Council receives 2024 tax-abatement compliance review; staff flags occupancy and compliance issues

City staff and the Economic & Sustainable Development Department presented the 2024 tax abatement compliance review and a status update on active pilots and new applicants.

Andrea Dela Rosa, assistant director for small business development, reported that new real and personal property investment tied to abatements totaled $536 million proposed and $227 million actual; projects reported 3,692 jobs and $317 million in salaries. Staff recommended finding Southern Knoll in compliance, Urban Station substantially compliant despite some shortfalls in employment commitments, and noted Union at Crescent has substantial vacancies that staff is continuing to investigate.

Staff described the Catalent abatements (now part of Novo Nordisk after an acquisition) and reported generally strong salary and employment numbers while acknowledging market-driven shifts in demand for production. Staff also described two ongoing pilots (Evergreen Village and Country View) focused on deeply affordable housing and noted administrative follow-up on payments routed through escrow.

Council members asked how the city measures the “but-for” case used to justify abatements, what happens when an abatement is transferred through acquisition, and whether occupancy should be written into future MOUs. Assistant City Attorney Audrey Brittingham said tax abatements are subject to the city's living wage ordinance and the office would contact abatement holders to collect living-wage certifications; she said staff plans to ask property owners to certify compliance during the recess and report back to council.

Council directed staff to provide more detail on problem properties (for example, Union at Crescent) when the council takes final compliance actions at the July meeting.