Council approves tax break for Vulcan

With little dissent, the Seattle City Council yesterday approved a tax break worth roughly $3 million for a South Lake Union development that will provide 35 apartments considered affordable to moderate-income people.

In an 8-1 vote, the council granted a 10-year property-tax exemption to Paul Allen's company, Vulcan, in exchange for providing 35 apartments at rents ranging from $738 to $916 a month. Those apartments will be built on the site of the old Lillian apartment building, which contained 33 unsubsidized apartments renting for $250 to $500 a month before Vulcan demolished the building in October 2002.

City officials estimate the total tax exemption to be $309,670 in the first year for the project called Alley24 at John Street and Pontius Avenue North. The city's share of exempted taxes is $101,705.

Councilman Tom Rasmussen, chairman of the council's housing committee, said the tax break was justified because the South Lake Union area already has low-income apartments but few units for people who earn slightly less than Seattle's median income. Developers can qualify for the tax exemption by offering 20 percent of a building's units at rents considered affordable to people making 60 percent of median income. For a single person, that translates to a yearly income of $32,700.

Only Councilman Nick Licata voted against the deal, saying it was "not a good deal" for the city's taxpayers, who must assume the tax burden for exempted properties. Councilman Peter Steinbrueck urged colleagues to toughen the program's rules on demolition to prevent developers from destroying low-income apartments so they can gain a tax break for more-expensive housing.

The council yesterday also approved a much smaller tax break, worth about $600,000 over 10 years, for a developer in the Chinatown International District.

Bob Young: 206-464-2174 or