City staff is recommending the council approve a partial property tax exemption for the Gordon Hotel & Residences complex planned for downtown. The developer, Obie Companies, is seeking a break equaling $3,409,596 over ten years. The matter is on the City Council’s agenda for Tuesday, Feb. 18.
The ask is submitted under the City’s Multi-Unit Property Tax Exemption ordinance, or MUPTE, which was established in 2023 to spur the development of more apartments. This is the first request made under the ordinance.
The envisioned complex would be a mix of retail and restaurants, 75 hotel rooms, and 92 new apartments – 17 studios, 56 one-bedrooms and 19 two-bedrooms.
The tax exemption would only apply to the portion of the complex that is apartments, according to the memo and recommendation to council from Corvallis’ Community Development Director Paul Bilotta.
Bilotta says the three lots the project would be built on currently have a taxable value of $924,757, and the City currently collects $4,668.20 in annual taxes from those properties. He says that all changes if the new complex is built.
“The projected net taxable value of the hotel component is $18,925,122.22, which is estimated to generate $95,534.56 annually to the City of Corvallis. Following the 10-year exemption period, the total projected net taxable value of the entire project is $37,003,228.28 and is estimated to generate $186,793.36 annually to the City of Corvallis,” said Bilotta.
He also says the hotel is estimated to generate about $670,000 per year of transit lodging tax with about $350,000 per year directed to the City of Corvallis, $150,000 per year to Visit Corvallis; and $170,000 per year to Benton County.
The memo says the developer will be spending $46,904,118 to build the complex, and the tax break would offset 7.1% of that. Ten percent of the tax break would go back to the City, helping to fund future affordable housing projects.
This project checks a number of the City Council’s longstanding boxes, but of the body of nine, four are newly elected.
An otherwise ‘business as usual’ agenda
Other than the Gordon proposal, the wide ranging agenda for the upcoming council meeting includes just under $800,000 in second quarter budget adjustments and hearing an annual report from the Visit Corvallis. Councilors will also be reviewing progress reports pursuant to the City’s social service grants program – and offering City staff some direction.
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