Form revised February 6, 2008

FISCAL NOTE FOR NON-CAPITAL PROJECTS

Department:	Contact Person/Phone:	DOF Analyst/Phone:
Office of Housing	Amy Gray 4-0232	Amanda Allen 4-8894

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 Northgate South Commons, LLC for new multifamily rental housing under construction as part of a mixed-use project on property situated at 307 Northeast Thornton Place and 337 Northeast Thornton Place, 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 Housing to enter into a Multifamily Housing Limited Property Tax Exemption Agreement (“Agreement”) for new multifamily rental housing in a mixed-use project under construction at 307 Northeast Thornton Place and 337 Northeast Thornton Place, Seattle.  The value of the multifamily residential improvements will be exempt from taxation for up to 12 successive years so long as the owner and its successors comply with the requirements of the Agreement and SMC Chapter 5.73, including the requirement that at least 20% of the units are affordable units, for the duration of the tax exemption period.  There is no tax exemption for the portion of the project that is not housing.

· 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 Housing Property Tax Exemption Program was adopted by the City Council in June 2008 (Ordinance 122730).  After the Director of Housing 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 Housing to enter into a Multifamily Housing Limited Property Tax Exemption Agreement with the applicant.

Project Description:

· The project consists of 278 rental housing units.

· The project contains 65 studio units, 176 one-bedroom units and 37 two-bedroom units.   

· A total of 20% (56) of the units will be affordable to households with incomes between $47,200 and $68,310 (80% of median income for the studio and one-bedroom units and 90% of median income for the two-bedroom units).

· The fifty-six affordable units will be comprised of 13 studio units, 36 one-bedroom units, and seven two-bedroom units.

· The applicant originally submitted an application for the project and was accepted under the previous MFTE program in 2006.  However, Ordinance 122730 allows an applicant with a project that had a building permit issued between July 22, 2007, and August 6, 2008, to submit (or re-submit) an application for limited tax exemption for multifamily housing prior to the completion of project construction.  The building permit for the project was issued on August 28, 2007.  Northgate South Commons, LLC submitted a new application on May 29, 2009, and construction of the residential improvements is expected to be complete on August 1, 2009.

· The total value of the first year exemption is $286,975, of which $92,926 is Seattle’s portion.

· The project is estimated to add $0.36 to the tax bill of the average assessed-valued home of $530,800 in the first year of exemption.

· The applicant received a $4.1 million Section 108 loan from the Office of Economic Development to help finance the ground floor commercial space and movie theater in another building on the site.  The applicant also received a Brownfields grant for approximately $460,000.

· 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.)