HomeMy WebLinkAboutItem 2C: Approval of Low-Income Housing Property Tax Exemption for Hawthorn Apts
ECC
UGENE ITY OUNCIL
AIS
GENDA TEM UMMARY
Adoption of Resolution 4999 Approving a Low-Income Rental Housing Property Tax
Exemption for the Property Located at 2984, 2986, 2988 Oak Street, Eugene, Oregon
(ShelterCare/Applicant)
Meeting Date: February 8, 2010 Agenda Item Number: 2C
Department: Planning and Development Staff Contact: Richie Weinman
www.eugene-or.gov Contact Telephone Number: 541-682-5533
ISSUE STATEMENT
The City Council is asked to consider a resolution related to a low-income rental housing tax exemption.
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The resolution would grant a 20-year property tax exemption for ShelterCare’s 29 Place development
(formerly known as Hawthorne Apartments).
BACKGROUND
The City of Eugene has a history of supporting increases to the supply of low-income housing. In order
to address the housing needs of our community, the council has adopted a variety of subsidy tools. One
tool is the 20-year low-income rental housing tax exemption. This program is enabled by state statute.
To date, Eugene has approved 20 projects totaling 924 apartments since 1992. The council reviews each
request on a case-by-case basis. Most recently, the council approved a low-income tax exemption for St.
Vincent dePaul’s VetLIFT project in 2008.
The Eugene Code provisions for a low-income rental housing tax exemption application do not include
the discretionary ‘public interest’ criterion that is included in the code criteria for the MUPTE program.
If an application meets the substantive criteria (EC 9.239(2)(e)-(i) & EC 9.239(3)(a)-(e)), the City must
approve the application. A decision to deny the exemption cannot be made by simple motion or
inaction, it would need to be made by a resolution that explains which of the criteria is/are not met.
The City and other local taxing districts forgo revenue when property is exempted from taxes. A
property tax exemption plays a very significant role in reducing rents and amounts to approximately
$100 per month per apartment. This particular project has served chronically mentally ill adults since it
was constructed in 1986, by a for-profit owner who used a federal program to subsidize the rents. The
project is on the tax rolls and owes $16,874 for 2009. ShelterCare has staffed and operated the program
since the beginning. This is known as an “expiring use” project because the federal program that
provided the subsidies has run out. ShelterCare is acquiring the development to keep it in operation and
affordable for its low-income disabled tenants. The alternative would be for the private developer to sell
the project to another private developer and the subsidized units would be lost. This property tax
exemption is critical for the project’s pro-forma. There are 35 one-bedroom housing units at this site.
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This project was recommended by the Housing Policy Board. The financing for the acquisition includes
$695,000 of federal HOME funds previously approved by the City of Eugene. This tax exemption
request was forecast at the time of the counci1’s approval of HOME funds.
RELATED CITY POLICIES
Since 1987, the City Council has frequently adopted annual goals related to homelessness or increasing
the availability of low-income housing. This development provides subsidized housing for low-income
chronically mentally ill adults. Support for low-income housing also is found in the City’s Growth
Management Goals and the adopted HUD Consolidated Plan.
COUNCIL OPTIONS
A. Approve the application by passing the resolution provided.
B. Direct the City Manager to provide additional information for further consideration of the
application.
C. Identify which of the criteria is/are unmet and direct the City Manager to bring back a resolution.
denying the application.
CITY MANAGER’S RECOMMENDATION
The City Manager recommends Option A, the approval of the resolution granting a 20-year property tax
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exemption to 29 Place.
SUGGESTED MOTION
Move to adopt Resolution 4999 approving a low-income rental housing property tax exemption for
the property located at 2984, 2986 and 2988 Oak Street, Eugene, Oregon (ShelterCare/Applicant).
ATTACHMENTS
A. Resolution to Approve, including the PDD Director’s Report and Recommendation
B. Application submitted by ShelterCare, including certifications and demonstration of compliance
with policies set forth in Standards and Guidelines
FOR MORE INFORMATION
Staff Contact: Richie Weinman
Telephone: 541-682-5533
Staff E-Mail: richie.d.weinman@ci.eugene.or.us
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ATTACHMENT A
RESOLUTION NO. _____
A RESOLUTION APPROVING A LOW-INCOME RENTAL HOUSING
PROPERTY TAX EXEMPTION FOR THE PROPERTY LOCATED AT 2984,
2986, AND 2988 OAK STREET, EUGENE, OREGON. (SHELTERCARE /
APPLICANT.)
The City Council of the City of Eugene finds that:
A.
ShelterCare (the applicant), located at P.O. Box 23338, Eugene, Oregon, 97402, is
purchasing real property located at 2984, 2986, 2988 Oak Street and 2985 Willamette Street Eugene,
Oregon, 97402 (Assessor’s Map/Tax Lot No. 18-03-07-11-06600; Assessor’s Property Account Number
0631976), and has submitted an application pursuant to Subsection 2.939(3) of the Eugene Code, 1971,
for an exemption from ad valorem taxes under the City's Low-Income Rental Housing Property Tax
Exemption Program (Sections 2.937 to 2.940 of the Eugene Code, 1971).
B.
The tax exemption is being sought for 35 one-bedroom units currently existing on the
properties located at 2984, 2986, and 2988 Oak Street at rents affordable to 60% of area median income.
The structure located at 2985 Willamette Street will be demolished and, therefore, that property is not
subject to the tax exemption.
C.
The Report and Recommendation of the Executive Director of the Planning and
Development Department (“the Executive Director”), as designee of the City Manager, attached as
Exhibit A to this Resolution, recommends that the application be approved and the exemption granted.
In making that recommendation, the Executive Director found that the applicant submitted all materials,
documents and fees required by the application and Section 2.938(1) of the Eugene Code, 1971, and is
in compliance with the policies set forth in the Standards and Guidelines adopted by Resolution No.
4623. In addition, as described more fully in Exhibit A, the applicant has complied with the criteria for
approval provided in Section 2.939(3) of the Eugene Code, 1971.
NOW, THEREFORE,
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF EUGENE, a Municipal
Corporation of the State of Oregon, as follows:
Section 1.
Based upon the above findings, and the findings in the Executive Director’s Report
and Recommendation attached as Exhibit A, the City Council approves the application of ShelterCare
for an ad valorem property tax exemption under the City's Low-Income Rental Housing Property Tax
Exemption Program for the properties located at 2984, 2986, and 2988 Oak Street Eugene, Oregon,
97402 (Assessor’s Map/Tax Lot No. 18-03-07-11-06600; Assessor’s Property Account Number
0631976), for 35 one-bedroom units at rents affordable to 60% of area median income.
Section 2.
The residential units described in Section 1 above are declared exempt from local ad
valorem property taxation commencing July 1, 2010, and continuing for a continuous period of twenty
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(20) years unless earlier terminated in accordance with the provisions of Section 2.940 of the Eugene
Code, 1971, which provides for termination after an opportunity to be heard if:
2.1 Construction or development of the exempt property differs from the construction or
development described in the application for exemption, or was not completed by January 1,
2010, and no extensions or exceptions were granted; or
2.2 The applicant fails to comply with provisions of ORS 307.515 to 307.523, provisions of
the Eugene Code, 1971, the Standards and Guidelines adopted by Council Resolution No. 4623,
or any conditions imposed in this Resolution.
The tax exemption shall be terminated immediately, without right of notice or appeal, pursuant to the
provisions of ORS 307.531 in the event that the county assessor determines that a change of use to other
than that allowed has occurred for the housing unit, or portion thereof, or, if after the date of this
approval, a declaration as defined in ORS 100.005 is presented to the county assessor or tax collector for
approval under ORS 100.110.
Section 3.
The City Manager, or the Manager's designee, is requested to forward a copy of this
Resolution to the applicant within ten days from the date of adoption of this Resolution, and to cause a
copy of this Resolution to be filed with the Lane County Assessor on or before April 1, 2010. The copy
of the Resolution sent to the applicant shall be accompanied by a notice explaining the grounds for
possible termination of the exemption prior to the end of the exemption period and the effects of the
termination.
Section 4.
This Resolution shall become effective immediately upon its adoption.
The foregoing Resolution adopted the _____ day of ____________________, 20__.
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AIC City Recorder
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