A new tax abatement policy is on the city of Mission’s books.
The Mission City Council on Wednesday voted 6-2 to approve an updated tax abatement policy. The updated policy comes after two separate developers — those of 58 Nall and Milhaus — requested tax abatements on apartment projects in Mission.
The policy caps tax abatement at 75% in special circumstances
- Mission’s previous tax abatement policy, which was never used, allowed developers up to 100% deferred property taxes for a 10-year period.
- The new policy starts developers off at 45% tax deferment if they meet certain criteria, such as a minimum capital investment of $3 million into a project.
- Developers can get even higher percentage of tax deferment — up to 75% — by meeting additional criteria such as the inclusion of attainable housing or sustainability elements.
Two councilmembers opposed the new policy
- Ward 3 councilmembers Debbie Kring and Kristin Inman voted against the new tax abatement policy.
- “I just don’t believe in it,” Kring said. “Here, we have on one hand a mill levy proposal increase and a developer we know nothing about, who is going to be in there, gets a break. Something is wrong with this picture.”
- Inman said she “completely agrees” with Kring on this issue.
- Kring also asked what tax-paying residents get out of a tax abatement from an unknown developer.
- Mayor Sollie Flora said she “rejects the premise” that being for economic development and considering public incentives on a case-by-case basis means you are also against residents.
A majority of councilmembers see the policy as ‘more stringent’
- Councilmember Ken Davis said he sees the policy, which is not specific to one developer or project, as a way to tighten up how the city evaluates tax abatement requests.
- Others like councilmembers Ben Chociej and Trent Boultinghouse echoed Davis’ comments.
- Chociej said he believes the new policy is “raising the bar” for developers while simultaneously limiting incentive maximums.
- Boultinghouse said the new policy is “more stringent” and offers better guard rails than the 2007-approved policy.
- “There will be times when it’s not appropriate to grant incentives to a particular development, and we always will retain that right, but we do know developers will be asking,” Boultinghouse said. “When they do ask, I want bonafide, rock solid guard rails like this.”
What’s next:
- City Administrator Laura Smith said two outside consultants are advising the city on finances and conducting the cost-benefit analysis for one of the developments that could be impacted by the new policy have been on standby.
- They are ready to “plug the numbers” to bring back a comprehensive report to the city council about whether at least one of the developers qualifies for a tax abatement under the new policy.
- “We’ve gone as far as we can go without having the policy formally adopted,” Smith said.
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