014-17 - Resolution - Multifamily Property Tax Agreement with Ovah, LLCRESOLUTION NO. 014-17
A RESOLUTION OF THE CITY OF PORT ORCHARD, WASHINGTON, TO AUTHORIZE
THE ACCEPTANCE OF A MULTIFAMILY PROPERTY TAX EXEMPTION AGREEMENT
BETWEEN OVAH, LLC AND THE CITY RELATING TO THE TERMS AND CONDITIONS
OF THE SUBJECT MULTIFAMILY HOUSING PROJECT AND ITS ELIGIBILITY FOR THE
PROPERTY TAX EXEMPTION PROVIDED BY CHAPTER 3.48 OF THE PORT
ORCHARD MUNICIPAL CODE
WHEREAS, the Port Orchard Municipal Code (POMC), Chapter 3.48, provides a multifamily
property tax exemption pursuant to the requirements of that chapter; and
WHEREAS, POMC 3.48.050 provides that, to be eligible for the multifamily property tax
exemption, the subject project must meet the following requirements: (1) the project must be
located within a residential targeted area as defined in POMC 3.48.030; (2) the project must not
displace existing tenants; (3) existing dwelling units proposed for rehabilitation must fail to comply
with one or more standards of the applicable state or city building codes; (4) the new, converted, or
rehabilitated multiple-unit housing must provide for a minimum of 50 percent of the space for
permanent residential occupancy and must include at least 10 units of multifamily housing; (5) new
construction of multifamily housing and rehabilitation improvements must be completed within
three years from the date of approval of the application; and (6) the project must be designed to
comply with the city's comprehensive plan, building, housing, and zoning codes, and any other
applicable regulations, standards or guidelines; and
WHEREAS, POMC 3.48.070 requires that, if the Director of the Department of Community
Development approves an application for the multifamily property tax exemption, the applicant
must enter into an agreement with the City regarding the terms and conditions of the
implementation of the project; and
WHEREAS, the multifamily property tax exemption agreement must be approved by the
Port Orchard City Council, in the form of a resolution, regarding the terms and conditions of the
project and eligibility for exemption under Chapter 3.48 POMC; and
WHEREAS, the Director of the Department of Community Development has determined
that the subject project meets the eligibility requirements set forth in POMC 3.48.050; has approved
the application for tax exemption; and recommends approval of the attached Multifamily Housing
Limited Property Tax Exemption Agreement as accurately setting forth the terms and conditions of
the subject project and eligibility for exemption under Chapter 3.48 POMC; and
WHEREAS, the Port Orchard City Council has determined to approve the attached
Multifamily Housing Limited Property Tax Exemption Agreement; now, therefore,
Resolution No. 014-17
Page 2 of 7
THE CITY COUNCIL OF THE CITY OF PORT ORCHARD, WASHINGTON, HEREBY RESOLVES AS
FOLLOWS:
THAT: The recitals set forth above are hereby incorporated by reference as if set forth in
full herein.
1. Authorization for Signature. The City of Port Orchard hereby authorizes the Mayor to
accept and sign the attached Multifamily Housing Limited Property Tax Exemption
Agreement.
PASSED by the City Council of the City of Port Orchard, SIGNED by the Mayor and attested
by the City Clerk in authentication of such passage this 28th day of March, 2017.
Robert Putaansuu, Mayor
ATTES ~
Brandy Rinearson, CMC, City Clerk
CITY OF PORT ORCHARD
MULTI-FAMILY HOUSING LIMITED PROPERTY
TAX EXEMPTION AGREEMENT
THIS AGREEMENT is entered into this,;) Y day of «.BvyrL,£ , 201Jby and
between d V/41+ I~ (hereinafter referred to as the "Owner"), and the
CITY OF PORT ORCHARD, a municipal corporation of the State of Washington
(hereinafter referred to as the "City").
WITNESSETH:
WHEREAS the City has an interest in stimulating new construction or rehabilitation of
multi-family housing in Residential Target Areas in order to reduce development pressure on
single-family residential neighborhoods, to increase and improve housing opportunities, and to
encourage development densities supportive of transit use, and
WHEREAS the City has, pursuant to the authority granted to it by Chapter 84.14 RCW,
designated various Residential Target Areas for the provision of a limited property tax
exemption for new multi-family residential housing, and
WHEREAS the City has, through Chapter 3.48 Port Orchard Municipal code (POMC),
enacted a program whereby property owners may qualify for a Final Certificate of Tax
Exemption which certifies to the Kitsap County Assessor that the owner is eligible to receive a
limited property tax exemption, and
WHEREAS, The Owner is interested in receiving the multiple family property tax
exemption for new/rehabilitated multiple family residential housing units in a residential targeted
area; and
WHEREAS, The Owner has submitted to the City a complete application form for no
fewer than ten (10) units of new/rehabilitated multifamily housing within a residential structure
or as part of an urban development. In the case of existing multifamily housing that is occupied
or which has not been vacant for twelve (12) months or more, the multifamily housing project
must also provide for a minimum of four (4) additional multifamily units for a total project of at
least ten (10) units including the four (4) additional units. Existing multifamily housing that has
been vacant for twelve (12) months or more does not have to provide additional units.
WHEREAS the Owner has submitted to the City preliminary site plans and floor plans
for multi-family residential housing to be constructed on said property legally described as:
Y/ID -~'{20 0,.LA:t/ D Q ST. , in the City of Port Orchard, Kitsap County.
Assessor's Parcel Number(s) .3o:l. 402-3-662 ~2.~~mmonly known as
~t/A-fl-. llt!-{J6'bJAC. 1/tt:I.J tl-1'/ttZf~tArr ~ mt:S , hereinafter referred to
as the ,zSite," and
MUL TI-FAMILY HOUSING LIMITED PROPERTY TAX EXEMPTION AGREEMENT
WHEREAS the City has determined that the improvements will, if completed as
proposed, satisfy the requirements for a Final Certificate of Tax Exemption;
NOW, THEREFORE, the City and the Owner do mutually agree as follows:
l. The City agrees to issue the Owner a Conditional Certificate of Acceptance of Tax
Exemption.
2. The Owner agrees to construct on the Site multi-family residential housing
substantially as described in the most recent site plans, floor plans, and elevations on file with the
City as of the date of administrative approval of this Agreement.
3. The project must comply with all applicable zoning requirements, land use
requirements, design review requirements and all building, fire, and housing code requirements
contained in the Port Orchard Municipal Code (herein referred to as the "POMC") at the time a
complete application for a building permit is received.
4. Existing dwelling units proposed for rehabilitation must fail to comply with one or
more standards of the applicable State or City building codes.
5. The new, converted, or rehabilitated multiple-unit housing must provide for a
minimum of fifty (50) percent of the space for permanent residential occupancy. The project,
whether new, converted, or rehabilitated multiple-unit housing, must include at least ten (10)
units of multifamily housing within a residential structure or as part of an urban development. In
the case of existing multifamily housing that is occupied or which has not been vacant for twelve
(12) months or more, the multifamily housing project must also provide for a minimum of four
( 4) additional multifamily units for a total project of at least ten ( 10) units including the four ( 4)
additional units. Existing multifamily housing that has been vacant for twelve (12) months or
more does not have to provide additional units.
6. The Owner agrees to complete construction of the agreed upon improvements within
three years from the date the City issues the Conditional Certificate of Acceptance of Tax
Exemption, or within any extension thereof granted by the City.
7. The Owner is requesting an __ EIGHT or a~ TWELVE year (check one)
limited property tax exemption. (If a twelve year exemption, the Owner commits to renting or
selling at least twenty percent (20%) of the multifamily housing units constructed on the site as
housing units affordable for low or moderate-income households as defined by Section 3.48.040
POMC).
8. The Owner agrees, upon completion of the improvements and upon issuance by the
City of a temporary or permanent certificate of occupancy, to file with the City's Department of
Community Development the following:
MULTI-FAMILY HOUSING LIMITED PROPERTY TAX EXEMPTION AGREEMENT
2
(a) A statement of expenditures made with respect to each multi-family housing
unit and the total expenditures made with respect to the entire property;
(b) A description of the completed work and a statement of qualification for the
exemption; and
(c) A statement that the work was completed within the required three (3) year
period or any authorized extension.
( d) If applicable, that the project meets the affordable housing requirements as
described in RCW 84.14.020.
9. The City agrees, conditioned on the Owner's successful completion of the
improvements in accordance with the terms of this Agreement and on the Owner's filing of the
materials described in Paragraph 8 above, to file an eight or twelve year, as applicable, Final
Certificate of Tax Exemption with the Kitsap County Assessor.
10. The Owner agrees, within 30 days following the first anniversary of the City's filing
of the Final Certificate of Tax Exemption and each year thereafter for a period of eight or twelve
years, as applicable, to file a notarized declaration with the City's Department of Community
Development indicating the following:
(a) A statement of occupancy and vacancy of the multi-family units during the
previous twelve (12) months;
(b) A certification that the property continues to be in compliance with this
Agreement; and,
( c) A description of changes or improvements constructed after issuance of the
certificate of tax exemption.
( d) A statement of 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 a summary of these figures.
(e) Any information needed by the City to file its annual report pursuant to
Port Orchard Municipal Code (POMC) 3.48.110 and any additional information requested by
the City in regards to the units receiving a tax exemption.
11. The parties acknowledge that the units are to be used and occupied for multifamily
residential use. The parties further acknowledge that the certificate of occupancy issued by the
City is for multifamily residential. units. The Owner acknowledges and agrees that the units shall
be used primarily for residential occupancy and any business activities shall only be incidental
and ancillary to the residential occupancy.
12. If the Owner converts to another use any of the new multi-family residential housing
units constructed under this Agreement, the Owner shall notify the Kitsap County Assessor and
the City's Department of Community Development within 60 days of such change in use.
MULTI-FAMILY HOUSING LIMITED PROPERTY TAX EXEMPTION AGREEMENT
3
13. The Owner agrees to notify the City promptly of any transfer of Owner's ownership
interest in the Site or in the improvements made to the Site under this Agreement.
14. For purposes of this agreement, "Owner" shall mean the Owners Association of a
condominium complex once such association is established which shall be responsible for all
reporting requirements required herein on behalf of the owners of individual condominium
units.
15. The City reserves the right to cancel the Final Certificate of Tax Exemption should
the Owner, its successors and assigns, fail to comply with any of the terms and conditions of
this Agreement.
16. Nothing in this Agreement shall permit or be interpreted to permit either party
to violate any provision of Chapter 84.14 RCW or POMC Chapter 3.48.
17. No modifications of this Agreement shall be made unless mutually agreed upon
by the parties in writing.
18. The Owner acknowledges its awareness of the potential tax liability involved if and
when the property ceases to be eligible for the incentive provided pursuant to this agreement.
Such liability may include additional real property tax, penalties and interest imposed pursuant
to RCW 84.14.110. The Owner further acknowledges its awareness and understanding of the
process implemented by the Kitsap County Assessor's Office for the appraisal and assessment
of property taxes. The Owner agrees that the City is not responsible for the property value
assessment imposed by Kitsap County at any time during the exemption period.
19. In the event that any term or clause of this Agreement conflicts with applicable law,
such conflict shall not affect other terms of this Agreement which can be given effect without
the conflicting term or clause, and to this end, the terms of this Agreement are declared to be
severable.
20 . This Agreement shall be a covenant running with the land and shall be binding on
the assigns, heirs and successors of the Owner.
IN WITNESS WHEREOF the parties hereto have executed this Agreement as of the
day and year first above written.
MULTI-FAMILY HOUSING LIMITED PROPERTY TAX EXEMPTION AGREEMENT
4
Approved as to Form:
'\ ,/')
-~ ~~·--·
s, City Attorney
STATE OF WASHINGTON )
. {.._1(jY ' ) ss .
County otifrtsttp~-,."j-)
On this ~-day of .. ft br J,.1 ·~~-, 201.!., before the undersigned , a Notary Public in and
for the State of Washington, duly co;,:imissioned and sworn, personally appeared
Scott Fitzsimmons and Mark Nordlie, to me known to be the authorized signors and the persons
who executed the foregoing instrument, and acknow ledged said instrument to be the free and
vo luntary act and deed of said persons , for the usual purposes therein mentioned.
WITNESS my hand and official seal hereto affixed the day and year first above w~itten . ., ~-/,' ,,. / ~) ~/y
,, / f t:.'.., ~2 -·-----~0i~:--i;TA;(;:BL~~ ------
Notary Public / h / 1
Slate ol Washington Printed Name: [lo1;v,l C () Cu~-:£..
RONALD O CUELLAR
My /\ppo inlmenl Expires Aug 26 , 2017 Residing at .F'-1.Jd,u,. ( ()~.::,!._, ______ _
My commission expires ..!2Ji...)_). 1,JtJ..t ·-,_
(notary seal)
MULTT --FAMJLY HOlJSTNG LIMLTED PROP ERTY TAX EXEJ\,fl'T!ON AGREEMENT
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