The Mission City Council is set to consider an updated tax abatement policy later this month.
This comes after two developers for separate apartment projects, 58 Nall and Milhaus, asked the city for tax abatements in the last year — something that has not happened in Mission since its current tax abatement policy went into effect.
The policy was drafted following a May 31 city council work session and presented to the finance and administration committee on July 5.
A 45% tax abatement is the baseline under the new policy
- This means developers who are approved for a tax abatement in Mission would pay 55% of their property taxes to the city.
- Developers must meet eight criteria in order to qualify for the 45% tax abatement, including a minimum capital investment of $3 million and proven economic benefit to the community.
- The policy states a 75% tax abatement is the maximum for any project for 10 years, “except in extraordinary circumstances,” according to city documents.
- “I appreciate all the work that was done on this,” Councilmember Ken Davis said at the July 5 finance and administration committee meeting. “I find that it really strengthens that policy and makes sure that our city is better protected.”
There are specific ways developers can add onto 45% baseline
- There are five different criteria outlined in the new policy that developers can meet in order to increase the 45% standard tax abatement.
- The first is a project investment adjustment, which, depending on the capital investment, can increase the abatement anywhere from 5% to 15%.
- A target area adjustment allows up to a 10% abatement increase if the development is in an area of distress.
- Developers can earn an additional 10% on the abatement by committing to attainable housing, or an additional 5% to 10% for sustainable developments.
Next steps:
- The finance and administration committee sent the draft policy to the city council for consideration at its July 19 meeting.
- City Administrator Laura Smith told the committee that once the policy is in place, the city can move forward on negotiations with the 58 Nall and Milhaus developers.
- The city shared a draft of the policy with one of the developers, but has yet to hear back, Smith said.
- Smith said the work the city has done on the tax abatement policy is “a good spring board” to strengthen its other incentive policies, like tax increment financing and community improvement districts.
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