Two Tacoma apartment projects bringing 438 market-rate units approved for tax breaks
Two sizable apartment projects received the city’s eight-year multifamily tax exemption at Tuesday’s Tacoma City Council session as the city already is outpacing last year’s number of approved projects.
MFTEs exempt qualifying projects from property taxes on the assessed improvement value for 8, 12 or 20 years, with the 12- and 20-year versions tied to a percentage of development of rent-restricted units. The 8-year version allows for all market rate.
The first one approved Tuesday is being developed by Tacoma Land Investments LLC, affiliated with McCormick International of Tacoma, with plans for 306 market-rate units at 1924 Yakima Ave. The site will offer 274 parking spaces.
The project is listed in its MFTE filings as McCormick View Phase 2, spread over multiple parcels with an estimated cost of $70 million. County records show the LLC also owns the 30-unit McCormick View apartments, 1925 S. I St.
Rents and unit breakdown for the project, as listed by the city, show:
▪ 12 studios, 500 square feet, $1,500.
▪ 282 one-bedroom/one bath, 650 square feet, $1,950.
▪ 12 two-bedroom/one bath, 750 square feet, $2,250.
The project’s estimated completion date is January 2025.
The second project is being developed by VDR Land, LLC, with plans for 132 market-rate units at 506 N. Fourth St. in the Stadium District. The site will have 163 parking spaces.
VDR Investment Homes, led by Rose Stanek-Norbe, purchased the property as part of the Vista Del Rey apartment acquisition for $25.7 million in 2019. The neighboring parcel was marketed for development as part of that sale.
Along with the development, plans have been filed with the city to improve the adjacent streets and alley, including a storm-main extension and new traffic-calming bulb-outs and access ramps.
The project is estimated to cost $45 million, with a tentative completion date of April 2024, according to permit application information listed on the city’s website.
Rents and unit breakdown for the project, as listed by the city, show:
▪ 60 studios, 403 square feet, $1,750
▪ 58 one-bedroom/one bath, 754 square feet, $2,250.
▪ 14 two-bedroom/two bath, 1,085 square feet, $2,950.
MFTEs by the numbers
The city has taken action approving nearly 20 multifamily tax exemptions so far this year with no letup in Tacoma’s race for apartments. Of those, seven were for the 8-year version and 10 applied for the 12-year. One switched from a previously received 8- to 12-year version.
Looking ahead, four more are “agenda ready,” according to the city’s portal for council agenda items, with one seeking an 8-year and two others seeking 12-year exemptions. The fourth one adds an additional parcel to its existing 8-year MFTE.
Those numbers are up from last year when 13 projects were approved, the majority of those seeking the 12-year option.
All told, the applications listed this year include nearly 1,500 market-rate units, 174 rent-restricted units, and roughly 1,230 parking stalls.
The city overhauled its MFTE program last year, with rules changing in terms of AMI affordability rates and taking Proctor and Point Ruston out of the 8-year MFTE development mix for new projects, among other changes. None of those changes affected the projects approved Tuesday.
Prior to approval during Tuesday’s meeting, Deputy Mayor Catherine Ushka told attendees to keep in mind the value of the properties once taxes resume on the sites.
“We can make easy assumptions that, after $70 million in investment, the property value will be much higher,” she said.
“So when those taxes resume, the incoming taxes to the city again go up. I say that because frequently we hear from community that we shouldn’t be giving away those tax dollars, but the investment is not just for the housing. It’s for the future economic development of the city as well.”
This story was originally published April 24, 2022 at 5:00 AM.
