Tacoma City Councilman Bill Evans is considering resigning from the council due to a conflict between his civic duties and his personal interests as a Proctor District business owner and developer, he said Tuesday.
The ethical quandary involves his partnership in developments that depend on 10-year property tax breaks from the city "in order to pencil out," Evans said.
One of them, a plan to build a European-style mix of retail, commercial and condominium units in a Proctor District parking lot, was pulled from City Council consideration twice in the last two weeks.
Evans said he was advised by City Attorney Elizabeth Pauli that a council vote on the project, which involved a contract between the city and Proctor Partners LLC, would have violated the city charter because Evans has more than a "remote" interest in the development.
He's a partner in the venture, which sought the tax exemption for six market-rate condominiums to be built in a parking lot at 2710 N. Proctor St. and sold for between $300,000 and $400,000 per unit.
"I was under the naive impression that I could recuse myself," and not participate in discussions or vote on the issue, Evans said. He added he thought the 10-year property-tax exemption wouldn't benefit him directly because it goes to the buyer of the home, not the developer.
Now, Evans said, he must decide whether to resign from the council, dissolve his partnership or seek other legal opinions. He doesn't plan to challenge Pauli's advice.
But he and business partner Erling Kuester have been working for five years to "develop a whole range of housing options," and at age 64, it's not a vision easily abandoned, Evans said.
He added he couldn't say when he might make a decision on how to proceed, but he is talking about restructuring the partnership.
The issue had no bearing on his recent decision to withdraw from the Tacoma mayor's race, said Evans, who was elected to the council in 1999 and 2003. His current term expires at the end of 2007.
Pauli said she couldn't comment on any specific opinion she or her office gave Evans, but she cited a city charter provision that prohibits any "officer or employee'' of the city from having a direct or indirect financial interest "in any contract, sale, lease, or purchase" with the city unless it's defined as remote, or minor, under state law.
A violation could cause the offender to forfeit his or her office and void the contract, the charter says.
At the heart of the issue is a 1995 state law that allows cities to exempt the newly developed portion of projects in some areas from property taxes for 10 years. The idea is to encourage higher density development in line with the state's Growth Management Act, funnel population growth into mixed-use areas, rather than single-family neighborhoods, rehabilitate substandard or vacant buildings and stimulate new construction, according to city records.
The tax exemption, which applies only to the improved portion of a property, makes it easier for builders to build and buyers to buy the kinds of market-rate housing going up now in the downtown core, said Ric Teasley, the city's housing development supervisor.
But even with the tax break, this type of housing often isn't easy to bring to market, Teasley said. As of December 2004, 967 units in 28 projects were completed; 85 units in four projects were under construction; 1,317 units in 23 projects were approved but not started; and contracts for 1,485 units in 14 projects were expired. Four projects totaling 63 units were canceled.
Last week, Gov. Christine Gregoire signed into law Senate Bill 5713, which amended the property-tax exemption legislation so that properties no longer must be vacant for a year to be eligible for the program as long as tenants get relocation help.
Both Evans and business partner Kuester testified on behalf of the bill before committees in the House and Senate.
Evans told a Senate committee on March 16 that as a Tacoma City Council member he really wanted "this legislation to be key in helping the city comply with the Growth Management Act." He did not identify himself as a developer of such projects, including one that would benefit from the legislation change.
It's not unusual for business owners to testify in favor of laws that would further their interests but it's important for city officials "to keep their private business and their public duties separate," said Mindy Chambers, a spokeswoman for the state auditor's office. "It's a perception problem as much as anything," she added. "It's an appearance of fairness issue."
Kuester said Evans was acting "more as a representative for the whole city, not just a particular project."
"Bill's always got the whole city in mind," his business partner said. "He's concerned about the city."
Evans said he's never looked at any property-tax exemptions as benefiting him directly.
"I'm a total believer in bringing neighborhood housing into our business districts," he said. "It's a creative way to create housing choices. There hasn't been any new residential development in the Proctor District in more than 40 years."
Kris Sherman: 253-597-8659