There has been considerable concern about the apartment project down by UTA. This project has been termed the Sapphire project. The apartments will sit between Center and Mesquite and be bordered on the north by Mitchell and on the south by Hosack. Now the project itself was approved in December of last year. The developer came to the city and asked for a tax abatement of 2.1 million dollars of a 5 year period. During this abatement time frame they would receive three times the current tax, or $21,000 a year. I was asked by one individual, why are you considering this. The following is my reasoning.
First I feel that the current apartments that occupy this entire city block are in such sad shape that the city is only getting $7,000 a year in total tax revenue. The taxes on my house alone are $7,500. So I feel that this property is ripe for redevelopment. During the abatement period the city will receive $105,000 instead of the current $35,000, which is a good deal for the city. This developer has a 2.1 million dollar delta between borrowed monies and development costs. After the abated period the taxes will rise to over $2000,000 per year. Now here is the kicker.
The city of Arlington has what is known as the Housing Incentive Program. What this program does is allow the home owner to receive money back on improvements accomplished to his/her property that increase the tax value of their property. You can receive 10 times the tax increase up to a maximum of $5,000.
Now the developer is sinking 41 million dollars into this project and it will increase the tax base of the property considerably, to where the annual tax bill is over $200,000. 2.1 million is only 5% of the total expenditure and if it is amortized over the five year period the numbers are very close to the Housing Incentive Program percentage wise, that is offered to every citizen in Arlington. I realize that 2.1 million is larger than $5,000, but I also realize the $41 million is larger than anyone is going to be willing to sink into their house.
I think that this is a good investment for the citizens of Arlington. There is no expenditure out of the General Fund or Capital Budget to redevelop this property. All it costs is what each citizen is able to receive themselves through the Housing Incentive Program. That is why I support the project and incentive package as proposed.