Sunday, April 25, 2021

City Council, April 26th - MUHTIP

Apart from Councilor Stapleton's motion for opening Union and Winter Streets for people on foot and on wheel during the Saturday Market, when Council convenes on Monday there are a few other items to note in passing.

The 990 Broadway project is applying for a tax abatement, and while there may not be a reason by the letter of the law to deny it, the application's time line makes it look like it may not meet the spirit of the law.

From the Staff Report:

The Multiple Unit Housing Tax Incentive Program (Program) allows the City stimulate transit supportive multiple-unit housing in the City’s core area through approving a property tax exemption. On March 29, 2021, 990 Broadway LLC (Applicant), whose Manager is Charles Weathers, submitted an application for participation in the Multiple Unit Housing Tax Incentive Program (Program) for development of a mixed-use building to be named “990 Broadway” (Project). The Project will consist of one 17,300 square foot mixed-use building containing 23 residential rental units and one 2,500 square foot commercial unit. Approval of the application will result in a ten-year exemption for the City’s portion of the property tax for the development, with the possibility of an exemption of the development’s entire property tax obligation for the ten-year period if other taxing districts agree.

The project was announced in late 2019. The dig at the Jason Lee House site took up part of 2020.  

With the application dated in March of this year, nearly two years after the project was publicly announced, it's hard to say that the tax abatement program actually "stimulated" any construction. It does not in fact look like the tax abatement was at all necessary to start and finish the project. Even though it might not be possible to apply for the abatement until after construction, this might be an unnecessary give-away.

Additionally, the total list of projects using this abatement program isn't very long, and there are reasons from that standpoint to wonder how effective it is. 

See more on previous uses of the program:

Maybe this is an opportunity for Council to refine a program and application deadlines so it is more clearly something that "stimulates" construction that wouldn't otherwise happen. We still have so many surface lots and empty space downtown in the "core area." Shouldn't an incentive program be spurring more action there? This may be evidence the City incentives are not yet property targeted.

As we try to fill in projects downtown and build more housing generally across all price points, it might be a good time for a detailed audit of this particular incentive and of other incentive programs to see what works, what doesn't work, and how things might be improved to better accomplish policy goals.

The details on revised agreements for the loan at the Jory apartments at the former State Hospital site might remind us that there weren't very many subsidized homes created in that project after all. That is a different situation to be sure, but it also suggests that our current incentives are not as effective and targeted as we might want them to be. (Recent posts on the OSH project generally are mostly about the Jory project specifically.)

There is an interesting annexation on the agenda. Part of the land appears to contain a segment of the Croisan Trail; and some of the lots are City-owned, but also currently outside of the city-limits. It seems like there are implications here that are not being made explicit in the Staff Report.

Two approvals from the Planning Commission as information reports:

And last week Council conducted a Work Session on the airport. It had been postponed from February, and there didn't seem to be anything new to say.


Anonymous said...

Salem Reporter has more from Council itself -

Salem Breakfast on Bikes said...


Re: "Even though it might not be possible to apply for the abatement until after construction":
An earlier Staff Report listed a project that applied and was approved for an abatement before construction: "The Residences at Riverfront Park (118 units) - 230 Front Street SE Project cancelled prior to construction." That is the project here from 2013.

So, yes, this application is late in the cycle and did not appear to have been at all necessary to "stimulate" construction.

Salem Breakfast on Bikes said...

This is fascinating. The paper today has a story (paywalled) on the School Board's decision to reject the property tax abatement for 990 Broadway. They articulated some policy that would make them more comfortable, but the City had already decided against that policy when they renewed the program for the next 10 years.

- The School Board should have weighed in during the renewal debate at Council
- In turn, Council should reflect on the reasons for the School Board's disagreement

If the abatement program is going to be effective, there needs to be stronger alignment among the taxing districts.

Probably this will be a new and developing conversation. Certainly there is more to come.

Anonymous said...

There is more...

Salem Reporter has news on an agreement negotiated by School Board members and a motion to reconsider the denial:

"The developer, Cascade Warehouse Company, agreed to cap rent increases for 10 units at 5% per year and not to raise rents on other units more than 7% per year, even when larger increases would be allowed under state law, according to a letter from the developer.

"The developer also agreed to lower the move-in deposit amount required for the units."