City Council okays downtown tax breaks

The City Council has okayed giving property tax breaks for new residential construction in the downtown business district. The new rules are designed to jump-start the creation of new residential housing above downtown businesses.

The Council approved the creation of a so-called Residential Targeted Area in the 22-block downtown area. Council members indicated the City Council will work on adding design guidelines over the coming months.

City Planning Director Ryan Larsen said the city staff recommended the ordinance because increasing the number of people living downtown will increase the number of shoppers at downtown businesses, hopefully benefitting retailers and increasing the city's tax revenue.

But, a letter Barbara and Manfred Hoffman sent to the city suggested not allowing low-income housing. "We grew up in a low-cost housing environment and it creates more problems than it solves." They added. "Crime and drugs will become more of a problem."

Council member Nick Petrish said, "People should not worry we'll have a low-income slum. The City Council is committed to the downtown area."

During the public hearing Monday night, old town resident Hal Rooks urged design standards be imposed, saying "We don't want to lose historic buildings in the central business district."

Larsen pointed that any developer or property owner who wants to take advantage of the tax breaks would need to sign a contract with the city and the contract would require City Council approval, giving the Council some say on the development plans.

Council Member Bill Turner urged approval of the ordinance. "For me there is a sense of urgency in the current business climate to get the tax exemptions approved. The tax exemption will make downtown better."

The new ordinance would give a developer or property owner that created new residential housing above either existing an business or build a new building with residences above a business a property tax break. In effect, the owner would pay no property tax on the new residential construction for 8 years, unless the property owner dedicated 20 percent of the housing to low-income buyers or renters, in which the tax break could last 12 years. The tax break would only be fore the city's portion of property taxes.