Council OKs tax break for condo conversion

Spokane’s multifamily housing tax break is spreading to the South Hill.

On Monday, the City Council unanimously approved a 10-year exemption for the remodeling of an apartment building at 2 E. Sumner Ave., across from St. John’s Cathedral.

The $1.5 million renovation of what will be called Cathedral Point will convert the structure, valued by the county assessor’s office at $189,000, into four condominiums with an average price of $500,000, according to a presentation made to the council.

The tax breaks are intended to encourage more people to live downtown and in several neighborhood business centers throughout the city, including the area around the cathedral. New projects will provide new customers for surrounding businesses and help districts flourish, said Susanne Croft, the city’s incentives specialist.

Owners of apartments and condos approved for the tax program continue to pay taxes on the land and, for a remodeling project, the value of the building before construction. For 10 years, the owner pays no taxes on new construction.

Marianne Guenther, the listing Realtor for the condos, said restoration of Cathedral Point, which was built as a mansion around 1904, wouldn’t have been possible without the exemption. The building is being developed by Jordalen Tangen Development.

“It would have been financially better for them to tear it down. It wasn’t about the money. It was more about preserving history,” Guenther said. “This is a showcase for the future of what we can do.”

She said a fourth floor will be added, which should be complete by next year.

In March, the City Council voted to extend the multifamily tax exemption program for five more years. It was created in 2000 and had been scheduled to expire this month.

The exemptions have been criticized by some for focusing too much on downtown and too little on affordable housing.

But city officials note that more than half of the 1,000 living units approved for the tax exemptions are apartments expected to be leased at around market price or below. They also say they are making bigger efforts to encourage use of the program in neighborhoods outside downtown.

Cathedral Point is the second on the South Hill to be approved for the tax program. The first, a proposed apartment at 2828 S. Garfield, was approved by the council last year. A few projects have been approved on the North Side, including one in the North Indian Trail neighborhood.

“I’m hoping that this project will spread the word” that the program is available outside downtown, Croft said.