No tax break for low-income housing

Posted: Thursday, September 23, 2004

Two low-income housing complexes in Soldotna and Seward will not get a housing tax credit from the borough and will be assessed at their full and true value, the Kenai Peninsula Borough Assembly said Tuesday in Homer.

The owners of the Bayview Apartments in Seward and the Parkview Apartments in Soldotna, which charge restricted rents to their low-income residents, had sought to be qualified by the borough as eligible for an assessment based on the actual income derived from the rent-controlled properties.

Under state law, two other apartment complexes that also happen to be in Seward and Soldotna, are assessed in that fashion because they had been qualified before Jan. 1, 2001. The two apartment buildings under consideration Tuesday fell under a different law requiring the borough assembly to determine whether they qualified for the lower assessment or should be assessed at their true value.

In other words, it was up to the assembly.

Had the assembly passed Resolution 2004-073, it would have cost the borough roughly $9,300 a year in lost tax revenue. But six of the nine members voted against qualifying the two complexes for the lower tax rate.

Milli Martin of Dimond Ridge, Ron Long of Seward, and Grace Merkes of Sterling voted for the measure, arguing that because the two other apartment buildings -- the Kimberley Court Apartments in Seward and the Northwood Retirement Apartments in Soldotna -- were enjoying the low-income assessment, the same should be done for the others.

But the majority argued, among other things, that low-income apartment complex owners often have access to other programs that compensate them for the low rents they charge. Others said it wasn't clear that the small benefit an owner would enjoy by the borough qualification would translate to benefits for the low-income tenants.

Betty Glick of Kenai said the resolution gave her "heartburn" and said property owners going into the low-income rental business should do so with their eyes wide open to all the ramifications of that move.

Gary Superman of Nikiski said the tax savings to the owner and the revenue loss to the borough was not a large number but could grow larger over time, either as assessments grew or as more buildings were deemed qualified.

He said the clincher for him at this point was the fact the borough already was required to assess two apartment complexes at the lower rate by virtue of their being qualified prior to Jan. 1, 2001, and that the state "is not reimbursing us one cent" for that cost. Until the state comes to grips with that, he said, he would not be supporting additional low-assessment properties.

In other business, the assembly approved Ordinance 2004-19-07, appropriating $28,000 for a new vehicle for the planning department, and approved Ordinance 2004-19-09, accepting and appropriating a $50,000 state grant and expenditure of $10,000 in borough funds toward an update of the borough's Coastal Management Plan.

Also approved were Ordinance 2004-19-10, accepting a federal grant of $70,000 for forest health restoration, and Ordinance 2004-29, providing for a reduced filing fee, payment plan or waiver of filing fees for appeal to the Board of Adjustment.

The assembly passed Resolution 2004-088 supporting an application by the Tsalteshi Trails Association seeking an Alaska Department of Natural Resources grant for trails improvements, and adopted Ordinance 2004-19-03, appropriating four Volunteer Fire Assistance Grants from the DNR. The Anchor Point Fire Service Area gets $1,981, the Bear Creek Fire Service Area will get $4,997, the Kachemak Emergency Service Area got $4,925, and the Nikiski Fire Service Area got $2,622.

The assembly also passed Resolution 2004-094, urging the Alaska State Board of Fisheries to provide public opportunity for testimony in Soldotna at its upcoming January meeting.

They also urged the board to hold committee meetings in the central peninsula area concerning Kenai River sockeye, king and coho salmon, and asking the board to arrange for its deliberations to be made available in the Kenai and Soldotna areas through video conferencing.

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