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HomeMy WebLinkAboutMulti-Family Housing Tax Exemption Agreement with MW Holdings SW Block LLC et Kl9 MULTI-FAMILY HOUSING TAX EXEMPTION AGREEMENT THIS AGREEMENT is entered into this 16th day of April, 2019, by and between MW Holdings Auburn SW Block LLC(hereinafter referred to as the "Owner"),and the CITY OF AUBURN,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 Area 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 Area for the provision of a limited property tax exemption for new multi- family residential housing,and WHEREAS the City has,through Chapter 3.94 Auburn City Code(ACC), enacted a program whereby property owners may qualify for a Final Certificate of Tax Exemption which certifies to the King County Assessor that that the owner is eligible to receive a limited property tax exemption, and WHEREAS the Owner is interested in receiving the multi-family property tax exemption for new/rehabilitated multiple family residential housing units in a Residential Target Area,and WHEREAS the Owner has submitted to the City a complete application form for no fewer than fifty(50) units of new/rehabilitated multi-family housing within a residential structure or as part of an urban development,and WHEREAS the Ownerhas submitted to the City preliminary site plans and floor plans for multi-family residential housing to be constructed on said property legally described in attached EXHIBIT A, located in the City of Auburn, King County,Assessor's Parcel Number(s) 7815700225, 7815700240, 7815700250, 7815700265,commonly known as the Auburn Towncenter Apartments project, hereinafter referred to as the"Site,"and 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: 1. 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 Auburn City Code(hereinafter referred to as the "ACC")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 fifty(50) units of multifamily housing within a residential structure or as part of an urban development. 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 x 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-income households as defined by Section 3.94.030 ACC). 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: 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 King 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, 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 certificate 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;and, 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 Auburn City Code (ACC)3.94.110 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 multi-family residential use. The parties further acknowledge that the certificate of occupancy issued by the City is for multi-family 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 King County Assessor and the City's Department of Community Development within 60 days of such change in use. 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 Owner 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. 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. 17. Nothing in this Agreement shall permit or be interpreted to permit either party to violate any provision of Chapter 84.14 RCW or ACC Chapter 3.94: 18. No modifications of this Agreement shall be made unless mutually agreed upon by the parties in writing. 19. 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 84.14.119. The Owner further acknowledges its awareness and understanding of the process implemented by the King County Assessor's Office for the appraisal and assessment of property taxes. The Owner agrees that the City is not responsive for the property value assessment imposed by King county at any time during the exemption period. 20. 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. IN WITNESS WHEREOF the parties hereto have executed this Agreement as of the day and year first above written. City of Auburn Property Owner iral%r)C4)44444 MW Holdings Auburn SW Block LLC By: R.D. Merrill Real Estate Holdings, LLC Nancy Backus, Mayor Its: g M• • B d �-� �-- William D. Pettit III, Preside Je Tate, r` irector of Community Development / Shelley Colema Director of Finance Approved 91,- .$m: Steven Gross,City Attorney Exhibit A LOTS 1 THROUGH 8, BLOCK 5,TOWN OF SLAUGHTER,ACCORDING TO THE PLAT THEREOF RECORDED IN VOLUME 2 OF PLATS, PAGE 56, RECORDS OF KING COUNTY,WASHINTON; TOGETHER WITH THAT PORTION OF THE VACATED ALLEY ADJACENT, WHICH ATTACHED THERETO BY OPERATION OF LAW, PURSUANT TO CITY OF AUBURN ORDEINANCE NO. 5842, RECORDED UNDER RECORDING NUMBER 20040708002028; EXCEPT THAT PORTION OF SAID LOT 5 CONVEYED TO THE CITY OF AUBURN FOR STREET PURPOSES UNDER RECORDING NUMBER 20010508002955; SUBJECT TO A 20 FOOT WIDE UTILITY EASEMENT OVER, UNDER AND ACROSS THAT PORTION OF THE VACATED ALLEY ADJACENT,WHICH ATTACHED THERETO BY OPERATION OF LAW, PURSUANT TO CITY OF AUBURN ORDINANCE NO.5842, RECORDED UNDER RECORDING NUMBER 20040708002028. (A PORTION OF SIAD BLOCK 5 ALSO BEING KNOWN AS LOTS A AND B,CITY OF AUBURN LOT LINE ADJUSTMENT NUMBER LLA-05-0015, RECORDED UNDER RECORDING NUMBER 20060117002764).