Latest news with #MFTE
Yahoo
11-06-2025
- Business
- Yahoo
Could a new tax incentive get the Village at Harbor Hill across the finish line?
Could an affordable housing initiative help get the Village at Harbor Hill across the finish line? The city of Gig Harbor is considering a potential tax exemption program aimed at encouraging rent-restricted housing. The Village at Harbor Hill, a proposed retail site in the Gig Harbor North area that has been stalled for years, could be its first test case. Talks to develop the 18.5-acre property go back at least a decade, according to The News Tribune's reporting. Last year, the property owner began considering adding multifamily housing to make the development more feasible financially. The development has struggled to land a grocer to anchor the project. A multifamily property tax exemption program, or MFTE, could make developing those housing units — and the project as a whole —more attractive, though representatives for the city and the property owner haven't shared any concrete timelines for moving forward. MFTE programs have been popular among developers in other area cities and are a tool for cities and counties to encourage housing development, including more affordable units. Tacoma, for example, offers three options. Those include an 8-year all-market rate version and 12- and 20-year versions, which require a percentage of units to be rent-restricted, or what the programs call 'affordable.' As defined by the state and as part of its Growth Management Act (GMA), the MFTE program offers a property tax exemption in exchange for the development of market-rate multifamily units or multifamily affordable housing of at least four units in designated 'residential targeted areas,' via the 8, 12- and 20-year versions. The property owner does not pay property taxes on the residential improvements for the designated number of years, but still pays tax on the land and any nonresidential improvements, such as a commercial portion of a mixed-use building. Cities and counties can tailor programs to meet policies, such as what percentage of area median income the 'affordable' units are based on, generally tied to figures from the U.S. Department of Housing and Urban Development (HUD). All cities, many towns, and Clark, King, Kitsap, Pierce and Snohomish counties are eligible to offer an MFTE program, according to the state Department of Commerce. The city of Gig Harbor hasn't been shy about mentioning the potential benefits of an MFTE program for the long-anticipated retail site. At one time, Village at Harbor Hill was planned as a business park at Borgen Boulevard and Harbor Hill Drive, anchored by a Town & Country Market grocery store and surrounded by banking, restaurants, shops and medical services. Plans for the site stalled as a legal battle over transportation impact fees and eventual settlement between the developer and the city took time to reach. Town & Country was out of the project by the summer of 2020 and two years later also abandoned plans to set up shop at the Peninsula Shopping Center on Judson Street. After a community meeting about the project last summer, property owner representative Jon Rose confirmed to The News Tribune in December that residential was now in the mix, along with the audience's receptivity to a discount grocer. Rose is vice president of real estate with Florida-based Raydient/Rayonier, which owns the Village at Harbor Hill property. In a city newsletter March 19, the city announced that 'Discussion of (an MFTE) mechanism, beginning with the Village at Harbor Hill, will focus on the opportunity to promote multi-family workforce/affordable housing in the community near transit and other key services.' The city council heard an overview of the program at its study session on March 13 and a formal proposal introducing a 12-year MFTE version with at least 20 percent of units designated as rent-restricted housing for low- and moderate-income households at the council meeting on April 28. Households are considered low-income if they earn 80% or less of the area median income, and moderate-income if they earn between 80 to 100%, as defined by the U.S. Department of Housing and Urban Development, per the city's draft ordinance presented April 28. As of April 1, the median family income in Pierce County is $120,800. A household of five is considered low-income if they make $104,400 or less in a year, according to the Tacoma Housing Authority. A one-person household qualifies as low income if they make $67,700 or less. The Gig Harbor City Council heard a first reading on April 28 but did not vote on an ordinance that would establish an MFTE program in the city. A second reading of the ordinance, scheduled for May, was removed from the agenda. Instead, city staff are planning a town hall to discuss the program with the community, according to City Clerk Josh Stecker. The council may consider the program again afterward under a new ordinance, he wrote in an email. That town hall is still being scheduled, but city staff are looking at the first three weeks of July, City Administrator Katrina Knutson said. Attendees will be able to learn more about a potential MFTE program as well as the spate of state housing bills passed in recent years that affect the city. Speaking about the Village at Harbor Hill project, Jon Rose, the property owner representative, told the city council at the April 28 meeting that 'multifamily developers that we have talked to are supportive of this version of the MFTE.' Gig Harbor Community Development Director Eric Baker explained to The News Tribune that an MFTE program could make a mixed-use project with housing more feasible because it could help the developer save on the housing portion. The property tax exemption wouldn't apply to the land and any commercial components of the project. He added that he doesn't have insight into the Village at Harbor Hill project specifically but understands how multi-use projects tend to proceed. Baker also explained that the tax exemption would result in a 'tax shift' onto the rest of the city's property owners. To make up for the lost revenue, residents and businesses would be subject to a slight levy rate increase, which he said city staff expects to be 'a relatively small number' but haven't quantified yet. City Administrator Knutson said that she has directed city staff to do a full comprehensive look at the proposed MFTE program and 'what the property tax offset would be' if used at the Village at Harbor Hill site, so that they can present that to the public and the city council for informational purposes. Knutson said Wednesday that the city is aware of at least two grocers 'in regular contact' with the Village at Harbor Hill property owner. She declined to comment on whether a budget grocer like Winco or a Trader Joe's is still a possibility for the site, but said 'that's a great question.' Since the Village at Harbor Hill is a private development project, the city's role is primarily regulatory, Knutson said. But the city is also aware that the project is of strong interest to many residents in the Gig Harbor North area, and has been in 'proactive and regular communication with the property owner and their agents in order to be responsive to what they may need to accomplish the project,' she said. In an interview on May 29, Rose noted that without a residential component or viable grocer as a possibility, the Village at Harbor Hill site likely would go back on the market. Since the community meeting with Gig Harbor residents in 2024, he said, 'probably six or seven grocers have brought their boats into the dock for a look, and most of them have taken a look and moved on.' As Rose explained, 'It's one thing to take over a space, like if the QFC emptied, you're buying a used space where it was built with dollars and expenses that were from 30 years ago. It's like buying a used car, you don't pay the same as new for a used car.' 'And some of the grocers, some of them that are particularly well liked and desired, have never done a ground-up retail,' he added. 'They don't have to. There's some in particular that just go to 15,000-square-foot spaces that are already there.' But he also noted there is some good news about the site, with several grocery entities that 'have stuck around.' 'And with the apartment idea, we have checked it with other apartment developers, just to make sure we're not chasing a dream. And there's interest from both sides.' While Baker, the Gig Harbor community development director, said the site has been rezoned to allow for multifamily development, Rose remained neutral on any MFTE benefits to the project. 'We'd love if our project was helpful, but the city needs to meet certain growth targets ... mandated by the GMA, and the affordable housing is also mandated,' he said. 'So it's up to the city. If it's offered as a program, people who develop multifamily and our project will consider using it.' 'If they don't offer it, there will still be apartments, and they just won't meet any affordable housing criteria,' he added. 'So we're not going to weigh in and start lobbying people. This is an internal issue for the city more than it's an issue for us.' 'But I can tell you, there's legitimate and strong interest from grocers — more than one. And same with the multifamily.' Previous reporting from The News Tribune contributed to this report.
Yahoo
27-04-2025
- Business
- Yahoo
Infamous downtown Tacoma property hit with ‘notice of abandonment' designation
It's a prime piece of property in the heart of downtown Tacoma, near McMenamins Elks Temple and Old City Hall. Plans for demolition of what's known as Graffiti Garages, 725 Broadway, and redevelopment into new apartments date back to 2014. Its 3-year development qualification for an 8-year multifamily property tax exemption (MFTE) expires in December. The property was among those used by Bellevue-based investment firm iCap in what later was determined to be a Ponzi scheme, according to a ruling in U.S. Bankruptcy Court for the Eastern District of Washington. Now, the property has hit another benchmark of sorts. A 'Notice of Abandonment' was listed for the property (officially 716-728 Commerce St.) in Pierce County records earlier this year. 725 Broadway LLC, an iCap-affiliated entity, remains as the site taxpayer on Pierce County's online property portal, and the property has accumulated more than $49,000 in current and past-due property taxes going back to 2024. The site also is tied to an ongoing investor lawsuit in King County. The abandonment notice is the latest turn for a property that has long been the subject of redevelopment. 'Savvy investors cautiously love distressed properties,' said Harrison Laird, a principal with Lee & Associates commercial real estate services. Laird specializes in the sales and leasing of office properties throughout the South Sound. 'Often, publicly known injunctions and notices spur activity on a property, though the investor pool will generally be targeting the absolute minimum bid it'll take to buy the property,' Laird told The News Tribune. Steven Bender is an associate dean and professor at Seattle University School of Law and is an expert in real estate law. In response to questions about the abandonment designation, Bender said many factors would play a role in the site's future, with whoever is in charge of the property opting for as cost-effective offloading as possible. In such cases, parties involved typically 'assess the current highest and best use of the property, the rental market conditions, and the transferability of any existing development permits,' he noted. According to city media representative Maria Lee, 'The development permits have all expired so new permits would be required.' Bender noted the 'abandonment' distinction likely wouldn't affect any new marketing of the site. Last year, The News Tribune reported that the property was being offered for just over $2 million. 'It probably doesn't matter,' Bender said. 'I mean, it's mostly a matter of getting it into the hands of somebody who's going to redevelop it, and what that will take.' As The News Tribune reported last year, one lawsuit noted that the property had been used by 725 Broadway LLC to secure a loan that eventually exceeded the property's value. Its most recent assessed value, according to Pierce County, is at just under $2 million. As for a lender taking on site prep, 'Most lenders are not going to be in the business of demolishing something,' Bender said. 'Generally, that would be very unusual for a lender to want to reach in his pocket and pay more on a site.' iCap Trust in December announced that iCap Enterprises and its affiliated debtors had completed Chapter 11 that included a 'landmark Ponzi ruling' under a court-approved joint plan of liquidation, developed with an Official Committee of Unsecured Creditors. The trust was established to recover assets for more than 1,800 defrauded investors, primarily from overseas. The Ponzi ruling was part of an October findings of fact, conclusions of law, and order confirming a modified amended joint Chapter 11 Plan of liquidation of iCap Enterprises and its affiliated debtors. As part of the court-approved plan, the Tacoma property was one of two iCap-related entities listed under 'abandonment of certain estate assets.' The determination meant that the property 'shall be abandoned by the Debtors and their Estates pursuant to Section 554 of the Bankruptcy Code and shall not be considered iCap Trust Assets.' A co-trustee for the iCap Trust did not respond to questions from The News Tribune about what's next for the Tacoma site. The other related entity abandoned in the bankruptcy case was iCap's interest in Airlink Holding LLC and Airlink Markets LLC, which operated in the securities industry. iCap Enterprises was the parent company for Airlink. In October, the director of the Washington State Department of Financial Institutions entered a final order against Airlink Markets, LLC, finding that 'an officer, director, partner, or person performing similar functions for ... Airlink Markets engaged in dishonest and unethical business practices in the securities industry, and those practices justified the revocation of the respondent's broker-dealer registration under to the Securities Act of Washington.' As a result, Airlink Markets was ordered to pay a $10,000 fine and $500 in costs, and had its broker-dealer registration revoked. Previous reporting from The News Tribune contributed to this report.
Yahoo
22-04-2025
- Business
- Yahoo
Hilltop cocktail lounge, amid neighborhood construction, closes after a year
The Hilltop cocktail bar known as 1022 South J has closed after one year under new ownership. Vanessa Goodrum and Corina Cross announced the closure in early April on Instagram, where they shared some of their struggles with the bar and the apparent impact of nearby construction in recent months. 'We appreciate all of you who have come by to experience 1022 while we had the honor of being there,' they wrote on April 2. 'The 1022 team and each of you and your support made this last year a time in our lives that we will always cherish. No matter the hardship, it was worth it. Unfortunately the negative impacts have started to affect our family, and that is not something we can allow to happen.' In a message to The News Tribune, they preferred not to elaborate beyond reiterating their appreciation for the experience of first-time restaurant ownership and the importance of caring for their families. 'To take a chance on two middle-aged moms with no experience in the hospitality industry means a lot to us,' they said. 'We did all we set out to accomplish, except financial success. That's hard, not only for us but the team who took a chance on us.' They were also grateful to have offered a 'safe place for everyone,' including the LGBTQ+ community. Goodrum and Cross, who both worked at a local optometry office, reached a deal in late 2023 to buy the bar from Lesley Fleming and Neil Harris, who own the building. The property owners, who also own The New Frontier Lounge in the Dome District, did not immediately respond to a request for comment. The couple decided to keep the name, which references the bar's address and carries local cocktail lore dating to the early 2000s. (In 2022, the chef and bar manager of its previous iteration were slated to take over before that arrangement fizzled.) The reincarnated 1022 also focused on cocktails, accompanied by dishes like steak with chimichurri at dinner and biscuits and gravy, fried chicken and bread pudding for brunch, plus frequent specials and happy-hour deals. In July, just a few months in, the owners posted on Instagram that 'construction and parking are a mess,' in apparent reference to the 330,000-square foot, five-story development that now towers over the single-story building at the corner of South J and 11th. Aspire 11's journey began in 2015, when a Kirkland-based developer showed interest in what was a vacant lot with a history of failed housing attempts, The News Tribune reported as the land deal was going through standard approval processes. The mixed-use complex — which spans almost the entire block between Martin Luther King Jr. Way and South J Street, from South 10th to 11th — broke ground in 2022. It received an 8-year multi-family tax exemption (MFTE) two years prior and qualified for Opportunity Zone funding, The News Tribune reported at the time. The developer had also pledged $500,000 to support neighborhood groups that manage health, education or wellness outcomes for residents, but it's unclear if 1022 would have been eligible for those funds. The website says some of its 289 units are now leasing, with monthly rates for studios around $1,400 and 1-bedrooms around $1,600, up to 2-bedrooms with two baths around $2,800. Workers could be seen outside on Martin Luther King Jr. Way as recently as April 8. Reached by phone, Tejvir Basra, who is leading the project for the developer, declined to speak in detail but said the project has 'been a long road,' and he hopes the influx of tenants will benefit the neighborhood in the long-term. 1022 South J shared the corner building with Manifesto Coffee and Goodfellas Barber Shop, both of which remain open. Jadin Bulger opened his coffee roastery and cafe at 1003 S. 11th St. in 2016. He told The News Tribune in a phone call last week that the bar had known busy summers on the patio in years past, but Goodrum and Cross lost access to their patio right when they maybe needed it most. 'That seemed pretty big to me,' he said. Communication with construction crews has been frustrating, Bulger said. Ongoing work had affected parking on both South J and South 11th streets, and at times limited access to their and their neighbors' only entrances. It was sporadic for the first two years, but the complications began happening more frequently and for longer periods at a time last summer, he said, adding that he has communicated frequently with the city. Last August, Goodrum and Cross said on Instagram that the bar had to 'close during lunch,' and they weren't able to use the patio or serve alcohol outside. Then in January, they called more attention to their difficulties in a GoFundMe that noted 'unforeseen setbacks' and some 'red flags' that perhaps they had overlooked. City spokesperson Maria Lee confirmed that city staff are aware of 'some communication challenges' between the contractor, Spanaway-based Jody Miller Construction, and neighboring businesses. Formal complaints filed through 311 were 'limited,' she said in an email Monday, but 'city staff were responsive when concerns were brought directly to their attention.' They have fielded 10 to 15 such concerns since 2022. She described the issues as 'primarily related to typical construction inconveniences such as temporary sidewalk or parking impacts, rather than code or safety hazards.' Staff discussed requirements with the contractor and tried to streamline communication with affected neighbors, she said. 'It's relevant to note that this area has seen multiple construction projects with various contractors recently, adding complexity,' continued Lee. 'We are pleased that the Aspire 11 project is now nearing completion.' Building inspectors approved a temporary occupancy certificate recently, while 'remaining work and related inconveniences will conclude in the coming months.' When right-of-ways are compromised, added Lee, the city can take enforcement actions including stop-work orders 'for serious or repeated issues.' Fellow restaurateurs, including Grann and Tibbitts at Fern Hill, hosted pop-ups at 1022 South J in an attempt to galvanize their own fans, but it wasn't enough. 'The hurdles just kept surmounting the ability to obtain success,' said Goodrum and Cross in their message to The News Tribune. 'When the choice of providing for our family was in jeopardy, it made the choice simple: family first.'
Yahoo
13-02-2025
- Business
- Yahoo
Debate over Tacoma apartment tax breaks continues as project gains 12-year MFTE extension
An apartment site that gained a tax exemption in spring 2015 is the latest project in Tacoma to gain an extension on that break by making some units rent restricted. On Tuesday, Tacoma City Council approved a 12-year extension to The Grand on Broadway, 252 Broadway, which is close to the Stadium District in downtown. The extension is an option that was introduced into the city's multifamily property-tax exemption program a few years ago. It is a result of a change initially made at the state level, then approved by the City Council in late 2021 among other MFTE changes aimed at improving and expanding the use of the development incentive. Projects qualify for the extension if rent-restricted units are added or maintained at a property. In this case, 20 percent of its market-rate units will become rent restricted for households whose income is at or below 70% of Pierce County AMI, adjusted for household size, as determined by HUD on an annual basis. Rent is capped at 30% of those income levels, adjusted annually. Tuesday's presentation showed average rents for the regulated units ranging from $1,419 for 340-490-square-foot studios, to $1,520 for 525-870-square-foot one-bedroom/bath units. The rates include utilities. Those compare with the market rate rents listed as ranging from $1,596 for studios to $1,978 for the one-bedroom/bath units. The 139-unit site, now operated by a mix of 11 owners that includes LLCs and individual investors, originally gained an 8-year all-market rate MFTE in April 2015. The site offers a mix of studios and one-bedroom apartments. Construction was estimated at a cost of $22.7 million, according to figures presented at the 2015 council meeting. The site now has a total assessed value of more than $42 million, according to Pierce County Assessor-Treasurer online property valuations. The incentive exempts projects from property taxes on the assessed improvement value for 8, 12, or 20 years based on the level of affordability provided. Doubts registered by some people have persisted over the actual costs to the city's coffers in offering the MFTEs, despite insistence through the years by council members that the projects more than pay for themselves via construction jobs, projected sales taxes generated by the new apartment dwellers, construction taxes and the addition of much-needed new housing. Then-Mayor Marilyn Strickland offered a defense of the MFTE program during the 2015 meeting, stating that 'this was created to try and drive growth and encourage development in very specific neighborhoods. But also I just want to dispel the myth here that these tax breaks are for million-dollar condos. This is to drive growth in very specific areas.' Critics continued to voice opposition at Tuesday's council meeting during public comment. Laurie Arnold of Tacoma told the council that the tax breaks are being given to projects that have become 'just finance transactions, rather than really providing housing in any meaningful sense, in my opinion, especially affordable housing.' She added, 'We all know we've been listening and following about our severe budget deficit, and I just don't feel like we can afford to lose revenue in this way.' The city late last year grappled with overcoming a $24 million deficit in its work toward adopting its latest budget. Kit Burns of Tacoma implored the council to take another look at the numbers, stating the exemption was simply 'a way to kick it down the road and not have any taxes for the next 12 years.' Elements of the development incentive program, including the 8- and 12-year MFTEs and extensions, are under review by the council's Government Performance and Finance Committee, led by council member John Hines. Hines at Tuesday's meeting noted that one of the extension's goals is to support rent-restricted units that could otherwise revert to market rate. 'The reason the state extended this was one so that after 12 years, you don't have a lot of units that were once rent controlled made market rate and pushing those people out of those units at the 12-year mark,' he said. 'And it was also sought to be an opportunity to take a building that was market rate and provide some affordability or rent-controlled units in those market-rate developments where they otherwise are not present.' He also underscored the benefit to units already in existence switching to rent restricted as opposed to starting from scratch in the current market environment. 'When you think about the affordability and what we're getting versus what it would cost to just pay for those affordable units, there is a real benefit,' he said. Here are the projects, including the one adopted Tuesday, that have been granted 12-year MFTE extensions following their original 8-year versions: ▪ February 2025: The Grand on Broadway, 252 Broadway, 139 units, 28 rent-restricted. ▪ May 2024: Stadium Vue35, 219-223 N. J St.: 35 units, 7 rent-restricted. ▪ April 2024: Proctor Station Apartments, 3910 N. 28th St.: 154 units, 31 rent-restricted. ▪ December 2023: Sound Heights Townhomes, 4031-4033 S. Puget Sound Ave.: 10 units, 2 rent-restricted. ▪ December 2023 Sound Heights Townhomes, 4001-4003 S. Puget Sound Ave.: 12 units, 3 rent-restricted. The News Tribune archives contributed to this report.
