A property tax exemption for a planned 200-unit apartment complex in Battle Ground near Walmart isn’t a possibility anymore following months of discussion.
During the Oct. 2 meeting, the Battle Ground City Council voted 4-3 to deny a request by developer Principal Properties for a multi-family tax exemption (MFTE) on a two-phased project, “Eaton Park and Remy Heights,” off of Southwest Scotton Way.
Had the exemption been approved, the developer would not have had to pay property tax on new construction for eight years. The developer would also have had to offer 10% of the units at “affordable,” rates, which is defined in code as not exceeding 30% of a household’s monthly income based on 80% of adjusted median income for Clark County.
The council previously approved adding the exemption to city code in February. Since then, one development has received approval on an exemption — a 220-unit complex on West Main Street that will also feature 36,000 square feet of commercial space.
In June, Tirus “T.J.” Fontenette, the managing principal for the Scotton Way development, came before the council for the second project using the exemption. That kicked off a series of meetings where the impacts to “junior” taxing districts, namely Clark County Fire District 3 (FD3), came to the forefront.
As the law is currently written, the exemption affects property taxes beyond what the city collects. Throughout the process, the developer and the fire district presented conflicting numbers on impacts. As of last month, Principal Properties estimated FD3 would miss out on $512,000 in the eight-year timeframe for the exemption, whereas the fire district estimated the number was closer to $702,000.
Mayor Philip Johnson commented on the confusion with the relatively new state law that allows for the exemption.
“In roughly eight months, the learning curve just seems to be steeper and steeper, and we as council are just trying to hold on to understand what it all means,” Johnson said.
Councilor Shane Bowman said, of the three prior times the council has seen data on the project, members have received different numbers. He said the program could be effective for a downtown revitalization project, however.
“I think most people think the MFTE program is a good program from the standpoint of providing affordable housing, maybe helping to promote development,” Bowman said.
Bowman said, after speaking to state legislators on the matter, many of them weren’t aware of the exemption’s effect on fire districts. Unlike cities like Vancouver, which have their own fire department for which the city itself budgets, Battle Ground can’t directly shift funds around to support any losses from the exemption as FD3 is its own taxing district, Bowman said.
Bowman said the state lawmakers he spoke to said there may be the potential for changes next session for how exemptions are enacted.
Councilor Dan Dingman joined Bowman in voting against allowing the exemption.
“As much as I want to see affordable housing for our people, the impact is too great and the uncertainty is too great for me to be able to support it,” Dingman said.
Councilor Adrian Cortes noted Principal Properties’ Walmart development is “one of the largest developments that has gone into the city in probably perhaps the past 20 to 30 years.” If the 10-acre property for the apartment complex does not develop, none of the taxing districts will see the economic potential of a built-out piece of land, including both the city and the fire district, he said.
Compared to Principal Properties, Cortes said the developer the city did approve for the exemption, Deacon Development, has had less of a relationship with the city, whereas Fontenette “has shown a commitment to this community.”
Cortes, alongside Johnson and Deputy Mayor Cherish DesRochers, voted for approving the exemption. Bowman and Dingman, alongside councilors Tricia Davis and Troy McCoy, voted against it.
Without the exemption, the project is unlikely to move forward as imagined currently. Fontenette previously said having the break was needed to make the project feasible with rising construction costs.
