Tirus “T.J.” Fontenette of Principal Properties LLC, which would build the Eaton Park–Remy Heights apartments, said the tax break is needed to offset rising construction costs. Costs have doubled since the developer built Alder Pointe in 2015. (The Columbian files)
Citing concerns about the impacts to Clark County Fire District 3 and other junior taxing districts, the Battle Ground City Council on Monday voted 4-3 against a multifamily tax exemption for the planned Eaton Park-Remy Heights development. Councilors Tricia Davis, Shane Bowman, Daniel Dingman and Troy McCoy voted against the proposed eight-year tax exemption. Councilor Adrian Cortes, Mayor Philip Johnson and Deputy Mayor Cherish DesRochers voted in favor.
“The learning curve seems to be steeper and steeper and we are, as a council, just trying to hold on and understand what it all means,” Johnson said during the meeting. “It is confusing. There are four different answers to each question.”
Bowman said there are still unanswered or inconsistently answered questions and impacts to consider before moving forward with this or any other tax exemption request.
“I don’t think we should be approving anything that we don’t have, at least, 90 percent faith in the process and the surety that this is what it is,” Bowman said.
Fire District 3 officials had voiced concerns that if the city granted the tax break, it would result in less tax revenue for its operations.
The multifamily property tax exemption program was approved by the Washington Legislature in 2021 and is intended to spur development of apartments, townhomes, condominiums and other higher-density homes compared with single-family houses.
Apartment developer Principal Properties applied to make use of the tax exemption program to build a 200-unit complex along Southwest 15th Avenue near Eaton Boulevard. The new apartment complex would occupy two 5-acre parcels west of Alder Pointe Apartments, a 180-apartment complex also owned and managed by Principal Properties.
Had the tax exemption been approved, the developer would have set aside 20 units for affordable housing. Rental prices for those units would not exceed 30 percent of a household’s monthly income based on 80 percent of the adjusted median income for Clark County.
Bowman said he recently spoke with some state legislators about changes needed to the program.
“I think most people think the (multifamily tax exemption) program is a good program from the standpoint of providing affordable housing and … helping to promote development,” Bowman said. “A lot of our legislators did not know or understand the effect it has on the fire district.”
Bowman said he was hopeful the Legislature would revise the program during the next session to exclude junior taxing districts, like the fire district, from receiving less revenue.
“I think we need to hit pause. That pause needs to be until we have more information or we can get the state to look at changing some of these things that affect some of us more than others,” Bowman said.
Dingman also agreed with holding off on approving tax exemptions requests for now.
“As much as I want to see affordable housing for our people, the impact is too great and the uncertainty is too great,” Dingman said.
As was made clear by the split vote, not everyone on the council agreed. Cortes said Principal Properties, and Fontenette specifically, have been behind some of the largest development projects in Battle Ground that have positively impacted the city’s economic growth.
“If this property remains undeveloped, we won’t see the full potential economic development and full potential windfall to any agency. That won’t help anybody at all,” Cortes said.
Whether Principal Properties will still move forward with the development isn’t clear. During the city council’s Sept. 5 meeting, Tirus “T.J.” Fontenette, managing principal for the company, said the tax break was needed to offset rising construction and management costs. Without the tax exemption, he said lenders may not be willing to finance the project.
“We’re evaluating what we can do moving forward. We understand the process was fully vetted and looked at. It’s just a matter now of seeing how we can get the project to move forward without that,” Fontenette said Tuesday.
If the Legislature does make changes to the program during the next session, Fontenette said the company would consider bringing the exemption request back before the council.
