A developer wants to buy what was once Virginia Manor, a now-boarded-up building at 3515 Hoyt Ave. that has been empty since 1996, and turn it into a 53-unit apartment complex.
But the prospective buyer wants the Everett City Council to expand a property tax exemption aimed at increasing multifamily housing. The City Council is expected to decide the issue at its meeting at 6:30 p.m. Wednesday. Council members last week discussed the exemption but delayed action to learn more about it.
Approval would amend an existing ordinance by changing the boundary of the Multiple Family Property Tax Exemption Area. The change would add six blocks -- between 33rd Street and 36th Street, from Rucker to Colby avenues -- to the tax-exemption area. Such areas are authorized by state law.
Allan Giffen, the city's planning director, said the tax exemption would apply only to the value of new improvements made to renovate the building for residential use. The value of the land and of the existing building would not be exempt from property taxes. Annual property taxes on the site are now $14,961, of which $3,887 is for the city.
The tax exemption wouldn't be permanent. It would last eight years for an owner creating market-rate rental units, which Giffen said is what the prospective buyer plans. It would last 12 years if at least 20 percent of units qualified as affordable rentals.
"There is a party trying to redevelop the property," said Scott Robertson, of Robertson & Associates Commercial Real Estate. The Bellevue-based company is working with the prospective buyer and the building's owner, Merrico Trust. The 44,000-square-foot nursing home was built in 1964 by C. Raymond Merriwether, now deceased.
"The concept is not unique," Robertson said. "It's an incentive used by a number of jurisdictions. One area, Renton -- it's been very successful for them.
"It makes it possible for property that needs to be redeveloped and improved to come in at a reasonable value, so the land owner is able to sell at a reasonable price and the developer removes a little bit of risk," he said.
The price he is negotiating is "nothing I can share," Robertson said. "We're working together trying to make this happen. Everybody wants this."
City Councilman Scott Murphy asked last week about whether the change would cost Everett tax revenue. Giffen said if the property is not redeveloped, the city would continue collecting taxes at the current rate. If it is renovated into apartments, the owner would still pay property taxes on the value of the land and the existing building.
"The net effect could be positive," Giffen said last week, citing the services any new residents would need. "Without the exemptions, we would not have done other developments downtown."
The location is close to downtown workplaces, Giffen said Monday. "It's walking distance to the courthouse or The Everett Clinic," he said.
"This is the kind of property, close to downtown, that the tax exemption is designed for," Everett City Council member Brenda Stonecipher said at last week's meeting. "It can be the tipping point that causes a developer to take on a project."
Julie Muhlstein: 425-339-3460, email@example.com.
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