June 19, 2002

Portland City Hall

1221 SW 4th Avenue

Portland, OR 97204

Dear Mayor Katz and Members of the Portland City Council:

The Portland City Code, Chapter 3.104, permits the granting of a limited ten year property tax exemption for newly constructed multiple dwelling projects within the Central City Plan District or in designated urban renewal areas. This exemption applies to the improvement value only. The land value remains subject to taxation.

The Portland Development Commission is responsible for initially reviewing the application based on a finding that the tax exemption is necessary for financial feasibility of the project. The Development Commission recommended approval at their May 8, 2002 meeting. See Exhibit 5 of the Report.

Proposed is a newly constructed 139-unit market rate apartment project to be built on the block between NW 9th, 10th, Marshall, and Northrup. The site is one of several properties owned by Hoyt Street Properties and is part of the larger River District Plan subject to the amended Central City development regulations and the Development Agreement between the City and Hoyt Street Properties.

The notable public benefits include the introduction of 139 newly constructed rental units and 8,980 square feet of street level retail in the expanding River District. The project includes the smaller 700 square foot units required under the Development Agreement and exceeds the unit density that is required under the Agreement at this stage. This project is not receiving any other public subsidy from the City.

Planning Commission Recommendation: Approval of the limited ten year property tax exemption for the Hoyt Street Properties Apartments on Block 13 based on the findings in the attached report and subject to the conditions listed on page 13 of the Planning Commission Report.

Sincerely,

Rick Michaelson, President