Developers Aren’T Using Urban Core Tax Credits Housing Program Fails To Draw Much Interest
Increasing housing in Spokane’s urban core was the goal of a March City Council ordinance providing 10 years of tax credits to developers building multi-family housing in designated neighborhoods.
Five months later, with little developer interest so far, the council may expand the affected areas.
The ordinance gives developers 10 years of property tax exemptions on multi-family housing projects of four units or more. Units must be new construction or inside a building that has been vacant a year or more. In renovation projects, tax credits apply only to the increased value of the property.
So far, just one development company has applied for the exemption. Wells & Co. is using the program for the remainder of its townhouse development on the 1200 block of West Riverside. It would primarily benefit the purchaser of the last unfinished unit.
Another developer, Bob Cooke of R.H. Cooke & Associates, would like to use the property tax exemption for a 12-unit condominium project he plans for a portion of Browne’s Addition bordering Peaceful Valley.
The area isn’t inside the current project boundaries but is part of the expanded area the council will consider adding on Monday.
“Quite honestly, the project won’t happen without the exemption,” he said. “We need the abatement to make the project feasible and attractive to investors.”
Other developers, he said, continue to build apartments on the city’s outskirts, where land is cheaper.
Downtown, however, is the perfect location for condos, Cooke said. He said the tax exemption could save future condo owners in his project more than $4,000 a year. The units will sell for $235,000 and up.
When the ordinance was enacted, Browne’s Addition was excluded for fear builders would tear down historic buildings to construct new housing. But Cooke’s project and other areas of Browne’s Addition and Peaceful Valley being considered for inclusion are vacant property.
That area is bounded by Riverside on the south and Main on the north, between Monroe and Elm. The program is already in place in the Riverside and West Central neighborhoods.
Some Peaceful Valley residents oppose the change, saying it will alter the character of their neighborhood.
High-density projects still won’t be allowed in areas where zoning prohibits them, said Spokane Planning Director John Mercer.
“The tax incentive program doesn’t change … the zoning,” Mercer said. “All it does is provide a tax break for certain types of projects. It’s a way of stimulating housing growth downtown, and I believe it is in the best interest of the community to do that.”
Also Monday, the City Council will hear a second reading of an ordinance that would make it easier for developers to rehabilitate historic buildings downtown.
Dave Mandyke, director of general services, said the ordinance would waive street obstruction permit fees for projects on downtown buildings that are on the Spokane Historic Register and are 50 years or older.
If approved, the ordinance could save Walt Worthy $50,000 on restoring the Davenport Hotel, said Mandyke, who added that project is one the city wants to encourage.
“We want to try to do it without seriously impacting the city’s budget, but at the same time supporting historic renovation projects,” he said.
Around town:
Brown Contracting & Development has begun construction on headquarters at 225 W. Main for Hawkins & Edwards real estate company.
The 6,000-square-foot, two-story brick building will feature skylights, an antiqued copper roof and a gas barbecue setup for Friday cookouts, said Dick Edwards. “Everything doesn’t have to be about work,” he said.
When the building is completed in December, Hawkins & Edwards will move into one floor and lease the other. Plans call for an identical office building next door.
Construction continues on NorthTown’s new addition, and opening dates have been set for both Nordstrom Rack’s new 25,000-square-foot store and Barnes & Noble. The bookstore opens Sept. 1, the Rack on Sept. 15.