The vote on whether to give a 10-year property tax exemption for an apartment complex planned for downtown returns to Salem City Council Monday.
The six-story, L-shaped complex will be at the site of the former city hall, now a parking lot at 277 High St. NE.
When the proposed tax exemption first came before Salem City Council in April, three people in the construction industry complained about Deacon Development, the company behind the project and the soon-to-be-opened Rivenwood Apartments at the former Nordstrom site. They said Deacon Development worked with irresponsible contractors who engaged in wage theft, worker exploitation and unethical business practices, citing conflicts with employees not getting paid on Portland-area projects.
One person testified that projects applying for tax breaks should have a prevailing wage requirement. According to the U.S. Department of Labor, a prevailing wage is the combination of the basic hourly wage rate and any fringe benefits rate, paid to workers in a specific classification of laborer, like a carpenter or plumber.
Company founder Steve Deacon, who also attended the April meeting, said it was the first time he had heard the accusations. He said he wanted to talk with the construction workers about their experiences and help address the problems.
If the company knew wage theft and worker exploitation was taking place, they would not allow it, Deacon said.
The council tabled a vote on the tax exemption until Monday’s meeting so more could be learned about the accusations.
About the High Street Apartments project
News of the project, now dubbed High Street Apartments, broke last year.
Developers plan to demolish the parking lot and build a mixed-use building with 98 apartments and a ground-floor commercial space with seven live/work units.
The apartments will consist of studios and one- and two-bedroom units. The project is expected to cost $27 million.
The monthly rental rates for the market rate units are expected to range from $1,375 per month up to $1,975 per month depending on the size, number of bedrooms, and location within the building, according to Deacon’s application for the tax program.
Additionally, 15% of the units will be set at affordable housing rates.
Deacon Development’s application for a tax exemption
On March 5, Deacon Development applied for participation in the city’s Multiple Unit Housing Tax Incentive Program.
The program provides a property tax exemption for up to 10 years for new or converted non-transient multifamily housing units constructed within the defined core area that provide one or more public benefits such as development or redevelopment of underutilized or blighted property.
The tax exemption is limited to the city’s tax levy, but developers also can seek tax exemption through other taxing districts like the county and school district.
Since 1976, the council has approved 12 properties for the program.
According to a staff report, the developer’s application detailed how the project will meet eight of the 19 public benefits outlined in the program, including developing an underutilized parking lot and providing programs and amenities supportive of public transit.
The building will include a large-screen monitor displaying real-time arrival information for Amtrak, Cherriots and vehicle-sharing systems. It is within walking distance to much of downtown and the Cherriots transit center.
The program provides a tax exemption only for the city’s tax levy, which is estimated to be $44,758 in the first full year.
Other Salem City Council meeting agenda items
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Acquisition of properties for the Pedestrian Safety Crossings Project. Three enhanced pedestrian crossings planned for River Road N near River Road City Park, State Street at 21st Street SE, and Lancaster Drive NE near Weathers Street NE require the city to begin the right-of-way acquisition process.
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A vote on authorizing the City Manager to apply for up to $10 million in federal funding to construct a series of pedestrian crossing improvements. The U.S. Department of Transportation’s Safe Streets and Roads for All program is designed to fund initiatives that will prevent roadway deaths and serious injuries.
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A vote on whether to borrow an amount not to exceed $6 million from the city’s Building & Safety Fund for the Emergency Services Fund to fund the startup capital expense for city-provided ambulance services. Council voted in March to end its contract with private ambulance service Falck Northwest and switch back to providing services through Salem Fire.
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Review of information on Salem Fire Department implementing the approved Ambulance Operator Model with Fire Department Oversight.
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A review of an appeal filed by a neighboring property owner over a planned 405-unit apartment complex at 4650 Hazelgreen Road NE.
How to participate in the Salem City Council meeting
The meeting is at 6 p.m. It will be held in person in the City Council Chambers at the Salem Civic Center, 555 Liberty St. SE, and also can be watched on Comcast Cable CCTV Channel 21 or on the Salem YouTube channel in English/American Sign Language and Spanish.
Those wishing to comment in person can sign up on the rosters at the chamber entrance before the start of the meeting.
Written public comments on agenda items can be emailed by 5 p.m. Monday to cityrecorder@cityofsalem.net. Or preregister between 8 a.m. and 2 p.m. Monday at cityofsalem.net/Pages/Public-Comment-at-Salem-City-Council-Meeting.aspx to speak during the meeting via Zoom.
For questions, comments and news tips, email reporter Whitney Woodworth at wmwoodworth@statesmanjournal.com, call 503-910-6616 or follow on X at @wmwoodworth
This article originally appeared on Salem Statesman Journal: Tax exemption for downtown apartments returns to Salem City Council