Form revised December 9, 2004

FISCAL NOTE FOR NON-CAPITAL PROJECTS

Department:	Contact Person/Phone:	DOF Analyst/Phone:
Office of Housing	Angela Brooks  #4-0262	Kristi Beattie   #4-5266

Legislation Title:

A RESOLUTION authorizing the Director of the Office of Housing to enter into a contract between the City of Seattle and Lothlorien Apartments, LLC, outlining the terms and conditions for eligibility for a tax exemption for property at 4730 University Way N.E. in Seattle, Washington under Seattle’s 2004 Multifamily Housing Property Tax Exemption Program, Chapter 5.73 SMC.

· Summary of the Legislation: The proposed resolution authorizes the Director of the Office of Housing (OH) to enter into a contract between the City of Seattle and Lothlorien Apartments, LLC (“the Applicant”).  Exhibit A describes the terms and conditions for eligibility of a property tax exemption for the value of new multifamily housing construction for up to 10 successive years in exchange for the Applicant providing affordable housing units for the same number of years the tax exemption is utilized.

· Background: (Include brief description of the purpose and context of legislation and include record of previous legislation and funding history, if applicable):

The 2004 Multifamily Property Tax Exemption Program was adopted by the City Council in March, 2004.  Each application requires Council adoption of a resolution that authorizes the OH Director to enter into a contract with the applicant. The contract is required for the applicant to receive the exemption.

The property taxes for the multifamily housing improvements for the first year of the exemption are estimated to be $154,010, of which $50,582 is Seattle’s portion for the Lothlorien Apartments, LLC project.  These are taxes that the property owner would otherwise have to pay.  If this project continues to qualify for the tax exemption for the duration of the 10 year period, the property tax liability shifted to other taxpayers will increase at a maximum of 1% each year for 10 years. The amount of the tax exemption is estimated by multiplying the value of residential improvement, as given by the applicant, by the property tax rate effective at the time of application. Taxes are shifted to other taxpayers as follows: the City portion to other City taxpayers; the County portion to County taxpayers; and the State portion to other State taxpayers. The City portion shifted to other City taxpayers for the first year of exemption for the Lothlorien Apartments, LLC Project is estimated to add $0.21 to the tax bill for the average assessed-valued home ($368,700).

· Please check one of the following:

__X__ This legislation does not have any financial implications. (Stop here and delete the remainder of this document prior to saving and printing.)