Property tax incentive for Paceline Apartments

Sunday, September 10, 2017

Paceline Apartments
New development, such as the Paceline Apartments at 172nd and Aurora (see previous article) can qualify for Property Tax Exemption (PTE).

Any multifamily builder of at least 4 units may apply for a property tax exemption; however, they must enter into an agreement with the city that requires 20% of its units being affordable, and that exemption can be removed if they do not comply.

The exemption is not for all property tax, nor is it indefinite in length; it is only on the value of the improvements and it lasts for 12 years.

When completed, Paceline Apartments will be a recipient of Shoreline’s Property Tax Exemption program (PTE), beginning the first full year after occupancy.

In return for 12 years of exemption on property taxes on new improvements – the owner continues to be required to pay property tax on the value of the land -- the project will provide 44 units of affordable housing.

According to Dan Eernissee, Shoreline Economic Development Program Manager, "After 12 years, Paceline will pay a large amount of property taxes as the value of the improvements are — and will continue to be -- significant."

The PTE program is a Washington State program that creates a mechanism for all state property tax payers to contribute to an incentive that discourages sprawl by encouraging multifamily development and affordable housing in urbanized areas.

Only 14.11% of Shoreline property tax goes to the City; therefore the City of Shoreline is only contributing that percentage toward the PTE incentive.

There are standards for the number of parking stalls new apartment buildings must provide. However, any project can apply for a reduction on parking based on things such as proximity of transit.

Paceline, which is marketing itself to bicycle commuters, and is located right on Aurora near 175th, applied for and received a 5% reduction for its project (11 stalls).

Eernissee says that Paceline must provide discounted ORCA passes, provide 5 free bicycles, and must continually verify that its long-term parking demand is being met.

Further, the Paceline developer is participating in Seattle City Light “Built Smart” program. The program is designed to encourage the construction of buildings that provide maximum comfort and also incorporate resource conservation.



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