Urban
Center (RM-U)
• Residential Multi-Family
Traditional (RM-T)
Urban Center North
• Urban Center North District 1
(UCN-1)
Center Village
• Center Suburban (CS)
• Multi-Family Suburban Center ;'
(RM-C) Proposed Residential Targeted �1
Areas for MultiFamily Property ...._... r ix,xe.._
• Residential 10 du/acre (R-I0) Tax Exemption ;::
4
Eligible Projects Must:
• Be located in one of the designated
residential targeted areas
• Be new construction rental or owner
occupied multi-family housing with four or
more housing units in each building
• Have a minimum number of housing units
Eligible Projects (continued)
Comprehensive Plan Designation & Zone Minimum # of
Housing Units
Center Downtown
•Center Downtown (CD) 30
•Residential Multi-Family Urban Center (RM-U) 10
•Residential Multi-Family Traditional (RM-T) 10
Urban Center North
•Urban Center North District 1 (UCN-1) 30
Center Village
• Center Suburban (CS) 30
• Residential Multi-Family Suburban Center (RM-C) 10
• Residential 10 dwelling units/acre (R-10) 10
5
Eligible Projects Must:
(continued)
• Be mixed-use if located in the Center
Downtown zone, Urban Center North
District 1 zone, or in the Center Suburban
zone within the Center Village Comp Plan
designation
• Comply with design standards and
guidelines if located in the Center Village
Comprehensive Plan designation
Process for Securing Property
Tax Exemption
• Submit application for Conditional
Certificate prior to the issuance of the
building permit for the project
• Have contract approved by City Council
with terms & conditions
• Complete project within three years
• Submit application for Final Certificate
6
Proposed Fees
Application Fee
For Conditional Certificate S500
To Amend Contract S250
(if needed)
To Extend 3-year Period $250
(if needed)
For Final Certificate S250
Staff Recommendation
• Adopt an ordinance to establish the
Property Tax Exemption for Multi-Family
Housing in the designated residential
targeted areas in the Urban Center North,
Center Downtown and Center Village
Comprehensive Plan designation areas
• Applications for new projects will not be
accepted after 12/31/2006 unless extended
by City Council action
CITY OF RENTON
NOTICE OF PUBLIC HEARING
NOTICE IS HEREBY GIVEN that the Renton City Council has fixed the 15th day of
December, 2003, at 7:30 p.m. as the date and time for a public hearing to be held in the
seventh floor Council Chambers of Renton City Hall, 1055 S. Grady Way,Renton,WA
98055,to consider the following:
City proposal to designate the following areas as residential targeted areas for a
potential limited property tax exemption for eligible multi-family housing
projects:
• The Center Downtown (CD),Residential Multi-Family Urban Center(RM-U)
and Residential Multi-Family Traditional (RM-T)zones in the Center
Downtown Comprehensive Plan designation;
• The Center Suburban (CS)Residential Multi-Family Suburban Center(RM-C)
and Residential 10 du/ac (R-10)zones in the Center Village Comprehensive
Plan designation; and
• The Urban Center North District 1 (UCN-1)zone in the Urban Center North
Comprehensive Plan designation.
The eligibility criteria and requirements for the multi-family housing projects will
be established by the City Council at a later date as part of a proposed multi-
family property tax exemption for the residential targeted areas noted above.
All interested parties are invited to attend the hearing and present written or oral
comments regarding the proposal. Renton City Hall is in compliance with the American
Disabilities Act, and interpretive services for the hearing impaired will be provided upon
prior notice. For information, call 425-430-6502.
&test -vi Waet&ram
Bonnie I. Walton
City Clerk
Published King County Journal
December 5 &8,2003
Account No. 50640
Proposed Multi-Family Property Tax Exemption for Residential Targeted Areas
Public Hearing Notice Information
FYI. Excerpt from RCW 84.14.040 related to public hearing requirements
(2) For the purpose of designating a residential targeted area or areas, the governing
authority may adopt a resolution of intention to so designate an area as generally
described in the resolution. The resolution must state the time and place of a hearing to
be held by the governing authority to consider the designation of the area and may
include such other information pertaining to the designation of the area as the governing
authority determines to be appropriate to apprise the public of the action intended.
(3) The governing authority shall give notice of a hearing held under this chapter by
publication of the notice once each week for two consecutive weeks, not less than seven
days, nor more than thirty days before the date of the hearing in a paper having a
general circulation in the city where the proposed residential targeted area is located.
The notice must state the time, date, place, and purpose of the hearing and generally
identify the area proposed to be designated as a residential targeted area.
Proposed draft supplemental text for public hearing notice on 12/5/03 and 12/8/03
(i.e., beyond the standard text used by the City Clerk's office)
The City proposes to designate the following areas as residential targeted areas for a
potential limited property tax exemption for eligible multi-family housing projects:
• The Center Downtown (CD), Residential Multi-Family Urban Center (RM-U)
and Residential Multi-Family Traditional (RM-T) zones in the Center
Downtown Comprehensive Plan designation;
• The Center Suburban (CS), Residential Multi-Family Suburban Center (RM-C)
and Residential 10 du/ac (R-10) zones in the Center Village Comprehensive
Plan designation; and
• The Urban Center North District 1 (UCN-1) zone in the Urban Center North
Comprehensive Plan designation.
The eligibility criteria and requirements for the multi-family housing projects will be
established by the City Council at a later date as part of a proposed multi-family ..
property tax exemption for the residential targeted areas noted above.
3,000
December 1,2003 Renton City Council Minutes Page 444
CONSENT AGENDA Items on the consent agenda are adopted by one motion which follows the
listing.
Council Meeting Minutes of Approval of Council meeting minutes of November 24, 2003. Council concur.
November 24, 2003
City Clerk: 2003 General City Clerk submitted 2003 General Election canvas results from King County
Election Canvas Results Records and Elections, as follows: Mayor, Kathy Keolker-Wheeler(5,076
votes - elected)and King Parker(4,153); Council Position No. 3,Marcie
Palmer(4,777 -elected) and Rosemary Quesenberry(3,991); Council Position
No. 4, Denis Law (4,885 -elected)and Robin H. Jones (3,143); Council
Position No. 5,Eric Cameron(3,382) and Toni Nelson(4,663 -elected);
Position No. 7,Don Persson (6,395 -elected). Information.
CAG: 03-173, Kiwanis Park City Clerk reported bid opening on 11/21/2003 for CAG-03-173,Kiwanis Park
Improvements, Advanced Improvements; 18 bids; engineer's estimate$110,000 to$120,000; and
Construction submitted staff recommendation to award the contract to the low bidder,
Advanced Construction,Inc., in the amount of$112,596. Council concur.
CAG: 03-158,Lind Ave City Clerk reported bid opening on 11/24/2003 for CAG-03-158,Lind Ave. SW
SW/SW 7th St Signalization, and SW 7th St. Signalization; seven bids; engineer's estimate $190,000; and
Totem Electric submitted staff recommendation to award the contract to the low bidder,Totem
Electric, in the amount of$172,103.70. Council concur.
t
Planning: Multi-Family Economic Development, Neighborhoods and Strategic Planning Department
Property Tax Exemption recommended approval to utilize Washington State's multi-family property tax
4 exemption to help foster new multi-family development in targeted areas.
Refer to Planning and Development Committee; set public hearing on
12/15/2003 to consider the residential targeted areas.
Annexation: Anderson, 148th Economic Development, Neighborhoods and Strategic Planning Department
Ave SE& SE 120th St submitted 10% Notice of Intention to annex petition for the proposed Anderson
Annexation, 19.75 acres located east of 148th Ave. SE and south of SE 120th
St., and recommended that a public meeting be set on 12/15/2003 to consider
the petition. Council concur.
Finance: Streamlined Sales Finance and Information Services Department recommended City endorsement
Tax of the adoption and implementation of the State of Washington's streamlined
sales taxes concept concurrent only upon Federal adoption of Internet and
catalog sales taxes; where the State adopts a point of delivery sales tax
collection system for interstate sales,but orders the Department of Revenue to
distribute sales tax to Washington cities based on point of sale. Council
concur. (See page 445 for resolution.)
CAG: 03-103, SW 7th St Surface Water Utility Division submitted CAG-03-103, SW 7th St. Drainage
Drainage Improvement Phase Improvement Project Phase I; and requested approval of the project,
I, DDJ Construction Co authorization for final pay estimate in the amount of$9,838.13,commencement
of 60-day lien period, and release of retained amount of$15,360.35 to D.D.J.
Construction Co., Inc., contractor, if all required releases are obtained. Council
concur.
Utility: Skyway Water& Utility Systems Division recommended approval of an agreement with Skyway
Sewer District Boundary Water and Sewer District that establishes the water and sanitary service
Agreement boundaries. Refer to Utilities Committee.
CIPir OF RENTON COUNCIL AGENDAIILL
I AI#: 6 r
Submitting Data: For Agenda of: December 1, 2003
Dept/Div/Board.. EDNSP
Staff Contact Mark Santos-Johnson Agenda Status
Consent X
Subject: Public Hearing.. X
Utilization of Washington state's multi-family property Correspondence..
tax exemption provided for in Chapter 84.14 RCW to Ordinance
help foster new multi-family development in targeted Resolution
areas. Old Business
Exhibits: New Business
Issue Paper Study Sessions
Information
Recommended Action: Approvals:
Refer to the Planning & Development Committee; set a Legal Dept
public hearing on 12/15/03 for the proposed residential Finance Dept
targeted areas for the multi-family property tax Other
exemption
Fiscal Impact:
Expenditure Required... 0 Transfer/Amendment 0
Amount Budgeted 0 Revenue Generated 0
Total Project Budget 0 City Share Total Project..
SUMMARY OF ACTION:
EDNSP is proposing the adoption of a Multi-Family Property Tax Exemption for Residential
Targeted Areas for new construction multi-family housing projects in the CD, RM-U, RM-T and
UCN-1 zones and the CS, RM-C and R-10 zones in the Center Village Comprehensive Plan
designation. Under the proposed new program, the value of the qualified new housing construction
would be exempt from ad valorem property taxation for ten successive years after completion of
the project. Qualified projects would need to meet the eligibility criteria and other requirements
adopted by the Council to participate in the program.
The state's multi-family property tax exemption provided for in 84.14 RCW has been utilized by a
number of local jurisdictions to help spur development in urban neighborhoods with insufficient
housing opportunities. Although the tax exemption by itself is not enough to create developments,
it is an added financial incentive for developers to create multi-family housing in targeted areas in
our community.
STAFF RECOMMENDATION:
Staff recommends that Council: (1) set a public hearing on 12/15/03 for the proposed
residential targeted areas for the multi-family property tax exemption; (2) approve the
designated residential targeted areas; and (3) adopt an ordinance to establish the multi-family
property tax exemption for projects that meet desired local eligibility criteria.
Multi-Family Property Tax Exemption Agenda Bill 11-24-03
CITY OF RENTON
ECONOMIC DEVELOPMENT, NEIGHBORHOODS,
AND STRATEGIC PLANNING DEPARTMENT
MEMORANDUM
DATE: November 24, 2003
TO: Kathy Keolker-Wheeler, President
City Council Members
FROM: Alex Pietsch, Administrator
Economic Development, Neighborhoods,
and Strategic Planning Department
STAFF CONTACT: Mark Santos-Johnson, Economic Development Specialist
Ext. 6584
VIA: .� Mayor Jesse Tanner
SUBJECT: Proposed Multi-Family Property Tax Exemption for
Residential Targeted Areas
ISSUE:
Should the City utilize Washington state's multi-family property tax exemption provided for
in Chapter 84.14 RCW to help foster multi-family development in targeted areas?
RECOMMENDATION:
• Set a public hearing for December 15, 2003 for the proposed residential targeted areas for
the multi-family property tax exemption as required by RCW 84.14.040.
• Approve the designated residential targeted areas and adopt an ordinance to establish the
multi-family property tax exemption for projects that meet desired local eligibility
criteria.
BACKGROUND SUMMARY:
Overview
The Washington State Legislature adopted Chapter 84.14 RCW to encourage increased
residential opportunities in cities required to plan under the Growth Management Act by
providing a partial property tax exemption for up to 10 years for eligible multi-family
housing (e.g., apartments or condominiums) located in targeted urban, residential areas. The
November 26, 2003
Page 2
purpose of the state's multi-family property tax exemption is to stimulate construction of new
multi-family housing and/or the rehabilitation of existing vacant and underutilized buildings
for multi-family housing in urban centers with insufficient housing opportunities.
The value of the qualified new housing construction, conversion and rehabilitation
improvements is exempt from ad valorem property taxation for ten successive years after
completion of the project. However, the exemption does not include the value of the land,
existing improvements or non-housing-related improvements (e.g., commercial space). The
multi-family property tax exemption is in addition to any other tax credits, grants or
incentives provided by law for the multi-family housing.
Example of Potential Property Tax Savings
The multi-family property tax exemption applies to all levels of the ad valorem property tax,
including the local jurisdiction, county, state and all local taxing districts. For projects in
Renton, this amounts to a total of$11.10347 per $1,000 of assessed value for 2003. (Please
see Attachment 1, Examples of Potential Property Tax Savings, for a breakdown of the local
ad valorem property tax rate and an example of how the tax rates apply to the various taxing
entities.)
The value of the property tax exemption will of course be determined by the nature, quality
and cost of the multi-family housing (e.g., size, type, parking and amenities). However, for
an eligible 1,000 sq. ft. apartment unit in Renton with development costs of$100 per sq. ft.
(excluding the land), the annual savings would be $1,110 (1000 sq. ft x $100/sq. ft., divided
by $1000, times $11.10347). For an apartment building in Renton with thirty similar 1,000
sq. ft. units, the savings from the multi-family property tax exemption would equal $33,300
per year, or $333,000 over ten years (based on the current ad valorem property tax rate).
Residential Targeted Areas
The state law, as amended, now allows for a city with a population of at least 30,000 to
utilize 84.14 RCW to provide a property tax exemption to eligible multi-family housing
located in a residential target area(s) designated by the local governing authority. The
designated area(s) must be an "urban center", a compact identifiable district as defined in
RCW 84.14.010 where urban residents may obtain a variety of products and services.
In light of the City's business plan, economic development and Comprehensive Plan goals,
EDNSP recommends that the following three areas be established as residential targeted areas
for the City's multi-family property tax exemption:
• The Center Downtown (CD), Residential Multi-Family Urban Center (RM-U) and
Residential Multi-Family Traditional (RM-T) zones in the Center Downtown
Comprehensive Plan designation;
• The Center Suburban (CS), Residential Multi-Family Suburban Center (RM-C) and
Residential 10 du/ac (R-10) zones in the Center Village Comprehensive Plan
designation; and
Multi-Family Property Tax Exemption Issue Paper 11-24-03.doc
November 26, 2003
Page 3
• The Urban Center North District 1 (UCN-1) zone in the Urban Center North
Comprehensive Plan designation.
Please see Attachment 2 for a map of the Proposed Residential Targeted Areas for the Multi-
Family Property Tax Exemption.
As required by RCW 84.14.040, EDNSP is requesting that the Council set a public hearing
for December 15, 2003 for the above proposed residential targeted areas for the multi-family
property tax exemption.
Eligible Properties
RCW 84.14 identifies the types of projects eligible to receive a multi-family property tax
exemption. However, as described in more detail in the Local Standards, Guidelines &
Requirements section below, the local jurisdiction has the authority to establish the specific
eligibility requirements for local projects within the parameters allowed by the statute.
Under RCW 84.14, the multi-family property tax exemption may apply to buildings with four
or more dwelling units that are used for "permanent residential occupancy" for either rental
or owner occupancy on a non-transient basis. This includes owner-occupied or rental
accommodation that is leased for a period of at least one month, but excludes hotels and
motels that predominantly offer rental accommodation on a daily or weekly basis.
The multi-family units may result from new construction, rehabilitation or conversion of
vacant, underutilized or substandard buildings to multi-family housing. However, property
proposed for rehabilitation must fail to comply with one or more state or local building or
housing codes AND be vacant for at least twelve months before submitting an application for
the multi-family property tax exemption. In mixed-use developments, at least fifty percent of
the total space must be provided for permanent residential occupancy. Notwithstanding the
above displacement prohibition, the property tax exemption may be used in the case of an
existing occupied multi-family development so long as a minimum of four additional multi-
family units are provided. Existing multi-family vacant housing that has been vacant for at
least twelve months does not have to provide additional multi-family units.
The new construction, rehabilitation or conversion of the multi-family housing must be
completed within three years from the date of approval of the application by the local
government. However, the deadline for completing the project may, in some instances, be
extended by the local jurisdiction for up to 24 consecutive months.
Local Standards, Guidelines & Requirements
State law allows the local government to establish standards and guidelines for utilizing the
multi-family property tax exemption within the parameters of the statute, including the
process and procedures for considering applications and making the determinations required
under RCW 84.14. The local government may, for example, (per RCW 84.14.030 and
RCW 84.14.040) establish building requirements addressing parking, height, density, public
Multi-Family Property Tax Exemption Issue Paper I1-24-03.doc
Nase
November 26, 2003
Page 4
benefit features, number and size of proposed development, low-income or moderate-income
occupancy requirements, environmental impact, compatibility with the existing surrounding
property, the provision of amenities that will attract and keep permanent residents and that
will properly enhance the livability of the residential targeted areas, and other adopted
requirements deemed necessary by the city.
EDNSP recommends the following general criteria for the City's Multi-Family Property Tax
Exemption for Residential Targeted Areas:
(1) The property must be located in a designated residential targeted area (see above);
(2) The project must be new construction;
(3) The project must have a minimum of 10 attached dwelling units if located in the RM-U
or RM-T zones or the RM-C or R-10 zones in the Center Village Comprehensive Plan
designation OR a minimum of 30 attached dwelling units if located in the CD or UCN-1
zones or the CS zone in the Center Village Comprehensive Plan designation; and
(4) The multi-family housing must be used for "permanent residential occupancy" which
includes either owner occupancy or rental accommodation that is leased for a period of
at least one month, but excludes hotels and motels.
(5) In mixed-use developments, at least fifty percent of the total space must be provided for
permanent residential occupancy.
Additional eligibility criteria and requirements for the City's Multi-Family Property Tax
Exemption for Residential Targeted Areas (such as mixed use and/or design requirements)
will be provided to the Planning and Development Committee for their consideration.
Process & Fees
Prior to the start of construction or rehabilitation, the project owner must submit an
application to the local jurisdiction, receive a conditional acceptance of tax exemption by the
local jurisdiction and enter into a contract (that specifies the terms and conditions for the
development project) with the local jurisdiction. At the completion of the project, the owner
must submit a report with a number of statements, including a breakdown of the amount of
construction or rehabilitation expenditures for each housing unit and the entire project. After
reviewing the material and ensuring that the completed project is consistent with RCW 84.14
and the local jurisdiction's requirements, the City issues a certificate(s) of tax exemption for
the project to the owner(s) and notifies the county assessor's office. The property owner(s)
also must submit an annual certification to the City during the ten-year tax exemption period.
State law allows the local jurisdiction to establish an application fee for the multi-family
property tax exemption to cover the costs incurred by both the local jurisdiction and the
county assessor in administering the multi-family property tax exemption for the project.
Typical application fees for other local jurisdictions range from $50 to $1,000. Some
jurisdictions have additional fees, for example, for an application amendment or an extension
of the conditional certificate deadline.
Multi-Family Property Tax Exemption Issue Paper 11-24-03.doc
November 26, 2003
Page 5
A proposed fee schedule for the City's Multi-Family Property Tax Exemption for Residential
Targeted Areas will be provided to the Planning and Development Committee for their
consideration.
Experiences of Other Jurisdictions with the Multi-Family Property Tax Exemption
Please refer to Attachment 3, Experiences of Other Jurisdictions with the Multi-Family
Property Tax Exemption, for information about the utilization and success of 84.14 RCW in
other jurisdictions.
CONCLUSION:
The multi-family property tax exemption provided for in 84.14 RCW has been utilized by a
number of local jurisdictions to help spur development in urban neighborhoods with
insufficient housing opportunities. Although the tax exemption by itself is not enough to
create developments, it is an added financial incentive for developers to create multi-family
housing in targeted areas in our community.
In order to proceed, the City needs to hold a public hearing to consider the residential
targeted areas for eligible projects, approve the designated residential targeted areas and
adopt an ordinance that establishes a multi-family property tax exemption for projects that
meet desired local eligibility criteria.
cc: Jay Covington, CAO
Bonnie Walton, City Clerk
Victoria Runkle
Gregg Zimmerman
Neil Watts
Derek Todd
Multi-Family Property Tax Exemption Issue Paper 11-24-03.doc
November 26, 2003
Page 6
Attachment 1
Examples of Potential Property Tax Savings
Table 1
2003 Property Tax Rates (per $1,000 of Assessed Value)
City of Renton - General Levy $3.18871
City of Renton - Special Levy 0.08865
Total City of Renton property tax rate $3.27736
King County 1.34948
Port of Seattle 0.25895
Hospital District #1 0.09254
Renton School District #403 2.98691
State of Washington School Fund 2.89680
Emergency Medical Service 0.24143
Total 2003 Property Tax Rates $11.10347
Table 2
Example of the 2003 Property Taxes for a 30-unit Apartment Building with an Assessed
Value of$4,000,000
City of Renton - General Levy $12,755
City of Renton - Special Levy 354
Total City of Renton property tax 13,109
King County 5,398
Port of Seattle 1,036
Hospital District#1 370
Renton School District#403 11,948
State of Washington School Fund 11,587
Emergency Medical Service 966
Total 2003 Property Taxes $44,414
Note: The proposed multi-family property tax exemption would apply to the assessed value of the qualified
housing improvements for the apartment building,but not the assessed value of the land or any non-housing-
related improvements(e.g.,commercial space). Based on an assessed value of$3,000,000 for the qualified
housing improvements(i.e.,$100,000 per apartment unit),the potential property tax savings related to the multi-
family property tax exemption would be$33,310.
Multi-Family Property Tax Exemption Issue Paper 11-24-03.doc
•
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• Economic Development, eighborhmie&Strategic Planning
• Alex Pietsch,Administrator
Tax Exemption G.Del Rosario
•.O' 25 November 2003
November 25, 2003
Page 8
Attachment 3
Experiences of Other Jurisdictions with the Multi-Family Property Tax Exemption
Washington state's multi-family property tax exemption statute has been utilized by a number
of local jurisdictions to help spur development in urban neighborhoods with insufficient
housing opportunities, including Tacoma, Seattle, Spokane, Bellingham, Olympia,
Vancouver, Wenatchee, Federal Way, Puyallup and, most recently, Auburn.
Although there is no central administration of the multi-property tax exemption program by
the state, it appears as though many jurisdictions utilize 84.14 RCW to establish a multi-
family property tax exemption for one or more designated residential target areas with limited
additional local requirements or eligibility criteria. However, at least two jurisdictions -
Seattle and Auburn - established significantly more restrictive eligibility criteria to target the
use of the multi-family property tax exemption to better meet local needs.
In Seattle, the multi-family property tax exemption was implemented with an affordability
component wherein at least 40% of the units were affordable at 60% of median income in the
"Pike-Pine neighborhood" and 25% of the units were affordable at 80% of median income in
all of the other residential targeted areas of the city.
In Auburn, the multi-family property tax exemption was adopted with local requirements that
eligible projects: (a) be new construction only; (b) have 30 or more units; and (c) have a
"minimum investment of$150,000 per unit annually adjusted for inflation by the Consumer
Price Index".
Although both Federal Way and Auburn established multi-family property tax exemption
programs this year, neither had a project application as of earlier this fall. However, a
number of other jurisdictions have successfully utilized the multi-family property tax
exemption to help develop new rental and ownership multi-family properties in urban
neighborhoods.
For example, Tacoma has had 45 multi-family property tax exemption projects with 3,076
units approved since 1998 (including 764 condo units). Seattle has had 14 multi-family
property tax exemption projects since 1999, including 12 rental projects (with 878 units) and
2 projects for homeowners (with 86 units). Six of the 14 projects involve a nonprofit agency
and for-profit developers are developing eight of the projects.
Multi-Family Property Tax Exemption Issue Paper 11-24-03.doc