<img height="1" width="1" style="display:none" src="https://www.facebook.com/tr?id=192888919167017&amp;ev=PageView&amp;noscript=1">
Friday, December 8, 2023
Dec. 8, 2023

Linkedin Pinterest

Battle Ground weighs tax exemption for apartment project

Developer says work won’t occur without multifamily break

By , Columbian staff writer
Published:

For the second time in as many months, Battle Ground’s city council is considering a multifamily tax exemption for an apartment development. The city council reviewed the tax exemption request for a planned 200-unit apartment complex during its regular meeting Tuesday. The council previously reviewed the proposal on June 5.

Tirus “T.J.” Fontenette of Principal Properties LLC, which would build the Eaton Park–Remy Heights apartments, said the tax break is needed to offset rising construction and management costs. Without the tax exemption, Fontenette said lenders may not finance the project.

“Since we built Alder Pointe in 2015, construction costs have doubled,” he said, adding operation, management and insurance costs have also increased. “With that and the lending environment, rents have got to go up or they simply do not get built.”

The council approved an eight-year tax exemption for Deacon Development’s West Main Commons project on Aug. 7. The exemption is expected to save the developer $4.2 million in property taxes over eight years. The total value of the tax exemption for Principal Properties is estimated at $3.38 million over the eight years.

The new apartments would be built on two 5-acre parcels west of the 180-unit Alder Pointe Apartments on Southwest 13th Avenue, another property built, owned and managed by Principal Properties.

Fontenette said the earlier council meeting resulted in more questions than answers, adding that his firm has worked diligently in the last two months to find answers to those questions.

If the tax exemption is approved, Principal Properties will set aside 20 units for affordable housing. To be eligible for the tax exemption, 10 percent of the development’s units must be set aside as affordable housing with rental prices not to exceed 30 percent of a household’s monthly income based on 80 percent of the adjusted median income for Clark County.

Rental prices for the remainder of the apartments will be based on market rate. Fontenette estimated a two-bedroom unit would rent for approximately $1,800-$1,900 per month. To qualify, tenants must earn 2.5 times the rental rate.

Mayor Philip Johnson said that means that a single person’s income would have to be approximately $5,000 per month, unless they’re on Section 8 or some sort of federal or state program. Battle Ground’s median income as of 2020 was $39,507, according to U.S. Census data.

Councilor Cherish DesRochers asked if housing programs such as Share’s Housing and Essential Needs program, Section 8 or other vouchers would be accepted. Fontenette said they would be, noting Alder Pointe already has tenants using rent assistance programs.

“Anything that will contribute towards getting somebody in at the rent that’s allowed, we will do that,” Fontenette said. “As for the rest of the units, anybody that can meet that market rent with housing assistance programs or vouchers, they’re welcome to rent with us.”

Fontenette noted the current rental occupancy rate for Battle Ground is around 97 percent.

Other benefits

If the council approves the tax exemption this fall, Fontenette said construction could begin in June 2024 with apartments coming available in June 2025.

There will be other benefits to the community if the apartment complex is built, Fontenette said.

“These projects are going to require a significant amount of infrastructure development. That infrastructure development will have a positive economic benefit for new development going forward,” he said. “When we bring in sewer, roads, utilities, this is going to have a corresponding affect.”

Principal Properties will install a sewer pump station on a 100-acre parcel along Northeast 122nd Avenue/Highway 503. Of those 100 acres, 35 acres are zoned for commercial use.

Principal Properties would also build Southwest 15th Avenue between Scotton Way and Eaton Boulevard at a cost of around $1.1 million. The road project would meet part of the city’s transportation improvement plan.

Fontenette estimated that over the eight-year tax exemption period, the project would generate $466,000 in utility tax revenue, $1.06 million in sales tax revenue from construction activities, $3 million in sales tax revenue from spending by the properties’ 600 tenants, $5 million in permit fees and system development charges and $2.5 million in infrastructure development.

The impact to other jurisdictions, such as fire districts, remained a concern for several council members.

“We understand there’s real questions about how the funding is impacted,” Fontenette told the council.

“We have confirmed there won’t be any existing impact on existing property levies with the city or fire district.”

Fontenette explained that state law fixes the levy amounts for cities and fire districts, which can be increased by 1 percent annually. Should the property tax base shrink, the levy amount would not shrink. Instead, the levy rate on the remaining properties would be adjusted to ensure that fixed levy amount is collected, he said. Additionally, only the building values would be exempt, Fontenette said, noting property taxes for the land would still be paid. For the Eaton Park–Remy Heights development, Fontenette said based on the assessed value, they expect to pay $600,000 over the eight years.

“About $100,000 of that would be going to the fire district,” Fontenette said.

Johnson said he could see some benefits but still had concerns about how the project will benefit Battle Ground’s residents.

“Most of the comments I’ve gotten over the last month about this program are scalding,” Johnson said. “It’s incredible how people are looking at this and think that the seven of us are your employees, or the employees of Deacon (Development) or the employees of whoever down the street are building, or Vancouver Housing Authority or whomever.”

Johnson said many residents see the tax exemption program as giving away taxpayer dollars.

The council will set a date to approve or deny the tax exemption request at a later date.

To watch the full meeting, go to https://www.youtube.com/watch?v=30szfBcgd3w.

Support local journalism

Your tax-deductible donation to The Columbian’s Community Funded Journalism program will contribute to better local reporting on key issues, including homelessness, housing, transportation and the environment. Reporters will focus on narrative, investigative and data-driven storytelling.

Local journalism needs your help. It’s an essential part of a healthy community and a healthy democracy.

Community Funded Journalism logo
Loading...