Another apartment developer in Mission will get public incentives to help finance their project.
The Mission City Council has unanimously approved a tax increment financing, or TIF, request from Block Real Estate Company for its proposed five-story, 300-unit apartment complex at 5665 Foxridge Drive.
City staff negotiated with the developer to bring more sustainability elements into the project, particularly after the developer signaled no plans to include affordable housing units as part of the $114 million luxury apartment complex.
On other recent projects, Mission has used the possibility of TIF and other public incentives as a way to get developers to include sustainable building elements and affordable housing units in projects.
The approval of TIF at last week’s city council meeting came two years after the Mission Planning Commission gave initial approval to the Block apartment plan, which is being built on the site of a former JCPenney call center off Metcalf Avenue that has stood vacant for nearly 20 years.
A look at the TIF details
In a TIF district, tax revenues earned from a development’s increased property values go to reimburse costs incurred by the developer. These TIF districts are typically limited to 20-year lifespans and apply to clearly defined geographic boundaries.
This TIF approved by the Mission City Council is effective for 20 years. Over that period, Block could get reimbursed between $14 million and $14.8 million in tax revenues raised by the apartment project.
The roughly $800,000 difference in what Block could receive comes down to whether it fully meets the city’s criteria for having environmentally sustainable elements to the project.
After the city council earlier pressed Block on adding sustainability measures, city staff negotiated options on the specific percentage of tax increment financing revenues the company will receive based on whether it meets sustainability criteria.
The city has a list of specific sustainability elements it wants to see included in the project that equate to a “Silver” certification under the international Leadership in Energy and Environmental Design standards.
For instance, Block could earn points related to its efforts to mitigate soil erosion at the site, dispose of construction waste in an environmentally friendly way and use water efficiently.
If the developer meets all the city’s criteria, then it will receive $14.8 million in TIF revenues over 20 years. The city, in turn, will receive $4.6 million in increased tax revenues from the project over that same time period.
If the developer fails to meet the sustainability criteria, then it will receive $14 million in TIF revenues over 20 years, with $5.4 million going to the city.
Either way, city officials say the project will be a boon to city coffers. If nothing is done with the site, the city estimates it will bring in less than $150,000 in total tax revenues over the next 20 years.
Other specifics of the TIF project plan:
- Block must earn at least 2 “Green Globes” under the Green Building Initiative standards.
- If the developer fails to finish construction of the project on time, maintain insurance or attain and maintain the sustainability requirements, then the developer will default on the redevelopment agreement.
- The 20-year timeline for the TIF agreement will starat on Jan. 1, 2030, according to the redevelopment agreement.
An unused, vacant site
- Previously, some city councilmembers expressed dismay at the fact that the Block project includes no affordable units (typically defined as a percentage of the metro area’s median income).
- Still, by last week, the city council seemed on board with the project given that the site it will be built on has sat unused for nearly two decades.
- Councilmember Ben Chociej pointed out that the site as is has made the city almost no property tax money for the past 20 years.
- Though the project includes no affordable units, Chociej said he believes the proposal passes the threshold for him to approve public incentives.
- “For me, it satisfies what we laid out as our criteria,” Chociej said. “Two decades of nothing happening there, I think, is a big motivator for me.”
Other Mission projects have received public incentives
The city council has approved public incentives for other recent apartment projects around the city, including:
- both the first and second phase of the Lanes at Mission Bowl complex along Martway Street on the site of the burned out Mission Bowl,
- a 70% tax abatement for the Mission Flats apartment project off of 58th Street and Nall Avenue,
- and a 75% tax abatement for the Mission Beverly apartment project in downtown near Powell Community Center.
Last week, the city council also approved an additional 1% sales tax for a significant renovation project at Mission Mart Shopping Center.
In the future, the city will also consider public incentives to revitalize the long-vacant Wild Oats building at 5101 Johnson Drive.
Go deeper: Watch the city staff presentation about the project and the associated public incentives online here, starting at 5:45.
