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March 13, 2010 in City
Kendall Yards tax benefit sought
City rewards construction of affordable housing
Ground has been broken for single-family houses and townhomes on Kendall Yards property west of Maple Street.
(Full-size photo)
Owners of nearly 300 residences in the Kendall Yards development won’t have to pay property taxes on the new structures for a dozen years under a proposal the Spokane City Council will consider Monday.
Greenstone Corp., which acquired 79 acres of former railroad property last year from developer Marshall Chesrown, is planning to build 2,100 residential units on the site within the next two decades.
On Monday, the Spokane City Council will consider a resolution granting 279 of the units, all west of Maple Street, 12-year tax exemptions. Although a vote will be taken, city officials say that because Greenstone’s application meets requirements of the city’s tax exemption rules, the council doesn’t have much latitude to turn it down.
Spokane’s multifamily tax exemptions, the first of which were finalized in 2004, are intended to encourage more people to live downtown and in several neighborhood business districts throughout the city, including Hillyard, Garland and most of Monroe Street between the Spokane River and Garland Avenue.
“The whole concept of this is to create economic growth and development,” said City Administrator Ted Danek.
City officials also are reviewing the first Kendall Yards application for a building permit – a significant milestone for a development that’s been in the concept phase for years. Greenstone is the third company to make an attempt to develop the land, which is west of Monroe Street, just north of the Spokane River.
Eldon Brown, Spokane’s principal engineer of developer services, said the application is for a few buildings on the south side of Bridge Avenue between Oak and Elm avenues.
In these business districts, new apartments, condos and townhouses with at least four units pay taxes only on the land, while owners of remodeled properties pay taxes based on the values before the work was done. If at least 20 percent of the units are geared to low- or moderate-income households, all the units qualify for 12-year exemptions. Otherwise, the exemptions apply for eight years.
Of the 279 units in Greenstone’s exemption request, 68 percent are geared to moderate- to low-income households.
The program does not affect the total collected for voter-approved taxes; other property owners end up paying a little more to cover what the exempted homeowners do not.
Teri Stripes, the city’s program manager for neighborhood business centers and multifamily tax exemptions, said Greenstone’s current plan for Kendall Yards includes another 195 residential units east of Maple Street that could qualify for exemptions. Greenstone has not yet submitted an application for those, she said.
If the full project is built, less than 25 percent of the residences in Kendall Yards would qualify for exemptions.
Attempts to reach representatives from Greenstone were unsuccessful on Friday.
The exemption will be the second tax subsidy for the high-profile development.
In 2007, the Spokane City Council created a tax-increment financing district for Kendall Yards. For 25 years, 75 percent of increased city and county taxes generated by the site will be siphoned off to pay for infrastructure like sewers, streets and water mains. School taxes aren’t affected.
So far, however, only $31.09 has been collected by the tax district for Kendall Yards infrastructure, said Bob Wrigley, Spokane County chief deputy treasurer.
City leaders in 2007 estimated Kendall Yards will get $20 million to $25 million for improvements through the district.
County Treasurer Skip Chilberg had been one of the few elected leaders within Spokane County to publicly criticize the tax-increment subsidy for Kendall Yards when it was approved. But Chilberg said Friday he’s changed his stance since Greenstone took over and created a new plan that included affordable housing.
Chesrown’s concept was a luxury development without affordable housing, a plan that Chilberg said didn’t deserve assistance from taxpayers.
“In order to give a tax subsidy, there should be a pretty clear public benefit,” Chilberg said.
MAC faces angry crowd 
cowboy on March 13 at 8:52 a.m.
I have been a property owner in Spokane for 10 years, where is my incentive.
Incentave for the new owner to build I have to have my taxes raised to off set new owners that don’t have to pay for 12 years.
My property taxes go up every year. But the streets never get fixed, or the city loves to raise my utility bills on a regular basis. What is my incentive to stay in this over taxed cow town.
There isn’t any.
edmitch on March 13 at 8:57 a.m.
Real estate is massively subsidized by taxpayers already with mortgage interest rate tax deductions, capital gains roll over, one time capital gains exclusion - and recently, an $8,000 tax credit for purchasing a home. Banks, who then gave out money to anyone who was breathing became surprised when their loan portfolios went sour - so the taxpayers bailed out the banks too.
Now, we must have taxpayers give Kendall Yards’ buyers a free ride on property taxes too?
Apparently real estate is a failed market that today can only function through massive government subsidies and bail outs. Economic development can no longer occur on its own - its must be managed by technocrats and subsidized by other taxpayers. There’s a name for an economic system that is controlled by government technocrats … gosh, that name escapes me at the moment …
Perhaps if Kendall Yards can not function on its own, may be the market is telling us that this development isn’t needed now.
skime on March 13 at 9:08 a.m.
Wait and see what happens with the “Y” property. It will be fun to see which “con-man” will get this.
And what is the cost per sq. foot on this property?
zelda on March 13 at 10:58 a.m.
The city gave tax incentives for the BlueRay Technologies building on West 1st Avenue. Remember how well that worked out?
spokanada on March 13 at 11:24 a.m.
The city has proved time and time again that they have no idea what they are doing. Mary won the election on a platform of not cutting down trees.
The public gets what the public wants. You voted for this.
CharlesBillford on March 13 at 11:37 a.m.
While the council will probably bury their heads again on this subject, they wont hear you unless you go to the council meetings and give them your opinion.
deacon46 on March 13 at 11:55 a.m.
Is this another race track. How about tax incentives for us who pay for this stupidity…..
Ron_the_Cop on March 13 at 1:04 p.m.
Mr. Brunt,
If my sources are correct, Besty Cowles is one of the financial backers of Greenstone both at Kendall Yards and at Liberty Lake. If correct and this is related to Cowles Co.’s interests perhaps a disclaimer would be in order.
zelda on March 13 at 1:35 p.m.
It figures. How many shell companies and fronts do they have?
liarsinnews on March 13 at 2:48 p.m.
I get sick and tired of the Spokesman Review`s censorship. Its not the first time a comment I`ve submitted has evaporated. I wonder why my comment sent early this morning was erased? It may be in the same waste basket as a letter to the editor of mine censored because the SR was covering up the assessed values of the River Park Square parking garage. The taxpayers have been stabbed again when Assessor Ralph Baker reduced the value by over $3. million from last year giving the owners another tax brake.
mdriftmeyer on March 13 at 3:51 p.m.
Free Press is a myth when the ownership has a long history of controlling the direction of the region, amongst a few key developers.
I’d love to see Worthy have a joint venture with WSU and produce a competing Digital paper.
sustainable on March 13 at 5:41 p.m.
It sounds like this is fairly straight forward. Some think this is a conspiracy, but it’s not. The city has had a multi-family tax exemption in place on this property (as well as much of the West Central and other identified urban neighborhhods) that was put in place to give an incentive to buyers to purchase in areas of the city that have infrastructure and services in place and therefore cost the city less to serve. You won’t actually see an increase on your,property taxes on this as the property wasn’t producing any structural property taxes right now anyhow. Once the tax exemption period ends the city will see a boost. It seems to make sense as nobody loses on this and the homeowners that buy in the neighborhood benefit, not the SR and not the developer.
Dazzeetrader11 on March 13 at 7:04 p.m.
My comment was deleted as well Dick. This is simply another RPS wherein the taxpayers get stuck with taxes to support somebody else’s project. Same old players behind it. Greenstone builds the houses and residential. The RPS owners build the commercial out. Doesn’t surpise me.
Last stop is the City Council. They have the power to approve or deny this exemption…project by project. When will Spokane learn that the powers that be always look after themselves. And Ron…you’re very correct. It’s the “family” up to their old tricks. Greenstone is a convenient front for all this. And so it goes….almost like Spokane continues to be enslaved to this group. It’s pretty unethical to force the taxpayers to pay for the infrastructure in the TIF and then exempt the residential purchasers fro their fair share. I know if I was going to buy a home, I sure would be looking for zero taxes for 10 years.
Wors tpart is that after decades of working over this great city, there is no remorse…it’s just business as usual.
WIll SPokane ever wake up? Doesn’t look like it. I sure would be replacing the members of the Council who vote for this though. Write them and write them frequently. In a distressed period or a a normal one, this just isn’t proper…
CharlesBillford on March 13 at 7:51 p.m.
I would bet that the Council does not do a cost/benefit study on this.
Losing 10 years of property tax for 279 units is a LOT OF MONEY. especially when some of the City Clowncimen will be long gone and the rest of the taxpayers are left holding the money bag.
Regarding missing postings.. The Spokesman violates its own code of ethics when doing so. Remember the ombudsman de jour that lasted like 3 days and then they replaced him with a do-nothing SR toady?
The S-R wants to know why its subscription rate is going down, they should perhaps take a long deep look in the mirror.
Since Dorne/Steele left, the reporting is shoddy and lackluster. You watch a city council meeting and there is little if any reporting on it and when they do a story, you wonder if they were in the same room.
Funny how KREM broke the Assessors scandel mess 2 weeks before the S-R even sniffed at it.
It would be nice to read a real ethical newspaper for a change.
zelda on March 13 at 7:52 p.m.
Ah, the sunk cost fallacy. Always a good play to run on the Fields of Dreams, isn’t it, Sustainable?
As for “the homeowners who buy in this neighborhood” — who might they be?
There is a constellation of not so desirable public buildings to the north of Kendall Yards and I can’t imagine many prospective homeowners who’d be thrilled to be living next to the cop shop, jail, courthouse, public health district, city/county motor pool, bailbond companies and the medical examiner, to name but a few. (Meaning no disprespect to the people who do those jobs, it’s just the, ahem, clientele I speak of.)
Renaming this The Yards at Kendall or Whispre Glenn at The Falls isn’t going to make a silk purse from a sow’s ear. It has all the makings of a future public housing project.
If Spokane really wanted to make a contribution to civic renewal it could come up with a workable plan for the block southwest of The Fox. The stench of urine and mildew is overwhelming and the buildings are haunted by the ghosts of low-income people evicted by a different set of condo developers gone bust. Who’s going to clean up THAT mess?
ZagChuck on March 13 at 11:43 p.m.
I too expect to be censored every time I post. I’ve had comments deleted, and worse, I’ve had letters edited, with more than 30 % of my letter removed, thus making the argument weak or non-existent, making my letter look petty, and making me look un-informed. Thus are the actions of the censors as they try to hide truth.
Perhaps someone should also look at the PDC’s and find how many council representatives over the years have taken big donations from those who are now benefiting from these tax incentives…..
Search the PDC’s for contributions from Kendall Yards and Greenstone as well as any big players in either of those groups; I won’t be at all surprised to find many current and former members of city council receiving these types of campaign donations, who also originally voted to provide the tax break.
Could those two items be related????
addyh on March 14 at 9:26 p.m.
Ron the Cop, I do not believe your sources are correct. A Cowles affiliate has a joint venture with Greenstone in Liberty Lake, but I don’t believe a similar joint venture is in place for Kendall Yards.
Ron_the_Cop on March 14 at 10:37 p.m.
Thanks Ms. Hatch. I will reconfirm with my sources.
Ron_the_Cop on March 15 at 9:36 a.m.
Ms. Hatch,
I’ve checked with a couple of my sources. Actually they were confused by the earlier S-R article on Kendall Yards that had this disclosure:
http://www.spokesman.com/stories/2009/nov/12/kendall-yards-plan-revised/
“Greenstone is a partner with Centennial Properties Inc. in RiverCrossing LLC, a development project in Liberty Lake. Centennial Properties is a real estate subsidiary of Cowles Co., which also owns The Spokesman-Review.”
This Liberty Lake project has been the source of considerable debate re the TIF financing it received. I believe this was before it was annexed into Liberty Lake. Liberty Lake City Council apparently wasn’t pleased as far as the level of oversight they have on this project because of the TIF. Other sources have told me that Ms. Cowles is a Washtington Trust Bank board member. Wash Trust is involved in the current Kendall Yards Project.
Another source said Frank purchased the old KBJR property off Regal from the Cowleses when it moved its station downtown.
Whether these relationships rise to the level of disclosure is up to your discretion. On the other hand perhaps Mr. Brunt should ask Ms. Cowles if there are any Cowleses financial arrangements/relationships with Frank on the Kendall Yards Project?
Dare I mention the light rail project between Liberty Lake and Spokane? I somewhat neutral on this one at least if the public subsidies are fully disclosed up front to the taxpayers.
Ron_the_Cop on March 15 at 2:43 p.m.
Jonathan,
The TIF financing may be water under the bridge however the property tax exemption could be beyond the pale:-) This is prime riverfront property. I have major equity issues re giving the property tax exemption as well to spur development. I’m familiar with this exemption for “infilling” along arterials but this is OVER KILL. I would hope that the City Council amends the ordinance to delete this property as it doesn’t really fit the intent of the exemptions.
This is DOUBLE DIPPING on the taxpayers wallets when the tax burden is already quite high.
Verbal on March 16 at 9:18 a.m.
More socialism for the richest citizens….ho hum.
eagleproducer on March 18 at 9:55 a.m.
Geez, who would ever think of the Cowles lining up at the public trough? It’s unfathomable.
What exactly has Betsy ever done with money she’s earned on her own? Has she ever ventured outside the protective cocoon of the wealth amassed by her forbears or are her exploits funded the way most of those currently wealthy funded: By the sweat and innovation of their ancestors?
I’m tired of Spokane and this region being exploited by this family. They’ve ruined the river for years with their paper mill, poisoned public debate through their “news” presentation propaganda mill and now that they’ve expended the natural resources upon the lands they own, the Cowles gang enters the development shell game while hiding behind the shams of subsidiaries.
Anyone who still works for this paper who call themselves a journalist/graphic designer etc. should just admit they check their souls at the door when they enter that tower on Riverside Avenue.
The Cowles gang is evil. There is no other word for their machinations. Non-cooperation with evil is just as much a duty as cooperation with good. I believe that is from Ghandi.