Commissioners OK Ren Zone extensions
City commissioners ended-up granting 12-year extensions for 2.5 properties in the nearly tax-free Renaissance Zone, meaning one-half of one project will not receive the tax benefits that accompany the designation.
Commissioners gave complete extensions to the developments proposed by True North Architecture, Construction and Investments and Via Design.
True North plans to invest nearly $2 million into the building at 607 Dewey Avenue NW for its new headquarters and for other tenants. Via Design plans to invest $300,000 into the building at 563 Grandville Avenue SW and do light manufacturing there as a way to expand its business.
True North and Via Design have options on their properties and plan to purchase the buildings once the state approves their zone extensions.
“These owners don’t own the properties yet and they won’t buy them without the Renaissance Zone,” said Kara Wood, city economic development director.
Commissioners also gave Wealthy Street Historical Development a 12-year extension, but only for half of its project — the lower level of the two-story structure at 632-636 Wealthy Street SE that it purchased last year for $500,000.
Wealthy Street Historical Development plans to invest $700,000 into the building and develop the ground floor for retail and the upper level for residential. It’s the residential space that commissioners blocked from receiving the tax breaks.
“We have to look at each one to see what makes sense,” said Third Ward Commissioner James White.
Commissioners felt they would be giving up too much tax revenue by granting the entire project an extension. Some felt that Wealthy Street has seen enough of a commercial revival that a longer zone designation was unnecessary and would be unfair to businesses that have opened in the district without any financial assistance from the city.
“If you have an area with low property values you need to prime the pump, and you don’t lose anything,” said Second Ward Commissioner David LaGrand, who owns a business on Wealthy Street in the current Ren Zone.
“I have a real problem with the building on Wealthy Street. Let me tell you why; Wealthy Street doesn’t need the help anymore,” he added.
LaGrand pointed to the Arnie Lee family who has turned a nearby two-story building on Wealthy Street into a ground-floor restaurant and a pair of apartments on the upper level, a plan similar to the one Wealthy Street Historical Development has. LaGrand noted that the Lees did the project without asking the city for any additional assistance and that WSHD would be competing with the Lees for tenants.
“They could have started and done what the Lees did,” said LaGrand.
The extension requests now go to the state for approval and a decision is expected to come on Dec. 17. All three properties have been in the Ren Zone since 1997 and the extensions would keep those sites nearly free from state and local taxes through 2023.