RSSYakima City Council expected to approve nine projects for tax breaks
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Three new restaurants, including the Sonic Drive-in at South First Street and Nob Hill Boulevard, are in line for tax credits designed to spur investment in designated areas of Yakima.
The Yakima City Council tonight is expected to approve a list of nine projects that will share $12 million in credits that will allow investors to more rapidly depreciate their investments.
The top tax breaks are expected to go to Ledgestone Hotel ($4 million), Roche Fruit ($1.67 million), Columbia River Bank ($1.4 million), Tony Ha Steakhouse ($1.25 million) and Yakima Co-Op ($1.1 million).
The list also includes $550,000 to the Great Western Building renovation, owned by Morrier Family Realty LLC, one of several companies controlled by mall owner Joe Morrier and his family.
The state still must sign off on the list prepared by the city.
“This is an incredibly important program for Yakima,” City Manager Dick Zais said. “It has been a huge benefit for our community and a further inducement for our community to invest.”
The credits are one element in a 7-year-old federal renewal community designation that allows a series of tax savings that also includes wage credits and no capital gains taxes on investments held at least 5 years.
The program has allocated $72 million over its life in depreciation tax credits.
The renewal area stretches along First Street and includes areas on Fruitvale Boulevard.
This year’s applicants must be in construction and scheduled to complete their projects in 2008.
Zais said Monday the city is in what he called a full-court press to renew the program after 2009, the final year for which the program is currently authorized.
Yakima is one of two renewal communities in Washington — Tacoma is the other — and 40 throughout the country.
Michael Morales, assistant director of community and economic development, said the more rapid depreciation allows investors to depreciate the property in one year or several years, instead of the regular 30-year depreciation schedule.
“This is a tax incentive to offset costs and depreciate that asset quicker,” he said. “The investor will have less taxable income, which frees up capital for investment,” he said.
Morales said the city received total requests for $33 million this year but had only the $12 million in credits. Other applicants included $9 million each for the proposed Holiday Inn on East Yakima Avenue and the new hotel proposed for the J.C. Penney building in the former mall; and $3 million for John I. Haas, hop broker and processor.
Greg Luring, owner of the McDonald’s franchises, said Sonic will be a formidable competitor for him. But he said the renewal programs have benefited the entire community.
McDonald’s restaurants within the zone also benefit from tax credits for employees who live and work within the renewal zone, he said.
The 2008 list of projects recommended by a city review committee (most amounts are rounded):
1. Tony Ha Steakhouse, Yakima Avenue -- $1.25 million
2. Columbia River Bank, North Fifth Avenue -- $1.4 million
3. Sonic Drive-in land owner -- $900,000
4. Roche Fruit, North First Avenue -- $1.67 million
5. Second Street Grill, North Second Street (former Pete's) -- $554,000
6. Ledgestone Hotel, North Fair Avenue -- $4 million
7. Great Western Building renovation, East Yakima Avenue -- $550,000
8. Yakima Co-Op, South First Street -- $1.1 million
9. Former Petco Building, East Yakima Avenue -- $494,000
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