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.