Tacoma council OKs 12-year tax exemption for Dome District apartment project

Tacoma City Council has approved a 12-year property tax exemption for the 115-unit Tacoma Trax mixed-use project planned for 415 E. 25th St. in the Dome District. The development will include 23 affordable housing units and a street-level indoor farmers market.

Situated next to the Tacoma Sounder station, Amtrak station and Link light rail stop, the development is geared towards users of mass transit. The project is expected to generate $9 million in salary and labor, according to Debbie Bingham, project manager at the city of Tacoma. Bingham presented the exemption request to council members at the May 11 City Council meeting.

The project is set to break ground this summer and finish by the end of 2023. It will cost about $40 million to develop. The tax exemption will save developers $1.28 million, while the city will still collect $473,000.

Councilmember Lillian Hunter noted the project will generate 183,500 labor hours, which is consistent with the intent of the tax exemption program’s goal of stimulating economic development.

The 154,000-square-foot building is being developed by GIS Companies Group and DMG Capital. Bellevue-based GIS has built multiple mid-rise mixed-use projects around the region.

Plans call for Tacoma Trax to have 76 one-bedroom and 16 two-bedroom units, which are expected to rent for $1,700 and $2,500 per month, respectively. The affordable housing units will be about $1,450 for a one-bedroom unit and $1,635 for a two-bedroom unit, including utilities.

The city’s Multifamily Tax Property Exemption Incentive is designed to encourage development of multifamily projects in one of its 17 mixed-use centers. The exemption is for eight to 12 years on the assessed improvements that create four or more additional housing units. The 12-year option requires that at least 20% of the units are affordable.

Tacoma and Pierce County are seeing rapid apartment development growth. In Tacoma, the development pipeline is up 45% from the same time last year, according to a Kidder Mathews report. The city currently has one of the lowest vacancy rates in the region.

The decision to enter the Tacoma multifamily market wasn’t difficult, said Ryan Grams, GIS Companies Group principal.

“Tacoma’s never been out of our scope,” he said. “It is impressive in terms of what it’s doing in regards to growth.”

Grams said this project’s proximity to mass transit is part of the appeal. He also noted it is the first development of its kind in the area.

The site is near Freight House Square, which is Tacoma’s equivalent of Pike Place Market.

“For a lot of us in King County, there’s this egocentric energy around Seattle and Bellevue,” he said. “But both of those places are very mature. Tacoma has a lot of room to grow.”

By   –  Reporter, Puget Sound Business Journal