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HomeMy WebLinkAbout2006-037 Downtown Redevelopment Tax Abeyance Incentive; YMC Addition 11.63 ORDINANCE NO 2006- 37 AN ORDINANCE relating to land use and development; identifying and designating an `urban center' area for the purpose of developing needed multiple -unit residential housing by means of rehabilitation, modification or conversion of existing structures or by means of new construction, in order to provide additional housing opportunities in the `urban center' where presently sufficient available, desirable and convenient residential housing is not available to meet the needs of the public who would be likely to live in the `urban center' if desirable, attractive and livable residential opportunities were available, establishing specific goals and guidelines for said rehabilitation, modification or conversion as well as a formal process of application, review, approval, denial and appeal for prospective projects, authorizing a process whereby properties satisfying the requirements of the application and development guidelines become eligible for exemption from ad valorem property taxation on the value of the new housing construction, conversion and rehabilitation improvements as provided in 84 14 RCW, and enacting Chapter 11 63 entitled "Downtown Redevelopment Tax Incentive Program" as a new chapter to Title 11 of the City of Yakima Municipal Code WHEREAS, the Yakima City Council perceives a need for the development of areas within the City's urban center to address the lack of sufficient available desirable and convenient residential housing to meet the needs of a growing number of the public who would live in these urban centers if desirable, attractive and livable residences were available for occupancy; and WHEREAS, the Yakima City Council believes that the development of desirable residential units in identified areas of the urban center will attract and maintain a significant increase in the number of permanent residents in these areas and thereby help to alleviate the detrimental conditions and social liability that tend to exist in the absence of a viable residential population, as well as to help achieve the planning goals mandated by the growth management act, per RCW 36 70A.020, and WHEREAS, typical planning solutions intended to solve problems of urban sprawl often fail to provide sufficient incentives and implementation techniques necessary to encourage residential redevelopment in the urban centers that often lack sufficient residential opportunities, and WHEREAS, the Yakima City Council believes said urban center development to be in the public best interest, and that it will benefit, provide and promote the public health, safety and welfare of the citizens of Yakima to stimulate new and /or enhanced residential opportunities within the Yakima urban center; and WHEREAS, it would benefit the City of Yakima and its citizens to stimulate the construction of new multifamily housing and the rehabilitation of existing vacant and underutilized buildings for multifamily housing in the Yakima urban center where presently there is insufficient housing opportunities for those seeking desirable, attractive and livable residences, and (jc)ord /Downtown Redevelopment 1 Tax Abeyance Incentive WHEREAS, in order to further these purposes, it is the intention of the Yakima City Council to designate an area of Yakima within the City's urban center, as that term is defined in RCW 84 14 010(10), for the purpose of residential development as described herein, and WHEREAS, an area designated as an "urban center" must lack sufficient available, desirable and convenient residential housing to meet the needs of the public who would be likely to live in the urban center, if the desirable, attractive and livable places were available, and WHEREAS, it is the Yakima City Council's purpose, through the opportunities provided by this ordinance, to encourage increased residential development in urban centers, to stimulate construction of new multifamily housing and rehabilitation of existing vacant and underutilized buildings for multifamily housing in urban centers having insufficient housing opportunities, and to provide special valuations for eligible improvements associated with multiunit housing in residentially deficient urban centers, and WHEREAS, a public hearing was held before City Council on August 1, 2006 for City Council to receive public comment on the specific area to be identified as an "urban center" within the City of Yakima and as a result of said public meeting the City Council has identified the specific area set forth in the ordinance attached below; Now, Therefore BE IT ORDAINED BY THE CITY OF YAKIMA. Section 1 Chapter 11 63, entitled "Downtown Redevelopment Tax Incentive Program" is hereby enacted as a new chapter to Title 11 of the City of Yakima Municipal Code, to read as follows Sections 11 63.010 Purpose. 11.63 020 Short title. 11 63 030 Definitions. 11 63 040 Residential Target Area Designation and Standards. 11 63 050 Tax Exemptions for Multi- Family Housing in Residential Target Areas. 11.63 010 Purpose. The purpose of this ordinance is to provide for increased residential opportunities in the City of Yakima within urban centers where the Yakima City Council determines there is insufficient housing opportunities It is further the purpose of this ordinance to stimulate the construction of new multifamily housing and the rehabilitation of existing vacant and underutilized buildings for multifamily housing in urban centers having insufficient housing opportunities that will increase and improve residential opportunities within these urban centers To achieve these purposes this ordinance provides special valuations for eligible improvements (jc)ord /Downtown Redevelopment 2 Tax Abeyance Incentive associated with multiunit housing in residentially deficient urban centers It is intended that this ordinance meet all required provisions and procedures set forth in 84 14 RCW to comport with State law 11 63 020 Short title. The following sections shall be known and may be cited as the "Downtown Redevelopment Incentive" 11 63.030 Definitions. A. "Multi- Family housing" means building(s) having four or more dwelling units designed for permanent residential occupancy resulting from new construction or rehabilitation or conversion of vacant, underutilized, or substandard buildings B "Owner" means the property owner of record C "Urban center" means a compact identifiable district where urban residents may obtain a variety of products and services An urban center must contain 1 Several existing or previous, or both, business establishments that may include but are not limited to shops, offices, banks, restaurants, government agencies, and 2 Adequate public facilities including streets, sidewalks, lighting, transit, domestic water, and sanitary sewer systems, and 3 A mixture of uses and activities that may include housing, recreation, and cultural activities in association with either commercial or office, or both types of use D "Director" means the director of the City's Department of Community and Economic Development or authorized designee E "Permanent residential occupancy" means multi - family housing that provides either rental or owner occupancy for a continuous period of at least one month, and provides sleeping, eating and cooking facilities These provisions specifically exclude hotels and motels that predominately offer rental accommodations on a daily or weekly basis F "Rehabilitation improvements" means modifications to existing structures in order to achieve a condition of substantial compliance with existing building codes, or modification to existing occupied structures which convert non - residential space to residential space and /or increase the number of multi - family housing units G "Residential target area" means an area within an urban center that has been designated by the Yakima City Council as lacking sufficient, available, desirable, and convenient residential housing to meet the needs of the public H "Substantial compliance" means compliance with local building or housing code requirements typically required for rehabilitation as opposed to new construction 11 63 040 Residential Target Area Designation and Standards. (jc)ord /Downtown Redevelopment 3 Tax Abeyance Incentive A. Criteria Following a public hearing, the City Council may, in its sole discretion, designate one or more residential target areas. Each designated target area must meet the following criteria, as determined by the City Council 1 The target area is located within a designated urban center; 2 The target area lacks sufficient available, desirable, and convenient residential housing to meet the needs of the public who would likely live in the urban center if desirable, attractive, and livable places were available, and 3 The provision of additional housing opportunities in the target area will assist in achieving the following purposes, (a) Encourage increased residential opportunities within the target area, (b) Stimulate the construction of new multi - family housing and the rehabilitation of existing vacant and under - utilized buildings for multi - family housing, (c) Stimulate the historically sensitive reuse of vacant and underutilized upper floors of urban center commercial space for permanent residential living, (d) Encourage mixed -use development or redevelopment of buildings in the identified areas of the urban center presently containing retail and commercial uses that would support downtown residential living on the ground floors and would provide permanent residential housing on the upper floors In designating a residential target area, the City Council may also consider other factors, including, but not limited to whether additional housing in the target area will attract and maintain a significant increase in the number of permanent residents, whether an increased residential population will help alleviate detrimental conditions and social liability in the target area, and whether an increased residential population in the target area will help to achieve the planning goals mandated by the Growth Management Act under RCW 36 70A.020 The City Council, may, by ordinance, amend or rescind the designation of a residential target area at any time pursuant to the same procedure as set forth in this chapter for original designation B Target Area Standards and Guidelines For each designated residential target area within an urban center the City Council shall adopt standards and guidelines, as required by RCW 84 14 040(5), for both new construction and rehabilitation, including any area - specific application procedures that may be required in addition to the standard application process described herein The requirements for a particular development plan (hereinafter "project ") shall be relative to the size of the proposed development and the tax benefit to be obtained In addition to the specific guidelines set forth in Yakima Municipal Code section 11 63 050, the City Council adopts the following guidelines applicable to the specific projects at issue in this ordinance (jc)ord /Downtown Redevelopment 4 Tax Abeyance Incentive 1 Minimum Investment: Each project must represent an investment of a minimum of $25,000 per unit. 2 Relocation The project shall not result in residential displacement and shall not be considered for approval unless all relocation obligations required by State and Federal law are satisfied 3 Ground Floor Space The program is not available for projects that plan to convert existing ground floor commercial space (occupied or vacant) to housing, unless approved by way of specific waiver from City Council The City Council encourages the use of ground floor spaces for retail and commercial uses that are supportive of downtown residential living in urban center residential projects approved under this program 4 Reuse and Conversion The program encourages the conversion and rehabilitation of the upper stories of urban center buildings for residential use C Designated Target Areas The boundary of the "residential target area" subject to this ordinance is the boundary of that portion of the urban center set forth below and indicated on the map identified as Exhibit "A ", attached hereto and incorporated herein by this reference, which are on file in the City Clerk's Office Beginning at the intersection of East Martin Luther King Jr Blvd and North 6 th Street; then south to the intersection of South 6 th Street and East Walnut Street; then west to the alignment of the BNSF railroad tracks, then north to the alignment of West Chestnut Street; then west along the alignment of West Chestnut Avenue to South 7 th Avenue, then north to East A Street; then east along the alignment of West A Street to the alignment of the BNSF railroad tracks, then north to the alignment of East Martin Luther King Boulevard; then east to point of beginning 11 63.050 Tax Exemptions for Multi - Family Housing in Residential Target Areas. A. Intent. Limited ten -year exemptions from ad valorem property taxation for multi- family housing in mixed -use urban centers are intended to 1 Encourage increased residential opportunities within mixed -use urban centers designated by the City Council as residential target areas, 2 Stimulate new construction or rehabilitation of existing vacant and underutilized buildings for multi - family housing in residential target areas to increase and improve housing opportunities, 3 Assist in directing future population growth to designated mixed -use urban centers, thereby reducing development pressure on single - family residential neighborhoods, and (jc)ord /Downtown Redevelopment 5 Tax Abeyance Incentive 4 Achieve development densities that are more conducive to transit use in designated mixed -use centers. B Duration of Exemption The value of improvements qualifying under this chapter shall be exempt from ad valorem property taxation for ten successive years beginning January 1 of the year immediately following the calendar year after issuance of the Final Certificate of Tax Exemption At the conclusion of the ten -year exemption period, the new or rehabilitated housing cost shall be considered as new construction for the purposes of chapter 84 55 RCW C Limits on Exemption The exemption does not apply to the value of land or to the value of improvements not qualifying under this chapter, nor does the exemption apply to increases in assessed valuation of land and non - qualifying improvements In the case of rehabilitation of existing buildings, the exemption does not include the value of improvements constructed prior to submission of the completed application required under this chapter D Proiect Eligibility A proposed project must meet the following requirements for consideration for a .property tax exemption 1 Location The project must be located within a residential target area, as designated in Yakima Municipal Code section 11 63 040 (C) 2 Tenant Displacement Policy Existing dwelling units proposed for rehabilitation must have been unoccupied for a minimum of twelve months prior to submission of an application and must have one or more violations of the City's minimum housing code, or the project shall not displace existing residential tenants of structures that are proposed for redevelopment prior to a demonstration that all relocation obligations set forth in and required by State and Federal laws have been complied with Applications for new construction cannot be submitted for vacant property upon which an occupied residential rental structure previously stood, unless a minimum of 12 months has elapsed from the time of most recent occupancy 3 Size The project must include at least four units of multi - family housing within a residential structure or as part of a mixed -use development. A minimum of four new units must be constructed or at least four additional multi - family units must be added to existing occupied multi - family housing Existing multi - family housing that has been vacant for twelve months or more shall not be required to provide additional units so long as the project provides at least four units of new, converted, or rehabilitation multi - family housing 4 Permanent Residential Housing One hundred percent of the space designated for multi - family housing must be provided for permanent residential occupancy, as defined in Section 11 63 030 (E) 5 Proposed Completion Date New construction multi - family housing and rehabilitation improvements must be scheduled to be completed within three years from the date of application approval (jc)ord /Downtown Redevelopment Tax Abeyance Incentive 6 Compliance with Guidelines and Standards The project must be designed to comply with the City's comprehensive plan, building, housing, and zoning codes, and any other applicable regulations in effect at the time the application is approved Rehabilitation and conversion improvements must comply with the City's minimum housing code New construction must comply with the International Building Code (IBC) The project must also comply with any other standards and guidelines adopted by the City Council for the residential target area in which the project will be developed E. Application Procedure A property owner who wishes to propose a project for a tax exemption under this Ordinance shall complete the following procedures 1 An applicant desiring to make use of this program shall file with the City's Planning and Development Services Department the required application, together with the required fees The initial application fee to the City shall consist of a base fee of $ 0 00, plus $ 0 00 per multi - family unit, up to a maximum total fee to the City of $ 0 00 An additional $100 fee to cover the Yakima County Assessor's administrative costs shall also be paid to the City If the application shall result in a denial by the City, the City shall retain that portion of the fee attributable to its own administrative costs and refund the balance to the applicant. 2 A complete application shall include (a) A completed City of Yakima application form setting forth the grounds for the exemption, (b) Preliminary floor and site plans of the proposed project; (c) A statement acknowledging the potential tax liability when the project ceases to be eligible under this chapter; and (d) Verification by oath or affirmation of the accuracy and completeness of the information submitted For rehabilitation projects, the applicant shall also submit an affidavit that existing dwelling units have been unoccupied for a period of 12 months prior to filing the application, or verifiable evidence that all State and Federal laws regarding residential displacement have been complied with, and shall secure from the City written verification of property noncompliance with the City's minimum housing code F Application Review and Issuance of Conditional Certificate The Director may certify an application that is determined to comply with the requirements of this chapter as complete and eligible to participate in this program Upon the Director's determination of completeness, the City Council shall consider said application and render a decision to approve or deny the application The determination of approval or denial shall be made within ninety days of receipt of a complete application The procedures set forth in this section do not preclude or replace, (jc)ord /Downtown Redevelopment 7 Tax Abeyance Incentive but are in addition to any other development application /permit/review processes otherwise required by the Yakima Municipal Code 1 Approval If an application is approved, the applicant shall enter into a contract with the City, subject to approval by resolution of the City Council, regarding the terms and conditions of the project. Upon Council approval of the contract, the Director shall issue a Conditional Certificate of Acceptance of Tax Exemption The Conditional Certificate expires three years from the date of approval unless an extension is granted as provided in this chapter 2 Denial If an application contract is denied by the City Council, the Director shall state, in writing to the applicant, the reasons for denial and shall send notice to the applicant at the applicant's last known address within ten days of the denial An applicant may seek reconsideration of a denial before the City Council within thirty days of receipt of notice On reconsideration, the City Council's decision shall be upheld unless the applicant can show that there is no substantial evidence on the record to support the Council's decision The City Council's decision on reconsideration will be final G Extension of Conditional Certificate The Conditional Certificate may be extended by the Director for a period not to exceed twenty four consecutive months. The applicant must submit a written request stating the grounds for the extension, accompanied by a $ 0.00 processing fee An extension may be granted if the Director determines that: 1 The anticipated failure to complete construction or rehabilitation within the required time period is due to circumstances beyond the control of the owner; and 2 The owner has been acting and could reasonably be expected to continue to act in good faith with due diligence, and 3 All the conditions of the original contract between the applicant and the City will be satisfied upon completion of the project. H Application for Final Certificate Upon completion of the improvements agreed upon in the contract between the applicant and the City and upon issuance of a temporary or permanent certificate of occupancy, the applicant may request a Final Certificate of Tax Exemption The applicant must file with the City's Department of Community and Economic Development the following 1 A statement of expenditures made with respect to each multi - family housing unit and the total expenditures made with respect to the entire property; 2 A description of the completed work and a statement of qualification for the exemption, and 3 A statement that the work was completed within the required three -year period or any authorized extension (jc)ord /Downtown Redevelopment 8 Tax Abeyance Incentive Within thirty days of receipt of all materials required for a Final Certificate, the Director shall determine which specific improvements satisfy the requirements of this chapter I Issuance of Final Certificate If the Director determines that the project has been completed in accordance with the contract between the applicant and the City and has been completed within the authorized time period, the City shall, within ten days, file a Final Certificate of Tax Exemption with the Yakima County Assessor for those improvements determined to satisfy the requirements of this chapter 1 Denial and Appeal The Director shall notify the applicant in writing that a Final Certificate will not be filed if the Director determines that: (a) The improvements were not completed within the authorized time period, (b) The improvements were not completed in accordance with the contract between the applicant and the City; or (c) The owner's property is otherwise not qualified under this chapter Within 14 days of receipt of the Director's denial of a Final Certificate, the applicant may request an open record appeal before the City's Hearing Examiner, as provided in Yakima Municipal Code section 16 08 020 If the applicant chooses to appeal the decision of the Hearing Examiner, the applicant may request a closed record appeal to the Yakima City Council, as set forth in Yakima Municipal Code section 16 08 030 The City Council's final decision may be appealed in Yakima County Superior Court, in accord with Yakima Municipal Code section 16 08 040 J Annual Compliance Review Within thirty days after the first anniversary of the date of filing the Final Certificate of Tax Exemption and each year thereafter, for a period of ten years, the property owner shall file a notarized declaration with the Director indicating the following 1 A statement of occupancy and vacancy of the multi - family units during the previous years, 2 A certification that the property continues to be in compliance with the contract with the City; and 3 A description of any subsequent improvements or changes to the property City staff shall also conduct on -site verification of the declaration Failure to submit the annual declaration may result in the tax exemption being canceled K. Cancellation of Tax Exemption If the Director determines the owner is not complying with the terms of the contract, the tax exemption will be canceled This cancellation may occur in conjunction with the annual review or at any other time when non - compliance has been determined If the owner intends to convert the multi - family housing to another use, the (jc)ord /Downtown Redevelopment 9 Tax Abeyance Incentive owner must notify the Director and the Yakima County Assessor within sixty days of the change in use 1 Effect of Cancellation If a tax exemption is canceled due to a change in use or other noncompliance, the Yakima County Assessor may impose an additional tax on the property, together with interest and penalty, and a priority lien may be placed on the land, pursuant to State legislative provisions 2 Notice and Appeal Upon determining that a tax exemption is to be canceled, the Director shall notify the property owner by certified mail The property owner may appeal the determination by filing a notice of appeal with the City Clerk within thirty days, specifying the factual and legal basis for the appeal The Hearing Examiner will conduct a hearing at which all affected parties may be heard and all competent evidence received The Hearing Examiner will affirm, modify, or repeal the decision to cancel the exemption based on the evidence received An aggrieved party may appeal the Hearing Examiner's decision to the Yakima County Superior Court." Section 2 This ordinance shall be in full force and effect 30 days after its passage, approval, and publication as provided by law and by the City Charter PASSED BY THE CITY COUNCIL, signed and approved this 15 of August, 2006 AAa ATTEST (avid Edler, Mayor City Clerk Publication Date 8 -18 -2006 Effective Date 9 -17 -2006 (jc)ord /Downtown Redevelopment 10 Tax Abeyance Incentive , a' ; " r i It ': kt ,o' #�' r - +:. ro 'T-5,:‘, ' ` 'i„spd�'' " 1P,V" ;7-.-7 , g 5 l "-` � Y ""°' ` `a ,+ f:' .; 'Afis �`, r�St ': TF ''..1 T3) . 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BUSINESS OF THE CITY COUNCIL YAKIMA, WASHINGTON AGENDA STATEMENT ITEM NO / J FOR MEETING OF August 15 , 2006 ITEM TITLE Consideration of Ordinance to establish a Yakima Downtown Housing Incentive Program SUBMITTED BY William Cook, Director of Community & Economic Development CONTACT PERSON/TELEPHONE William Cook / 575 -6113 SUMMARY EXPLANATION Following a public hearing on August 1, 2006 and subsequent Council Economic Development Committee meetings, a study session of the City Council was held on August 8, 2006 At the study session, Council directed staff to prepare an Ordinance to bring to the full Council for consideration at their meeting on August 15, 2006 The purpose of the Ordinance is to designate a downtown housing area and establish program guidelines as provided for in RCW Chapter 84 14 "New and Rehabilitated Multi- unit Dwellings in Urban Centers " In establishing this program the Council has identified the four following goals 1 Create a downtown residential community to support the economic growth and revitalization of our Central Business District (CBD) 2 Set a goal of creating 500 new or renovated market rate housing units within the Yakima Downtown Housing Area over the next five years (Continued on Page 2) Resolution _ Ordinance X Contract _ Other (Specify) Funding Source APPROVAL FOR SUBMITTAL. City Manager er 9 STAFF RECOMMENDATION Pass Ordinance BOARD RECOMMENDATION COUNCIL ACTION Ordinance passed as amended. ORDINANCE NO. 2006-37 3 Stimulate the historically sensitive reuse of vacant and underutilized upper floors of downtown commercial space for permanent residential living 4 Encourage mixed -use development or redevelopment of buildings in the Central Business District (CBD) with retail and commercial uses that support downtown residential living on the ground floor and permanent housing on the upper floors The section of the proposed Ordinance regarding application fees has been intentionally left blank. This was done to allow the Council to set fees as they feel appropriate Staff has no recommendation Should Council approve this Ordinance, there is a 30 -day period before the Ordinance becomes effective and applications may be considered Program Goals. 1 Create a downtown residential community to support the economic growth and revitalization of our Central Business Distnct (CBD) 2 Set a goal of creating 500 new or renovated market rate housing units within the Yakima Downtown Housing Area over the next five years 3 Stimulate the historically sensitive reuse of vacant and underutilized upper floors of downtown commercial space for permanent residential living. 4 Encourage mixed -use development or redevelopment of buildings in the Central Business Distnct (CBD) with retail and commercial uses that support downtown residential living on the ground floor and permanent housing on the upper floors Proposed Program Guidelines 1 Location The project must be located within the "Downtown Housing Area" designed by City Council. 2 Size The project must include at least four units of housing within a residential structure or mixed -use development. 3 Permanent Residential Housing At least 100 percent of the units designated for multi - family housing must be provided for permanent residential occupancy with sleeping, eating and cooking facilities 4 Proposed Completion Date Projects approved for property tax abatement under this program must be completed within three years (36 months) from the date of approval of the application. 5 Off - Street Parking New construction and conversion projects benefiting from this program must provide off - street parking within three blocks of the project. *6 Minimum Investment: Project must represent an investment of a minimum of $15,000 per unit. 7 Relocation No project will be considered for approval that will result in displacement unless all relocation obligations required by State and Federal law are met. 8 Demolition and Extenor Modifications Demolition and exterior modifications to buildings more than 50 years old shall be reviewed and recommended for approval by the City of Yakima's Historical Preservation Commission before final approval for this program. 9 Ground Floor Space The program is not available for projects that plan to convert existing ground floor commercial space (occupied or vacant) to housing, unless approved as a waiver by City Council 10 Compliance with Guideline and Standards The project must be designed to comply with the City's comprehensive plan, building, housing and zoning codes, and any other applicable regulations in effect at the time the application is approved. Rehabilitation and conversion improvements must comply with the City's minimum housing code 11 Ground Floor Space The program encourages the use of ground floor spaces of downtown residential projects approved under this program for retail and commercial uses that are supportive of downtown residential living. 12 Reuse and Conversion The program encourages the conversion and reuse of upper stones of downtown buildings for residential use