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Council approves multifamily tax exemption for Kenmore Inn conversion; 7 of 27 units to be affordable
Summary
Council approved Resolution 26‑450 to implement an MFTE contract for the Kenmore Inn conversion at 8202 NE Bothell Way: the motel will be converted to 27 multifamily units with 7 reserved at 50% AMI, with covenants enforced by audits and penalties under state law.
The council unanimously approved Resolution 26‑450 to authorize a Multifamily Tax Exemption (MFTE) contract for the Kenmore Inn Apartments at 8202 NE Bothell Way. Development Services Director Samantha Loyuk said the project converts a former 27‑room motel into 27 legal multifamily dwelling units; the owners designated 7 units as affordable for households at 50% area median income (AMI).
Loyuk said the property had an unpermitted change of use and the city issued a notice of violation in September 2024; the owner later entered a voluntary correction agreement (Dec. 2024) and submitted a building permit application in January 2025 that staff has reviewed and is ready to issue. The city attorney explained the affordability covenants run for the life of the project and are enforced through audits and annual reporting; state law requires repayment of tax benefits plus penalties if covenants are breached.
Next steps: with council approval staff will finalize the MFTE contract, the building permit is ready for issuance and staff will rely on Arch (housing partner) to audit and enforce the affordability obligations.
