Downtown apartments clear council hurdle after reconsideration

Downtown apartments clear council hurdle after reconsideration

A rendering of the Hailey Apartments, a mixed-use 166-unit development planned for the southwest corner of Tacoma Avenue South and Earnest S. Brazill Street. It will include two levels of underground parking and retail. Photo via The News Tribune.

TACOMA, Wash. — Tacoma’s City Council has allowed for a do-over after votes last week halted progress on a financially stalled apartment project next to the downtown library.

Several council members were not in attendance at last week’s meeting, making Councilman Chris Beale’s “no” votes on two measures key to stopping the project.

The votes April 30 stopped the apartment developer from switching the plan from a 12-year multifamily property tax exemption plan, which calls for affordable housing, to an eight-year tax credit version that does not. It also put the brakes on amending terms of the development agreement with the city.

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The project has been stalled over financing issues since last summer, and the city’s Economic Development Services office had been working with the developer, Vietnamese company HQC USA LLC, to find a path forward.

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The switch to the eight-year tax credit, eliminating affordable units from the project, was deemed necessary for the site to qualify for a new construction loan.

This time, enough of the other council members were in attendance to vote in support of the project making the switch to the eight-year plan. Beale still voted against the switch and Councilman Anders Ibsen abstained, as he did last week.

Councilman Robert Thoms, who was absent during last week’s vote, appreciated the second chance.

“Whereas I can appreciate the confusion of what was happening last week while four members were away ... we can work on an affordable housing plan and also try to allow existing developments to take place in the city,” Thoms said Tuesday.

He went on to acknowledge the need for a larger debate on affordable housing and tax credits.

“I’d like to think we are open for business and want people to come do as much development as possible as our city expands and grows, taking into account the impacts that said development will have as well as the needs that we have in our community, be it additional amenities, be it additional infrastructure, be it levels of housing for our community,” Thoms said.

Deputy Mayor Conor McCarthy also acknowledged rising rent rates and cost-burdened households.

“This is not something we take light of heart,” McCarthy said before the vote. “That being said, we have a project that’s not even half built that went from being a $35 million project to a $50 million project and is just sitting there. And the only way, given the economics involved, by my understanding, to get this project moving and completed, which will ... include parking spaces for the public library ... is to make some changes to the initial agreement.”

Three people in the audience spoke against allowing the tax credit switch.

“As far as the parking lot benefit,” said one speaker, “I’m just wondering is this also going to be a place for people to sleep in their cars?”

“Considering these tax breaks is just a joke,” said another.

Tuesday’s reconsidered votes were not on the council agenda and came forward during the “unfinished business” segment of the council meeting.

The actions required a suspension of rules to allow for a member from the non-prevailing side of the vote to ask for the reconsideration.

Council member Catherine Ushka brought a reconsideration of the votes toward the end of the meeting.

Beale voted no against the rule suspension, Ibsen abstained, the rest supported it. Mayor Victoria Woodards was not in attendance at the meeting.

Before the votes, Beale made clear his position on the eight-year tax exemption had not changed, but rather his no votes had more to do with his confidence level in a third amended agreement for a development running 15 months behind schedule.

“I know the city staff has done a lot of really great work around this,” Beale said. “I think some of the issues here surround what our current policy is regarding development agreements but also development agreements that involve public land.”

City Manager Elizabeth Pauli explained there was no policy requiring affordable housing on public land projects or in development agreements, and that the city’s Affordable Housing Action Strategy calls for that type of policy to be developed.