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 between the City of Seattle and Linden 143 LLC for new multifamily rental housing to be constructed as part of a mixed-use project on property situated at 909 North 143^rd Street, Seattle, Washington, under Seattle’s 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 Multifamily Housing Limited Property Tax Exemption Agreement (“Agreement”) for new multifamily rental housing to be constructed at 909 North 143^rd Street, Seattle. The value of the new multifamily rental housing will be exempt from taxation for up to 12 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 period.

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

The City Council passed Ordinance 122730 on June 30, 2008, amending SMC Chapter 5.73, the Multifamily Housing Property Tax Exemption Program, hereby referred to as the “Seattle Homes Within Reach” Program. One of the amendments to SMC Chapter 5.73 allows owners whose first building permit under SMC Chapter 22 for an eligible project was issued between July 22, 2007 (the effective date of amendments to RCW Chapter 84.14) and the effective date of Ordinance 122730 (August 6, 2008) to apply or reapply for tax exemption any time prior to the completion of construction of the project. Linden 143 LLC (“Applicant”) previously applied for tax exemption under SMC Chapter 5.73. The Applicant received its first building permit on November 9, 2007 and construction of the project is not completed. The Applicant has reapplied for tax exemption under SMC Chapter 5.73 as amended by Ordinance 122730.

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 the Applicant.

The Linden 143 project will provide 476 rental housing units for individuals and small families in a mixed-use facility. The project will contain 476 units: 110 studio units, 199 one-bedroom units, and 167 two-bedroom units. At this time the developer anticipates that all of the units will be affordable to households earning up to 80% and 90% of median income, or up to $45,600 for a one person household, $52,080 for a two person household, and up to $65,970 for a three person household.

· Please check one of the following:

__X__ This legislation does have financial implications. (Stop here and delete the remainder of this document prior to saving and printing.)

The value of the exemption from property taxes for the multifamily housing improvements for the first year of the exemption are estimated to be $447,835, of which $152,551 is Seattle’s portion for the Linden 143 project. If this project continues to qualify for the tax exemption for the duration of the twelve-year period, the property tax exemption amount (which is shifted to other taxpayers) will increase at a maximum of 1% each year for the twelve 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 Linden 143 project is estimated to add $0.57 to the tax bill for the average assess-valued home of $451,363.