The city of Spokane will excuse some property taxes for nearly a decade on the apartments that will fill three floors of the Chronicle Building.
On Monday, the Spokane City Council unanimously approved an eight-year tax exemption for the 32-unit project being built by Centennial Properties. Centennial is a subsidiary of the Cowles Co., which publishes The Spokesman-Review.
“I’m in support of more housing downtown,” City Council President Ben Stuckart said. “We need more density.”
The project qualified for a multifamily property tax exemption, a program established in state law to promote residential construction in urban areas. Cities are allowed to provide additional restrictions on applicants and designate where qualifying projects can be built. In Spokane, city ordinances limit the projects to downtown, Kendall Yards, the University District, areas near Gonzaga University, along the Division Street and Monroe Street corridors and – in a change approved by City Council members this year – parts of the lower South Hill.
Twelve of the proposed 32 rental units in the former home of Spokane’s defunct afternoon newspaper will have two bedrooms and two bathrooms, while the rest will have one apiece.
Doug Yost, spokesman for Centennial, said the company plans to begin advertising the units as early as next month, with the apartments ready for occupancy in March.
“We are getting quite a bit of interest already,” Yost said.
The designation means Centennial will not have to pay some property taxes on the increased value of the Chronicle Building for eight years, as long as the building remains in use primarily for housing. The building was most recently assessed at $4.8 million. Centennial still will pay taxes based on the building’s current value. The exemption does not lower the total amount of taxes collected by government agencies, instead distributing the burden to other taxpayers.
Developers may apply for a longer exemption of up to 12 years in Spokane, if at least 20 percent of the housing is made available to families earning less than 115 percent of the median household income in the county. Centennial did not pursue the 12-year exemption, but several other projects in downtown Spokane are pursuing it, said Ali Brast, the city planner overseeing Spokane’s multifamily tax exemption program. Those include proposed apartments in Kendall Yards and some floors of Mick McDowell’s planned $20 million condominium tower overlooking Peaceful Valley.
“I think people are starting to feel more comfortable, looking at housing downtown,” Brast said.
Stuckart said the city needs more variety in downtown housing, and praised the multifamily tax exemption for promoting construction and rehabilitation of existing vacant properties.
“That tax exemption is one of the most powerful tools we can use to incentivize infill development,” he said. Centennial also is applying for the tax subsidy as part of the mixed-use plans for the former Macy’s department store, Stuckart said.
The seven-story Chronicle Building was built in 1928. The Chronicle merged newsrooms with The Spokesman-Review in 1983 and ceased publication in 1992. The apartments will be on floors three, four, five and six of the Chronicle Building and will range in size from 668 square feet to 1,185 square feet, according to Centennial.
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