passed ordinance

*Amend approved application under the Multiple-Unit Limited Tax Exemption Program for SW Park + Columbia Apartments located at 1414 SW Park Ave to increase the number of restricted units (amend Ordinance No. 188341)

housing
levy bond

Department: Housing Bureau
Introduced by: Councilor Dan Ryan
Status: Passed

Impact statement

Purpose & background

On April 21, 2016, the City approved a Central City Master Plan and Design Review decision for the Broadway Tower located at 710 SW Columbia Street under LU 15-281248 DZM MS (the “Land Use Decision”). As a condition of the Land Use Decision, the owners are required to construct a multi-family dwelling structure, on the same site, with a minimum of 60 total residential units of which 33% would be restricted to households earning no more than 80% median income for 40 years. SW Park + Columbia Apartments is the proposed structure intended to meet this Land Use Decision obligation. On April 18, 2017, the Council passed Ordinance 188341 which authorized a 10-year property tax exemption for SW Park + Columbia Apartments. Due the conditions of the Land Use Decision, both during the tax exemption period and thereafter, the project must provide 33% of its 73 units, totaling 24 units, for 40 years restricted to households earning no more than 80% median income. The tax exemption will apply to all the residential units. Since the passage of the aforementioned Ordinance, the developers of the building have requested to amend their approved 10-year property tax exemption application in order to accommodate a technical change due to an increase in the Project’s total units from 73 to 82 total units and an adjustment in the project’s overall unit type mix. 82-unit building at 1414 SW Park Ave Market rate units: 55 units Restricted Units: 27 units Studio One Bedroom Two Bedroom Three Bedroom Total 51 31 - - Market Rate 34 21 - - Restricted to 80% of Median Income 17 10 - -

Financial impacts

The applicant submitted a $1,000 application fee and paid an additional $16,000 application activation fee; $9,000 of that was paid to Multnomah County with the remaining balance being used to support the administration of the MULTE program at PHB and the monitoring of the project during the exemption period. This Ordinance approves a property tax exemption resulting in foregone tax revenue. The total estimated amount of the property tax revenue not collected for the 10 years of the exemption period is valued at approximately $1,649,375, assuming a four percent discount rate and a three percent annual assessment increase. This 10-year estimate includes taxes foregone by the City of Portland, Multnomah County and other entities which receive property taxes within Multnomah County. The reduced amount of property taxes to the City of Portland over the 10 years is roughly 33 percent of that amount, or $544,294. The City will still benefit from property taxes collected on the improved value of the land during the exemption period.

Community impacts

As the largest taxing jurisdiction affected by the tax exemption programs, Multnomah County has approved the administration of the programs in order to meet shared affordable housing goals.

▸ Full text (the legislation as adopted)

The City of Portland ordains: Section 1. The Council finds: On behalf of the City of Portland, the Portland Housing Bureau (“PHB”) administers the Multiple-Unit Limited Tax Exemption Program (the “MULTE Program” or “Program”), authorized under ORS 307.600-307.637 and City Code Chapter 3.103. The MULTE Program provides a 10-year property tax exemption on the residential portion of the structural improvements so long as Program requirements are met. During the exemption period, property owners remain responsible for the payment of taxes on the assessed value of the land and any commercial portions of the project, except for those commercial improvements deemed a public benefit and approved for the exemption. Ordinance No. 188341, passed by the Council on April 21, 2016, authorized a 10-year property tax exemption under the MULTE Program for the development known as SW Park + Columbia Apartments (the “Project”) and located at 1414 SW Park Ave (the “Property”). The application proposed 24 units, comprised of 14 studios, nine one-bedrooms, and one two-bedroom, or 33%, of the Project’s 72 units would be restricted to households earning no more than 80 percent of Median Family Income (“MFI”) at the time of lease-up (the “Restricted Units”). The developers of the Project have requested to amend their approved MULTE application in order to accommodate an increase in the project’s total units and a change in their unit-type mix. The total number of Restricted Units has increased compared to the initial application. The amended application proposes 27 units, comprised of 17 studio and 10 one-bedroom units, or 33%, of the Project’s 82 units would be restricted to households earning no more than 80 percent of MFI at the time of lease-up. The MULTE Program has an annual cap limiting the approval of new property tax exemptions to no more than 15 million dollars of new estimated foregone revenue within a five-year period, defined as any current year and the previous four years. There is sufficient cap remaining for the 2022 calendar year to include the Project’s amended application. PHB has the responsibility for reviewing compliance of approved applications with the minimum MULTE Program requirements and has concluded that the amended application for the Project does indeed meet the minimum Program requirements. NOW, THEREFORE, the Council directs: The amended request for a 10-year property tax exemption under the MULTE Program is hereby approved for 100% of the residential portion of the structural improvements of SW Columbia + Park Apartments, including 100% of residential parking and common areas. Ordinance No. 188341 is amended as follows: The Project must restrict 33% of its 82 units to households earning no more than 80 percent MFI (the “Restricted Units”). The Restricted Units will reflect the unit-mix in the Project and will consist of 17 studio and 10 one-bedroom units. All other portions of Ordinance 188341 will remain the same. Section 2. The Council declares an emergency exists because timely City approval of the application for the MULTE Program is necessary in order to allow the Project to meet requirements to approve the building permit as outlined by the Bureau of Development Services; therefore, this Ordinance shall be in full force and effect from and after its passage by the Council.

Tally

4 yea 0 nay 1 other