A project to merge the Providence Academy with additional urban mixed-use buildings is set to receive a tax exemption for providing a public benefit through its development.
On Monday, the Vancouver City Council unanimously approved an eight-year market-rate tax break for the Aegis Phase 2 project. The $71 million project will complete a series of multifamily residential units near the historic building.
Under the requested exemption, Aegis developers must fulfill city requirements to incorporate public art, structured parking, and improve public infrastructure that isn’t already included in construction standards, according to Vancouver’s Multifamily Tax Exemption program manual. The cost of these public benefit features cannot be less than 25 percent of the tax benefit over the break period.
The mixed-use campus is expected to generate $13 million in taxes for taxing districts over the duration of 20 years with the exemption, according to a city staff report. Vancouver will forgo about $840,000 in tax revenue.
Vancouver’s tax exemption program provides a tax break for developers to construct multifamily housing in targeted areas with an added public benefit, such as a plaza or parking. It has already been implemented in other city development projects.
Out of the available exemption options, the market-rate break is the most popular among developers.
Future of the site
The Aegis Phase 2 site will be located south of the intersection of 12th Street and D Street on the north side of the Providence Academy site.
It includes a six-story, 195-unit apartment complex with 256 parking spaces and bicycle storage. In response to the city’s interim climate action steps, project developers agreed to omit the use of natural gas in the building and make it all electric.
Proposed rents are slightly less than the U.S. Department of Housing and Urban Development’s rent rates at 100 percent Area Median Income. For example, studios will cost $1,481 in the development, while the federal agency states the maximum allowed rent is $1,692; the trend is consistent with Aegis 2’s other unit types.
Developers proposed investing $300,000 for a public space with art and $400,000 for rebuilding Main Street between Fifth and 15th Street. The project will include plaques to indicate where historic structures stood, a sculpture of the Providence Academy’s landmark smokestack, a play area and signs with notable information of the site.
John McDonagh, Greater Vancouver Chamber of Commerce president, said the stretch of C Street between Evergreen and 12th Street hasn’t been maintained for a long time, and the development is giving the area a promising future.
“It adds to the vibrancy of downtown,” he said.
McDonagh addressed the greatest perk included in the project: the retention of the Providence Academy.
“I can’t think of a better public benefit, deserving of consideration than the ability to do that,” he said.
Larry Smith, member of the Historic Trust’s board, which owns the Providence Academy, recalled when he first visited Vancouver in 1989 and wondered what the fate of the Academy building would be. He said demolishing the structure seemed inevitable.
“I’m really tickled pink to preserve the history that goes with this whole area,” Smith said.
He noted how the development’s open space and parking will increase the residential stock downtown and add to the revitalization of its economy. More importantly, he added, it will contribute to recreation, education and relaxation in a meaningful way.
“Becoming a new development will help the site fulfill the city’s vision for a bright, vibrant downtown and will also enhance connections with Officers Row,” Smith said.
The development project previously came under fire for the planned removal of the Academy’s landmark smokestack.
Aegis Phase 1 was granted a tax exemption for its 147-unit apartment and retail space in 2021, which is anticipated to be completed in 2023.
Construction and final tax exemption certificate issuance for Aegis Phase 2 are anticipated to be completed in 2025.
