HomeMy WebLinkAbout02/21/2017 09 Multi-Family Housing Limited Tax Exemption Agreement with One Chestnut, LLCBUSINESS OF THE CITY COUNCIL
YAKIMA, WASHINGTON
AGENDASTATEMENT
Item No. 9.
For Meeting of: February 21, 2017
ITEM TITLE: Resolution authorizing an agreement with One Chestnut, LLC for a
multi -family housing limited tax exemption
SUBMITTED BY: Sean Hawkins, Economic Development Manager, 575-6274
SUMMARY EXPLANATION:
The City received an application from One Chestnut, LLC for the City's multi -family housing
limited tax incentive. The project is to update the former Dragon Inn building on the southeast
corner of 1 st Street and Chestnut Avenue with 16 market rate apartments on the second and third
floor of the building. The group floor would be reserved for a new retail use.
The City Council approved an update to the City's ordinance to reflect the current state statute
that would allow us to offer either an eight year tax exemption for market rate housing projects in
the City's urban center or a twelve year tax exemption for low income housing. This project would
be for eight year and the units will be market rate. One Chestnut, LLC expects the units to be
available to the public in early 2018.
ITEM BUDGETED:
STRATEGIC PRIORITY:
NA
Economic Development
APPROVED FOR
SUBMITTAL: "~City Manager
STAFF RECOMMENDATION:
Adopt resolution.
BOARD/COMMITTEE RECOMMENDATION:
This project was reviewed at the January 10, 2017 Council Economic Development Committee.
The Committee recommended moving this agreement forward to the full Yakima City Council.
ATTACHMENTS:
Description
Resolution One Chestnut LLC Agreement
Project Image - One Chestnut LLC
Agreement One Chestnut, LLC
Upload Date
Type
211412017
Omer Memo
2/13/2017
Co r Memo
2/14/2017
Coxer Memo
RESOLUTION NO. R -2017-
A RESOLUTION authorizing the City Manager of the City of Yakima to execute an agreement
between the City of Yakima and One Chestnut, LLC for a multi -family housing
limited tax exemption.
WHEREAS, the City has an interest in stimulating new construction or rehabilitation of multi-
family housing in designated Residential Target Areas in order to reduce development pressure on
single-family residential neighborhoods, to increase and improve housing opportunities, and to
encourage development densities supportive of transit use; and
WHEREAS, the City has, pursuant to the authority granted to it by Chapter 84.14 RCW,
designated a Residential Target Area for the provision of a limited property tax exemption for new
multi -family residential housing; and
WHEREAS, the City has, through Ordinance No. 2017-001, enacted a program whereby
property owners may qualify for a Final Certificate of Tax Exemption which certifies to the Yakima
County Assessor that the owner is eligible to receive a limited property tax exemption; and
WHEREAS, the Applicant is interested in receiving a limited property tax exemption for the
construction of Housing Remodel and Upgrade at 107 S. 1St Street, Yakima, WA consisting of
sixteen residential units; and
WHEREAS, the units will be approximately 500-800 square feet each; including four two
bedroom units and twelve one bedroom units, all containing one bathroom each, and providing
housing for individuals and small families in the designated Residential Target Area; Now,
Therefore,
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF YAKIMA:
The City Manager is hereby authorized and directed to execute and administer the necessary
Agreements for One Chestnut, LLC to utilize a multi -family housing limited tax exemption to develop
multi -family residential housing in the City's designated residential target areas.
ADOPTED BY THE CITY COUNCIL this 17th day of February, 2017.
ATTEST:
Sonya Claar-Tee, City Clerk
Kathy Coffey, Mayor
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COMPONENTS. NOT FOR CONSTRUCTION.
MULTI -FAMILY HOUSING LIMITED PROPERTY
TAX EXEMPTION AGREEMENT
THIS AGREEMENT is entered into this 17th day of February, 2017, by and
between (One Chestnut, LLC), (hereinafter referred to as the "Applicant"), and the CITY
OF YAKIMA, a municipal corporation and first-class charter city (hereinafter referred to
as the "City").
WHEREAS, the City has an interest in stimulating new construction or
rehabilitation of multi -family housing in designated Residential Target Areas in order to
reduce development pressure on single-family residential neighborhoods, to increase
and improve housing opportunities, and to encourage development densities supportive
of transit use; and
WHEREAS, the City has, pursuant to the authority granted to it by Chapter 84.14
RCW, designated a Residential Target Area for the provision of a limited property tax
exemption for new multi -family residential housing; and
WHEREAS, the City has, through Ordinance No. 2017-001, enacted a program
whereby property owners may qualify for a Final Certificate of Tax Exemption which
certifies to the Yakima County Assessor that the owner is eligible to receive a limited
property tax exemption; and
WHEREAS, the Applicant is interested in receiving a limited property tax
exemption for the construction of Housing Remodel and Upgrade at 107 S. 1 st Street,
Yakima, WA consisting of sixteen residential units; and
WHEREAS, the units will be approximately 500-800 square feet each; including
four two bedroom units and twelve one bedroom unit all containing one bathroom each,
and providing housing for individuals and small families in the designated Residential
Target Area; and
WHEREAS, the Applicant has submitted to the City preliminary site plans and
floor plans for multi -family residential housing to be constructed on said property,
described more specifically as follows:
Parcel: 1 91 31 9-2351 5 with a legal description of Section 19 Township 13 Range 19
Quarter NW: TOWN OF NORTH YAKIMA, NOW YAKIMA (A-10): Block 32 Lot 27
THRU 32
Hereinafter referred to as the "Site"; and
WHEREAS, the City has determined that the improvements will, if completed as
proposed, satisfy the requirements for a Final Certificate of Tax Exemption;
NOW, THEREFORE, the City and the Applicant do mutually agree as follows:
ac)contract
MULTIFAMILY HOUSING LIMITED
PROPERTY TAX EXEMPTION AGREEMENT
1. The City agrees to issue the Applicant a Conditional Certificate of Acceptance
of Tax Exemption.
2. The Applicant agrees to construct on the Site multi -family residential housing
substantially as described in the most recent site plans, floor plans, and elevations on
file with the City as of the date of City Council approval of this Agreement. In no event
shall such construction provide fewer than four new multi -family permanent residential
units. It shall provide one hundred percent (100%) of its total residential units as
permanent housing.
3. The Applicant agrees to complete construction of the agreed upon
improvements within three years from the date the City issues the Conditional
Certificate of Acceptance of Tax Exemption, or within any authorized extension thereof
granted by the City.
4. The Applicant agrees, upon completion of the improvements and upon
issuance by the City of a temporary or permanent certificate of occupancy, to file with
the City's Community and Economic Development Department the following:
(a) a certified statement of expenditures made with respect to each multi-
family housing unit and the total expenditures made with respect to the entire property;
and
(b) a specifically detailed description of the completed work and a
statement of qualification for the exemption; and
(c) a certified statement that the work was completed within the required
three-year period or any authorized extension thereof.
5. The City agrees, conditioned on the Applicant's successful completion of the
improvements in accordance with the terms of this Agreement and on the Applicant's
filing of the materials described in Paragraph 4, above, to file a Final Certificate of Tax
Exemption with the Yakima County Assessor's Office. The value of new housing
construction, conversion and rehabilitation improvements qualifying under this chapter
is exempt from ad valorem property taxation, for eight (8) successive years beginning
January 1 of the year immediately following the calendar year of issuance of the Final
Certificate of Tax Exemption. The exemption does not include the value of land or non-
housing -related improvements. At the conclusion of the eight-year exemption period,
the new or rehabilitated housing cost shall be considered as new construction for the
purpose of chapter 84.55 RCW.
6. The Applicant agrees, within thirty (30) days following the first anniversary of
the City's filing of the Final Certificate of Tax Exemption and each year thereafter for the
duration of the tax exemption period, to file a notarized declaration with the City's
Department of Community and Economic Development indicating the following:
ac)contract 2
MULTIFAMILY HOUSING LIMITED
PROPERTY TAX EXEMPTION AGREEMENT
(a) a statement of occupancy and vacancy of the rehabilitated or newly
constructed property during the previous twelve months ending with the anniversary
date; and
(b) a certification that the property has not changed use and continues to
be in compliance with this Agreement; and
(c) a description of any subsequent improvements or changes to the
property after the issuance of the Final Certificate of Tax Exemption.
7. If the Applicant converts any of the new multi -family residential housing units
constructed under this Agreement to another use, the Applicant shall provide written
notification of any such change in use to the Yakima County Assessor and the City's
Department of Economic Development within sixty (60) days of such change in use.
8. The Applicant agrees to notify the City promptly of any transfer of Applicant's
ownership interest in the Site or in the improvements made to the Site under this
Agreement.
9. The City reserves the right to cancel the Final Certificate of Tax Exemption
should the Applicant, or the Applicant's successors and assigns, fail to comply with any
of the terms and conditions of this Agreement or the requirements of RCW 84.14
applicable to the tax exemption provided by the terms of this Agreement.
10. No modifications of this Agreement shall be made unless mutually agreed
upon by the parties hereto in writing.
11. In the event that any term or clause of this Agreement conflicts with
applicable law, such conflict shall not affect any other terms of this Agreement which
can be given effect without the conflicting term or clause, and to this end, the terms of
this Agreement are declared to be severable.
12. In the event a dispute arises over the terms and conditions of this
Agreement, the laws of the state of Washington shall apply; venue for any action
necessary to enforce the terms and conditions of this Agreement shall lie in a court of
competent jurisdiction in Yakima County, Washington.
IN WITNESS WHEREOF the parties hereto have executed this Agreement as of
the day and year first above written.
CITY OF YAKIMA (DEVELOPER)
By
Cliff Moore, City Manager Jon Alke, One Chestnut, LLC
ac)contract 3
MULTIFAMILY HOUSING LIMITED
PROPERTY TAX EXEMPTION AGREEMENT
Approved:
Sean Hawkins, Director
Department of Economic Development
Attest:
Sonya Claar Tee, City Clerk
STATE OF WASHINGTON
) ss.
County of Yakima
On this day of
2017, before the undersigned, a Notary
Public in and for the state of Washington, duly commissioned and sworn, personally
appeared , to me known to be the authorized signor for
(CITY), and the person who executed the foregoing instrument, and acknowledged said
instrument to be the free and voluntary act and deed of said person, for the uses and
purposes therein mentioned.
WITNESS my hand and official seal hereto affixed the day and year first above
written.
NOTARY PUBLIC
Printed Name:
Residing at
My commission expires
ac)contract 4
MULTIFAMILY HOUSING LIMITED
PROPERTY TAX EXEMPTION AGREEMENT
STATE OF WASHINGTON
) ss.
County of Yakima
On this day of
2017, before the undersigned, a Notary
Public in and for the state of Washington, duly commissioned and sworn, personally
appeared , to me known to be the authorized signor for
(DEVELOPER), and the person who executed the foregoing instrument, and
acknowledged said instrument to be the free and voluntary act and deed of said person,
for the uses and purposes therein mentioned.
WITNESS my hand and official seal hereto affixed the day and year first above
written.
NOTARY PUBLIC
Printed Name:
Residing at
My commission expires
ac)contract 5
MULTIFAMILY HOUSING LIMITED
PROPERTY TAX EXEMPTION AGREEMENT