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	Janet Credo #4-8687

Legislation Title:

A RESOLUTION authorizing the Director of the Office of Housing to enter into a contract between the City of Seattle and Artspace Hiawatha LP, outlining the terms and conditions of eligibility for a tax exemption for new multifamily housing to be constructed as part of a mixed-use project on property situated at 843 Hiawatha Place South, 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 Artspace Hiawatha LP (the “Applicant”).  Exhibit A to the Resolution describes the terms and conditions of eligibility for 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 current Multifamily Property Tax Exemption Program was adopted by the City Council in March, 2004.  Each application requires Council adoption of a Resolution authorizing the OH Director to enter into a contract with the applicant.  The contract is required for the applicant to receive the exemption.  This resolution allows the Director of OH to enter into a contract with Artspace Hiawatha LP.

The Hiawatha Artist Lofts project will provide 61 rental housing units for individuals and small families in a mixed-use facility.  The project will contain 55 one-bedroom units and 6 two-bedroom units.  Included in the development will be a large community room to provide residents with exhibition space and a learning center.  Six storefront spaces will also be included. 

The property taxes for the multifamily housing improvements for the first year of the exemption are estimated to be $39,178, of which $12,868 is Seattle’s portion for the Hiawatha Artist Lofts 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, provided 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 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 Artspace Hiawatha LP Project is estimated to add $0.06 to the tax bill for the average assessed-value home of $399,500.

· 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.)