Seattle developer Tarragon will receive a property tax break each year for eight years from the city of Kent for building the 154-unit Kent Station Apartments downtown.
The City Council unanimously approved an exemption at its Tuesday night meeting for Tarragon on property taxes on the building valuation, which is estimated to cost the city about $25,000 a year in tax revenue. The developer still must pay taxes on the land value.
Tarragon started construction on the apartments earlier this year at the shopping center along Fourth Avenue North, across from the Maleng Regional Justice Center. Construction is expected to be done by spring 2016.
The tax exemption will save Tarragon nearly $1.7 million over eight years as it also won’t have to pay building valuation taxes to schools, the Kent Regional Fire Authority, King County and other taxing districts. City principal planner Matt Gilbert said Tarragon will save an estimated $210,000 a year in property taxes.
The council approved a property tax exemption waiver in 1998 to encourage development downtown. No developer had taken advantage of the tax break until Tarragon applied for it in order to help fund building of the apartment complex.
“This is an incentive that this council enthusiastically put into place and renewed just last year with almost exactly this sort of project in mind,” Councilman Dennis Higgins said. “Furthermore, when we talk about exemption of property taxes for eight years, I don’t like to see that revenue go away and I know the school district doesn’t like to see it go away, but at the end of eight years they are going to have revenue that wouldn’t otherwise be there.
“Without this incentive program perhaps the project wouldn’t be built and after eight years that tax revenue wouldn’t be coming in. That’s the eye on the prize that I hope people keep in mind.”
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