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01/07/2019 - Minutes 1 City of Port Orchard Land Use Committee Meeting Minutes – January 7, 2019 Committee Members Present: Scott Diener (chair), Fred Chang, Bek Ashby (for Shawn Cucciardi) City Officials and Staff: Mayor Rob Putaansuu, Community Development Director Nick Bond, Long Range Planner Keri Sallee Chair Diener called the meeting to order at 9:33 am. 1. Discussion: Tax Abatement Zones. The committee reviewed an email received from Fire Chief Steven Wright, South Kitsap Fire and Rescue (SKFR), concerning a boundary revision that the Council is considering for the City’s adopted tax abatement areas. Because SKFR is a junior taxing district, it relies solely on property tax allocations for fire and emergency services, and property tax reductions due to tax abatement could impact SKFR’s ability to plan and fund their services. SKFR prefers that the City adopt a tax abatement period shorter than 12 years, and that SKFR be included in all future discussions about expanding tax abatement areas. Community Development Director Bond discussed a developer’s recent request to have his properties included in one of the existing tax abatement areas. The properties under discussion are located on the south side of SE Sedgwick Rd, adjacent to the east side of Fred Meyer. The site is proposed for a 113-unit apartment development. Bond said that the City Council recently discussed two options with respect to this request. The first option would revise the terms of the City’s tax abatement program, so that 12-year tax abatement only applies in the downtown area with all other designated areas limited to 8-year abatement, and would add the developer’s properties to the 8-year abatement area. The second option would add the developer’s properties to the abatement area without any other changes (which means the developer could apply for 8- or 12-year tax abatement). Bond said that Council may want to have additional discussion to clarify the goals and priorities of the tax abatement program either now or in future, with an eye toward future revision. If the City’s primary goal is to provide affordable housing, the City may want to adjust its criteria for how “affordable” is calculated. The City currently uses federal census data, including median income, that is calculated for the Bremerton-Silverdale metropolitan area, which includes all of geographical Kitsap County. If median income were calculated just for Port Orchard residents, the median income would likely be considerably lower. Councilmember Chang said that he did not support the addition of the Sedgwick properties to the tax abatement area, since they are located outside downtown in a desirable area. The City should be prioritizing downtown development and redevelopment, and should not give the impression that anyone who wants tax abatement can be added to an abatement area, no matter where a property is located. Councilmember Ashby said that most rental units in Port Orchard are already considered affordable housing. Once the Southworth fast ferry is operating, the demand for housing along the commuter corridor will likely increase and developers can charge more for rent, without the necessity of tax abatement to make their development costs “pencil out”. Additionally, new multifamily housing developments result in additional service demand and costs for the schools and SKFR. Although one-time impact fees can help with developing necessary infrastructure such as a new school, they can’t take the place of continuing property tax revenues that fund ongoing services and facility maintenance. Mayor Putaansuu said that in order to receive tax abatement outside downtown, developers should provide financial information demonstrating that a project cannot be completed without this assistance, and an affordable housing component should be required. The committee recommended that the Council discuss this issue again at the January 15 work-study meeting. 2 2. Discussion: Errol Dow Properties. Bond said that a citizen, Errol Dow, has asked to have the City sponsor a comprehensive plan amendment to redesignate portions of his properties and those of two neighbors along Old Clifton Road, from Light Industrial to Residential High Density. All of these properties must be redesignated to residential use in order to have legal road access from Anderson Hill Rd. Accessing the industrial portions of the properties from Old Clifton Rd is not feasible because a stream corridor bisects them. According to Dow, his neighboring property owners are not interested in participating with Dow in a comprehensive plan amendment application, although they would not object if the City redesignated their properties. Putaansuu said that the City’s long-term plan is to sell and develop part of the City’s industrial properties to the north, which would then provide Dow and his neighbors with industrial road access. Residential development should not be enabled on these properties, due to their location next to the City’s quarry and gun range sites. Diener said that the City should not reduce its supply of industrial land without a review of potential impacts. The committee did not recommend moving this issue to the full Council. Chair Diener adjourned the meeting at 9:41 a.m. Next Meeting/Location: The Land Use committee’s regular meeting time has been changed from the first Monday of each month, to the fourth Monday of each month. The next meeting is scheduled for January 28, 2019, in the 720 Prospect conference room.