New Proctor apartment project will include 20 rent-restricted units
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- Council approved a 12-year multifamily property tax exemption for 3917 N. 26th St.
- The 98-unit, six-story Proctor 4 project will include 20 rent-restricted units.
- An LLC affiliated with Rush purchased the former Key Bank site for $2.5 million.
The fourth apartment project in the Proctor neighborhood from Gig Harbor-based The Rush Companies crossed another development threshold at Tuesday’s Tacoma City Council meeting.
The resolution had been on a council agenda last month but was tabled so the full council could be in attendance to discuss and vote, according to city officials.
The council on Tuesday approved the project, 3917 N. 26th St., for a 12-year multifamily property-tax exemption. Plans call for development of the 98-unit, six-story podium-style building with ground-level commercial space.
Plans also call for 67 parking stalls below grade within the building’s footprint.
The site was formerly a Key Bank branch. The bank closed in spring 2024, and a month later an LLC affiliated with Rush purchased the site at North Madison and North 26th streets for $2.5 million. The property at the time had an appraised value of just over $1.7 million.
According to a chart included in the city’s action memorandum on the MFTE, expected rent rates are:
The 12-year MFTE calls for 20 percent of the units to be rented to households whose income is at or below 70% of Pierce County AMI, adjusted for household size, as determined by HUD on an annual basis, For example, according to income limits posted on the City of Tacoma’s MFTE website, 70 percent AMI as of May 1 was $62,407 for a one-person household and $71,332 for a two-person household. Rent is capped at 30% of those income levels, adjusted annually.
The Proctor neighborhood and Point Ruston are two areas in Tacoma that do not allow developers to use the 8-year version of the MFTE, which has no affordability component. That was the result of changes to the MFTE program approved by council in 2021 and implemented the following year that removed the 8-year from mixed-use centers designated “very high” opportunity based on the City’s Equity Index.
In April 2024, an LLC affiliated with Rush obtained a 12-year MFTE extension to the original 8-year MFTE applied to Proctor Station apartments, 3910 N. 28th St. Projects qualify for the extension if rent-restricted units as defined by the 12-year MFTE regulations are added or maintained.
Council member John Hines, who helped guide the changes to the MFTE program that led to the end of using the 8-year MFTE in Proctor, told The News Tribune on Tuesday that the project was “exciting for an area like Proctor, where there’s not a lot of those kind of rent-regulated units.”
He noted that “the bank property there is highly underutilized right now, and it’d be great to get some more housing.”
Proctor 4’s developers applied for the 12-year MFTE in December 2025. The project received its final design review in October 2025 with the city’s Urban Design Board.
The apartment project would be Rush’s fourth multifamily- residential development in the neighborhood, after Proctor Station, Madison25 and Proctor Flats.
Tuesday’s vote included one abstention and one “no” vote. Mayor Anders Ibsen ahead of the vote said he would abstain “out of an abundance of caution ... due to the potential for the appearance of a conflict of interest.”
Ibsen said during the meeting, “I stand to gain nothing personally, financially. I just have a prior commercial relationship with one of the people involved in the transaction ... .”
Council member Latasha Palmer voted against the resolution but noted that she appreciated the rent difference and previous work done to attract housing to the area.
Palmer stated, “I still have a lot of questions around the fiscal implications that are presented as a pro and a con to consider,” particularly regarding estimated sales tax generated for the city through the 12-year exemption period. The projection is provided to council as part of MFTE action memos.
The projected amount for total sales tax for the city generated in this project was more than $1.3 million, based off total sales tax projections included in the action memo.
The memo states the figures are estimated “by the increase in households the project creates using the average sales tax revenue generated per household in Tacoma.”
“I don’t know how we say that it will generate this new sales tax when we don’t know that it’s new sales tax, it could be just relocating from another part of the city,” Palmer said before the vote.
At Tuesday’s meeting, Hines noted that skeptics a few years ago doubted that any developer would take on a project in Proctor that wasn’t 100 percent market-rate, noting he was proud that “Council Member (Kristina) Walker and I spearheaded a change to the multifamily tax exemption to eliminate the 8-year multifamily tax exemption in Procter and Point Ruston.”
He recalled that they “heard multiple times that we were going to kill development in Proctor, that no one was going to build there ever again, and that a 12-year MFTE would not be possible.
“I am proud that right now this is showing that we were right all the way back then,” he added.
Previous reporting by The News Tribune contributed to this report.
