What’s better for University Place’s Town Center:
(a) A project that doesn’t get built, thus generating no tax revenue?
(b) Or a project that does get built and starts generating some tax revenue immediately and even more a few years down the road?
The answer to that question seems obvious. And it’s why the City Council should give serious consideration to providing tax abatement to a Tacoma-based developer currently building one mixed-use building at Town Center and hoping to build a second.
The project now under construction above the parking garage on the north side of University Place’s civic building and library will provide 100 apartments and 12,000 square feet of retail space. Developer SEB Inc. would like to build another mixed-use project on the south side, but the city can’t afford to build a parking garage as its foundation.
Tax abatement – delaying property tax collection on the residential portion for eight or 12 years – would allow SEB to move forward and build the garage and mixed-use building. Property taxes would still have to be paid on the land and commercial portion of the project, and construction would generate jobs and sales tax revenue.
Tax abatement is a useful tool for local governments trying to steer development where they want it. The City of Tacoma has employed it to encourage several residential developments.
In October, the Pierce County Council approved a 12-year tax exemption for the residential part of Garfield North, a $20 million mixed-use development in Parkland. The goal: revitalize the neighborhood by bringing in jobs and housing. The 12-year tax abatement hinges on a portion of the residential units being rented as affordable housing. And local governments that provide that kind of break need to show the state that it helps them toward meeting growth management density goals.
By providing multifamily residences in University Place’s core – with easy access to shopping, eateries and services – the proposed SEB project seems a natural for tax abatement status.
Of course it would be preferable to have a development pay full freight from the get go, but the slow progress of Town Center shows that University Place shouldn’t be too picky on that score.