Wednesday, January 20, 2021
Jan. 20, 2021

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Vancouver city council gives Block 10 developer tax break

Holland Partner Group gets $772K cut in return for promise of affordable apartments

By , Columbian staff writer
Published:

A property tax exemption designed to spur more affordable housing was granted to the developer of Block 10 by the Vancouver City council Monday evening, drawing some protest from the community — and Mayor Anne McEnerny-Ogle — over what should be considered “affordable.”

A newly approved lease agreement with the developer of Block 10, Holland Partner Group, allows the company to shave its tax bill by $772,000 over eight years in exchange for making at least 20 percent of the proposed 105 units affordable.

The units are priced from $1,496 per month for a studio, up to $2,578 for a two-bedroom.

That prompted a Vancouver resident at the meeting, Glen Yung, to say “$2,200 a month, to me is not affordable in any way. It’s kind of a frustration, because it comes back to a transparency issue. The public generally sees this (program) as being a tax abatement for people creating affordable housing, and really, it’s not.”

The Multifamily Tax Exemption Program offers breaks to housing developers who meet certain affordability standards, based on regional income data collected by the U.S. Department of Housing and Urban Development.

In Vancouver, the income data is grouped together with that of Portland and Hillsboro, Ore. HUD reports that the 2019 family median income for the whole region is $87,900 — considerably more than the median family income of Vancouver, which was around $55,600 in 2017.

As a result, an apartment that costs up to $2,197 per month in Vancouver still counts as affordable under the tax exemption program.

Following Yung’s comments, McEnerny-Ogle jumped in to voice criticism for how the income data is calculated. High earners in Portland skew the region’s income level, she added.

“I agree with you,” McEnerny-Ogle told Yung. “When you look at that, there are some extreme outliers in that data.”

Dozens of housing developers in Vancouver have taken advantage of the Multifamily Tax Exemption Program since it was enacted in 2016.

To date, the city has approved 28 requests from developers, with three more applications pending, according to Peggy Sheehan, Vancouver’s community development programs manager.

The program has helped lure 2,564 new apartments, including 552 “income-restricted” units, to the city, Sheehan said.

“By allowing the exemption, we’ll be expediting a project with a construction value of over $42 million,” Sheehan told the city council.

Councilor Ty Stober said the city ought to be working to ensure its definition of affordability is based on Vancouver’s income level, and not on that of the entire region.

Stober said “$87,000 is our area median income. That is unrealistic for us, and is something I think we should be taking up with our state legislators.”

“And perhaps our federal, too,” McEnerny-Ogle added.

Block 10, long vacant

Holland Partner Group’s tax exemption applies to just the residential portion of its proposed development at Block 10, a long-vacant acre in the heart of downtown that’s seen several development opportunities slip through the cracks.

The company will still pay property tax on the proposed commercial use of the space, a new 10,000-square-foot headquarters for the company, and the residential tax exemption will expire after eight years.

In all, Sheehan said, the project will add about $4.37 million to the area’s various taxing districts over the next 20 years, including $1.21 million directly to the city of Vancouver.

Currently, Mayor Pro Tem Bart Hansen pointed out, the city collects nothing in taxes from the site.

“Twenty-six years it’s been sitting there, with zero dollars coming in, and it’s been a blight on downtown,” Hansen said. “I would love to see the property developed.”

The history of Block 10, which is bordered by Columbia, Washington, Eighth and Ninth streets, is speckled with one almost-project after another.

In the 1990s, Kaiser Permanente had considered the spot for an office building, but ultimately pulled out. A performing arts center was another proposal.

In 2007, city leaders identified the need for a grocery store downtown, and started eyeing Block 10 as the ideal site around 2013. But that, too, fizzled earlier this year, when repeated attempts to attract a grocer to the site was met with reluctance from industry leaders to take a chance on a low-density area.

The city gave Holland Partner Group the green light in May. Holland is currently using the site as a staging area for its construction of the final tower in the Vancouvercenter development.

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