HomeMy WebLinkAbout18-045 Affirming the Language of Ordinance 3200 Regarding the Multi-Family Tax Exemption ProgramResolution 18-045
RESOLUTION NO. 18-045
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PORT TOWNSEND,
WASHINGTON, AFFIRMING THE LANGUAGE OF ORDINANCE 3200 REGARDING
THE MULTIFAMILY TAX EXEMPTION PROGRAM
WHEREAS, the City of Port Townsend City Council adopted a multifamily tax
exemption program at the regular City Council meeting on August 6, 2018; and
WHEREAS, the City Council modified the ordinance at the August 6, 2018 meeting so
that the exact language of the ordinance was not available for City Council review prior to
passage.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Port
Townsend as follows:
The City Council adopts the language of the multifamily tax exemption program as
reflected in Exhibit A.
ADOPTED by the City Council of the City of Port Townsend at a regular meeting
thereof, held this 201h day of August 2018.
Attest:
Joanna Sanders, MMC-
City Clerk
Deborah S, Stinson
Mayor
Approved as to form:
�. m......... ...-
leis i -rceeiiwo c°l
City Attorney
Ordinance 3200
Page l of 2
Ordinance No. 3200
AN ORDINANCE OF THE CITY OF PORT TOWNSEND, WASHINGTON, RELATED
TO TAXATION; ADOPTING A MULTIFAMILY TAX EXEMPTION PROGRAM,
DESIGNATING RESIDENTIAL TARGET AREAS, AND ADDING A NEW CHAPTER
3.15 "MULTI -FAMILY TAX EXEMPTIONS" TO THE PORT TOWNSEND
MUNICIPAL CODE
WHEREAS, RCW 84.14 allows the City to enact a program that provides limited 8 --of
12 -year tax exemptions from ad valorem property taxation for qualified new multiple -unit
housing located in designated target areas; and,
WHEREAS, the City's Finance and Budget Committee reviewed the proposed program
at its March 27, 2018 meeting and recommended that Council adopt such a program; and,
WHEREAS, as required by RCW 84.14.040, staff published a notice of public hearing
for the designation of Residential Target Areas ("RTA") on June 27 and July 4 for the hearing
held on July 16, 2018;
NOW, THEREFORE, the City Council of the City of Port Townsend do ordain as
follows;
Section 1. Findings. and Conclusions. Based on the staff presentation and the public
hearing, Council finds and concludes as follows;
a) A proposed RTA meets the definition of "urban center" in RCW 84.14.010(18) if
the products or services currently exist, or if they are proposed in the City's 6 -
year Capital Improvement Plan or Transportation Improvement Plan, or if the
City's code would require a developer to make them available as part of the
development;
b) Each of the proposed RTAs has sufficient available, desirable, and convenient
residential housing, including affordable housing, to meet the needs of the public
who would be likely to live in the urban center, if the affordable, desirable,
attractive, and livable places to live were available;
c) The providing of additional housing opportunity, including affordable housing, in
the proposed areas will assist in achieving one or more of the stated purposes of
Chapter 84.14 RCW and Chapter 3.15 PTMC.
Section2.1 l� !_qr. Title 3 of the Port Townsend Municipal Code is amended by
adding a new Chapter, 3.15 "Multi -Family Tax Exemption Program" as set forth in
substantially the same form as in Exhibit A.
Section 3. Desi "nation of Residential Tar yet Areas. The areas listed in PTMC 3.15.030
and shown in substantially the same form as Exhibit B are hereby designated as
"Residential Target Areas" for purposes of this Chapter.
Resolution 18-045 Exhibit A
Ordinance 3200
Page 2 of 2
Section 4. Seyera%ili If any provision of this Ordinance or its application to any
person or circumstance is held invalid, the remainder of the Ordinance, or the application
of the provision to other persons or circumstances, is not affected.
Section 5. Publication. This Ordinance shall be published by an approved summary
consisting of the title.
Section 6. Effective Date. This Ordinance shall take effect and be in force five days
after the date of its publication in the manner provided by law.
ADOPTED by the City Council of the City of Port Townsend at a regular meeting
thereof, held this 6th day of August 2018.
Attest:
Joanna Sanders, MMC
City Clerk
Deborah S. Stinson
Mayor
Approved as to form:
Heidi Greenwood
City Attorney
Resolution 18-045 Exhibit A
Ordinance 3200 Exhibit A
Page I of 7
EXHIBIT A
Chapter 3.15
MULTI -FAMILY TAX EXEMPTION PROGRAM
Sections:
3.15.010 Purpose
3.15.020 Definitions
3.15.030 Residential target area, target area designation and standards
3.15.040 Tax exemption for multiple -unit housing in target areas
3.15.050 Project eligibility and performance standards
3.15.060 Application procedure
3.15.070 Application review and conditional certification
3.15.080 Extension of conditional certificate
3.15.090 Final certificate
3.15.100 Annual certification and report
3.15.110 Cancellation of tax exemption
3.15.120 Effective period
3.15.010 Purpose.
A. As provided for in Chapter 84.14 RCW, the purpose of this chapter is to provide limited;
eight—_or twelve-year exemptions from ad valorem property taxation for qualified new multiple -
unit housing located in designated residential targeted areas.
B. This chapter is intended to promote and incentivize the development and redevelopment of
a balanced socio-economic mix of housing within the residential target area as a catalyst for
additional investment and development of land uses to create vibrant, urban mixed-use districts.
3.15.020 Definitions.
For the purposes of this chapter, the following definitions shall apply:
A. "Administrator" means the director of the City of Port Townsend development services
department or designee assigned to carry out this chapter.
B. "Affordable housing" means residential housing that is rented by a person or household
whose monthly housing costs, including utilities other than telephone, do not exceed thirty
percent of the household's monthly income. For the purposes of housing intended for owner
occupancy, "affordable housing" means residential housing that is within the means of low- or
moderate -income households.
C. "Household" means a single person, family, or unrelated persons living together.
D. "Low-income household" means a single person, family, or unrelated persons living
together whose adjusted income is at or below eighty percent of the median family income
adjusted for family size, for the county where the project is located, as reported by the United
States Department of Housing and Urban Development.
E. "Moderate -income household" means a single person, family, or unrelated persons living
together whose adjusted income is more than eighty percent but is at or below one hundred
fifteen percent of the median family income adjusted for family size, for the county where the
project is located, as reported by the United States Department of Housing and Urban
Development.
Resolution 18-045 Exhibit A
Ordinance 3200 Exhibit A
Page 2 of 7
F. "Multiple -unit housing" means a building having four or more dwelling units not designed
or used as transient accommodations and not including hotels and motels. multiple -unit housing
may result from new construction or rehabilitated or conversion of vacant, underutilized, or
substandard buildings to multiple -unit housing.
G. "Owner" means the property owner of record.
H. "Permanent residential occupancy" means multiple -unit housing that provides either rental
or owner occupancy on a nontransient basis. This includes owner -occupied or rental
accommodation that is leased for a period of at least one month. This excludes hotels and motels
that predominately offer rental accommodation on a daily or weekly basis.
I. "Rehabilitation improvements" means modifications to existing structures, that are vacant
for twelve months or longer, that are made to achieve a condition of substantial compliance with
existing building codes or modification to existing occupied structures which increase the
number of multiple -unit housing units.
J. "Residential targeted area" means an area within an urban center or urban growth area that
has been designated by the governing authority as a residential targeted area in accordance with
this chapter. Residential targeted area may not include a campus facilities master plan. For
purposes of this chapter, an area may be designated a residential target area if the requirements in
subsection L of this section either currently exist, are provided for in the City's Capital Facilities
Plan or Transportation Improvement Plan, or would be required to be installed by the developer
as a condition of development.
K. "Substantial compliance" means compliance with local building or housing code
requirements that are typically required for rehabilitation as opposed to new construction.
L. "Urban center" means a compact identifiable district where urban residents may obtain a
variety of products and services. An urban center must contain:
1. Several existing or previous, or both, business establishments that may include but are
not limited to shops, offices, banks, restaurants, governmental agencies; and
2. Adequate public facilities including streets, sidewalks, lighting, transit, domestic
water, and sanitary sewer systems; and
3. A mixture of uses and activities that may include housing, recreation, and cultural
activities in association with either commercial or office, or both, use.
3.15.030 Residential target area, target area designation and standards.
A. Residential Target Areas shall meet the criteria set forth in RCW 84.14.040 and this
Chapter.
B. Designation of additional residential target areas shall follow the process and procedures
identified in RCW 84.14.040.
C. The Residential Target Area(s) have been designated by the City Council as shown on the
map adopted with the implementing Ordinance and maintained by the Development Services
Department.
D. At any time, the City Council may, by ordinance, in its sole discretion, amend or rescind
the designation of a residential targeted area pursuant to the same procedural requirements of this
section for the original designation.
E. If a part of any legal lot is within a residential targeted area as shown on the adopted
Residential Target Area(s), then the entire lot shall be deemed to lie within such residential
targeted area.
Resolution 18-045 Exhibit A
Ordinance 3200 Exhibit A
Page 3 of 7
3.15.040 Tax exemption for multiple -unit housing in target areas.
A. Duration of Exemption. The value of improvements qualifying under this chapter is
exempt from ad valorem property taxation as follows:
1. For properties for which applications are submitted after the date of adoption of the
ordinance codified in this chapter, the value is exempt:
a. ... sueeessivelvafs-.
i�rdy € Of
b. For twelve successive years beginning January 1 st of the year immediately
following the calendar year of issuance of the final certificate of tax exemption, if the
property otherwise qualifies for the exemption and the applicant/owner rents or sells at
least twenty percent of the multiple -unit housing units as affordable housing to low and
moderate -income households as further defined in this section.
(tea. For rental projects, at least twenty percent of the multiple -unit housing units
in the project must be rented throughout the duration of the twelve-year exemption
period as affordable housing to low-income households at eighty percent or less of
median income.
W12. For ownership projects, at least twenty percent of the multiple -unit housing
units in the project must be sold as affordable housing to low- or moderate -income
households at one hundred twenty percent or less of median income.
B. Limits on Exemption. The exemption does not apply to the value of land or to the value of
non -housing -related improvements not qualifying under this chapter, nor does the exemption
apply to increases in assessed valuation of land and nonqualifying improvements. This section
also does not apply to increases in assessed valuation made by the county assessor on
nonqualifying portions of building and value of land, nor to increases made by lawful order of a
County Board of Equalization, the Department of Revenue, or a county, to a class of property
throughout the county or specific area of the county to achieve the uniformity of assessment or
appraisal required by law.
3.15.050 Project eligibility and performance standards.
To qualify for exemption from property taxation under this section, the project must satisfy all of
the following requirements:
A. Location. The project must be located within a residential target area identified in PTMC
3.15.030.
B. Size. The qualifying new multiple -unit residential apartment project must include a
minimum of four units of multiple -unit housing. Existing multiple -unit housing that has been
vacant for twelve months or more does not have to provide additional units.
C. The new, converted, or rehabilitated multiple -unit housing must provide for a minimum of
fifty percent of the space for permanent residential occupancy. In the case of existing occupied
multiple -unit development, the multiple -unit housing must also provide for a minimum of four
additional multiple -unit units. Existing multiple -unit vacant housing that has been vacant for
twelve months or more does not have to provide additional multiple -unit units.
D. Mixed -Use and Mixed -Use Redevelopment Projects. New and redevelopment projects of
existing buildings located within the residential target area proposing a mixed-use commercial,
office, or retail project with multiple -unit residential units may qualify for the tax exemption if
four or more residential units are included within the project.
Resolution 18-045 Exhibit A
Ordinance 3200 Exhibit A
Page 4 of 7
E. Compliance with Guidelines and Standards. The project must be designed to comply with
the city's Comprehensive Plan, building, housing, and zoning codes and any other applicable
regulations in effect at the time the application is approved.
F. The applicant must enter into a contract with the city, approved by city council, under
which the applicant agrees to the implementation of the development on terms and conditions
satisfactory to the city council.
G. Completion Deadline. The project must be completed within three years from the date of
approval of the contract by the city council. The administrator may grant one two-year extension,
provided the applicant has demonstrated a good faith effort to complete the project.
3.15.060 Application procedure.
Applications under this chapter will be processed as a Type II permit application as defined in
Chapter 20.01 Port Townsend Municipal Code. A property owner who wishes to propose a
project for a tax exemption shall complete the following:
A. File with the development services department the required application form, provided by
the department, setting forth the grounds for tax exemption along with the required application
fees. The application materials shall include the following information:
1. A brief written description of the project, and schematic site and floor plans of the
multiple -unit dwelling units and the structure(s) in which they are proposed to be located.
2. Floor and site plans of the proposed project, which plans may be revised by the owner,
provided such revisions are made and presented to the administrator prior to the city's final
action on the exemption application.
3. A statement from the owner acknowledging the potential tax liability when the
property ceases to be eligible for exemption under this section.
4. Verification by oath or affirmation of the information submitted.
B. Deadline. The application shall be submitted prior to the issuance of the building permit
for the project, unless otherwise approved by the council. The administrator shall approve or
deny an exemption application within ninety days of receipt of a complete application.
3.15.070 Application review and conditional certification.
A. Approval. The administrator may approve an application if he/she finds that:
1. The owner has complied with all the requirements of this section, including but not
limited to the project eligibility requirements contained in this chapter and the applicable
requirements contained within the Port Townsend Municipal Code; and
2. The proposed project is, or will be at the time of completion, in conformance with all
approved plans, and all applicable requirements of the Port Townsend Municipal Code or
other applicable requirements or regulations in effect at the time the application is approved.
B. Contract Required. If the application is approved, the owner shall enter into a contract with
the city, approved by the city council, regarding the terms and conditions of the project under
this section.
C. Issuance of Conditional Certificate. Following council approval of the contract, the
administrator shall issue a conditional certificate of acceptance of tax exemption. The conditional
certificate shall expire three years from the date of council approval of the contract unless an
extension is granted as provided in PTMC 3.15.080.
D. Application Denial.
Resolution 18-045 Exhibit A
Ordinance 3200 Exhibit A
Page 5 of 7
1. Denial. The administrator shall deny an application if the criteria in this chapter are not
met. The administrator shall state in writing the reasons for the denial and send notice of
denial to the owner's last known address within ten days of the denial.
2. Appeal. The owner may appeal the administrator's decision to the hearing examiner in
accordance with Chapter 20.01 of the Port Townsend Municipal Code.
E. Contract Amendment. An owner may request an amendment(s) to the contract by
submitting a request in writing to the administrator, together with the required fee, any time
within three years of the date of the approval of the contract as provided for in PTMC 3.15.080.
The date for expiration of the conditional certificate shall not be extended by contract
amendment unless all the conditions for extension are met.
3.15.080 Extension of conditional certificate.
A. Application. The conditional certificate may be extended by the administrator for a period
not to exceed twenty-four consecutive months. The owner shall submit a written request stating
the grounds for the extension together with the required application fee.
B. Approval. The administrator may grant an extension if he/she finds that:
1. The anticipated failure to complete construction within the required time period is due
to circumstances beyond the control of the owner; and
2. The owner has been acting, and could reasonably be expected to continue to act, in
good faith and with due diligence; and
3. All the conditions of the original contract between the owner and the city will be
satisfied upon completion of the project.
C. Denial --Appeal. The owner may appeal the administrator's decision to the hearing
examiner in accordance with Chapter 20.01 of the Port Townsend Municipal Code.
3.15.090 Final certificate.
A. Application. Upon completion of the construction as provided in the contract between the
owner and the city, the owner may request a final certificate of tax exemption. The owner shall
pay all required fees and file with the administrator such information as the administrator may
deem necessary or useful to evaluate eligibility for the final certificate, which shall at a minimum
include:
1. A statement of expenditures made with respect to each multiple -unit housing unit and
the total expenditures made with respect to the entire property;
2. A description of the completed work and a statement of qualification for the
exemption;
3. The total monthly rent or total sale amount of each multiple -unit housing unit rented or
sold to date;
4. The income of each renter household to date at the time of initial occupancy and the
income of each initial purchaser of owner -occupied multiple -unit housing units to date at the
time of purchase;
5. If applicable, a statement that the project meets the affordable housing requirements of
this section, along with the number, type, and specific multiple -unit housing units rented or
sold to date, as applicable, to meet the affordable housing requirements;
6. Any additional information requested by the city pursuant to meeting any reporting
requirements under Chapter 84.14 RCW; and
Resolution 18-045 Exhibit A
Ordinance 3200 Exhibit A
Page 6 of 7
7. A statement that the work was completed within the required three-year period or any
approved extension.
B. Determination. Within thirty days of receipt of all materials required for a final certificate,
the administrator shall determine whether the completed work is consistent with the contract
between the city and owner, whether all or a portion of the completed work is qualified for
exemption under this section and, if so, which specific improvements satisfy the requirements of
this section.
C. Filing with County Assessor. For projects that comply with the requirements of this
chapter, the city shall file a final certificate of tax exemption with the county assessor within ten
days of the expiration of the thirty -day period provided in subsection B of this section.
D. Denial. The administrator shall notify the owner in writing that the city will not file a final
certificate if. (1) the administrator determines that the project was not completed within the
required three-year period or any approved extension, or was not completed in accordance with
the contract between the owner and the city and the requirements of this section, or the owner's
property is otherwise not qualified for the limited exemption under this section; or (2) the owner
and administrator cannot come to an agreement on the allocation of the value of the
improvements allocated to the exempt portion of the project.
E. Appeal. The owner may appeal the administrator's decision to the hearing examiner in
accordance with Chapter 20.01 of the Port Townsend Municipal Code.
3.15.100 Annual certification and report.
A. Within thirty days after the first anniversary of the date the city issued the final certificate
of tax exemption and each year thereafter for the duration of the tax exemption period, the
property owner shall file an annual report with the administrator. Failure to submit the annual
report may result in cancellation of the tax exemption. The certification shall contain such
information as required by Chapter 84.14 RCW and as the administrator may deem necessary or
useful, and shall at a minimum include the following information:
1. A statement of occupancy and vacancy of the multiple -unit dwelling units during the
twelve months ending with the anniversary date;
2. A certification that the property has not changed use and, if applicable, that the
property has been in compliance with the affordable housing requirements as described in
this section since the date the city issued the final certificate of tax exemption and that the
project continues to be in compliance with the contract with the city and the requirements of
this section;
3. A description of any improvements or changes to the property made after the city
issued the final certificate of tax exemption;
4. The total monthly rent of each multiple -unit housing unit rented or the total sale
amount of each multiple -unit housing unit sold to an initial purchaser during the twelve
months ending with the anniversary date;
5. The income of each renter household at the time of initial occupancy and the income of
each initial purchaser of owner -occupied multiple -unit housing units at the time of purchase
during the twelve months ending with the anniversary date;
6. If applicable, a breakdown of the number, type, and specific multiple -unit housing
units rented or sold during the twelve months ending with the anniversary date, as
applicable, to meet the affordable housing requirements of this section; and
Resolution 18-045 Exhibit A
Ordinance 3200 Exhibit A
Page 7 of 7
7. Any additional information requested by the city pursuant to meeting any reporting
requirements under Chapter 84.14 RCW.
3.15.110 Cancellation of tax exemption.
A. Cancellation. If at any time the administrator determines that: (1) the property no longer
complies with the terms of the contract or with the requirements of this chapter; (2) the use of the
property is changed or will be changed to a use that is other than residential; (3) the project
violates applicable zoning requirements, land use regulations or building code requirements; or
(4) the property for any reason no longer qualifies for the tax exemption, the tax exemption shall
be canceled and additional taxes, interest and penalties imposed pursuant to state law. Upon
determining that a tax exemption shall be canceled, the administrator shall notify the property
owner by certified mail, return receipt requested.
B. Appeal. The property owner may appeal the determination in accordance with Chapter
20.01 Port Townsend Municipal Code.
C. Change of Use. If the owner intends to convert the multiple -unit housing to another use,
the owner must notify the administrator and the county assessor within sixty days of the change
in use. Upon such change in use, the tax exemption shall be canceled and additional taxes,
interest and penalties imposed pursuant to state law.
Resolution 18-045 Exhibit A
Ordinance 3200 Exhibit B-1
I*AsII:)rr:-Mi
Residential Target Area Descriptions
AREA 1
Area 1 is located in historic downtown, including the historic commercial core in Uptown. The
area includes all of the C -III zoned areas along Water Street and Washington Streets, east to
Monroe Street and west to VanBuren Street. The Uptown area includes all of the C -III zoned
areas along Lawrence Street, east to Taylor Street and west to the R -III zoned properties along
VanBuren Street. Area 1 also includes the R -III zoned properties east to Polk Street and west to
Benton Street that connect downtown commercial core and the commercial areas of uptown.
AREA 2
Area 2 is generally described as the C -II zoned area Sims Way, east to Pierce Street and west to
Prosper Street. It includes the CII/MU zoned area north to 19th Street, east to Gaines St and west
to Kearney Street. It also includes the R -IV and R -III zoned area east to Walker Street.
AREA 3
Area 3 is generally described as the C -II zoned area along Sims Way east from 12th Street and
west to Hill Street. It includes the R -III zoned area north to 1 gth Street, east to Landes Street and
west to Hill Street.
AREA 4
Area 4 is generally described as the C-I/MU zoned area at the intersection of San Juan Avenue
and F Street, as well as the adjacent R -III zoned areas to the north, west and south.
AREA 5
Area 5 is generally described as the C-I/MU zoned area at the intersection of Hastings Avenue
and Howard Street, as well as the adjacent R -III zoned areas to the north and south.
AREA 6
Area 6 is generally described as the area within the Rainier Street/Upper Sims Way subarea plan.
It also includes the R -III zoned area north of Sims Way, west to the Port Townsend Business
Park, north to 91h Street and east to Logan Street.
AREA 7
Area 7 is generally described as the R -IV and R -III zoned area north to 19th Street, west to
Rosecrans Street, south to 7th Street and east to Grant Street.
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