HomeMy WebLinkAbout18-081 - Washington Towers, LP - Multi-Family Residential Property Tax Exemption Agreement18-081
Council Approval N/A
MULTI -FAMILY RESIDENTIAL PROPERTY TAX EXEMPTION AGREEMENT ("Agreement")
BY AND BETWEEN
CITY OF TUKWILA AND WASHINGTON TOWERS, LP
THIS AGREEMENT is entered into this'- day of Meq 2018, by and between the City of
Tukwila, Washington (the "City"), a non -charter, optional code city organized under the laws of
the State of Washington, and Washington Towers, LP, a limited partnership organized under the
laws of the State of Washington (the "Property Owner").
WHEREAS, the City desires to stimulate the construction of residential units within the
Southcenter District of the City; and
WHEREAS, Chapter 84.14 RCW permits cities to designate a residential targeted area eligible
for a certain property tax exemptions; and
WHEREAS, on December 1, 2014, the Tukwila City Council adopted City Council Ordinance
No. 2462 (as amended by Ordinance 2538), enacting a limited property tax exemption for eligible
multi -family development projects within a designated residential target area in the Tukwila
Urban Center - Transit Oriented Development (TUC-TOD) zoning district; and
WHEREAS, the Property Owner owns a 3.4 -acre parcel located at 223 Andover Park East ("the
Property") within the residential targeted area; and
WHEREAS, the Property Owner is constructing a mixed-use development project on the
Property which will include multi -family residential units (the "Project"); and
WHEREAS, in connection with the Project, the Property Owner has submitted a complete
application for the City's multi -family tax exemption in accordance with Chapter 3.90 of the
Tukwila Municipal Code (TMC); and
WHEREAS, the City has determined that the Project meets the eligibility criteria for issuance
of a conditional certificate of acceptance for the multi -family tax exemption ("MFTE"); and
WHEREAS, TMC 3.90.070(A) requires the Property Owner to enter into an agreement with
the City regarding the terms and conditions of the Project and eligibility for the multi -family tax
exemption prior to issuance of a conditional certificate of acceptance;
NOW THEREFORE, the City and the Property Owner mutually agree as follows:
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Page 1 of 7
Section 1: Property Owner's Obligations
A. The Property Owner will construct on the Property a mixed-use project substantially
consistent with the plans depicted in the attached Exhibit A, which is incorporated herein by
this reference. Construction shall be considered substantially consistent for the purposes of
this Agreement if, at a minimum, construction of the project meets the following
requirements:
i. The residential units must have an average size of at least 500 square feet per unit;
ii. A minimum of a least four dwelling units shall be constructed in either a mixed use or
residential building;
iii. A minimum of 15 percent of the residential units must be at least 900 square feet each
and contain at least two bedrooms each;
iv. The residential units must be designed and used for permanent residential occupancy as
defined by TMC 3.90.020(J);
v. Each residential unit must have its own private bathroom and a private kitchen. Units that
utilize common kitchens or shared bathrooms are not eligible for the multi -family
residential property tax exemption; and
vi. The project shall comply with all applicable zoning requirements, the development
agreement between the City of Tukwila and the Property Owner, land use regulations,
environmental requirements, building codes and fire code requirements, as outlined in
the TMC.
B. Construction of the residential units must be completed, including having a certificate of
occupancy, within three years from the date of issuance of the conditional certificate of
acceptance of tax exemption by the City, or within authorized extension limits.
C. Upon issuance of a permanent certificate of occupancy for the residential units, Property
Owner shall file with the City's Economic Development Administrator ("Administrator") the
following:
i. A statement of expenditures made with respect to each multi -family housing unit, and of
the total expenditures made with respect to the total property;
ii. A description of the completed work and a statement of qualifications for the exemption;
iii. A statement that the work was completed in the timeframe outlined in Section 1.B of this
Agreement, or within the time limit of any approved extension granted pursuant to TMC
3.90.080.
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Section 2: City Obligations
A. The City will issue a Conditional Certificate of Acceptance of Tax Exemption for the Project
("Conditional Certificate") within 45 days of execution of this Agreement. The Conditional
Certificate shall expire three (3) years from the date of issuance.
B. Upon the Property Owner's successful completion of its obligations as set forth in Section 1
of this Agreement, and after receiving a request from Property Owner for a Final Certificate
of Tax Exemption, the City shall file a Final Certificate of Tax Exemption ("Final Certificate")
with the King County Department of Assessments. The Final Certificate must be filed with
the assessor no later than 40 days after the City's receipt of all materials required for the final
certificate under TMC 3.90.090(A).
C. The King County Department of Assessments shall be responsible for determining the
allocation of the Property's assessed value to be attributed to the multi -family portion of the
project.
Section 3: Property Owner's Annual Reporting Requirements and Record Keeping
A. Within thirty (30) days of each anniversary of the filing date of the Final Certificate and for
each year of the tax exemption period, the Property Owner shall submit to the Administrator
a notarized declaration containing the following:
i. A statement identifying the total number of occupied and vacant multi -family units during
the previous year;
ii. A certification that the property has not changed use since the date of filing of the Final
Certificate and continues to be in compliance with this Agreement, Chapter 3.90 TMC,
and Chapter 84.14 RCW;
iii. A description of any improvements or changes to the property made after the filing of the
Final Certificate or after the last declaration, as applicable;
iv. The value of tax exemption for the Project; and
v. Any other information with respect to the units receiving a tax exemption necessary for
the City to comply with any reporting requirements by the State of Washington and/or
King County.
B. The Property Owner shall maintain records supporting all information provided to the City
and shall make such records available for inspection upon request by the City. Additionally,
the Property Owner shall permit the City to enter and inspect the multi -family units, upon
prior notice, to ensure the continued compliance with applicable zoning requirements, land
use regulations, building codes, fire codes, and housing codes as required by the TMC.
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C. Failure to submit the annual declaration as required by Section 3(A) of this Agreement, or to
maintain adequate records, may result in cancellation of the tax exemption in accordance
with Section 7 herein.
Section 4: Conversion of Residential Units
If the Property Owner converts any of the multi -family residential housing units subject to this
Agreement to another use, the Property Owner shall notify the King County Department of
Assessment and the Administrator within 60 days of such change in use. Upon such change in
use, the tax exemption shall be cancelled pursuant to Section 7 herein.
Section 5: Ownership Transfer
The Property Owner agrees to notify the Administrator within 30 days of any transfer of the
Property Owner's ownership interest in the Property or in the improvements made to the
Property under this Agreement and shall assign its interests in this Agreement to any subsequent
purchaser/owner upon written approval by the City. Such approval shall not be unreasonably
withheld. Failure to notify the City or assign the Agreement as required by this section may result
in termination of the Agreement pursuant to Section 7 herein.
Section 6: Duration of Exemption
The value of the improvements qualifying under this Agreement will be exempt from ad valorem
property tax for eight (8) years beginning from the date the King County Department of
Assessments applied the exemption.
Section 7: Cancellation by City
The City reserves the right to cancel the Final Certificate should the Property Owner, and/or its
successor or assigns fail to comply with any of the terms and conditions of this Agreement.
Cancellation of the Final Certificate may subject the Property Owner (or future Property Owner)
to potential tax liability, interest and penalties as further described in Chapter 84.14 RCW and
TMC 3.90.100.H. The Property Owner may appeal the cancellation determination as specified in
TMC 3.90.100.H within 30 days of the date of notice of cancellation.
Section 8: General Provisions
A. Termination
i. Automatic Termination. This Agreement shall automatically terminate upon the
expiration of the eight-year tax exemption, as outlined in Section 6 herein.
ii. Termination by City. The City may terminate this Agreement at any time under any of the
following circumstances:
1. The Property Owner obtained the property tax exemption under deceit or false
pretenses, including providing incorrect or inadequate information to the City
regarding the intended use of the building on the property.
2. The project no longer complies with the requirements of Chapter 3.90 TMC.
Page 4 of 7
3. The Final Certificate is cancelled pursuant to Section 7 herein.
iii. Termination by Property Owner. The Property Owner may terminate its rights and
obligations under this Agreement by providing 30 days' written notice to the City.
B. Potential Tax Liability. The Property Owner acknowledges and agrees that, regardless of the
reason therefor, termination of this Agreement may subject Property Owner to potential tax
liabilities and penalties under state law.
C. King County Assessment Fee. King County Assessment charges a fee for the review and
processing of MFTE application requests. The Property Owner shall either pay this fee directly
to King County or reimburse the City for payment of this fee.
D. Governing Law and Venue. This Agreement shall be construed and enforced in accordance
with the laws of the State of Washington. Venue for any action arising under this Agreement
shall lie in King County Superior Court.
E. Compliance with Tukwila Municipal Code. The Property Owner shall ensure that the site and
project comply with all applicable sections of the Tukwila Municipal Code, including, but not
limited to, the zoning code, sign code, building code, fire code, and public works standards. If
the event of conflict between this Agreement and any provision of the Tukwila Municipal
Code, the more stringent requirement shall govern. Additionally, this Agreement shall not be
interpreted to prevent the City from enforcing any provisions of the Tukwila Municipal Code.
Nor shall the Agreement preclude the Property Owner from pursuing any administrative
appeals or rights permitted under applicable provisions of the Tukwila Municipal Code.
F. Assignability. Except for case the Property is sold, transferred, or acquired by a new entity,
neither party may assign its rights and/or obligations under this Agreement.
G. Recording. Upon execution of this Agreement by both parties, the Property Owner shall
record this Agreement with the King County Recorder's office, and provide a copy of the
recorded document to the City.
H. Indemnification. The Property Owner shall indemnify, defend, and hold harmless the City, its
officers, officials, employees and volunteers from any and all claims, injuries, damages, losses
or suits arising out of or resulting from the acts, errors or omissions of the Property Owner in
performance of this Agreement
1. Attorney Fees. In the event a lawsuit is filed regarding the subject matter of this Agreement,
the prevailing party shall be entitled to payment of attorneys' fee by the other party.
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J. No Third -Party Beneficiaries. This Agreement is for the benefit of the Parties hereto only and
is not intended to benefit any other person or entity, and no person or entity not a signatory
to this Agreement shall have any third -party beneficiary or other rights whatsoever under
this Agreement. No other person or entity not a Party to this Agreement may enforce the
terms and provisions of this Agreement.
K. Severability. The provisions of this Agreement are separate and severable. The invalidity of
any clause, sentence, paragraph, subdivision, section, or portion or the invalidity of the
application thereof to any person or circumstance, shall not affect the validity of the
remainder of this Agreement, or the validity of its application to other persons or
circumstances.
L. Amendment to Agreement; Effect of Agreement on Future Actions. This Agreement may be
amended by mutual consent of all of the parties, provided that any such amendments are in
writing.
M. Notices. Notices, demands, and correspondence between the City and Developer shall be
deemed sufficiently given if dispatched by pre -paid first-class mail to the addresses of the
parties as designated in this Section. The parties hereto may, from time to time, advise the
other of new addresses for such notices, demands or correspondence.
To Developer:
Washington Tower, LP
C/O Omar and Christine Lee
18230 East Valley Hwy #195
Kent, WA 98032
To City:
City of Tukwila
Office of the City Clerk
6200 Southcenter Blvd
Tukwila, WA 98188
With a Copy To:
Office of Economic Development
6200 Southcenter Blvd
Tukwila, WA 98188
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the
dates set forth below:
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CITY OF TUKW
By
Allan Ekberg, Mayor
WASHINGT
By
By
OWER, LP
Omar Lee, P. tner
Ch ' - Lee, Partner
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