A developer who wants to buy the city’s Riverbend par 3 golf course property to build 500 apartments will get a chance to receive an eight-year property tax exemption.
The Kent City Council voted 7-0 on Tuesday night to approve an ordinance to extend the multi-family housing property tax exemption from the downtown core to the Riverbend Gateway property that sits between West Meeker Street and the Green River.
“This is not the first time the city has supported multifamily tax exemption,” Council President Bill Boyce said. “We did it for the Dwell (at Kent Station) in downtown Kent, and that’s near capacity. We are finding renters who want to be in family environments. Based on the research and what we have done for that (Riverbend) market area, we feel strongly that will be a good location and we will have renters in it.
“I think the area will be a big plus for the community. Not only will it have the multifamily housing, but it will have a bike trail and places to eat and hang out.”
Auburn-based FNW Inc./Landmark Development Group (FNW) submitted plans in September for a mixed-use project featuring two contemporary-style buildings, each with 6,000 square feet of retail space and 120 residential flats; and 21 urban-style walk-up buildings with 12 units each, including one, two and three bedroom units. The development would seek to attract young professionals and families. The units would rent for market-rate prices.
City officials and FNW have yet to sign a purchase agreement for the 18-acre site, but this property tax waiver expects to move the sale forward. Sale proceeds would be used to eliminate the golf fund debt of about $2.6 million and allow for about $6 million in capital improvements to the 18-hole course in an effort to draw more players. The Riverbend Golf Complex operates at a deficit of about $300,000 per year.
If the developer applies for the property tax waiver and it receives approval from the council, no taxes would be paid on the value of the apartment complex. The developer would still pay taxes on the land and the value of the commercial part of the project.
Matt Gilbert, city planning manager, told the council there is no estimate at this time about how much the developer would save in taxes. He said that will be known once the King County tax assessor sets the value.
Seattle developer Tarragon used the property tax break to build the Dwell at Kent Station Apartments, which opened earlier this year. The exemption costs the city about $25,000 a year in tax revenue but will save Tarragon nearly $1.7 million over the eight years because it won’t have to pay building valuation taxes to schools, the Kent Regional Fire Authority, King County and other taxing districts. Tarragon will save an estimated $210,000 a year in property taxes, according to city staff.
FNW would save quite a bit more on taxes at the Riverbend property because of a much larger development with a higher value.
Six people testified during the public hearing about the property tax waiver. Five people were primarily against the waiver with one in favor.
“I’d like to get a tax deduction as a senior citizen,” said Sylvia Hildebrandt after she voiced concerns about increased traffic along West Meeker Street.
Gilbert said the waiver serves as a tool to help make sure the city gets a high quality developer. The developer saves tax money and puts that money into the project with better amenities, such as rooftop decks, courtyards, fitness centers and other features.
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