Ordinance would give property owners tax break

Posted: Tuesday, February 05, 2002

Private property owners across the Kenai Peninsula Borough soon may be eligible for a tax break merely for beautifying their land or buildings.

An ordinance being considered by the borough assembly would exempt from taxes the increase in assessed value caused by certain qualifying improvements to land and buildings. The exemption would last four years.

The aim is to encourage beautification of private property across the borough, raising the aesthetics of the community as a whole.

Ordinance 2002-46 gets a public hearing tonight.

Current borough tax law already provides a tax exemption to assessment increases caused by improvements enhancing the exterior appearance or aesthetic quality of structures within 150 feet of rivers and streams.

The new ordinance, introduced by assembly members Gary Superman of Nikiski and Ron Long of Seward would amend that law, extending eligibility to property owners boroughwide.

To qualify, owners would be required to have their property inspected before and after construction of an improvement and complete the job before Jan. 1 of the year for which the exemption is sought.

Few municipalities around the state have such beautification ordinances, according to a survey conducted by the borough assessor's office, said Shane Horan, director of assessing. Where they do exist, they seldom are used.

In a memo to the assembly, Horan said Fairbanks adopted an ordinance in 1985, but in more than 16 years not one property has qualified for an exemption. According to Horan, Fairbanks Deputy Assessor Karl McManus said typical improvements, such as a coat of paint, are considered maintenance, not value-adding projects.

Also, common improvements such as landscaping or new facades are not included in calculating increases to assessed value in Fairbanks, McManus said.

No one has applied under Kodiak Island Borough's exemption law adopted in 1989, said Geoff Mould, assessor for the borough. The same is true in the cities of Seward and Cordova, which adopted such ordinances in 1999 and 1994, respectively.

Ketchikan, the Matanuska-Susitna Borough, the city and borough of Sitka and the Municipality of Anchorage have not adopted tax-exemption laws for beautification projects, according to the survey, although Anchorage, under a separate section of the state law, has exempted improvements to specific projects for the McKay Building and the Ship Creek Power Plant.

Only in the city and borough of Juneau has an exemption that resulted in a significant number of tax reductions. Currently, 193 properties are enjoying a $10,000 exemption for four years.

Improvements allowed focus mainly on eliminating health and safety hazards, but also include structural improvements, energy conservation and providing accessibility for the disabled.

The proposed borough law would not permit exemptions when improvements are designed merely to increase living space or are for a nonresidential use. Neither would an exemption apply to landscaping necessary because of construction activity.

Estimating the impact of the proposed ordinance on revenues is not possible at this point, said Denis Mueller, residential appraisal manager for the borough.

"It's kind of an unknown thing," Mueller said, "because we don't know who or how many would apply. We also don't have any specific criteria to tell us what would qualify."

Those issues still need to be resolved, he said.

Chances are there would not be a great rush of projects, at least not at a rate likely to cause a revenue headache.

Only four projects have earned grants under the current near-river program. Those property enhancements were valued at $17,800. That translated to about $200 in exempted taxes, according to the assessor's office.

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