A local development company is building a 40-unit apartment complex on Tacoma’s East Side and planning a 94-unit apartment complex in the South End.
“A lot of these properties were under development, then they went back to the bank,” Novotny said last week. The South End property is “probably worth $1.5 million, and we paid $500,000 for it. So to build 100 units, it’s $5,000 a unit in land cost. That makes it real feasible.”
Another financial factor: the 94-unit property is in the city’s zone that makes the property eligible for an eight-year property tax exemption for multifamily developments. The Tacoma City Council voted unanimously Tuesday to grant the exemption, which will save the developer $128,800 a year until the exemption expires. The city’s portion of that tax is $29,250, according to city documents.
Novotny has been working in multifamily properties for about five years, he said, with Kissler doing it a little longer. The 94-unit complex is the largest they’ve attempted, Novotny said, though Kissler has remodeled a property of similar size.
Each project has multiple private investors, Novotny said.
The pair plan to break ground on the 94-unit property in the first quarter of next year, with an opening in early 2016. The project at 7635 Pacific Ave. will cost an estimated
About a third of the units will be one bedroom, with the rest having two bedrooms and two baths. The two-bedroom units are designed for single people with roommates, Novotny said, with both being designed as master suites. Rents will run from $975 to $1,100 a month.
Work is underway now on the East Side property, on East 72nd and I streets, which is estimated to cost $2.5 million.