Mike Cohen, should he pull off his grand plan to transform a Superfund eyesore into a $1 billion waterfront community, will deserve Tacoma’s gratitude.
Whether he’s due a tax break is another matter.
Cohen is the Thurston County developer who bought the former Asarco smelter site on Commencement Bay. His project includes finishing the cleanup project that came to a halt when Asarco went bankrupt and building a mix of residential and commercial buildings on the 67-acre site, which straddles the Tacoma-Ruston border.
His partnership, Point Ruston LLC, is asking Tacoma officials for help. It wants the City Council to tweak city code so the project can qualify for the multifamily tax abatement program. The abatement is, the partnership notes in a letter to Mayor Bill Baarsma, one of the very few economic development incentives that the city can provide a developer.
It is a particularly popular incentive, too. Developers of hundreds of condos and apartments built in Tacoma since 1996 have taken advantage of the tax break, which exempts part of a project’s value from property taxation for up to 12 years.
The program has been a spectacular success at spurring market-rate housing and improving once-blighted areas. Cohen himself has used it to build two apartment towers on a hill overlooking the Tacoma Mall.
But the former Asarco site doesn’t quite fit the program’s intent, which is to lure developers to areas targeted for density because of their proximity to services and mass transit. The goal is to boost housing stock in areas that might not otherwise get it.
No one had to lure Cohen and company to Point Ruston. They jumped at the chance to develop one of the largest undeveloped parcels of Puget Sound waterfront property. While their project will certainly meet a demand, the market for view homes is capable of supporting itself without public subsidies.
That’s not to say Cohen isn’t taking something of a gamble. Point Ruston is no ordinary project. Along with cleanup obligations, Cohen inherited Asarco’s commitments to provide public spaces along the waterfront, amenities that go above and beyond what is normally required of developers. Then there’s the downturn in the housing market, which hit just as Cohen was gearing up to market his new waterfront community.
But extending the tax abatement program, which the city has never targeted at a specific project, is the wrong way to help ensure his project is a success. City officials would risk undermining what little public support for the tax program still exists. A report last year found the chief beneficiaries of Tacoma’s tax break have been affluent home buyers – the likes of whom Cohen will be courting.
Rather than extending the program to additional high-end development, Tacoma should be focusing on jump-starting more affordable housing projects. Odds are, Point Ruston will do very well without a tax break. Potential residents are likely to have all the incentive they need when they get a peek at that knockout view.
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