Ordinance 4047ORDINANCE NO.4047
AN ORDINANCE OF THE CITY OF EDMONDS,
WASHINGTON, ADDING A NEW CHAPTER 3.38 ENTITLED
"MULTI -FAMILY HOUSING TAX EXEMPTION";
PROVIDING FOR SEVERABILITY; AND ESTABLISHING AN
EFFECTIVE DATE.
WHEREAS, Chapter 84.14 of the Revised Code of Washington (RCW) provides for
temporary special valuations for eligible improvements associated with multifamily housing,
especially within urban centers deficient in planned residential development; and
WHEREAS, in order to establish a Multi -family Housing Tax Exemption program, the
City must designate one or more residential targeted areas within which the temporary special
valuation may be granted to qualifying residential improvements; and
WHEREAS, in accordance with RCW 84.14.040(2), the Edmonds City Council passed a
Resolution of Intent on July 26, 2016 to designate the Westgate Mixed -Use Zone District a
residential targeted area; and
WHEREAS, after complying with all the corresponding requirements set out in RCW
84.14.040, on August 16, 2016 the Edmonds City Council designated the Westgate Mixed -Use
Zone District, as defined by Edmonds Community Development Code Chapter 16.110 and the
city's official zoning map, as a residential targeted area for the purposes of establishing a Multi-
family Housing Tax Exemption program; and
WHEREAS, the Mayor and City Council find it to be in the public interest to promote
redevelopment in the Westgate Mixed -Use Zone District, especially including market -rate and
affordable housing;
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF EDMONDS, WASHINGTON,
DOES ORDAIN AS FOLLOWS:
Section 1. A new Chapter 3.38, entitled "Multi -Family Housing Tax Exemption," is
added to the Edmonds City Code, as follows:
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CHAPTER 3.38
MULTI -FAMILY HOUSING TAX EXEMPTION
3.38.010 Purpose.
3.38.020 Definitions.
3.38.030 Tax exemption — Duration — Valuation — Exceptions.
3.38.040 Residential targeted areas — Designation.
3.38.050 Project eligibility.
3.38.060 Application Procedure.
3.38.070 Application review — Approval — Required findings — Issuance of
conditional certificate — Denial — Appeal.
3.38.080 Amendment of contract.
3.38.090 Extension of conditional certificate — Required findings — Denial —
Appeal.
3.38.100 Final certificate — Application — Issuance — Denial — Appeal.
3.38.110 Annual certification.
3.38.120 Cancellation of tax exemption — Appeal.
3.38.010 Purpose.
The purpose of this chapter, pursuant to Chapter 84.14 RCW, is to stimulate the construction of
new multifamily housing and the rehabilitation of existing vacant and underutilized buildings for
multifamily housing, which may include affordable housing opportunities, in keeping with the
goals and mandates of the Growth Management Act (particularly Chapter 36.70A RCW), within
urban centers designated as Residential Targeted Areas where the City has found insufficient
housing opportunities, including affordable housing opportunities. To achieve these purposes,
this chapter provides for special valuations in residentially deficient urban centers for eligible
improvements associated with multiunit housing, which may include affordable housing.
3.38.020 Definitions.
Unless expressly provided for below, in construing the provisions of this chapter, definitions of
key terms in this chapter shall follow the definitions as set out in RCW 84.14.010.
A. "City" means the city of Edmonds, Washington.
B. "Director" means the director of the city's department of development services or authorized
designee.
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C. "Residential targeted area" means any urban center so designated by the Edmonds city
council in accordance with this chapter and Chapter 84.14 RCW, and which has been found by
the city council to be lacking sufficient available, convenient, attractive, livable, and desirable
residential housing to meet the needs of the public.
D. "Urban center" means any district or subarea of the City of Edmonds designated as a mixed -
use center through a subarea or comprehensive planning process, where urban residents may
obtain a variety of products and services including several business establishments, such as
shops, offices, banks, restaurants, medical facilities, governmental agencies and a mixture of
uses and activities that may include housing, recreation, and cultural activities in association with
either commercial or office uses, or both uses.
3.38.030 Tax exemption — Duration — Valuation — Exceptions.
A. The value of new housing construction, conversion, and rehabilitation improvements
qualifying under this chapter is exempt from ad valorem property taxation for 12 successive
years beginning January 1 st of the year immediately following the calendar year of issuance of
the final certificate of tax exemption if the property otherwise qualifies for the exemption under
this chapter and the applicants commits to renting or selling at least 20 percent of the multifamily
housing units as affordable housing units to low- and moderate -income households, and the
property must satisfy that commitment.
B. The exemption does not apply to the value of land or to the value of nonhousing
improvements not qualifying under ECC 3.38.050, nor does the exemption apply to increases in
assessed valuation of land and nonqualifying improvements. This article also does not apply to
increases in assessed valuation made by the assessor on nonqualifying portions of building and
value of land, nor to increases made by lawful order of a county board of equalization, the
Department of Revenue, or a county, to a class of property throughout the county or specific area
of the county to achieve the uniformity of assessment or appraisal required by law.
3.38.040 Residential targeted areas — Designation.
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A. The following area is designated by the City Council as a residential targeted area, consistent
with the requirements of RCW 84.14.040:
1. Westgate Mixed Use (WMU) Zoning District.
B. If part of any legal lot is within a residential targeted area, the entire lot shall be deemed to lie
within the residential targeted area.
C. The area(s) designated in subsection A of this section may be amended and other areas may
be added by action of the City Council consistent with requirements of RCW 84.14.040. Any
amendment to the residential targeted areas shall not affect the status of a project for which the
City has received a complete application for property tax exemption under this chapter.
3.38.050 Project eligibility.
To qualify for temporary exemption from property taxation under this chapter, the property shall
satisfy all of the following requirements.
A. The property must be located in a designated residential targeted area.
B. The project must consist of at least twenty dwelling units of multifamily housing, located
within a residential structure or a mixed -use development, in which at least 50 percent of the
space within such residential structure or mixed -use development is intended for permanent
residential occupancy.
C. The project must comply with all zoning requirements, land use regulations, and building
code requirements contained in the Edmonds City Code and applicable upon land use permit
approval or submittal of a complete building permit application, whichever occurs sooner.
D. For the duration of the exemption granted under this chapter, the property shall have no
violations of applicable zoning requirements, land use regulations, or building code requirements
contained in the Edmonds Community Development Code for which the development services
department shall have issued an order to correct ("OTC") or notice of violation ("NOV") that are
not resolved by a voluntary correction agreement, vacation by the hearing examiner, or action of
the property owner in compliance with the applicable code requirements as determined by the
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director, within the time period for compliance provided in such OTC or NOV and any extension
of the time period for compliance granted by the director.
E. New construction multifamily housing must be completed within three years from the date of
approval of the application or by any extended deadline granted by the director pursuant to
ECC 3.38.090.
F. The owner must enter into a contract with the city, approved by the mayor, under which the
owner has agreed to the implementation of the development on terms and conditions satisfactory
to the city and in compliance with this chapter.
3.38.060 Application Procedure.
The owner of property applying for exemption under this chapter shall submit an application to
the director on a form established by the director. The owner shall verify the correctness of the
information contained in the application by his/her signature and affirmation made under penalty
of perjury under the laws of the state of Washington. The application shall contain such
information as the director may deem necessary or useful, which at a minimum shall include:
A. A completed City of Edmonds application form, including information setting forth the
grounds for tax exemption;
B. A brief written description of the project, and schematic site and floor plans of the
multifamily units and the structure(s) in which they are proposed to be located;
C. Floor and site plans of the proposed project, which plans may be revised by the owner
provided such revisions are made prior to the city's final action on the exemption application;
D. A statement from the owner acknowledging the potential tax liability when the property
ceases to be eligible for exemption under this chapter;
E. At the time of initial application under this section, the owner shall pay to the city an initial
application fee of $1,000.00, plus an amount necessary to cover recording fees as set out in the
City's Development Fee Table;
F. Except as otherwise provided for in subsection G, the application shall be submitted any time
before a complete application for a building or other construction permit is submitted;
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G. If, on the effective date of the ordinance codified in this chapter, the owner has applied for a
permit identified in subsection F of this section, then application for exemption under this section
may be submitted any time prior to issuance of a building permit.
3.38.070 Application review — Approval — Required findings — Issuance of conditional
certificate — Denial — Appeal.
A. The director may approve an application if he or she finds that:
1. A minimum of twenty new units are being constructed;
2. The proposed project is or will be, at the time of completion, in conformance with all
approved plans, and all applicable requirements of the Edmonds City Code or other
applicable requirements or regulations in effect at the time the application is approved;
3. The owner has complied with all of the requirements of this chapter, including but not
limited to project eligibility requirements contained in ECC 3.38.050 and application
requirements contained in ECC 3.38.060;
4. The project site is located within a designated residential targeted area; and
5. If applicable, the proposed multiunit housing project meets the affordable housing
requirements as described in ECC 3.38.030.
B. The director shall deny an application if the foregoing criteria are not met.
C. If the application is approved, the owner shall enter into a contract with the city, approved by
the mayor, who is hereby authorized to approve such contracts, regarding the terms and
conditions of the project under this chapter.
D. Following mayor approval of the contract, the director shall issue a conditional certificate of
acceptance of tax exemption. The conditional certificate shall expire three years from the date of
approval unless an extension is granted as provided in ECC 3.38.090.
E. If the application is denied, the director shall state in writing the reasons for the denial and
send notice of denial to the owner's last known address within 10 days of the denial.
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F. An owner may appeal a denial of a tax exemption application to the hearing examiner by
filing a notice of appeal with the city clerk within 30 calendar days of receipt of notice of the
denial. The appeal before the hearing examiner shall follow the procedures for appeal of Type II
decisions, shall be based upon the record before the director, and the director's decision will be
upheld unless the owner can show that there is no substantial evidence on the record to support
the director's decision. The hearing examiner's decision on appeal shall constitute the final
action of the city.
3.38.080 Amendment of contract.
A. Any owner seeking amendment(s) to the contract approved by the mayor may do so by
submitting a request in writing to the director at any time within three years of the date of the
mayor's approval of the contract.
B. Any owner seeking amendments to the approved form of contract shall pay to the city an
amendment application fee of $200.00 for administrative costs, plus any amount necessary to
cover recording fees as set out in the City's Development Fee Table.
C. The director may approve amendments to the contract that comport with the intent of the
original contract approved by the mayor.
3.38.090 Extension of conditional certificate — Required findings — Denial — Appeal.
A. The conditional certificate may be extended by the director for a period not to exceed 24
consecutive months. The owner shall submit a written request stating the grounds for the
extension together with a fee of $300.00 for the city's administrative cost to process the request.
The director may grant an extension if the director finds that:
1. The anticipated failure to complete construction within the required time period is due
to circumstances beyond the control of the owner; and
2. The owner has been acting, and could reasonably be expected to continue to act, in good
faith and with due diligence; and
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3. All the conditions of the original contract between the owner and the city will be
satisfied upon completion of the project.
B. If an extension is denied, the director shall state in writing the reason for denial and shall
send notice to the owner's last known address within 10 calendar days of the denial. An owner
may appeal the denial of an extension to the hearing examiner, using the process for appeals of
Type II decisions.
3.38.100 Final certificate — Application — Issuance — Denial — Appeal.
A. Upon completion of the construction as provided in the contract between the owner and the
city, and upon issuance of a certificate of occupancy, the owner may request a final certificate of
tax exemption. The owner shall file with the director such information as the director may deem
necessary or useful to evaluate eligibility for the final certificate, which shall at a minimum
include:
1. A statement of expenditures made with respect to each multifamily housing unit and the
total expenditures made with respect to the entire property;
2. A description of the completed work and a statement of qualification for the exemption;
3. If applicable, a statement that the project meets the affordable housing requirements as
described in ECC 3.38.030;
4. A statement that the work was completed within the required three-year period or any
approved extension.
B. At the time of application for final certificate under this section, the owner shall pay to the
city a fee of $300.00 to cover the city's administrative costs, in addition to recording costs.
C. Within 30 days of receipt of all materials required for a final certificate, the director shall
determine whether the completed work, and the affordability of the units if applicable, is
consistent with the contract between the city and owner, whether all or a portion of the
completed work qualifies for exemption under this chapter and, if so, which specific
improvements satisfy the requirements of this chapter.
D. If the director determines that the project has been completed in accordance with the contract
between the owner and the city and the requirements of this chapter, the city shall file a final
certificate of tax exemption with the assessor within 10 days of the expiration of the 30-day
period provided under subsection C of this section.
E. The director is authorized to cause to be recorded, or to require the owner to record, in the
real property records of the Snohomish County Auditor's Department, Recording Division, the
contract with the city required under ECC 3.38.070.C, or such other document(s) as will identify
such terms and conditions of eligibility for exemption under this article as the director deems
appropriate for recording.
F. The director shall notify the owner in writing that the city will not file a final certificate if the
director determines that the project was not completed within the required three-year period or
any approved extension, or was not completed in accordance with the contract between the
owner and the city and the requirements of this chapter, or, if applicable, the affordable housing
requirements as described in ECC 3.38.030 were not met, or the owner's property is otherwise
not qualified for the limited exemption under this chapter.
G. The owner may appeal the director's decision to the hearing examiner by filing a notice of
appeal with the city clerk within 14 calendar days after issuance of the notice of the denial. The
appeal before the hearing examiner shall follow the provisions for appeals of Type Il decisions.
The owner may appeal the hearing examiner's decision to the Snohomish County superior court
according to the procedures contained in RCW 34.05.510 through 34.05.598, as provided in
RCW 84.14.090(6), within 30 days of notification by the city to the owner of the decision.
3.38.110 Annual certification.
A. Within 30 days after the first anniversary of the date the city filed the final certificate of tax
exemption and each year thereafter during the tax exemption period, the property owner shall file
a certification with the director, verified upon signed affirmation under penalty of perjury under
the laws of the state of Washington. The certification shall contain such information as the
director may deem necessary or useful, and shall at a minimum include the following
information:
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1. A statement of occupancy and vacancy of the multifamily units during the previous year;
2. A certification that the property has not changed use and, if applicable, that the property
has been in compliance with the affordable housing requirements as described in ECC
3.38.030 since the date of filing of the final certificate of tax exemption, and continues to
be in compliance with the contract with the city and the requirements of this article;
3. A description of any improvements or changes to the property made after the filing of
the final certificate or most recent certification, as applicable.
B. Failure to submit the annual certification may result in cancellation of the tax exemption.
3.38.120 Cancellation of tax exemption — Appeal.
A. If at any time the director determines that the property no longer complies with the terms of
the contract or with the requirements of this chapter, or the use of the property is changed or will
be changed to a use that is other than residential, or if the owner intends to discontinue
compliance with the affordable housing requirements as described in ECC 3.38.030, or the
property for any reason no longer qualifies for the tax exemption, the tax exemption shall be
canceled and additional taxes, interest and penalties imposed pursuant to state law.
B. If the owner intends to convert the multifamily housing to another use or intends to
discontinue compliance with the affordable housing requirements as described in ECC 3.38.030,
the owner must notify the director and the Snohomish County assessor within 60 days of the
change in use. Upon such change in use, the tax exemption shall be canceled and additional
taxes, interest and penalties imposed pursuant to state law.
C. Upon determining that a tax exemption shall be canceled, the director shall notify the
property owner by certified mail, return receipt requested. The property owner may appeal the
determination by filing a notice of appeal with the city clerk, within 30 days after issuance of the
decision by the director, specifying the factual and legal basis for the appeal. The appeal before
the hearing examiner shall follow the procedures set forth for appeals of Type I1 decisions. At
the appeal hearing, all affected parties may be heard and all competent evidence received. The
hearing examiner shall affirm, modify, or repeal the decision to cancel the exemption based on
the evidence received. The hearing examiner shall give substantial weight to the director's
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decision to cancel the exemption, and the burden of proof and the burden of overcoming the
weight accorded to the director's decision shall be upon the appellant. An aggrieved party may
appeal the hearing examiner's decision to the Snohomish County superior court in accordance
with the procedures in RCW 34.05.510 through 34.05.598, as provided in RCW 84.14.110(2),
within 30 days after issuance of the decision of the hearing examiner
Section 2. Severability. If any section, subsection, clause, sentence, or phrase of this
ordinance should be held invalid or unconstitutional, such decision shall not affect the validity of
the remaining portions of this ordinance.
Section 3. Effective Date. This ordinance, being an exercise of a power specifically
delegated to the City legislative body, is not subject to referendum and shall take effect five (5)
days after passage and publication of an approved summary thereof consisting of the title.
APPROVED:
ATTEST/AUTHENTICATED :
CI ERK, SC SEY
APPROVED AS TO FORM:
OFFICE OF THE CITY ATTORNEY:
BY
3EFF T RADAY
FILED WITH THE CITY CLERK: October 14, 2016
PASSED BY THE CITY COUNCIL: October 18, 2016
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PUBLISHED: October 23, 2016
EFFECTIVE DATE: October 28, 2016
ORDINANCE NO. 4047
12
SUMMARY OF ORDINANCE NO.4047
of the City of Edmonds, Washington
On the 181h day of October, 2016, the City Council of the City of Edmonds, passed
Ordinance No. 4047. A summary of the content of said ordinance, consisting of the title,
provides as follows:
AN ORDINANCE OF THE CITY OF EDMONDS,
WASHINGTON, ADDING A NEW CHAPTER 3.38
ENTITLED "MULTI -FAMILY HOUSING TAX
EXEMPTION"; PROVIDING FOR SEVERABILITY;
AND ESTABLISHING AN EFFECTIVE DATE.
The full text of this Ordinance will be mailed upon request.
DATED this 19th day of October, 2016.
CITY TRK, SCO T P Y
13
Everett Daily Herald
Affidavit of Publication
State of Washington }
County of Snohomish } ss
Kathleen Landis being first duly sworn, upon
oath deposes and says: that he/she is the legal
representative of the Everett Daily Herald a
daily newspaper. The said newspaper is a legal
newspaper by order of the superior court in the
county in which it is published and is now and
has been for more than six months prior to the
date of the first publication of the Notice
hereinafter referred to, published in the English
language continually as a daily newspaper in
Snohomish County, Washington and is and
always has been printed in whole or part in the
Everett Daily Herald and is of general
circulation in said County, and is a legal
newspaper, in accordance with the Chapter 99
of the Laws of 1921, as amended by Chapter
213, Laws of 1941, and approved as a legal
newspaper by order of the Superior Court of
Snohomish County, State of Washington, by
order dated June 16, 1941, and that the annexed
is a true copy of EDH727996 ORDINANCE
4045-4047 as it was published in the regular
and entire issue of said paper and not as a
supplement form thereof for a period of 1
issue(s), such publication commencing on
10/23/2016 and ending on 10/23/2016 and that
said newspaper was regularly distributed to its
subscribers during all of said period.
The amount of the fee for such publication is
$48.16.
Subscribed and sworn before me on this
day of�
AUBREY KNAPP
Notary Public
State of Washington
f My Co ntbissibn Expires
AI July 30, 2018
'vA+:-rR"'•• ::fir-?Yrp?�+�L=tea. u �-�
Notary Public in and for the State of
Washington.
City oFEdmonds - LEGAL ADS 114101416
SCOTT PASSEY
RECEI V I J it I
'(A(,T 2, 6 ?01Fi
EDMONDS CTf
ORDINANCE SUMMARY
of the Cty of Edmonds, Washington
On the 18th day of October, 2016, the City Council of the Clty of
Edmonds, passed the Iul["aly Ordinances, the summaries of the
Content of said ordinances conslsling of tillas Bro provided as
follows:
ORDINANCE NO.4045
AN ORDINANCE OF THE CITY OF EDMONDS,
WASHINGTON, AMENDING ORDINANCE NO.4038 AS A
RESULT OF UNANTICIPATED TRANSFERS AND
EXPENDITURES OF VARIOUS FUNDS, AND FIXING A
TIME WHEN THE SAME SHALL BECOME EFFECTIVE
ORDINANCE NO.4046
AN ORDINANCE OF THE CITY OF EDMONDS,
WASHINGTON, AMENDING THE PARKING PROVISIONS
OF CHAPTER 8.64 OF THE EDMONDS CITY CODE;
PROVIDING FOR SEVERABILITY; AND SETTING AN
EFFECTIVE DATE
ORDINANCE NO.4047
AN ORDINANCE OF THE CITY OF EDMONDS,
WASHINGTON, ADDING A NEW CHAPTER 3.38 ENTITLED
"MULTI -FAMILY HOUSING TAX EXEMPTION"; PROVIDING
FOR SEVERABILITY; AND ESTABLISHING AN EFFECTIVE
DATE
The full text of these prdlnancos wlO be malted upon request.
DATED this 19th day of Oclobw.2016,
CITY CLERK, SCOTT PASSEY
ubllshed: October 23, 2018. EDH72799�
ELo