Form revised April 10, 2006

FISCAL NOTE FOR NON-CAPITAL PROJECTS

Department:	Contact Person/Phone:	DOF Analyst/Phone:
Office of Housing	Amy Gray #4-0232	Kathryn Wise 3/9580

Legislation Title:

A RESOLUTION authorizing the Director of Housing to enter into a Multifamily Housing Limited Property Tax Exemption Agreement on behalf of the City of Seattle for new multifamily rental housing to be constructed as part of a mixed-use project on property situated at 507 Northeast Northgate Way, 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 Housing (OH) to enter into a Multifamily Housing Limited Property Tax Exemption Agreement (“Agreement”) for new multifamily rental housing to be constructed at 507 Northeast Northgate Way, Seattle.  The value of the new multifamily rental housing will be exempt from taxation for up to 10 successive years so long as the owner complies with the requirements of the Agreement and SMC Chapter 5.73, including providing affordable housing units for the duration of the tax exemption.

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

The current Multifamily Property Tax Exemption Program was adopted by the City Council in March, 2004.  After the Director of OH approves an application for limited tax exemption for multifamily housing under SMC Chapter 5.73, the applicant must enter into a contract approved by resolution of the City Council to receive the exemption.  This resolution allows the Director of OH to enter into a Multifamily Housing Limited Property Tax Exemption Agreement with 507 Northgate LLC.

The 507 Northgate project will provide 163 rental housing units for individuals and small families in a mixed-use facility.  Of these, the developer anticipates 49 will be affordable at 70% of median income.  The project will contain 111 studio units, 44 one-bedroom units and 6 two-bedroom units.  The developer anticipates the affordable units will consist of 34 studio units, 14 one-bedroom units and 1 two-bedroom unit.  Included in the development will be approximately 55,000 square feet of commercial space and an underground garage for parking. 

The property taxes for the multifamily housing improvements for the first year of the exemption are estimated to be $294,504 of which $102,217 is Seattle’s portion for the 507 Northgate 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 ten-year period, the amount shifted will increase at a maximum of 1% each year for the ten years.  The amount of the tax exemption is estimated by multiplying the value of the residential improvements 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 other County taxpayers; the State portion to other State taxpayers.  The City portion shifted to City taxpayers for the first year of exemption for the 507 Northgate project is estimated to add $0.33 to the tax bill for the average assess-valued home of $451,363.

· 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.)

t