Chapter 3.60
URBAN CENTER DEVELOPMENT
Sections:
3.60.030 Residential targeted areas – Criteria – Designation – Rescission.
3.60.050 Application procedure – Fee.
3.60.060 Application review – Issuance of conditional certificate – Denial – Appeal.
3.60.070 Amendment of contract.
3.60.080 Extension of conditional certificate.
3.60.090 Final certificate – Application – Issuance – Denial and appeal.
3.60.100 Exemption – Duration – Limits.
3.60.110 Annual certification – Cancellation of exemption.
3.60.010 Purpose.
A. The purposes of this chapter are:
1. To encourage more multifamily housing opportunities within the city;
2. To stimulate the construction of new multifamily housing and the rehabilitation of existing vacant and underutilized buildings for multifamily housing;
3. To increase the supply of multifamily housing opportunities within the city; and
4. To accomplish the planning goals required under the Growth Management Act, Chapter 36.70A RCW, as implemented by the city’s comprehensive plan.
B. Any one or a combination of these purposes may be furthered by the designation of a residential targeted area under this chapter. (Ord. 2007-377 § 1).
3.60.020 Definitions.
A. “Assessor” means the King County assessor.
B. “Director” means the director of the city’s community development department, or any other city office, department or agency that shall succeed to its functions with respect to this chapter, or the director’s designee.
C. “Household” means a single person, family, or unrelated persons living together.
D. “Multifamily housing” means a building or townhouse project having four or more dwelling units designed for permanent residential occupancy resulting from new construction or rehabilitation or conversion of vacant, underutilized, or substandard buildings.
E. “Owner” means the owner of the real property on which the project proposed for tax exemption is located. If tax exemption is requested or authorized for 12 years pursuant to this chapter, “owner” also means a nonprofit corporation that will own or owns the affordable housing units.
F. “Permanent residential occupancy” means multifamily housing that provides either rental or owner occupancy for a period of at least one month, and excludes hotels and motels that predominately offer rental accommodation on a daily or weekly basis.
G. “Rehabilitation improvements” means:
1. Modifications to an existing structure, the residential portion of which has been vacant for at least 12 months prior to application for exemption under this chapter, that are made to achieve a condition of substantial compliance with the applicable building and construction codes contained in NMC Title 15; or
2. Modifications to an existing occupied residential structure or mixed use structure that contains occupied residential units and that adds at least four multifamily dwelling units.
H. “Residential targeted area” means an area within an urban center as defined by Chapter 84.14 RCW that has been so designated by the city council pursuant to this chapter.
I. “Substantial compliance” means compliance with the applicable building and construction codes contained in NMC Title 15 that is typically required for rehabilitation as opposed to new construction. (Ord. 2007-377 § 1).
3.60.030 Residential targeted areas – Criteria – Designation – Rescission.
A. Following notice and public hearing as prescribed in RCW 84.14.040, the city council may designate one or more residential targeted areas, in addition to the area stated in subsection (D) of this section, upon a finding by the city council that the residential targeted area meets the following criteria:
1. The residential targeted area is within an urban center as defined by Chapter 84.14 RCW;
2. The residential targeted area lacks sufficient available, desirable and convenient residential housing to meet the needs of the public who would be likely to live in the urban center if desirable, attractive and livable residences were available; and
3. Providing additional housing opportunity in the residential targeted area will assist in achieving one or more of the following purposes:
a. Encourage increased residential opportunities within the city; or
b. Stimulate the construction of new multifamily housing; or
c. Encourage the rehabilitation of existing vacant and underutilized buildings for multifamily housing.
B. In designating a residential targeted area, the city council may also consider other factors, including:
1. Whether additional housing in the residential targeted area will attract and maintain an increase in the number of permanent residents;
2. Whether providing additional housing opportunities for low and moderate income households would meet the needs of citizens likely to live in the area if housing was available;
3. Whether an increased permanent residential population in the residential targeted area will help to achieve the planning goals mandated by the Growth Management Act under Chapter 36.70A RCW, as implemented through the city’s comprehensive plan; or
4. Whether encouraging additional housing in the residential targeted area supports better jobs and housing balance.
C. At any time the City Council may, by ordinance, amend or rescind the designation of a residential targeted area pursuant to the same procedural requirements as set forth in this chapter for original designation.
D. The Community Business Center/Lake Boren Corridor, as shown on Exhibit A attached to the ordinance codified in this chapter and incorporated by this reference as if fully set forth herein, meets the criteria of this chapter on residential targeted areas (hereafter “RTA”) and is designated as such. (Ord. 2007-377 § 1).
3.60.040 Project eligibility.
To be eligible for exemption from property taxation for a period of eight years under this chapter, the property shall satisfy all of the following requirements:
A. The property must be located in a residential targeted area.
B. A building or buildings in the project on the property shall have at least four dwelling units. Any project may be proposed in phases. If applicable, the affordable housing units may be located in all or some of the buildings in the project.
C. For new construction, a minimum of four new dwelling units must be created; for rehabilitation or conversion of existing occupied structures, a minimum of four additional dwelling units must be added.
D. Existing dwelling units proposed for rehabilitation shall have been unoccupied for a minimum of 12 months prior to submission of an application and shall fail to comply with one or more requirements the building code as set forth in NMC Title 15.
E. No application may result in the net loss of existing affordable housing which receives housing assistance through federal low or moderate income housing programs (e.g., HUD Section 8 program).
F. The project must meet all adopted and applicable plan and Newcastle Municipal Code requirements.
G. New construction of multifamily housing and rehabilitation improvements shall be scheduled to be completed within three years from the date of approval of the application, or within an authorized extension of this time limit.
H. In addition to the foregoing, the following are required for consideration of a project under this chapter:
1. The project is designed with high architectural quality and will be an aesthetic benefit to the fulfillment and implementation of the vision for the CBC as set forth in the city’s comprehensive plan;
2. While LEED certification will not be required, it will be encouraged. The project will be sustainable or, if the city council has established sustainability targets, the project will meet or exceed such targets;
3. The project must be a mixed-use project that includes housing;
4. The project must include a civic or cultural use available to the community at large, such as but not limited to:
a. A library;
b. Municipal offices;
c. A museum or art gallery;
d. A performance/recital space;
e. Additional structured parking that facilitates increased transit usage;
f. An entertainment or recreation venue;
g. A child-care facility;
h. A public meeting space; or
i. Another similar beneficial civic or cultural use acceptable to the city council. (Ord. 2007-377 § 1).
3.60.050 Application procedure – Fee.
A. The owner of property applying for exemption under this chapter shall submit an application to the director, on a form established by the director. The owner shall verify the application by oath or affirmation. The application shall contain such information as the director may deem necessary or useful, and shall include:
1. A brief written description of the project, including phasing if applicable, and preliminary schematic site and floor plans of the multifamily units and the structure(s) in which they are proposed to be located;
2. A statement from the owner acknowledging the potential tax liability when the property ceases to be eligible for exemption under this chapter; and
3. In the case of rehabilitation of an existing vacant structure, verification of noncompliance with applicable building and housing codes, and an affidavit from the owner verifying that the existing dwelling units have been vacant for a period of 12 months prior to filing the application.
B. At the time of application under this section, the owner shall pay an initial application fee as established by resolution and pursuant to the provisions of Chapter 84.14 RCW. In addition, at the time of application under this section, the owner shall pay a fee as established by resolution to cover the county assessor’s administrative costs. If the director approves the application, the city shall forward the fee for the county assessor’s administrative costs to the county assessor. If the director denies the application, the city shall refund the fee for the assessor’s administrative costs to the applicant.
C. The director shall notify the owner within 28 days of the application being filed if the director determines that an application is not complete and shall identify what additional information is required before the application will be complete. Within 14 days of receiving additional information, the director shall notify the owner in writing if the director determines that the application is still not complete, and what additional information is necessary. An application shall be deemed to be complete if the director does not notify the applicant in writing by the deadlines in this section that the application is incomplete; however, a determination of completeness does not preclude the director from requiring additional information during the review process if more information is needed to evaluate the application according to the criteria in this chapter.
D. The application shall be submitted any time before, but no later than, the date the building or other construction permit is issued under NMC Title 15. (Ord. 2007-377 § 1).
3.60.060 Application review – Issuance of conditional certificate – Denial – Appeal.
The following process shall govern the approval or denial of an application:
A. Following a determination that an application is complete pursuant to NMC 3.60.050, the director shall make a recommendation to the city council for approval or denial of the application.
B. Should the director recommend approval of the application, such recommendation shall include a proposed contract for execution by the city and the applicant which includes the terms and conditions of the project.
C. Upon receipt of the director’s recommendation, the city council shall pass a resolution accepting, modifying, or rejecting the director’s recommendation concerning the application and proposed contract.
D. The resolution approving, modifying, or rejecting the director’s recommendation shall be passed within 90 days of the director’s receipt of the completed application. Upon the city council’s passage of a resolution approving or modifying the application and proposed contract, the director shall execute the contract, which shall be substantially in the form of the contract as approved or modified by the city council, and the director shall issue a conditional certificate of acceptance of tax exemption. The conditional certificate shall expire three years from the date of passage of the resolution unless an extension is granted as provided in this chapter.
E. If the application is denied, the city council’s resolution shall contain the reasons for the denial and a copy of the resolution shall be sent to the owner’s last known address within 10 days of the denial.
F. An aggrieved party may appeal the decision to superior court under RCW 34.05.510 through 34.05.598 if the appeal is properly filed within 30 days of the date of date the copy of the resolution is postmarked for mailing to the applicant. (Ord. 2007-377 § 1).
3.60.070 Amendment of contract.
A. Any owner seeking an amendment to the contract may do so by submitting a request in writing to the director at any time within three years of the date of the city council’s approval of the contract.
B. The director shall have authority to approve amendments to the contract that are reasonably within the scope and intent of the approved contract. Amendments that are not reasonably within the scope and intent of the approved contract, as determined by the director, shall be transmitted to the city council for approval by resolution.
C. Any owner seeking amendments to the contract, which in the sole discretion of the director require approval by the city council, shall pay to the city an amendment application fee as established by resolution.
D. The date for expiration of the conditional certificate shall not be extended by contract amendment unless: (1) all the conditions for extension set forth in NMC 3.60.080 are met, or (2) the conditions set forth in NMC 3.60.080(A) and (B) are met. (Ord. 2007-377 § 1).
3.60.080 Extension of conditional certificate.
The conditional certificate may be extended by the director for a period not to exceed 24 consecutive months. The owner shall submit a written request stating the grounds for the extension together with a fee as established by resolution. The director may grant an extension if the director determines that:
A. The anticipated failure to complete construction or rehabilitation within the required time period is due to circumstances beyond the control of the owner;
B. The owner has been acting and could reasonably be expected to continue to act in good faith and with due diligence; and
C. All the conditions of the original contract between the applicant and the city will be satisfied upon completion of the project. (Ord. 2007-377 § 1).
3.60.090 Final certificate – Application – Issuance – Denial and appeal.
A. Upon completion of the rehabilitation improvements or new construction as provided in the contract between the applicant and the city, and upon issuance of a certificate of occupancy, the owner may request a final certificate of tax exemption. The owner shall file with the director such information as the director may deem necessary or useful to evaluate eligibility for the final certificate, and shall include:
1. A statement of expenditures made with respect to each multifamily housing unit and the total expenditures made with respect to the entire property;
2. A description of the completed work and a statement of qualification for the exemption; and
3. A statement that the work was completed within the required three-year period or any approved extension.
B. Upon the director’s receipt of all materials required for a final certificate, the director shall make a recommendation to the city council as to whether the completed work is consistent with the application and contract and is qualified for exemption under Chapter 84.14 RCW, and which specific improvements completed meet the requirements of this chapter and the required findings of RCW 84.14.060.
C. If, upon receipt of the director’s recommendation, the city council finds that the project has been completed in accordance with subsection (A) of this section, the city council shall pass a resolution directing the director to file a final certificate of tax exemption with the assessor. The resolution shall be passed within 30 days of the director’s receipt of the materials required for a final certificate. The director shall file the final certificate of tax exemption within 10 days of the city council’s passage of the resolution.
D. The director is authorized to cause to be recorded, or to require the owner to record, in the real property records of the King County department of records and elections, the contract with the city required under NMC 3.60.060(B), and such other documents as will identify such terms and conditions of eligibility for exemption under this chapter as the director deems appropriate for recording.
E. The director shall notify the owner in writing that the city will not file a final certificate if the director determines (1) that the project was not completed within the required three-year period or any approved extension or was not completed in accordance with subsection (B) of this section or (2) that the owner’s property is not otherwise qualified under this chapter.
F. Within 30 days of the date a resolution denying a final certificate, the owner may appeal the decision to superior court under RCW 34.05.510 through 34.05.598. (Ord. 2007-377 § 1).
3.60.100 Exemption – Duration – Limits.
A. The value of new housing construction and rehabilitation improvements qualifying under this chapter shall be exempt from ad valorem property taxation for eight successive years beginning January 1st of the year immediately following the calendar year of issuance of the certificate.
B. The exemption in subsection (A) of this section does not apply to the value of land or to the value of improvements not qualifying under this chapter, to increases in assessed valuation of land and non-qualifying improvements, or to increases made by lawful order of the King County board of equalization, Washington State Department of Revenue, State Board of Tax Appeals, or King County to a class of property throughout the county or a specific area of the county to achieve uniformity of assessment or appraisal as required by law. In the case of rehabilitation of existing buildings, the exemption does not include the value of improvements constructed prior to submission of the completed application required under this chapter. (Ord. 2007-377 § 1).
3.60.110 Annual certification – Cancellation of exemption.
A. A property that receives a tax exemption under this chapter shall continue to comply with the contract and the requirements of this chapter in order to retain its property tax exemption.
B. Thirty days after the anniversary of the date the city filed the final certificate of tax exemption and each year for the tax exemption period, the owner shall file a certification with the director, verified upon oath or affirmation, which shall contain such information as the director may deem necessary or useful, and shall include the following information:
1. A statement of occupancy and vacancy of the rehabilitated or newly constructed property during the previous year;
2. A certification that the property has not changed use since the date of filing of the final certificate of tax exemption;
3. A description of any changes or improvements constructed after the filing of the final certificate or last declaration;
4. The income of each renter household at the time of initial occupancy and the income of each initial purchaser of owner-occupied units at the time of purchase for each of the units receiving a tax exemption; and
5. Any additional information requested by the city in regards to the units receiving a tax exemption.
C. Failure to submit the annual declaration may result in cancellation of the tax exemption.
D. For the duration of the exemption granted under this chapter, the property shall have no violation of applicable zoning, land use and building and housing code requirements of this code for which the designated city department or contract agency shall have issued a notice of violation or notice of civil infraction that is not resolved by a certificate of compliance, certificate of release, or withdrawal within the time period for compliance provided in such notice of violation or notice of civil infraction and any extension of the time period for compliance granted by the director.
E. If the owner converts the multifamily housing to another use, the owner shall notify the director and the assessor within 60 days of the change in use. Upon such change in use, the tax exemption shall be canceled and additional taxes, interest and penalty imposed pursuant to state law.
F. The director shall recommend to the city council cancellation of the tax exemption for any property or individual unit that no longer complies with the terms of the contract or with the requirements of this chapter. The city council shall accept or reject the director’s recommendation by resolution. Upon passage of a resolution canceling the tax exemption, additional taxes, interest and penalties may be imposed pursuant to state law. Upon passage of a resolution canceling a tax exemption, the director shall mail a copy of the resolution by certified mail, return receipt requested. The owner may appeal the determination to superior court under RCW 34.05.510 through 34.05.598 if the appeal is properly filed within 30 days of the date of date the copy of the resolution is postmarked for mailing to the applicant. (Ord. 2007-377 § 1).
3.60.120 Annual reporting.
If the city issues tax exemption certificates pursuant to this chapter, the director shall submit annually by December 31st of each year to the department of community, trade and economic development the report required by RCW 84.14.100. (Ord. 2007-377 § 1).
3.60.130 Chapter review.
Following review and action on each application received and processed under the program, the city shall not entertain a subsequent application for two years after project completion to give the city the opportunity to evaluate the financial, service, and public policy costs and benefits surrounding each project approved under the program. Such evaluations will be provided to the city council periodically whether or not an application is currently pending. (Ord. 2007-377 § 1).