AGENDA BILL. Beaverton City Council Beaverton, Oregon

Transcription

1 AGENDA BILL Beaverton City Council Beaverton, Oregon SUBJECT: Resolution to Exempt Specific Affordable FOR AGENDA OF: BILL NO: Housing Developments from Property Taxes Mayor's Approval: ~~ DEPARTMENT OF ORIGIN: COD DATE SUBMITTED: CLEARANCES: g~oattorney~v Finance ~ Planning PROCEEDING: ACTION ITEM EXHIBITS: 1. Resolution 2. Application: Spencer House Apts. 3. Application: The Barcelona at Beaverton 4. Application: Merlo Station Apts. BUDGET IMPACT EXPENDITURE AMOUNT APPROPRIATION REQUIRED $x BUDGETED $x REQUIRED $x RECOMMENDED ACTION: City Council approves the attached resolution (A Resolution to Exempt Specific Affordable Housing Developments from Property Taxes). HISTORICAL PERSPECTIVE: On August 14, 2013, the Beaverton City Council officially adopted property tax exemption as an affordable housing development incentive. The program was adopted pursuant to ORS and is tailored specifically to non-profit housing providers that serve residents earning below 60 percent of the area median income. Subsequent to adoption, staff launched a statewide marketing effort to promote the program. Staff also began discussions with several non-profit housing corporations that currently supply affordable housing units within the city and informed them of the exemption program. By the March 1, 2014, application deadline, two non-profit organizations that operate several housing developments in Beaverton had responded to the City's inquiries and submitted applications for tax exemption. The applications include the Spencer House Apartments with 48 units, land planned for the Barcelona Apartments (future 47 units), and the Merlo Station Apartments with 128 units. If approved by the Council, the proposed exemptions will benefit a total of 223 units. INFORMATION FOR CONSIDERATION: Staff has reviewed the applications and determined that all application submittals meet the program approval criteria. If the City Council adopts the resolution for approval, the City of Beaverton will forego an estimated $22,630 in potential 2014/15 tax revenue. This translates to approximately $128 in savings per unit that will be awarded to the affordable housing provider. It should be noted that if approved, the City's share of foregone revenue will account for only 21 percent of the total exemption that will benefit the applicants. The City Council will recall that public agencies representing 99 percent of the taxing authority over the subject properties endorsed the City's program prior to Council adoption and passed resolutions to forgo their share of property taxes levied. The total revenue that will be foregone by all jurisdictions amounts to approximately $105,159 (or $597 per unit). Agenda Bill No: 14057

2 RESOLUTION NO....:...;42=2:...:.4 _ A RESOLUTION TO EXEMPT SPECIFIC AFFORDABLE HOUSING DEVELOPMENTS FROM PROPERTY TAXES WHEREAS, Beaverton Municipal Code (BMC) section 3.20 provides for application and consideration of non-profit corporation low-income housing project exemptions from property taxes; and. WHEREAS, the BMC requires applications for exemption be filed with the City by March 1; and WHEREAS, on February 28,2014, Community Partners for Affordable Housing (CPAH), a qualified non-profit corporation, filed an application for property tax exemption for one existing low-income housing project and another for land planned for low-income housing and meets all the applicable criteria for exemption under BMC 3.20; and WHEREAS, MHT Housing, Inc., a qualified non-profit corporation, filed an application dated February 28, 2014, for property tax exemption for one low-income housing project, and under BMC 3.20, meets all the applicable criteria for exemption; and WHEREAS, upon review of the applications, it was found that granting the exemptions would be consistent with the applicable Beaverton Municipal Code and other adopted City housing policies; now, therefore BE IT RESOLVED BY THE COUNCIL OF THE CITY OF BEAVERTON, OREGON: Section 1. Section 2. Section 3. The applicant, Community Partners for Affordable Housing, qualified for the exemption set forth in Beaverton Municipal Code section The applicant, MHT Housing, Inc., qualified for the exemption set forth in Beaverton Municipal Code section The Finance Director is directed to certify to the Assessor of Washington County that the City of Beaverton agrees to the abatement of property taxes for the following three housing projects: a. b. c. Spencer House Apartments, SW Larch Place, Beaverton OR (Tax Lot 1S116BD02200) The Barcelona at Beaverton, SW 2 nd Street, Beaverton OR (portions of Tax Lots 1S115BC03600, 1S115BC03700, and 1S115BC03800) Merlo Station Apartments, 2032 SW Merlo Rd, Beaverton, OR (Tax Lots 1S108BB01400, 1S108BB01500, 1S108BB01600, and 1S1 08BB01700) Section 4. This resolution is effective immediately upon passage. Resolution No Agenda Bill No

3 Adopted by the Council this day of, 2014 Approved by the Mayor this day of,2014 Ayes: Nays: _ ATTEST: APPROVED: Catherine Jansen, City Recorder Denny Doyle, Mayor Resolution No

4 Beaverton o H E C; 0 N EXHIBIT 2 Instructions and Application Property Tax Exemption Program for Low-Income Housing Held by Charitable, Nonprofit Organizations* CPAH: Spencer House Apartments *Implementing provisions of ORS City of Beaverton' 4755 SW Griffith Drive' PO Box 4755' Beaverton, OR 97076' 3

5 The 1985 Oregon legislature authorized a property tax exemption for low-income housing held by charitable, nonprofit organizations. 1 The tax exemption is intended to benefit low-income renters and is available for qualifying property located in some parts of Washington County. Application guidelines: Charitable, nonprofit organizations that provide housing to low-income persons 2 are eligible. The organization must be certified by the Internal Revenue Services as a 501(c)(3) or 501 (c)(4) (ORS ). Organizations must own or have a leasehold interest in the property. In addition, your nonprofit organization can qualify if it participates as the general partner in a limited partnership who owns the property, so long as the nonprofit organization is responsible for the day-to-day management of the property. In this case, the limited partnership must be listed as the owner. The site must be able to show that it will be occupied during the eligible tax year by income-eligible households. Vacant land intended to be developed as low-income housing is eligible for the exemption provided under this program. Applicants who are leaseholders must have a signed leasehold agreement by the April 1 application deadline. The program is set to sunset in 2015; applications for the exemption must be made annually. Applications for each year are due by April 1 of that year. Applicants may also apply for the exemption for properties expected to be acquired after April 1 and before July 1 of the tax year but the application form must be submitted within 30 days ofproperty acquisition. The application for tax exemption is for property that is, or will be, owned or leased from July 1 of 2014 through June of the year for which the tax exemption is requested. If the property changes ownership between July 1 and June 30 of the year for which the tax exemption is requested, please notify the city of Beaverton of the change in the status so that the continuing eligibility of the property can be evaluated. Only the residential portion of property that is used to house low income people or property that is being held for future development as low income housing. For example, the commercial space in a mixed-use building would not be eligible for the exemption. SB 503, Chapter 660 Oregon Laws 1985 and Chapter 108 Oregon Laws 1993 amending Oregon Revised Statutes "Low-income persons" are individuals earning 60% or less of the area median income. See Income Eligibility Schedule (Attachment A) [U.s.C. Section 1437 (a)(b)(2)]. 4

6 Property may qualify for exemption under this program when governing bodies and service districts representing 51 % of the taxes levied on the property have formally agreed to the exemption. Note: Please check to see that your property{ies) are located within the jurisdiction ofa participating governing body. As of November 2013 the governing bodies are the City of Beaverton, Washington County, Beaverton School District, Tualatin Hills Park and Recreation District, Tualatin Valley Fire and Rescue, Metro, and Portland Community College have approved the exemption. The most recent property tax statement for the property should include a list of taxing jurisdictions and districts that have levied against the property. Who administers the program? The City of Beaverton will administer the program with close coordination with the Washington County Office of Assessment and Taxation.. Please contact Jeff Sa/von at or at jsalvon@beavertonoregon.gov with questions. How to apply? Submit a complete and accurate application which includes all the following information: 1. Complete Sections A and E for your organization. Complete Sections B f C, and D for each property for which a property tax exemption is being requested. 2. All applications must be signed and notarized - Notarization (Section E) is required only for each organization and application, not each property. 3. New applications must include a copy of IRS 501(c)(3) or (4) letter certifying your organization's eligible charitable nonprofit status. If your nonprofit organization is a general partner in a limited partnership who owns the property, the nonprofit organization must be responsible for the day-to-day management of the property. In this case, the limited partnership must be listed as the owner. 4. Applications must be received at the City of Beaverton no later than April 1, Postmarks are not sufficient-applications sent by mail must be received by April 1. Applications received after Apri/1 will not be accepted, and exemptions will not be granted. 5. No application fee is required to apply for this program. 5

7 Submit applications to the address below: City of Beaverton Community and Economic Development Department C/o Jeff Salvon P.O. Box 4755 Beaverton, OR If you have questions about the application, please contact the Community and Economic Development Department at

8 Attachment A 2013 Income Eligibility Schedule The following income eligibility schedule is to be used in determining the amount of eligible property. Only units which are intended for occupancy by households with incomes at or below these income guidelines are eligible for the exemption. Figures are rounded to the nearest $50. Household Size Household Income Not to Exceed 3 1 $ $33,350 3 $37,500 4 $41,650 5 $45,000 6 $48,350 Note: Unoccupied housing units at the time of application may be included in the total eligible units if the applicant meets the following conditions: A. The units will be available exclusively to eligible low-income persons. B. The units are intended to be occupied within the year. C. The applicant must provide a written statement to the effect of A and B above and attach it to the application. 3 The schedule is based on 60% of the 2013 Portland Area Median Income ($68,300 for a family of 4), adjusted for household size, as determined by the U.S. Department of Housing and Urban Development 7

9 Application Property Tax Exemption for Low-Income Housing Held By Charitable, Nonprofit Organizations (Implementing Provisions of ORS ) (For Office Use Only), City of Beaverton, Oregon Date Received _ Contents Section A B C D E.. Application Information Property to be Considered for Exemption Leasehold Interest in Eligible Property Description of Charitable Purpose/Project Benefit Declarations Section A - Applicant Information Corporate Name: Community Partners for Affordable Housing Address: 6380 SW Capitol Hwy. #151 Portland OR Telephone Number: =50=3~-2=9"-"3'--4.:...:0"-"3=8 Business ----'1 Alternate Phone _ Address: sgfink@cpahinc.org Chief Executive Officer: Sheila Greenlaw-Fink Contact Person: Linn Brillman Property Tax Exemption Application - 2/26/14 Page 1 8

10 Section B - Property to be Considered for Exemption (Sections 8, C, and D must be filled out for each projecuproperty for which you are requesting a tax exemption) Owner of record: Preserve Spencer House, Inc. Property Address: SW Larch Place, Beaverton OR (Physical address of the property for which you are seeking an exemption) Property Tax Account Number(s): R Taxlot Account Number(s): (code area), 1S116BO (map) (Be sure to identify all account numbers for both land and improvements on the property for which you are requesting tax exemption; in some cases, land and improvements may have separate account numbers. The Property Tax Account Number(s) and the Taxlot Account Number(s) should be on your property tax statements.) Total Number of Residential Units in Building(s): 48 units Number of Residential Units Occupied by Very Low-income People: 48 Total Square Feet in BUilding(s): 33,260 square Feet Total Square Feet of Residential and Residential Common Area: 4 33, ,485 (common) for a total of 34,745 square feet 4 This includes halls, baths, dining, and other space dedicated to residential use. Retail uses and other accessory uses not related to residential use are not to be counted. Property Tax Exemption Application - 2/26/14 Page 2 9

11 Section C - Eligible Property Do you own the property in question? c;yes +No If you do not own the property, do you have leasehold interest in the property? Yes No If you have an ownership interest in the property, but your organization is not the record owner, describe your interest in the property. The property is a single asset entity (SAE) for which CPAH is the HUD-authorized representative. responsible for day to day management. The nonprofit SAE is Preserve Spencer House. Inc. (TID # ). and the nonprofit representative (owner) is CPAH (TID # ). Property Tax Exemption Application - 2/26/14 Page 3 10

12 Section D - Description of Charitable Purpose/Project Benefit Briefly describe your organization's charitable purpose: CPAH's mission is to promote a healthy community through the development of permanent affordable housing, sustainable economic growth, and community-based partnerships. Our donors, funders, residents and volunteers help us accomplish our mission through work in the following five areas: Affordable housing development: building service-enriched, green and sustainable projects for the health of our residents and the environment. Partnerships with individuals and groups in our community. Outreach and education on affordable housing. Promotion of affordable housing policy incentives. Strong internal organizational systems and capacity. Is all or a portion of the property is being used for the charitable purpose? +Portion If a portion, approximately what percentage of the property? _ Will the cost savings resulting from the proposed tax exemption enable you to do the following: Reduce the rents that your very low-income residential tenants pay on the property in question? SYes + No If so, by approximately how much? The exemption (based on 2013 tax statement of $11,035), represents $230 per unit per year, or $19 monthly per resident. The rent increases required from year to year to pay higher utility and other operating costs (normally 2-5% per year) will be reduced by the amount of this exemption. Provide greater services to your very low-income residential tenants? ~ Yes + No If yes, in what way(s)? CPAH provides after school programs for the children at the property including homework mentoring and enrichment activities such as crafts, games, computers and gardening, and a 5-week summer youth program. We coordinate regularly with police, fire, library, schools, and parks and recreation staff to ensure a flow of communication which reduces the number and nature of police and fire responses at Property Tax Exemption Application - 2/26/14 Page 4 11

13 the site, and enhances the educational performance, health and stability of residents, supporting a direct reduction in the demand for government funded services. CPAH offers a variety of community-building and support activities (including coordinated backpack, winter coat. and holiday gift drives). Provide any other benefit to your very low-income residential tenants? SYes + No If yes, please explain. As noted above, CPAH staff coordinates community building activities including National Night Out celebrations, community potlucks, holiday parties, and community safety meetings, often with Fire and Police Department support. If you lease the property identified in this application, please explain to what extent your lease agreement coincides with the timeframe of the qualifying tax year: N/A Property Tax Exemption Application - 2/26/14 Page 5 12

14 Section E - Declarations (Please read carefully and sign below before a notary) 1. I have attached to this application the IRS declaration of the status of applicant as a tax-exempt corporation under 26 U.S.C. Section 501 (c)(3) or (4). 2. I am aware that the income-qualifying tenants must meet the income guidelines in accordance with 42 U.S.C. Section 1437 (a)(b)(2) as amended. (See Attachment A, Income Eligibility Schedule.) Tenant incomes do not exceed these limitations as I verily believe. 3. I am aware of all requirements for tax exemption imposed by DRS (Chapter 660 Oregon Laws 1985, as amended by Chapter 756 Oregon Laws 1987). 4. The above-described property(ies) qualifies(y), or will qualify upon completion of any rehabilitation improvements and subsequent occupancy by very low-income residents, for property tax exemption within 30 days of the April 1 application or the date of approval. 5. All the information in this application is true to the best of my belief and knowledge, and is for the purpose of determining eligibility for the tax exemption program authorized by DRS By: SI{A ({-evl ~ -::J--F-~ Agency Chief Executive Officer (Signature) Sheila Greenlaw-Fink Agency Chief Executive Officer ~S'E!~;;S;:'~~~$."'~~~S'~'~3S:S:S~ OFf-iCtAL SEAL SHJ~NNON YOLANDA WILSON NOT~.'1Y PUBLIC - OREGON Notary Public for Oregon (Signature) S k O<.-V) V) D V) \tii' {os' 0 h Notary Public for Oregon (Print or Type Name) My Commission Expires 3( U-/I Property Tax Exemption Application - 2/26/14 COMMISSION NO Page 6 MY COMMISSION EXPIRES MARCH 22, '"""" 13

15 .. :INTERNAL REVENUE SERVICE DISTRICT DIRECTOR P. O. BOX 2509 CINCINNATI, OR Employer Identification Number: Date: IIAB 11 IH. DLN: COMMUNITY" PARTNERS FOR AFfORDABLE Contact Person: HOUSING THOMAS E O'BRIEN Ioll PO BOX Contact Tel~phone Number: TIGARD, OR (877) Our Letter Dated: February 1995 Addendum Applies:' No \ 1 I i I Dear Applicant: This 1UOclifies our letcer of the above date in which we stated that you would be t,:-eated as an organization that is not a private foundation until the ~iration of your advance ~ling period. Tour exempt st~tus under section SOl (a) of the Internal Revenue Code as an organization describe!! in section 501 (e) (3) is still in effect. Based on the ij1foj:matlon you submitted, we have determined that you are not a private foundation within the meaning of section 509 (a) of the Code because you are an ~rganization of.the type described in section S09(a) (1) and 170 (b) (1') (A) (vi)'. Grantors and contributors may rely on this determination unl~ss the.internal Revenue Se'rviec pub~ishes notice to the contrary. Rowev~r, if you lose your section 509 (a) (1) status, a grantor or contributor may not'rely on. this determination if he or she was in part responsible for, or was aware of, the act or failure to' act, or the substantial or Illaterial change 'on the.part of, the organization, that resulted in your, 105S of such status, Or if he'or she' acquired knowledge that the Internal Revenue Service had given notice that yc?u. would no longer be classified as ~ section 509 (a) (l) organization.. J:f we have indicated in the heading of this letter that an addendum applies, the addendum enclosed is an integral. part of this let~er. Because this letter could help resolve any questions about.your private foundation status, please keep it in your permanent records. If you have any questions, please contact the person whose name and telephone number are shown above., SincerelY your~, e:~ij/j District Director Letter 1050 (DO/OG) 14

16 Instructions and Application RECEIVED FEB City of Beaverton Planning Services EXHIBIT 3 Property Tax Exemption Program for Low-Income Housing Held by Charitable, Nonprofit Organizations* CPAH: The Barcelona at Beaverton "Implementing provisions of ORS City of Beaverton 4755 SW Griffith Drive PO Box 4755 Beaverton, OR t5

17 The 1985 Oregon legislature authorized a property tax exemption for low-income housing held by charitable, nonprofit organizations. 1 The tax exemption is intended to benefit low-income renters and is available for qualifying property located in some parts of Washington County. Application guidelines: Charitable, nonprofit organizations that provide housing to low-income persons 2 are eligible. The organization must be certified by the Internal Revenue Services as a 501 (c)(3) or 501 (c)(4) (ORS ). Organizations must own or have a leasehold interest in the property. In addition, your nonprofit organization can qualify if it participates as the general partner in a limited partnership who owns the property, so long as the nonprofit organization is responsible for the day-to-day management of the property. In this case, the limited partnership must be listed as the owner. The site must be able to show that it will be occupied during the eligible tax year by income-eligible households. Vacant land intended to be developed as low-income housing is eligible for the exemption provided under this program. Applicants who are leaseholders must have a signed leasehold agreement by the April 1 application deadline. The program is set to sunset in 2015; applications for the exemption must be made annually. Applications for each year are due by April 1 of that year. Applicants may also apply for the exemption for properties expected to be acquired after April 1 and before July 1 ofthe tax year but the application form must be submitted within 30 days ofproperty acquisition. The application for tax exemption iscfor property that is, or will be, owned or leased from July 1 of 2014 through June of the year for which the tax exemption is requested. If the property changes ownership between July 1 and June 30 of the year for which the tax exemption is requested, please notify the city of Beaverton of the change in the status so that the continuing eligibility of the property can be evaluated. Only the residential portion of property that is used to house low income people or property that is being held for future development as low income housing. For example, the commercial space in a mixed-use building would not be eligible for the exemption. SB 503, Chapter 660 Oregon Laws 1985 and Chapter 108 Oregon Laws 1993 amending Oregon Revised Statutes "Low-income persons" are individuals earning 60% or less of the area median income. See Income Eligibility Schedule (Attachment A) [U.S.C. Section 1437 (a)(b)(2)]. 16

18 Property may qualify for exemption under this program when governing bodies and service districts representing 51 % of the taxes levied on the property have formally agreed to the exemption. Note: Please check to see that your property(ies) are located within the jurisdiction of a participating governing body. As of November 2013 the governing bodies are the City of Beaverton, Washington County, Beaverton School District, Tualatin Hills Park and Recreation District, Tualatin Valley Fire and Rescue, Metro, and Portland Community College have approved the exemption. The most recent property tax statement for the property should include a list of taxing jurisdictions and districts that have levied against the property. Who administers the program? The City of Beaverton will administer the program with close coordination with the Washington County Office of Assessment and Taxation.. Please contact Jeff Salvon at or at jsalvon@beavertonoregon.gov with questions. How to apply? Submit a complete and accurate application which includes all the following information: 1. Complete Sections A and E for your organization. Complete Sections B, C, and D for each property for which a property tax exemption is being requested. 2. All applications must be signed and notarized - Notarization (Section E) is required only for each organization and application, not each property. 3. New~plications must include a copy of IRS 501(c)(3) or (4) letter certifying your organization's eligible charitable nonprofit status. If your nonprofit organization is a general partner in a limited partnership who owns the property, the nonprofit organization must be responsible for the day-to-day management of the property. In this case, the limited partnership must be listed as the owner. 4. Applications must be received at the City of Beaverton no later than April 1, Postmarks are not sufficient-applications sent by mail must be received by April 1. Applications received after Apri/1 will not be accepted, and exemptions will not be granted. 5. No application fee is required to apply for this program. 17

19 Submit applications to the address below: City of Beaverton Community and Economic Development Department C/o Jeff Salvon P.O. Box 4755 Beaverton, OR If you have questions about the application, please contact the Community and Economic Development Department at

20 Attachment A 2013 Income Eligibility Schedule The following income eligibility schedule is to be used in determining the amount of eligible property. Only units which are intended for occupancy by households with incomes at or below these income guidelines are eligible for the exemption. Figures are rounded to the nearest $50. Household Household Income Size Not to Exceed 3 1 $ $33,350 3 $37,500 4 $41,650 5 $45,000 6 $48,350 Note: Unoccupied housing units at the time of application may be included in the total eligible units if the applicant meets the following conditions: A. The units will be available exclusively to eligible low-income persons. B. The units are intended to be occupied within the year. c. The applicant must provide a written statement to the effect of A and B above and attach it to the application. 3 The schedule is based on 60% of the 2013 Portland Area Median Income ($68,300 for a family of 4), adjusted for household size, as determined by the U.S. Department of Housing and Urban Development 19

21 Application Property Tax Exemption for Low-Income Housing Held By Charitable, Nonprofit Organizations (Implementing Provisions of ORS ) (For Office Use Only) " City of Beaverton, Oregon Date Received _ Contents Section A Application Information 1 B Property to be Considered for Exemption 2 C Leasehold Interest in Eligible Property... 3 D Description of Charitable Purpose/Project Benefit 4 E Declarations... 5 Section A - Applicant Information Corporate Name: Community Partners for Affordable Housing Address: 6380 SW Capitol Hwy.. #151 Portland. OR Telephone Number: Business Alternate Phone Address: sgfink@cpahinc.orq (or. kpfox@cpahinc.org) Chief Executive Officer: Sheila Greenlaw-Fink Contact Person: Karen Perl Fox Property Tax Exemption Application - 2/28/14 Page 1 20

22 Section B - Property to be Considered for Exemption (Sections B, C, and D must be filled out for each project/property for which you are requesting a tax exemption) Owner of record: Currently: City of Beaverton Planned Transition, Fall 2014 Property Address: SW 2 nd, Beaverton (to be reassigned by US Postal Service based on future development),a RePlat of'block 4 Hocke~'s Second Addition to Beayerton lying in'the s~uth~~ o~e quarter,qfthenortliwestonequarterofs~tjon 15~Township 1 south, RaD.g~ 1 w~ Will~ette, " Meridian in the.city ofbeavert~n, Washington County, Oregon. (Physical address of the property for which you are seeking an exemption) Property Tax Account Number(s): Portions of R116957, R116939, R Taxlot Account Number(s): Portions of 03600,03700,03800 (Be sure to identify all account numbers for both land and improvements on the property for which you are requesting tax exemption; in some cases, land and improvements may have separate account numbers. The Property Tax Account Number(s) and the Taxlot Account Number(s) should be on your property tax statements.) Total Number of Residential Units in Building(s): 47 Number of Residential Units Occupied by Very Low-income People: 47 Total Square Feet in Building(s): 40,281 Total Square Feet of Residential and Residential Common Area: 4 40,281 All common space in the building is for use of the residents, with only "incidental" use by others based on availability 4 This includes halls, baths, dining, and other space dedicated to residential use. Retail uses and other accessory uses not related to residential use are not to be counted. Property Tax Exemption Application - 2/28/14 Page 2 21

23 Section C - Eligible Property Do you own the property in question? Yes No (still under City ownership at this time) If you do not own the property, do you have leasehold interest in the property? Yes* No If you have an ownership interest in the property, but your organization is not the record owner, describe your interest in the property. NOTE: Your nonprofit organization must be responsible for day-to-day operations in order to be eligible for exemption under this program. Include that information in your description. The City of Beaverton signed an Option Agreement for this property with Community Partners for Affordable Housing (CPAH) on August 16, It is anticipated that this Option Agreement will be converted to Ground Lease in Fall 2014 (after land use and financing approvals are in place. and partition completed). (This is why we have included at this time all three tax lots until the final pal1itiol1 is completed). If you have a leasehold interest, describe your interest and include a statement describing how, as the nonprofit organization, you are obligated under the terms of the lease to pay the ad valorem taxes on this property or other contractual arrangement such that the property tax exemption benefits accrue to the nonprofit agency and the residential tenants rather than the owner or corporation from whom you lease. The affordable housing development on this site will be owned by a limited partnership (tentatively called The Barcelona at Beaverton Limited Partnership). A single member LLC (tentatively called CPAH Barcelona GP LLC) will be the general partner of this partnershjp--cpah will be the sole member of the LLC. If the property is being held for future low income housing development, describe the future development (number of units, units broken out by # of bedrooms, amenities available, etc.) and the income level(s) that will be served by the future development. A 47-unit affordable housing development will be constructed, with 3 studios, 41 onebedroom units, and 3 two-bedroom units. The building area will be approximately 40,281, and will include a community room with kitchenette and restrooms, a computer room and small service partner office on the first floor, and a common interior and exterior space on the 4 th floor. The project will serve those at or below 60% of area median income, with an exempt manager's unit. Eight units will be set-aside for very low-income seniors. All units will be adaptable, and eight will be fully accessible. The building will include an elevator. A Tri-Met bus stop is located just outside the entrance to the building. Property Tax Exem ption Application - 2/28/14 Page 3 22

24 Section D - Description of Charitable Purpose/Project Benefit (Use for multiple projects if same conditions apply) Briefly describe your organization's charitable purpose: CPAH's mission is to promote a healthy community through the development of permanent affordable housing, sustainable economic growth, and community-based partnerships. Our donors, funders, residents and volunteers help us accomplish our mission through work in the following five areas: affordable housing development (building service-enriched sustainable projects promoting the health of our residents and the environment), partnerships with individuals and groups in our community, outreach and education on affordable housing, promotion of affordable housing, and the development of strong internal organizational systems and capacity. Is all or a portion of the property is being used for the charitable purpose? All Portion If a portion, approximately what percentage of the property? 100% of the partitioned lot. Will the cost savings resulting from the proposed tax exemption enable you to do the following: Reduce the rents that your very low-income residential tenants pay on the property in question? Yes No If so, by approximately how much? The value of the tax exemption is reflected in the rents we have established. We assumed the value at approximately $20,000 annually, for a savings of $425 per unit annually or $35 per household monthly. Provide greater services to your very low-income residential tenants? No If yes, in what way(s)? CPAH provides a mix of services at its seven properties, depending on tenant mix and on-site facilities. Because there will be 8 units set-aside for seniors at this property, our senior services coordinator will organize activities and connections to nearby services. CPAH coordinates regularly with police, fire, library and schools staff, to ensure a flow of communication which reduces the number and nature of police and fire incidents at the site, and enhances educational performance, health and stability of residents. thereby supporting a reduction in the demand for government funded Property Tax Exemption Application - 2/28/14 Page 4 23

25 services. CPAH offers a variety of community-building and support activities (such as coordinated. backpack, winter cost. and holiday gift drives). Provide any other benefit to your very low-income residential tenants? Yes No If yes, please explain. As noted above, CPAH staff coordinates community-building activities. including National Night Out celebrations. community potlucks, holiday parties. and community safety meetings. often with fire and police department support. If you lease the property identified in this application, please explain to what extent your lease agreement coincides with the timeframe of the qualifying tax year: Our construction loan will close on or around November which is when the ground lease for this property will be executed with the City. This would mean 8 months (November 2014-June 2015) would be exempt via this application. Property Tax Exemption Application - 2/28/14 Page 5 24

26 Section E - Declarations (Please read carefully and sign below before a notary) 1. I have attached to this application the IRS declaration of the status of applicant as a tax-exempt corporation under 26 U.S.C. Section 501 (c)(3) or (4). 2. I am aware that the income-qualifying tenants must meet the income guidelines in accordance with 42 U.S.C. Section 1437 (a)(b)(2) as amended. (See Attachment A, Income Eligibility Schedule.) Tenant incomes do not exceed these limitations as I verily believe. 3. I am aware of all requirements for tax exemption imposed by ORS (Chapter 660 Oregon Laws 1985, as amended by Chapter 756 Oregon Laws 1987). 4. The above-described property(ies) qualifies(y), or will qualify upon completion of any rehabilitation improvements and subsequent occupancy by very low-income residents, for property tax exemption within 30 days of the April 1 application or the date of approval. 5. All the information in this application is true to the best of my belief and knowledge, and is for the purpose of determining eligibility for the tax exemption program authorized by ORS By:.~ ~'LA... ~.(t~-;(,, Agency Chief Executi~e Officer (Signature) Sheila Greenlaw-Fink Agency Chief Executive Officer (Print or Type) For: Community Partners for Affordable Housing Corporate Name (Print or Type) S-hc(c<.. ~ O./2L-t!~ [,,(SVL.-c-...k--'::) $;,0 ~L-f~~h-. SUBSCRIBED AND SWORN to before me this L-t61"-day of reubn-'lll/v-,j '2..0 1, orr,cial SEAL SHANNON YOLANDA WILSON NOTARV I"UBLIC - OREGON COMMISSION NO, MY COMMISSION EXPIRES MARCH 22, 2015 Notary Public for Oregon (Signature) ShCl/nV)/:H'l W;L~o v, Notary Public for Oregon (Print or Type Name) My Commission Expires Property Tax Exemption Application - 2/28/14 Page 6 25

27 ...,I i < \ INTERNAL REVENUE SERVICE DISTRICT DIRECTOR P. O. BOX 2508 CINCINNATI, OR Employer Identification Number: 1 Date: lias r I.,n DLN: I t ~ COMMUNITY PARTNERs FOR AFfORDABLE Contaot Person: HOUSING THOMAS E O'BRIEN PO BOX Contact Tel~phone Number: TIGARD, OR (877) OUr Letter Dated: February 1995 Dear Applicant: Addendum Jl.pplies:.{ No i This modifies our letter of the above date in which we stated that you would be t:~eatedas an organization that is not a private foundation until the C](piration of your advanoe ~ing period...' Your exempt sutus under section 501(a} of the Internal R.evenue Code as an organization desorlbeli in seotion 501(0) (3) i.e still in effect. Based on the 1Jl!ormation you subtuitted, we have determined that you are not a private foundation within the meaning of section 509 (a) of the COde 1>ecause you. are an ~rganization of.the type described in section 509 (a) (ll and 170 (b) (1:) (Al (n). Grantors and contributors may rely on this deteradnation unless the. Znternal Revenue Se'rvice puh~ishes notice to the contraxy. Howev~r,.if you lose your section 509 (a) (ll status, a grantor or contributor may not rely on. this determination if he or she was in part responsible for, or was aware of, the act or failure to' aot, or the substantial or material change 'on the.part of. the organization, that resulted in your. loss of such status, or if he' or she' acquired knowledge that the Internal R.evenue Service had given notice. that y,?u. would no longer be classified as ~'section 509(a)(1} organization. :If we have indicated in..the h~ading of this letter that an addendum applies, the addendulll enclosed is an integral. part of this lett:er. Because this letter could help resolve any questions about.your private foundation status, please keep it in your permanent records. If you have any ~estions,.please contact the person whose name and telephone number are shown above., SinoerelY your~, ~~IJ/J District Director Letter 1050 (DO/CG) 26

28 EXHIBIT 4 HOUSING INC. MIDWEST: An affordable housing corporation serving Michigan and the Pacific Northwest PACIFIC NORTHWEST: TELEG RAPH ROAD, STE SW BANI< ROAD BINGHAM FARMS, IVI',CHIGAN VASHON, WASHINGTON T F T F February 27, 2014 RECENtlED Mr. Jeff Salvon Community and Economic Development Department City of Beaverton FEB P.O. Box 4755 Beaverton Oregon, City of Beaverton PI::. ' Re: Merlo Station Property Tax Exemption Application Dear Mr. Salvon: ~nnmg Services Included herein is our property tax exemption application for Merlo Station Apartments. As instructed, we have completed Sections A and E for our organization, and Sections B, C, and D for the property. In addition, the application has been signed and notarized in accordance with Section E, and I included our IRS 501(c)(3) letter certifying our organization's eligible charitable nonprofit status. As required under Attachment A, please note that all units are at or below 60% of area median income; that all units are and will continue to be available exclusively to households that conform to 30%, 50% and 60% of area median income; and that all units are leased with the exception of any vacant units which are actively being marketed and leased in accordance with the income set-asides so noted. Thank you for your attention to this. Sincerely, (~~~ Christopher H.l3ric Executive Vice President, MHT Housing IV, Inc. Sole Member ofmht Merlo Station LLC, General Partner Merlo Station Apartments Limited Partnership Cc Torn Brenneke 27

29 Application Property Tax Exemption for Low-Income Housing Held By Charitable, Nonprofit Organizations ~={ECE'VED (Implementing Provisions of ORS ) FEB (For Office Use Only) J e. cc... W'c, LVI I Planning Services, City of Beaverton, Oregon Date Received _ Contents Section A Application Information. 1 B. Property to be Considered for Exemption. 2 C Leasehold Interest in Eligible Property. 3 D Description of Charitable Purpose/Project Benefit. 4 E - Declarations. 5 Section A - Applicant Information Corporate Name: MHT Housing IV, Inc., a housing nonprofit organization and sole member of MHT Merlo Station, LLC, General Partner of Merlo Station Apartments Limited Partnership ("Owner"). Address: 9620 SW Bank Road, Vashon, WA Telephone Number: / Business Alternate Phone Address: cbric@mhthousing.net Chief Executive Officer: T. Van Fox, President and Christopher H. Brie, Executive VP Contact Person: Christopher H. Brie, Executive Vice President Property Tax Exemption Application - 2/27/14 Page 1 28

30 Section B - Property to be Considered for Exemption (Sections B, C, and 0 must be filled out for each project/property for which you are requesting a tax exemption) Owner of record: Merlo Station Apartments Limited Partnership Property Address: 2032 SW Merlo Court, Beaverton, OR (Physical address of the property for which you are seeking an exemption) Property Tax Account Number(s): R , R , and R TaxlotAccount Number(s): 1S18BB-01400, 1S18BB-01500, and 1S18BB (Be sure to identify all account numbers for both land and improvements on the property for which you are requesting tax exemption; in some cases, land and improvements may have separate account numbers. The Property Tax Account Number(s) and the Taxlot Account Number(s) should be on your property tax statements.) Total Number of Residential Units in Building(s): 128 units in 8 buildings. Number of Residential Units Occupied by Very Low-income People: 105 units. Total Square Feet in Building(s): 135,498 total square footage. Total Square Feet of Residential and Residential Common Area: 4 132,958 residential and 2,540 residential common area and management offices. 4 This includes halls, baths, dining, and other space dedicated to residential use. Retail uses and other accessory uses not related to residential use are not to be counted. Property Tax Exemption Application - 2/27/14 Page 2 29

31 Section C - Eligible Property Do you own the property in question? Yes No If you do not own the property, do you have leasehold interest in the property? Yes No If you have an ownership interest in the property, but your organization is not the record owner, describe your interest in the property. NOTE: Your nonprofit organization must be responsible for day-to-day operations in order to be eligible for exemption under this program. Include that information in your description. MHT Housing IV, Inc., a housing nonprofit organization and sole member of MHT Merlo Station, LLC (a disregarded entity for federal and Oregon income tax purposes), General Partner of Merlo Station Apartments Limited Partnership ("Owner"). N1HT Housing IV, Inc., as sole member of MHT Merlo Station, LLC, is responsible for day-to-day operations including, but not limited to: i) Obtain information from and interface with low-income tenants regarding their needs and services to be provided by the Company; ii) Develop and produce a resident resource guide for provision to the low income residents providing details on health, social and education services and emergency contacts within the community; iii) Develop and produce a resident services plan addressing the needs of the residents; iv) Monitor the Management Agent's operating of the Project; v) Monitor compliance of the Partnership and the Project with applicable governmental regulatory agreements and the restrictive covenant and all governmental regulations applicable thereto (including, without limitation, making appropriate administrative filings); vi) Coordinate with local services agencies, including housing authorities, welfare and social services departments, churches and other organizations operating for the purpose of assisting residents to advice such agencies about the availability of the Project as desirable housing for such persons and promote and encourage such agencies to refer potential tenants to the Project; and vii) Obtain, from the Management Agent, and review information on tenants with respect to the Project's compliance with all government regulations affecting Property Tax Exemption Application - 2/26/14 Page 3 30

32 the Project and either file, or supervise filing, with government bodies required regulatory reports and compliance monitoring. If you have a leasehold interest, describe your interest and include a statement describing how, as the nonprofit organization, you are obligated under the terms of the lease to pay the ad valorem taxes on this property or other contractual arrangement such that the property tax exemption benefits accrue to the nonprofit agency and the residential tenants rather than the owner or corporation from whom you lease. N/A If the property is being held for future low income housing development, describe the future development (number of units, units broken out by # of bedrooms, amenities available, etc.) and the income level(s) that will be served by the future development. N/A Property Tax Exemption Application - 2/26/14 Page 4 31

33 Section D - Description of Charitable Purpose/Project Benefit (Use for multiple projects if same conditions apply) Briefly describe your organization's charitable purpose: To preserve and extend affordable housing through the acquisition and operation of multifamily residential real estate for low and very low income tenants. Is all or a portion of the property is being used for the charitable purpose? All Portion If a portion, approximately what percentage of the property? _ Will the cost savings resulting from the proposed tax exemption enable you to do the following: Reduce the rents that your very low-income residential tenants pay on the property in question? Yes-indirectly No If so, by approximately how much? The proposed tax exemption will dramatically improve the operational viability of the property since rents are already deeply skewed to as low as 30% of area median income. The property has long been challenged to maintain reasonable working capital given the very low-income of its residents - and corresponding rents - and the proposed tax exemption would alleviate these operational and financial pressures. Provide greater services to your very low-income residential tenants? Yes No If yes, in what way(s)? The proposed tax exemption would contribute directly to additional services for the benefit of this very low-income apartment community. With additional working capital, property management could afford to pay for more activities and community gatherings, provide free meals, and enhance play areas for the children. In addition, management could expand upon its service coordination for the benefit of the residents and increase its assistance to families in need of school supplies such as printer paper and toner, notebooks, writing utensils, etc. Property Tax Exemption Application - 2/26/14 Page 5 32

34 Provide any other benefit to your very low-income residential tenants? Yes No If yes, please explain. The benefits of the proposed tax exemption will extend beyond property enhancements and greater resident access to community services, it will better assure the property's sustained affordability in providing safe and desirable housing for service sector employees serving Beaverton's businesses. As noted in January 2011 Center for Housing Policy report, "Research has shown that the stability of an affordable mortgage or rent can have profound effects on childhood development and school performance, and can improve health outcomes for families and individuals." The financial resources resulting from the proposed exemption will have a direct bearing on these outcomes for the foreseeable future. If you lease the property identified in this application, please explain to what extent your lease agreement coincides with the timeframe of the qualifying tax year: Property Tax Exemption Appiication - 2/26/14 Page 6 33

35 Section E - Declarations (Please read carefully and sign below before a notary) 1. I have attached to this application the IRS declaration of the status of applicant as a tax-exempt corporation under 26 U.S.C. Section 501 (c)(3) or (4). 2. I am aware that the income-qualifying tenants must meet the income guidelines in accordance with 42 U.S.C. Section 1437 (a)(b)(2) as amended. (See Attachment A, Income Eligibility Schedule.) Tenant incomes do not exceed these limitations as I verily believe. 3. I am aware of all requirements for tax exemption imposed by ORS (Chapter 660 Oregon Laws 1985, as amended by Chapter 756 Oregon Laws 1987). 4. The above-described property(ies) qualifies(y), or will qualify upon completion of any rehabilitation improvements and subsequent occupancy by very low-income residents, for property tax exemption within 30 days of the April 1 application or the date of approval. 5. All the information in this application is true to the best of my belief and knowledge, and is for the purpose of determining eligibility. fo~ the tax exemption program authorized by ORS I \ : "-" /-~J~-- f:<'.. I J\-:r- i" l By. I / AgencY-Chief Executive/Officer (Signature) Christopher H. Brie Executive VP Agency Chief Executive Officer (Print or Type) For: MHT Housing IV, Inc., Sole Member of MHT Merlo Station LLC, General Partner Corporate Name (Print or Type) Dawn Perlman State of Washington Notary Public Commission No My Commission ExPIres ')-"'{l~ SUBSCRIBED AND SWORN to before me this.-i day of r'e l? rl){l/t.~ii4- "\ T~~.: [L-u.JV (~~~-~~..C!-'--~A C~ Notary Public for Washington (Signature) Notary Public for Washington Dawn Perlman My Commission Expires Property Tax Exemption Application - 2/26/14 Page 7 34