Council questions tax exemptions for multi-family housing

MOSES LAKE — The Moses Lake City Council again tabled a plan that would give tax breaks to landowners and future developers, citing concerns about the proposed land area.

The ordinance would essentially allow for developers of new or renovated multi-family housing to apply for a 10-year tax exemption from the city. The purpose of the plan would be to encourage new private development as well as provide housing near the urban center of town. The plan, as well as a proposed development looking to take advantage of the plan, received mixed reviews during a public hearing at Tuesday evening.

Council members and those in the public brought up several different options for the Tax Exemption Program's target area, and decided to again table the ordinance and bring it up at their next meeting.

Moses Lake Mayor Ron Covey said he started with a very neutral position on the exemption, and said he and the council will try and come up with an honest and fair solution. He did say the council should not make any changes to the map once it is adopted.

"I think we should establish this target zone and then stick by it," Covey said.

The proposed target zone includes the Moses Lake downtown area from Dogwood Street to Pioneer Way. Different proposals of the map also bring the tax exemption zone as far as Seventh Avenue, but the original proposal extended as far as Ninth Avenue with portions extending all the way out to Hill Avenue.

A proposed three-phase development is planning on taking advantage of the tax breaks if the ordinance passes, but Community Development Director Gilbert Alvarado said the city of Moses Lake would not see the potential development if their it is not included in the target area.

"There has to be an incentive to see it developed," Alvarado said.

Alvarado stressed to the public and the council during his presentation though that the one area in question was not a zoning issue, and that the area is already zoned for multi-family housing.

"It's not a zoning issue, at least to me," Alvarado said.

The tax exemptions would be given to multi-family housing units designated as new constructions, rehabilitations or conversions. Alvarado said that a rehabilitation project is one considered when a building has been vacant for a 12-month period. Alvarado also said that for landowners to qualify for the exemption under the plan, that their building would have to have been vacant for a 12-month period. The tax exemption would only impact projects that had a minimum of four housing units. If a landowner were to qualify for tax exemption under the plan with an existing home, that exemption would be considered a conversion and the landowner would have to bring the building up to existing building codes.

Under the proposed plan, new construction projects must be completed within three years to qualify for the tax exemption.

Alvarado said, for example, on an $8 million project that approximately $24,000 comes to the city, and that $24,000 is the money the city won't see for 10 years in property taxes.

During the meeting, Councilman Steve Shinn also mentioned to the crowd that the tax exemption would only amount to city property taxes, and landowners would have to pay other property taxes.

The proposed development would be adjacent to a land area which is zoned for single family homes, and a number of residents of that area on Garden Street came to Tuesday night's council meeting to show their concerns about the tax exemption program and the development.

Don Korando who lives near the proposed development on Garden Street asked the council why would the city give tax breaks to developers from who knows where.

Fellow Garden Street resident Ron Lane said that over 10 years the tax exemption could be up to $240,000 that the city would not be receiving in revenue, and he asked how many police officers that would put on the street.

"I don't think the intent of this ordinance was to build apartment complexes," Lane said, "it was to take downtown and revitalize it."

Area landlord Clay Crook said that he also had an ax to grind, asking why the council was only benefiting a select few.

"I don't understand the most favored status that is going to be given to whoever moves in and develops this," Crook said.

Philip Bloom with Columbia Northwest Engineering viewed the proposals as a trade-off, saying that the city will see more money spent on sales taxes in the downtown area while giving up some property taxes. Bloom also brought up the idea of adding more land to the proposed map.

Jacie Dashcel represented both Vision 2020 and the Chamber of Commerce, and she came out in full support of the project. Sally Goodwin with the Moses Lake Business Association also came to show her support for the project.

Before the meeting, the council also had a study session for its preliminary 2005 budget. The budget is likely to be approved in December.