Tax break paves way for downtown apartments

$18 million project will bring 120 affordable units to Vancouver

By Cami Joner, Columbian retail & real estate reporter

Published:

 

Affordable apartments with parking and bike storage are the cornerstones of an $18 million complex that will get a tax break from the city for construction on a triangular piece of land in downtown Vancouver.

Work on the five-story West 15 Apartments is expected to start in May on a vacant site between West 15th Street, Mill Plain Boulevard and Columbia Street. City leaders on Monday validated the project as part of a plan to create more housing options for low-wage workers and more housing density downtown. In exchange for providing affordable units, the project developer will receive the same kind of tax break that has helped spur other multifamily projects downtown, including the Prestige Plaza apartments nearing completion on the former Burgerville site at Mill Plain and C street.

The city council voted unanimously to limit property taxes to the land beneath the proposed 120-unit apartment complex. The measure will allow Portland-based developer Walter Grodahl, principal of DBG Properties LLC, to forgo taxes on the building for the next 12 years. The dollar amount of the tax abatement has not been determined, according to city officials.

DBG Properties hopes to begin construction in May.

"Occupancy is expected in May of 2015," said Kurt Creager, director of housing and community development at Otak Inc., a consultant working for Grodahl.

In return, developers of West 15 have to ensure apartment renters do not earn more than 60 percent of Clark County's median annual income. That means the units are available for a four-person household earning $41,640 or less. Making the units available to low-income households allows the project to receive the city's maximum tax abatement of 12 years.

A similar tax abatement for providing more moderate-income housing was awarded to Prestige Plaza, a $16 million, 96-unit complex set to open this spring.

Before 2007, all downtown apartment projects were eligible for the abatement, which did not require affordability standards. Other downtown exemptions included Heritage Place, a $17 million condominium development; Vancouvercenter, a 112-unit apartment complex; and 22 units in a development called The Uptown Village.

The projects were part of a multi-million-dollar wave of downtown redevelopment in the early 2000s that brought hundreds of housing units and $236 million in projects online in a 30-block area covered by the Esther Short redevelopment plan of 1998. The plan was expanded several years later to cover 130 blocks from the Columbia River north to Fourth Plain Boulevard. It is now called the City Center Vision, and is aimed at creating a more vibrant downtown core.

Part of the goal involves bringing more residents into the area, Creager said. He added that people continue to show a desire to live in downtown Vancouver, according to a study Colliers International conducted for Otak.

"The demand is still quite strong in the downtown core," especially for hourly wage earners, Creager said. "And this project is located between the freeway and the Port of Vancouver."

Creager said the tax abatement will make West 15 Apartments pencil out. The building will be situated about seven blocks west of the Mill Plain entrance to Interstate 5 and will offer studio, one-, two- and three-bedroom apartments. It also will include ground-floor parking for 90 vehicles and a storage space for 30 bicycles.

Two of the project's 120 units will be ground-floor live-work spaces located just north of an existing office building that fronts Columbia Street, Creger said.

Grodahl has signed a purchase and sales agreement to buy the project's half-acre site for an undisclosed price from Vancouver-based O&M Hidden LLC, operated by brothers Oliver and Monty Hidden.