EVERETT — The development company aiming to revitalize an abandoned industrial site southeast of downtown wants to cash in on a federal program designed to lure commercial developments to low-income areas.
San Diego’s OliverMcMillan is seeking up to $100 million in new market tax credits from the Treasury Department to help finance its sweeping planned development between Snohomish River and I-5.
“It’s an exciting new financing tool that’s available,” said City Councilman Mark Olson, who sits on the council’s riverfront committee.
OliverMcMillan plans to open the Everett Riverfront District by spring 2012. At build-out, the project could include as many as 1,400 houses and condos, more than 1 million square feet of retail and hotel space, and a movie theater complex.
The new market tax credit program has been used successfully elsewhere in the state.
A developer in downtown Tacoma in 2004 used the same tax credit program to convert a crumbling, century-old cereal mill on the Thea Foss Waterway into a 36 loft-style apartments.
The same year, historic preservationists used the credits to help restore the Cadillac Hotel at Second Avenue and S. Jackson Street in Seattle’s Pioneer Square neighborhood, which now houses the Klondike Gold Rush Museum and offices for the National Park Service.
The Everett City Council on Wednesday agreed to apply for the tax credits on behalf of OliverMcMillan, which said it will reimburse the city for application costs.
This year, various development projects in low-income areas around the country will compete for $3.5 billion in these credits offered by the federal government through a competitive application process.
The city’s endorsement should lend credibility to the application, which is especially important at a time when many developers are struggling to raise capital to keep projects moving forward, Everett spokeswoman Kate Reardon said.
Before the project can qualify for tax credits, a so-called community development entity must be created.
The community development entities use money derived from the sale of tax credits to make loans to or direct investments in businesses and projects in low-income areas.
Everett plans to create such a vehicle in the form of a publicly owned and operated limited liability corporation. The company will include a board of advisers appointed by the City Council and would be subject to public disclosure laws, Reardon said.
The entity would be able to sell tax credits to investors and then use proceeds to make loans to businesses or make direct investments in commercial projects.
“It’s additional evidence that the city of Everett and OliverMcMillan are working together to make this very special place on Snohomish River,” said Charlie Hickcox, development director for the company that specializes in mixed-use developments. “I can’t emphasize that enough.”
David Chircop: 425-339-3429, dchircop@heraldnet.com.
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