Lacey council approves multifamily property tax exemption to create housing in its downtown

Lacey City Council has approved three key ordinances, including a multifamily property tax exemption that will be applied to the city’s Woodland District in hopes of turning it into a vibrant mixed-use destination.

The other ordinances approved were the city’s $112.3 million budget for 2015, and a multiyear sewer rate plan that raises rates 4.25 percent annually through 2019.

A public hearing on the tax exemption was conducted at Thursday night’s council meeting prior to the council taking action. But Mark Lahaie of Olympia, who also is a partner in MJR Development of Kirkland, a business that owns seven office buildings in the district near Huntamer Park, was the only person to speak during the public hearing. He said the exemption will enhance the area.

The Woodland District borders the Chehalis-Western Trail, Interstate 5, Pacific Avenue and College Street. Although the area has plenty of retail, it doesn’t have much in the way of housing. The only significant apartment building in the area is the 100-unit Sixth Avenue Place.

But that might soon change. Lahaie said after the meeting that MJR is studying the feasibility of turning one of their properties in the district — the Prudential building at 621 Woodland Square Loop SE — into housing. To do that, the building would be demolished and then redeveloped into market-rate housing, although they haven’t ruled out affordable housing either, he said.

Prior to voting on the exemption, the council amended the ordinance, adding a sunset clause that will end the exemption in 10 years, on Dec. 31, 2024, unless the council extends it.

The council decided to do this as a way to check whether the exemption is meeting its goals.

The exemption was approved on a 5-0 vote; Mayor Andy Ryder and councilman Jason Hearn were absent. Deputy Mayor Cynthia Pratt led the meeting.

Also Thursday night:

The council adopted the city’s residential sewer rates, raising them 4.25 percent a year from 2015 through 2019. The rates would be $18.04 per month next year, eventually growing to $21.30 per month by 2019, according to city data.

Councilman Lenny Greenstein said it was painful to vote for a rate increase, but they will help fund the city’s $22.8 million capital improvement program.

The council also approved the city’s $112.3 million budget for next year, including a $38.9 million general fund budget.

Finance Director Troy Woo said the city had found a way to balance the general fund budget and compensate for a previously identified $874,000 shortfall without cutting city services or jobs.