HomeMy WebLinkAboutR-2007-121 2007 Allocation of Federal Renewal Commuity Commercial Revitalization DeductionsRESOLUTION NO. R-2007-121
A RESOLUTION approving projects for the 2007 allocation of the federal Renewal
Community Commercial Revitalization Deduction, and directing the City
Manager to submit the list of approved projects to the Washington State
Department of Community, Trade and Economic Development (CTED)
for ratification and commitment.
WHEREAS, economic development is a priority of the City of Yakima, and the City
intends to approach economic development on a comprehensive basis involving public, private
and community-based efforts to achieve new investment and redevelopment in the City; and
WHEREAS, the City has been formally designated a Renewal Community under the
Empowerment Zones and Renewal Communities Initiative by the federal government; and
WHEREAS, the Renewal Communities Program includes, in part, an opportunity for
Renewal Communities to participate in a Commercial Revitalization Tax Deductions plan
whereby certain local development projects (including certain rehabilitation of existing
development) may qualify for accelerated partial deduction of development costs by way of
enhanced federal income tax deductibility; and
WHEREAS, the City of Yakima retains responsibility for developing and administering
locally a Qualified Allocation Plan for evaluating eligible development activities within the
community; and
WHEREAS, the City of Yakima has an allocation of $12 million in Commercial
Revitalization Tax Deductions for the year 2007 that must be allocated by December 31, 2007;
and
WHEREAS, applications for the 2007 Commercial Revitalization Deduction were made
available to, and were received from the public; and
WHEREAS, a total of thirteen (13) applications were submitted to the City for
consideration of the Commercial Revitalization Deduction; and
WHEREAS, nine (9) project applications were determined to be eligible to receive a
2007 Commercial Revitalization Deduction allocation; and
WHEREAS, the City Council appointed Commercial Revitalization Deduction Allocations
Committee reviewed and recommends approval for the nine projects in the amount of
$12,000,000; and
WHEREAS, the City Council finds it is in the best interests of the City of Yakima to
approve and submit for federal Commercial Revitalization Deductions the projects listed on the
attached sheet; now, therefore,
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF YAKIMA:
1. The City Council approves the attached list of projects to receive allocations from the
2007 federal Renewal Community Commercial Revitalization Deduction in the
amount of $12,000,000; and
2. The City Manager is hereby authorized and directed to submit the list of approved
projects to the Washington State Department of Community, Trade and Economic
Development for ratification and commitment.
ADOPTED BY THE CITY COUNCIL this 4th day of September, 2007
David Edler, Mayor
ATTEST:
/a/ilka-k r1tnk
City Clerk
Upon City Council approval, the list of projects below will be forwarded to the state Department
of Community, Trade and Economic Development for ratification. After passage of a 45 -day
appeal period, CTED will then provide a binding commitment letter and certificate to the CRD
awardees for verification with the Internal Revenue Service. Another $12 million allocation of
CRD will be available for the city to award after January 1, 2008.
2007 Commercial Revitalization Deduction Projects:
Applicant/Prolect Allocation Amount
1.) Aileen Roche Irrevocable Insurance Trust (Roche Fruit)
Freezer storage building and loading dock at 709 North 1st Avenue
2.) Fiesta Foods
New grocery store at Nob Hill Blvd. and Fair Avenue
3.) Shields Bag & Printing
New ink room in facility at 1009 Rock Avenue
4.) Tacoma Screw Products International
New hardware distribution and retail facility at 711 East R Street
5.) Jeld-Wen
Building remodel to accommodate expansion of Yakima manufacturing
operation at North 6th Avenue and River Road.
6.) NCTH-WA, Inc. (Cleartalk Wireless)
Building rehabilitation at 319 West Yakima Ave. for mixed use.
7.) Jundt-Elgin, LLC
New commercial building at 500 South 2nd Ave.
8.) Columbia River Bank
New financial services center at 10 North 5th Avenue
9.) Yakima Residences, LLC
New hotel at 107 N. Fair Avenue.
$ 583,000*
$ 3,000,000
$ 100,000
$ 1,464,609
$ 1,500,000
$ 910,045
$ 880,000
$ 854,963
$ 2,707,383
TOTAL 2007 CRD ALLOCATIONS: $12,000,000
* — Project received a partial award in 2006, and was eligible for remainder of award
because the building did not actually go into service until January 2007.
** -- These projects are currently under construction, but will not be placed into service until
early 2008. Because the other 2008 projects were not under construction
The City of Yakima was designated a federal Renewal Community (RC) in January 2002, and
the current designation is set to expire on December 31, 2009. The RC designation provides a
variety of tax incentives to RC businesses located in Census Tracts 01, 02, 03, 06, 07 and 15.
These benefits include: RC Wage Credits ($1500 per employee), increased Section 179
Expensing ($35,000 annually), Zero Capital Gains Rate on qualified assets, and the
Commercial Revitalization Deduction (CRD).
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ITEM TITLE:
BUSINESS OF THE CITY COUNCIL
YAKIMA, WASHINGTON
AGENDA STATEMENT
Item No. -Kg
For Meeting Of: September 4, 2007
Consideration of Resolution to Approve projects for the 2007 allocation of
the Commercial Revitalization Deduction, and forward to state of
Washington for commitment.
SUBMITTED BY: Michael Morales, Deputy Director of CED
CONTACT: Michael Morales, 575-3533
SUMMARY EXPLANATION:
The Commercial Revitalization Deduction (CRD) is a federal Renewal Community tax incentive
that allows accelerated depreciation of newly constructed or rehabilitated commercial buildings
within the RC. Yakima is one of only 40 RC's in the United States that can provide these
benefits, and each year, the city receives a $12 million allocation of CRD that must be awarded
within the calendar year. The CRD is strictly a tax incentive for investment, and is not a source
of grant or loan funds. This year, the city received over $20 million in applications, and we are
pleased to report that, with council approval today, the entire $12 million 2007 allocation of CRD
will be utilized.
The application cycle for CRD allocations is a public process that includes an advertised
application availability notice and submittal deadline (June 29 for 2007). In addition to extensive
media coverage of the application cycle, staff also conducts outreach to the business
community, including announcements to business and merchant associations, and direct
contact with prior year applicants and people who have applied for construction permits. After a
preliminary staff review, a council -appointed committee reviews, scores and ranks the proposals
for allocation. Projects that will be placed in service this year were given priority consideration,
due to the fact that they would not be able to reapply in 2007.
CONTINUED ON NEXT PAGE
Resolution X Ordinance Contract Other:
Approval for Submittal:
ity Manager
STAFF RECOMMENDATION: Staff recommends approval of the allocations.
BOARD RECOMMENDATION: CRD Allocations Committee recommends approval.
COUNCIL ACTION:
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