91视频

Two months before one of the original Burgerville restaurants in downtown Vancouver, Wash., is scheduled to be closed and torn down to clear space for a new, mixed-use building, the project’s developer says he needs the city’s help to move forward.

Elie Kassab, president of Prestige Development, is asking the city to use a state-authorized property tax break that would give him relief for the residential portion of his $16 million project for 12 years. The move has helped spur development in Vancouver in the past, but it would limit property tax funding for public services 鈥� like school districts 鈥� over the deferral period.

Kassab’s plan is to construct two identical, four-story buildings between the Burgerville lot and a neighboring vacant lot Kassab owns on East Mill Plain Boulevard in downtown Vancouver. The project would include 92 apartment units, 11,300 square feet of ground-floor retail space and 70 covered parking spaces between the two buildings.

Kassab originally proposed constructing a five-story building on only the vacant lot. But then he took advantage of an opportunity earlier this year to purchase the neighboring lot, which holds a Burgerville restaurant built in 1962, for $750,000.

The plan then was to close the Burgerville in October, demolish it and then start construction on the mixed-use project.

But now, Kassab said, lenders aren’t willing to loan money unless the city offers the tax breaks.

鈥淭he financing is on its way, but the bank is demanding the tax break,鈥� Kassab said. 鈥淚t will take the tax break for the project to move forward.鈥�

The tax break is an exemption for multifamily housing in residential target areas; Washington state lawmakers passed the legislation in 1995 and updated it in 2007. The exemption, according to state law, is meant to 鈥渟timulate new or enhanced residential opportunities in designated urban centers and achieve the housing goals mandated by the Growth Management Act.鈥�

The exemption allows property owners who add residential units to forgo paying property tax increases for eight years, or 12 years if 20 percent of the units are considered affordable. Kassab is asking the city for the 12-year exemption because 58 of the 92 units in the building would meet the affordable requirements.

According to projections by Paul Lewis, a consultant for the city, Kassab would be able to forgo paying an average of $93,000 a year in property taxes over the next 12 years. Kassab added that he would still pay approximately $35,000 annually for the nonresidential portion of the property.

During a workshop on the issue last week, Vancouver city councilors looked at both sides. On one hand, a property tax break reduces potential funding for public entities like the city, county, school districts and fire districts. But on the other hand, there would be no funding at all if the project didn’t move forward.

鈥淚t’s the classic question,鈥� Lewis said. 鈥淲ould development occur without the exemption?鈥�

Lewis believes that if the exemption were granted and the project were completed, income potential would decrease by about $972,000 for the state, $920,000 for the city, $280,000 for schools and $123,000 for Clark County.

But even if the tax break were granted, the mixed-use development would generate more property tax revenues for all of those entities than they receive from the Burgerville lot. According to projections, the new development would yield about $2.4 million in property taxes over the next 25 years, while the Burgerville site would yield only about half as much. Moreover, the new construction would generate about $770,000 in sales tax revenues for the city.

Mayor Tim Leavitt reiterated that the project could be generally positive for the city. But the big question about the tax break that needs to be answered, he said, is: 鈥淗ow do we know if they can’t go forward without it?鈥�

In the past, the city has provided the tax break for projects including Heritage Place Condominiums, the Vancouvercenter and Uptown Village; $20.7 million was added to the tax roll for Heritage Place this year, and $30.7 million is expected to be added to the tax roll in 2013 for the other two projects.

Other cities in Washington have supported the program. The city of Tacoma in 2007 released a report that said the tax break has helped it meet specific policy requirements.

Vancouver City Council will make the final decision whether to extend the tax break to Kassab. The council will take up the issue, and receive public comment, at its meeting on Aug. 8. A final consent vote is scheduled for Aug. 15. An official decision must be issued by Sept. 6, per state requirements.