City Council will make a final decision about the public investment in this proposed project at a future work session. City Council is considering approving the use of these tools:
- The City would offer the property at no cost to the development team. The City bought the property from LCC in April 2020, through our land bank program, using federal Community Development Block Grant (CDBG) funds. These federal funds require that the property be used for housing, with at least 51% of the units be available to households with incomes at or below 80% of AMI. CDBG rules also require the property be available for occupancy by 2025, or the City risks having to return the funds. The City paid LCC $500,000 for the property. The property was appraised at $680,000 in 2019.
- The City would offer $1.1 million to cover pre-development costs.The City’s RFP identified these funds as potential financial tools and asked that proposals explain how they would use the funds. The Montgomery proposal asked to use the funds to pay for system development charges, permit fees, and the EWEB connection fee. The funds would come from two sources:
- The Downtown Urban Renewal District would contribute $700,000. The Downtown Urban Renewal Plan identifies 1059 Willamette as a redevelopment project eligible for up to $3 million. There are limited funds available in the District, and funds have been committed to other projects, limiting what’s now available to 1059 Willamette.
- The MUPTE Moderate-Income Housing fund would contribute $400,000. The City’s Multi-Unit Property Tax Exemption (MUPTE) program expects to collect $400,000 in the fall of 2021. Those funds are to be made available to support the development of moderate-income housing.
- The project would be eligible for a MUPTE. The City’s MUPTE program offers an exemption on property taxes, up to 10 years, for the assessed value of new residential units in the downtown area. The program’s intent is to encourage the development of housing in the downtown, a long-standing goal of the community. The project would be required to go through the standard MUPTE application process before Council could vote on their application, which includes a community Review Panel, neighborhood engagement, and demonstration that the project meets several public benefit criteria. Visit the MUPTE webpage for more information.