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HomeMy WebLinkAboutCOW 2014-07-14 Item 5C - Discussion - Washington Place Development Fee DeferralCOUNCIL AGENDA SYNOPSIS Meetin ' Date P ',tired b Ma or review Council review 07/14/14 DCS ma= ; °- ❑ Bid2lward Mtg Date ❑ Public Hearing Mtg Date ❑ Other Mtg Date SPONSOR ❑ Council /1 Mayor ❑ HR 0 DCD ❑ Finance ❑ Fire ❑ IT ❑ P&R ❑ Police ❑ PW SPONSOR'S The owners of 223 Andover Park East would like to develop a mixed -use building that SUMMARY includes 370 multi - family residential units and 189 hotel rooms. They have requested a property tax exemption on the multi - family portion and a reduction and deferral of permit and impact fees. The Council is being asked to discuss and provide guidance to staff. No action is requested at this time. REVIEWED BY ❑ COW Mtg. ❑ CA &P Cmte ❑ Utilities Cmte ❑ Arts Comm. DATE: 07/08/14 I4 F &S Cmte ❑ Transportation Cmte Comm. ❑ Planning Comm. h CHAIR: DUFFIE ❑ Parks COMMIT 1 ITEM INFORMATION ITEM No. 5.C. 71 STAFF SPONSOR: DEREK SPECK ORIGINAL AGENDA DA i i:: 07/14/14 AGENDA ITEM TITLE Washington Place Development Fees and Property Tax CATEGORY /1 Discussion Mtg Date 07/14/14 ❑ Motion Mtg Date ❑ Resolution Mtg Date ❑ Ordinance Mtg Date ❑ Bid2lward Mtg Date ❑ Public Hearing Mtg Date ❑ Other Mtg Date SPONSOR ❑ Council /1 Mayor ❑ HR 0 DCD ❑ Finance ❑ Fire ❑ IT ❑ P&R ❑ Police ❑ PW SPONSOR'S The owners of 223 Andover Park East would like to develop a mixed -use building that SUMMARY includes 370 multi - family residential units and 189 hotel rooms. They have requested a property tax exemption on the multi - family portion and a reduction and deferral of permit and impact fees. The Council is being asked to discuss and provide guidance to staff. No action is requested at this time. REVIEWED BY ❑ COW Mtg. ❑ CA &P Cmte ❑ Utilities Cmte ❑ Arts Comm. DATE: 07/08/14 I4 F &S Cmte ❑ Transportation Cmte Comm. ❑ Planning Comm. h CHAIR: DUFFIE ❑ Parks COMMIT 1 RECOMMENDATIONS: SPONSOR /ADMIN. COMMI!TEE Mayor's Office - Economic Development Unanimous Approval; Forward to Committee of the Whole COST IMPACT / FUND SOURCE EXPENDITURE REQUIRED AMOUNT BUDGETED APPROPRIATION REQUIRED $0 $0 $0 Fund Source: Comments: MTG. DATE RECORD OF COUNCIL ACTION 07/14/14 MTG. DATE ATTACHMENTS 07/14/14 Informational Memorandum dated 7/9/14 Informational Memorandum dated 7/2/14, including attachments Minutes from the Finance and Safety Committee meeting of 7/8/14 71 72 City of Tukwila Jim Haggerton, Mayor INFORMATIONAL MEMORANDUM TO: City Council FROM: Economic Development Administrator DATE: July 9, 2014 SUBJECT: Washington Place Development Fees and PropertyTax ISSUE On July 8, 2014 the Finance and Safety Committee discussed the development fees and property tax for the proposed Washington Place development. At that meeting, the Committee requested a summary of options for the Council to consider. Those options are provided below. BACKGROUND The property owners of 223 Andover Park East would like to develop a mixed-use project C8U8d Washington Place and has requested the city to reduce or defer fees and taxes. The staff memo dated July 2, 2014 to the Finance and Safety Committee provides background information. DISCUSSION If the City is interested in adjusting fees and property tax to encourage construction of new multi-family residential units in the Urban Center, the City has four options. (1) Reduce the building permit fees and/or impact fees (2) Approved deferral of a portion of the building permit fees (3) Approve deferral of some or all of the development impact fees (traffic, parks, and fire) (4) Approve a property tax exemption on the multi-family residential portion of the project. It is important to note that while we are still performing some legal nysearCh, it is unlikely that the City could approve changes for this specific p ject. Most ikely, the City would need to adopt a fee deferral or multi-family property tax exemption program that would be based on specific criteria and apply to any pr jeot meeting that criteria. There is a significant amount of staf work needed to further research these general options. Before embarking on that work, staff would appreciate guidance as whether the Council is interested in exploring any or all of these, If sn, staff would return at a future Council meeting with specific recommendations. FINANCIAL IMPACT This topic is addressed in the July 2, 2014 memo. RECOMMENDATION The Council is requested to provide guidance on this topic. ATTACHMENTS Informationai Memorandum dated July 2, 2014 74 City of Tukwila Jim Haggerton, Mayor INFORMATIONAL MEMORANDUM TO: Finance and Safety Committee FROM: Derek Speck, Economic Development Administrator DATE: July 2, 2014 SUBJECT: Washington Place Fee Deferral Options ISSUE The property owner of 223 Andover Park East would like to develop a mixed-use project called Washington Place and has requested the City reduce or defer fees and taxes. BACKGROUND Omar and Christine Lee, as owners of the former Circuit City site at 223 Andover Park East have been working for the past few years to demolish the Circuit City building and construct a mixed-use building that would comprise 370 multi-family residential units, 188 hotel rooms and a small cafe. The Lee's are still working on pr ject design and financing. Currently, the total project cost is over $100 million. The Lee's have explained that financing the p ject is very challenging and have requested the City for any possible reduction or deferral in taxes and fees in order to increase the probability that the p jectCanbefunded.Theyp|antousetheFedera|foneigninvesturprognann(EB-5)to provide at Ieast $50 million of the project ject funding. Given the repayment arrangements they would have with those investors, the Lee's have indicated they would have greater ability to pay taxes and fees starting five years after receiving certificate of occupancy. Currently, the Lee's have requested: (1) the development permit fees to be limited to $600,000, (2) the development impact fees to be reduced to the extent possible and deferred for payment in years five through eight after receiving a certificate of occupancy, and (3) to receive approval for an eight year property tax exemption on the multi-family residential portion of the project. Following is our most current estimate of the permit and impact fees and when they would be required to be paid per current City policy. The fees are based on the City's adopted fee schedules and are intended to cover the City's costs of providing the related services. INFORMATIONAL MEMO Page 2 Current Estimate of Development Fees Due at Permit Application Due at Permit Issuance Total Building $208,000 $336,000 $544,000 Mechanical 13,000 54,000 67,000 Plumbing 2,000 7,000 9,000 Electrical 16,000 67,000 83,000 Traffic Concurrency 12,000 0 12,000 Traffic Impact 47,000 47,000 Fire Impact 484,000 484,000 Parks Impact 546,000 546,000 Total $251,000 $1,541,000 $1,792,000 Fees are estimates based on 189 hotel rooms and 370 apartments. Actual amounts will be calculated based on the application when submitted or when permits are issued, Additional permit fees may apply such as pavement mitigation, fire hydrants and sprinkers, special inspections, etc. Fees from non -City agencies such as water, sanitary sewer, and power are not reflected in this analysis. Developer may be required to install or contribute to infrastructure such as sanitary sewer. DISCUSSION The primary question is whether the City needs to make adjustments to the fees in order to ensure the development can move forward. We do not have a definitive answer to this question. On the one hand, the fees are less than 2% of the total project budget. Projects of this magnitude and risk do not typically move forward with higher projected returns that 2% would not make the go or no -go decision. On the other hand, this is not a typical project. Under conventional financing arrangements, this project would not be feasible since the estimated market rents for multi - family residential in Tukwila do not justify the investment. Because of the EB -5 funding method, the property owners and investors are willing to accept lower returns in early years in expectation of greater returns in later years. As such, smaller costs can add up to become significant enough to affect the go or no -go decision. The second question is whether the City would like to do what it can to adjust or defer fees to facilitate the project. Following are a number of reasons why the City may want to do so: Vision - The project supports the City's vision for future development of the urban center and would start new multi - family residential development with higher amenities (e.g. view, rooftop clubhouse) than market demand would traditionally support. Unique Opportunity - New development is often financed based on comparable rents at other properties. Since Tukwila has not had new apartment or condominium construction in decades, traditional financial markets are cautious about our market. 76 INFORMATIONAL MEMO Page 3 Given the property owner's knowledge and history in the region, alignment with the City's vision, and contacts with potential foreign investors, this is a unique opportunity. Renovation - New, quality market rate multi-family residential would garner higher rents than other apartments in Tukwila. Those higher rents may help other multi-family properties in Tukwila justify redevelopment and renovation. • Image - This would be the tallest building between Seattle, Bellevue, and Tacoma. It will be very visible and can improve Tukwila's image and solidify Tukwila's Southcenter District as the premier location to live, work, and play between Seattle and Tacoma. • Public Safety - May increase public safety with more "eyes on the street" in the urban center. Housing - Offers a type of housing that some Tukwila residents may desire. As units convert to ownership, it can encourage greater residential stability. • Tax Revenues — The proposed p ject has a significantly much higher property value than would be likely under traditional market conditions. The property valuation for the proposed development is probably ten times greater than as a single story retail building. That additional valuation can result in higher construction sales tax and property taxes. Even if the City approves a multi-family property tax exemption, the one-time construction sales would be approximately $600,000 and annual property tax, sales tax, and real estate excise tax would range from S95,000 in year one to nearly $150,000 in year eight (see attached exhibit). It is important to remember that the City will incur costs to provide police, fire, parks, and public infrastructure services. We have not quantified those costs but believe they would be Iess than the revenues. Attracts Investment— Some of the EB-5 investors have significant wealth and may want to invest in future p j8ctSb8G8dOnth8SUCC8SSOfthiSOO8. Stimulates De t— If this p ject is successful, it provides an example that will facilitate other multi-family p jects to develop and may stimulate development of other types in the urban core. • Capacity to Defer— The City has some discretion as to when to incur the costs related to impact fees. For instance, if the fees are deferred, the City can choose to defer the related capital improvements to match with when the fees are received. Or, the City could borrow to complete the p jects and repay the debt as impact fees are collected. Even if the Council agrees with the above reasons to support the adjustments, there are a number of considerations why the City may not want to adjust or defer fees such as: • Precedence — The City cannot sustainably function if it reduces or defers fees on all projects. Approving adjustments for this p je{t can encourage other property owners to make similar requests. INFORMATIONAL MEMO Page 4 • Necessity — As mentioned before, it is not completely certain that adjusting the City's fees would be the deciding factor in the success of the p jeCt. The third question is what method would be most acceptable. State law provides for cities to provide multi-family property tax exemptions and some fee adjustments or deferrals. Attached is some information from the Municipal Research and Services Center (MRSC) on those programs. If the Council is interested in considering adjustments or deferrals, staff would return with specific options. The attached spreadsheet shows the fee and revenue cash flows assuming the City makes no adjustments to the fees but defers the impact fees to be paid over years five through eight after the p j8ctr8C8iv8S8CertifiC818ofoccupencyandasaumin8th8CitV8pprOveS8neiOhtye8[ multi-family property tax exemption. The Administration is interested in seeing what the City can do to encourage this development while ensuring our costs re!ated to the deveopment are covered. Staff is still researching the fee deferral and multi-family property tax exemption program and will be prepared to make a recommendation in August. Staff would like to hear Council discussion of this item to help guide the research. FINANCIAL IMPACT An estimate of the city's tax and fee revenues for the project is attached. It is important to remember that the City will incur costs to provide police, fire, parks, and public infrastructure services. We have not quantified those costs but believe they would be less than the revenues. Revenues and cost savings related to development stimulated by this project are difficult to quantify and are not included in the analysis. RECOMMENDATION The Committee is being asked to forward this item to the July 14th, 2014 Committee of the Whole meeting for discussion. Based on the discussion at COW, staff will return to a future council meeting with a recommendation. ATTACHMENTS MRSC information on Multi-Family PropertyTax Exemption MRSC Information on Fee Deferrals Projected Tax and Fee Revenues Spreadsheet 78 Municipal Research Service Center (MRSC) Multi-Family Tax Exemption Under RCW 84.14, Washington cities with a population of 15,000 or more may establish a tax exemption program to stimulate the construction of new, rehabilitated, or converted multi-family housing within designated areas of the citicn, including affordable housing. (Cities in "Buildable Lands" counties under RCW 36.70A.215, and the largest city in a GMA county where no city has 15,000 or more population may also utilize the tax exemption program.) When a project is approved under this program, the value of eligible multifamily housing improvements is exempted from property taxes for 8 or 12 years. Land, existing improvements, and non- residential improvements are not exempt. Only multiple unit projects with 4ormore units are eligible for either the 8- or 12'yoarcxcoopdon, and only property owners who commit to renting or selling at least 20 percent of units as affordable housing units to low and moderate income households are eligible for a 12-year exemption. If the property use changes in a manner inconsistent with program requirements before the 8- or 12-year exemption ends, back taxes are recovered based on the difference between the taxes paid and the taxes that would have been paid without the tax exemption. • Bellingham Municipal Code Ch. 17.82.030 - Tax Exemptions for Multi-Family Housing in Targeted Residential Areas • Kirkland Municipal Code Ch. 5.88 - Multifamily Housing Property Tax Exemption • Moses Lake Municipal Code Ch. 18.23 -Multi-Family Housing Tax Exemption � Olympia Municipal Code Ch. 5.86 - Multi-Family Dwelling Tax Exemption • Spokane Municipal Code Ch. 8.15 - Multi-Family Housing Property Tax Exemption ° Tacoma Municipal Code Title 6A, Ch 6A.II0 (m) - Tax Exemption for Multi-family Housing in Target Areas - Eight or Twelve-year property tax exemption • Vancouver Municipal Code Ch. 3.22- Multi-Family Housing Tax Exemption • Wenatchee Municipal Code Ch. 5.88 - Property Tax Exemptions for Eligible Improvements in Residentially Deficient Urban Centers • Yakima Municipal Code Ch. 11.63 - Downtown Redevelopment Tax Incentive Program Municipal Research Service Center (MRSC) Impact Fee Payment Deferral Programs Introduction Local jurisdictions have taken different approaches regarding when to collect impact fees. Most jurisdictions in Washington do not issue building permits, or in other cases, subdivision or development pconiie, until impact feeabuvebeeupuid./\ developer ibeobusu major iocooiive to pay up, since the de may not proceed with the project until fees are paid. Once permits are issued, some fear that it may become more difficult to collect the fees. Also, collection at eudiccaiugoyprovidcScnonc]cudhcuc[orpluouinguodconahoctiono[tucUihcabe[occibencvv dcrnundiszculized.flovvcvor,irupuot[ccscoUcctcduiibeocour|icra{ugcarcprcScntasigoificuot upfront expense which a developer must pay before the pr ject is generating any revenues. As a result, developers have pushed for state legislation to require jurisdictions with impact fee programs to allow deferred payrnent. Initia! attempts to pass such legislation failed. More recently, in large part to assist a building construction industry in recessi times, a number of jurisdictions have adopted new ordinances allowing deferment of impact [ocpuycncn1. Both Pierce County and Olympia have fashioned new deferred payment programs despite concerns with earlier programs. In April 2Ol3, the legislature appruvedESIlB 1652, which would have required local jursidiciioosin adopt a fee collection deferral system. However, the legislation was vetoed by the Governor. For more information about irnpact fees in Washington, see our wehpage: Impact Fees. Deferred Impact Fee Payment Code or Ordinance Examples • ICitsap County Code Ch. 4.110 - Impact Fees - See especially Sec. 4.II0.020(B) and (F) - Impact fees must be paid before issuance of certificate of oocnDarzol, w Olympia Municipal Code Sec. I5.04.040(B) - To defer impact fee payment, a developer is required to execute an impact fee deferral agreement, which is recorded and creates a lien on the property. Note, however, that some lenders have required that the impact fee deferral agreement lien be subordinated to their financing before approving loans. Ordinance includes sunset clause. • Pierce County Code Sec. 4A.I0.080(D - H) and Pierce County Ordinance No. 2010-65o - This ordinance allows owners of residential properties being constructed or improved for resale to request a voluntary lien to defer paying traffic and park impact fees until a property is sold, but no later 80 than 2 years from the date of building permit issuance, whichever comes first. Also, the webpage for the ordinance includes links to documents related to adoption process • Redmond Ordinance No. 2501, 11/2009, and Ordinance No. 2469, 06/2009 - Impact fees must be paid at time of drywall construction for individually permitted single family and detached residential construction. Ordinance includes sunset clause. • Renton Development Regulations §4-1-190(G)(6) - (12) - Fees for some types of development can be delayed until after sale of unit or 18 months from date of building permit issuance, subject to a lien • Woodland Municipal Code Ch. 3.41 - Development Impact Fees— Fire and Park, Recreation, Open Space or Trail Facilities - Woodland allows payment deferral for parks and fire facilities, but not for schools, or for its newly adopted transportation impact fees Impact Fee Deferral Programs and Documents • Sammamish Affidavit of Impact Fee Deferral • Kitsap County o Deferred Impact Fees (#5) - Handout explaining program in Q & A format o Deferred Impact Fee Acknowledgement form - Scroll down to form • Olympia Impact Fees, Community Planning and Development, 01/01/2013 - Brochure • Pierce County Impact Fee and Connection Charges Deferral Program - Includes link to brochure with questions and answers, and Request for Deferral Lien form 81 82 Projected City of Tukwila Tax and Fee Revenues Washington Place Paid at Time of Year After Certificate of Occupancy Application Issuance C of O 1 2 3 4 5 6 7 8 Ongoing Permit Fees Building $ 208,000 $ 336,000 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ 544,000 $ Mechanical 13,000 54,000 - - - - - - - - - 67,000 Plumbing 2,000 7,000 - - - - - - - - - 9,000 Electrical 16,000 67,000 - - - - - - - - - 83,000 Traffic Concurrency 12,000 - - - - - 12,000 Traffic Impact - - - - - - 11,750 11,750 11,750 11,750 47,000 Fire Impact - - - - - - 121,000 121,000 121,000 121,000 484,000 Parks Impact - - - - - 136,500 136,500 136,500 136,500 546,000 Subtotal $ 251,000 $ 464,000 $ - $ - $ - $ - $ - $ 269,250 $ 269,250 $ 269,250 $ 269,250 $ 1,792,000 $ Construction Sales Tax - 600,000 - - - - 600,000 Property Tax - - 75,000 75,750 76,508 77,273 78,045 78,826 79,614 80,410 621,425 239,582 Real Estate Excise Tax - - - - - - 50,000 50,000 50,000 50,000 200,000 50,000 Sales Tax on Hotel 20,000 40,000 41,200 42,436 43,709 45,020 46,371 47,762 326,498 50,000 Total $ 251,000 $ 464,000 $ 600,000 $ 95,000 $ 115,750 $ 117,708 $ 119,709 $ 441,004 $ 443,096 $ 445,235 $ 447,422 $ 3,539,924 $ 339,582 Subtotal Notes: (a) This table estimates taxes and fees the City of Tukwila would receive if Washington Place is completed with 370 apartments and 189 hotel rooms as a total deveopment cost of $100 million including $75 million in "hard" costs. (b) Current City policy requires impact fees to be paid at time of permit issuance. This table reflects a deferral of impact fees until years 5 -8 after issuance of a CofO. (c) Permit fee assumptions listed on separate exhibit. (d) Construction sales tax estimated based on $70 million in taxable construction costs. (e) Property tax estimated at $0.00295 per dollar of valuation. Year 1 property tax based on $25 million of assessed valuation for hotel. Increased at 1% annually. (f) Property tax assumes City approves a multi - family property tax exemption for years 1 through 8 resulting in no additional property tax for the multi - family portion until after year 8. After that, the multi - family valuation is assumed to be $50 million escalated at 1% annually. (g) Real estate excise tax assumes property sales start in year 5 with 25 residential units per year at $400,000 per unit. (h) Sales tax assumes 189 hotel rooms rented at 70% occupancy at $100 /night with phasing during year 1. (i) This table includes revenues only and does not reflect the City's associated costs of providing services. (j) This table does not reflect taxes and fees paid to other government agencies, even if collected by the City. (k) This table does not reflect what the taxes and fees would be if the Washington Place development did not occur. (I) The City would receive loding tax but that is not included in this table due to its restricted use. Mayor's Office - Economic Development Updated: July 2, 2014 84 x-,` 'T�..I `7 ��t[�/ �� � ��yC��Jt/LJ �� Finance and Safety Committee FINANCE AND SAFETY COMMITTEE Meeting Minutes July 8[20/4-5:3Op.nn.. Hazelnut Conference Room PRESENT Councilmembers: Verna Seal, Chair; Joe Duffie, Kathy Hougardy Staff: Derek Speck, Joyce Trantina, Vicky Carlsen, Eric Orevor, Bob Giberson, Laurel Humphrey Guests: Omar Lee, Christine Lee, and Matthew Chan, Washington Place CALL TO ORDER: Committee Chair Seal called the meeting to order at 5:30 p.m. I. PRESENTATIONS No presentations. U. BUSINESS AGENDA A. Purchase of Replacement Major Crimes Vehicle Staff is seeking Committee approval to purchase a Ford Taurus in the amount of $26,497,82 for the Major Crimes Division using surplus funds. Due to a significant cost savings in the replacement of the Jail Transport Van, the 2014 Police fleet replacement budget has a surplus of $79.698.58. so funds are available to accelerate the replacement of one of the Major Crimes vehicles, six of which will be approaching or surpassing their 100,000 mile replacement criteria in the 2015-2016 budget cycle. UNANIMOUS APPROVAL. B. Resolution: Authorizing Issuance of Checks Before Council Action Staff is seeking Council approval of a resolution that would allow the City to occasionally issue checks before the Council has taken action to approve those claims. The City currently pays claims twice a month, immediately after Regular Meetings. Occasionally issues arise that result in invoices being paid late, In addition, the City receives a large rebate for timely payment to US Bank for the PCard program. RCW 4224180 aliows taxing districts, including Cities, to issue checks prior to legislative approval if certain conditions are met, If this proposal is approved, the City Council will continue to retain full authority for review and approval. If a claim is disapproved by Council, it will be recognized as a receivable to the City and collection will be pursued until funds are recovered or the Council approves the claim. Committee members asked clarifying questions and asked that the voucher review form be revised to include a mechanism to alert them to which claims have already been paid under this practice. Staff agreed to revise the document. UNANIMOUS APPROVAL. FORWARD TO JULY 14, 2014 COMMITTEE OF THE WHOLE. C. Discussion nf Options for Washington Place Fees Staff provided a briefing to the Committee regarding a request from Omar and Christine Lee that the City reduce or defer fees and taxes for their mixed-use dove|oprnentproject ot223 Andover Park East known as Washington Place. Because financing for this S100 million project is ohaUenging, and the Lees are looking at ways to address an $18 million budget ����`�� de�cit.they have requested the Chvexamine any possibility for reduction ordefena|intaxes �� and/or fees to ensure funding success. The Lees plan to use the Federal foreign investor program (EB-5)to provide at Ieast $5O million of the project funding.andgiventhereVayment schedule they would arrange with those investors, they believe they would have greater ability to pay the City starting five years following receipt of the certificate of occupancy. Finance &Safety Committee Minutes July 8,2D14- Page 2 Under the City's current pV|icies, building permit fees and development impact fees for this project are estimetedto be $1,792,000 (based on 189 hotel rooms and 370 apartments), $251,000 of which is due at the time of permit application and $1,541,000 due at the time of permit issuance. The Lees have requested that the City limit the development permit fees to $800.000.O0. reduce the development impact fees to the extent posnib|e, defer those fees for payment in years 5-8 after receiving the certificate of occupancy, and receive approval for an eight-year multi-family property tax exemption. City staff agreed to evaluate the requests and contracted Heartland LLC to provide a third-party market-based perspective of the pr ject's feasibility. The Heartland analysis deems the pr jeotfinenciaUyremsonmb|eon|y as a result of the EB-5 program and the property owner's connection to investors but also indicates that a city's building permit and development impact fees are not normally responsible for project feasibility or infeasibility. 86 Staff requested that the Committee discuss the proposal and consider whether or not there is merit in moving it forward to the Committee of the Whole for further review. The Council may ultimately opt to do nothing, grant a multi-famUy tax exemption proQnann, defer bui|ding, permit or traffic, fir8, and park impact fees, or reduce permit or impact fees. Multi-family tax exemptions are common and there is staff support for such a program being applied to a limited region in the Tukwila Urban Center core. Deferral of permit fees or impact fees is also something other Cities have granted. Reduction of fees would be challenging and requires more research, which staff will provide if there is Council direction to do so. Administration's position is that it is interested in seeing what can be done to encourage this innovative development while also ensuring the City's costs are covered. It is important to note that there is no precedent in Tukwila for reduction or deferral of fees, and any consideration to do so much be carefully considered. Staff is prepared to complete its research and make a recommendation in August, but believes Council discussion will guide the remaining research. To aid in the Committee's disnusaion, staff prepared and reviewed a document outlining a scenario for deferral of traffic, fire, and parks impact fees and a multifamily property tax exemption for 8 years. Committee members asked clarifying questions and requested to hear from Mr, and Mrs. Lee and Mr. Chang, who each spoke to the difficulties in financing as well as the project's great value as a pioneering development. Mrs. Lee raised the concern that impact fees are charged per unit rather than per square foot which is a disadvantage for a project such as Washington P|ace, which includes studios and one-bedrooms alongside Iarger units. The Committee agreed to forward this item to the Committee of the Whole for further discussion, and requested that staff clearly outline the options discussed. In addition, Committee Chair Seal asked that the Heartland report be provided to Council, NO RECOMMENDATION. FORWARD TO JULY 14, 2014 COMMITTEE OF THE WHOLE FOR DISCUSSION. D. Resolution: City of Opportunity Scholarship Staff is seeking Council approval of a resolution that would amend the ~Tuhvv|e. City of OpportunityGchu|onship^poognannbyincnaoninQthefunding|eve|andn*finingproceduresin response to Iessons learned during the inaugural 2014 process. The Committee reviewed and discussed the proposal at its June 3 and June 17 meetings, most recently requesting the foliowing two changes: � Include a request for the applicant to provide a written statement that describes his or her financial need; . � Add a procedure that prohibits an employee or elected official on the selection panel from scoring a candidate to whom they are related.