Developers of a planned 200-unit apartment complex off of Southwest Scotton Way are seeking a property tax exemption, though Battle Ground city leaders still have questions over what impacts the plan would have.
During their July 17 meeting, the Battle Ground City Council was updated on the plan for “Eaton Park and Remy Heights,” a 200-unit, two-phased development on the southwest side of the city.
Tirus “T.J.” Fontenette, the managing principal of Principal Properties LLC, returned to the council following questions about the development asked during his first presentation last month.
The project developer is looking for a “multifamily tax exemption” (MFTE) for the project. The exemption allows a development to not pay property taxes for several years as long as the project offers 10% of its units as “affordable.” Affordability is defined in code as rent that does not exceed 30% of a household’s monthly income based on 80% of adjusted median income for Clark County.
A chief concern the council had previously was what impacts waiving property taxes would have. Given the city’s property tax base of about $3.7 billion, according to the city’s 2023 budget, Fontenette said the effects on property tax revenue would be minimal for the city.
The project would generate about $466,000 in utility tax revenue over the eight years of tax abatement, Fontenette said. The new construction would result in about $1.1 million in sales tax and will also generate $5 million in permit fees and system development charges.
“There’s a substantial amount of revenue that will be built back into the city,” Fontenette said.
Fontenette said the complex would build on the existing development in the area that has been in the works since 2007.
“This is in place right now. We’ve got 70 acres out there, 800,000 square feet of mixed-use development,” Fontenette said.
Fontenette said filling the units won’t be a problem. He noted the adjacent 180-unit Alder Pointe project has been full since it opened in 2016, showing there was demand for another complex.
The project would also feature $2.5 million in new infrastructure. Fontenette said the first phase featuring the southernmost five acres would involve bringing down Southwest 15th Avenue to connect to Eaton Boulevard. It will also feature building sewer infrastructure that will be able to serve beyond what is needed for the project.
Though the city will receive benefits, the effects it will have on other taxing districts is a concern. Councilor Shane Bowman mentioned a letter received from Clark County Fire District 3, which stated the district could miss out on some $800,000 in property tax it would ordinarily receive without the exemption.
Though the district will receive impact fees, those cannot be used on operational costs, only capital purchases, Clark County Fire District 3 Chief Scott Sorenson said.
“It’s just about paying for the service, that’s what we’re concerned about,” Sorenson said.
Whereas the city has other revenue sources like sales tax, the fire district is reliant on property tax funding as its major source, Bowman noted.
“That’s the problem we have with these other agencies, is that all they depend on is that property tax,” Bowman said.
The city has also received conflicting information from different sources as to what the effects of the exemption would be.
“(E)very time we get a presentation on [the exemption], we get something different because nobody knows what’s going on with this thing right now,” Bowman said.
Councilor Troy McCoy said his concern wasn’t over the project itself, noting Principal Properties LLC stays invested in its projects as it takes over management duties once complete. His concern was on the conflicting information the city has received on its execution and effects.
“The manual’s still being written,” McCoy said.
He said he wanted to see how the city’s first use of the exemption pans out. In February, the council approved an exemption for West Main Commons, a 220-unit project including 36,000 square feet of commercial space.
Fontenette said the project could start on the first phase next summer. That would require action from the city on the exemption by September.
The council wasn’t set to vote on the exemption as of the meeting.
“Listening at what’s happened this evening, I think we will scoot this back and wait on the department of commerce and perhaps the assessor and anyone else who wants to pitch in and figure out where we are,” Battle Ground Mayor Philip Johnson said.
