Valhalla Hall 1216 Martin Luther King Jr Way Tacoma, Washington 98405 A Low Income Housing Tax Credit Market Study
PREPARED FOR:
PREPARED BY:
Mr. Carey Jenkins
Matt LaMotte, MAI
Tacoma Community Redevelopment Authority Wilcox LaMotte Valuation & Advisory 747 Market St
109 NW 47th St,
Tacoma, WA, 98402
Seattle, WA 98107
December 20, 2015
Mr. Carey Jenkins Tacoma Community Redevelopment Authority 747 Market St Tacoma, WA 98402 Re:
Market Study for Valhalla Hall 1216 Martin Luther King Jr Way Tacoma, WA 98405
Mr. Jenkins, This letter transmits the attached market study for the above-referenced property. The marketability of the project has been evaluated using generally accepted principles and theory, and this report is intended to comply with the requirements of the Uniform Standards of Professional Appraisal Practice (USPAP). The subject is a proposed 28-unit multi-family project which will be comprised of studio and one bedroom units. The 0.1 acre site will be developed with a single four-story building. Income restrictions are expected to be set at 50% of the area median income. The target demographic is family housing. There are no additional targeted populations or restrictions. The market depth analysis presented in this study indicates market conditions are strong and there is demand for rent restricted units at or below 50% of AMI and for market rate units. The surveyed LIHTC projects report low vacancies and waiting lists for various programs and projects within the area. LIHTC and subsidized projects report extensive waiting lists. Other report conclusions are summarized as follows:
The subject appears competitive with other multi-family properties (both low income and conventional) in the competitive market area. Current and Projected Market Need – The subject will meet only a small portion of the concluded 2015 and projected 2020 demand for rental housing units among the targeted income demographic. Below Market Rate Supply – Based on the wide rent gaps formed by the concluded market and restricted rents in this analysis, the subject will supply units at below market rates. Other Public Benefit – The subject provides multi-family housing of superior quality and condition compared to most other affordable units in the market area. In addition, Tacoma is in need of additional affordable units as indicated by the low vacancy and long wait lists at competing properties, as well as the demonstrated housing affordability issues in the city.
In summary, the analysis indicates continued demand for rent restricted housing. The rent conclusions in this report assume the project will be developed as proposed and will target households with income and rent levels as presented in this analysis. The conclusions of this report are qualified by assumptions, limiting conditions, definitions, and certifications. This letter is invalid as an opinion of value if detached from the body of the report. Wilcox LaMotte Valuation & Advisory 109 NW 47th Street, Seattle, WA 98107
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Mr. Carey Jenkins Tacoma Community Redevelopment Authority December 20, 2015 Respectfully submitted, Wilcox LaMotte Valuation & Advisory
Matt LaMotte, MAI Principal (206) 432-9059
[email protected] Washington State Certified General Appraiser License Number 1101987
Wilcox LaMotte Valuation & Advisory 109 NW 47th Street, Seattle, WA 98107
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TABLE OF CONTENTS Executive Summary ...................................................................................................................................... 5 Scope of Work ............................................................................................................................................... 8 Regional Description ................................................................................................................................... 10 Local Area Description ................................................................................................................................ 17 Site & Improvement Descriptions ................................................................................................................ 21 Market Analysis ........................................................................................................................................... 38 Supply ...................................................................................................................................................... 40 Demand ................................................................................................................................................... 41 Affordable Housing Considerations ......................................................................................................... 45 Market Rent Analysis .................................................................................................................................. 50 Restricted Rent Levels ............................................................................................................................ 62 Concluded Restricted Rents .................................................................................................................... 70 Assumptions & Limiting Conditions ............................................................................................................. 72 Certification of Appraisal ............................................................................................................................. 75 Addenda ...................................................................................................................................................... 76
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EXECUTIVE SUMMARY Subject Property Identification Property Name:
Valhalla Hall
Street Address:
1216 Martin Luther King Jr Way, Tacoma, Pierce County, 98405
Tax Parcel ID:
Pierce County parcel number: 2012220040
Legal Description:
A title report was not provided. The legal description, per the Pierce County Assessor's Office, is: Section 05 Township 20 Range 03 Quarter 13 : NEW TACOMA L 8 & 9 B 1222 INC PART ALLEY VAC
Site Description Site Size:
6,500 SF/ 0.15 ac acres
Zoning:
NRX (Neighborhood Commercial Mixed Use District)
Improvement Description Property Type:
Multi-family
Construction:
Wood Frame
Year Built:
Proposed
Condition:
New
Unit Mix:
Unit Type Studio 1 BR 1 BR Loft 1 BR Loft Live/Work Unit Totals
Proposed Unit Mix Unit Count Avg. Size 16 455 SF 1 756 SF 9 776 SF 2 645 SF 28 583 SF
Non Rentable Area Common Areas (Entry/Bike Locker) Hallways, Penetrations Non-Rentable Area Total Non-Rentable Area Gross Building Area
Total SF 7,280 SF 756 SF 6,984 SF 1,290 SF 16,310 SF 758 SF 1,372 SF 1,072 SF 3,202 SF 19,512 SF
Market Study Summary of Findings Subject Description:
The subject is a proposed 28-unit multi-family project which will be comprised of studio and one bedroom units. The 0.1 acre site will be developed with a single four-story building. Rent restrictions are proposed based on 50% of the area median income (AMI).
Rent Restriction Overview:
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In the mid-1980s, the production of affordable housing shifted to programs emphasizing “privatization” (although HUD-assisted properties are also privately owned) and a shift in philosophy away from the federal
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Executive Summary government to the state level. State governments were allowed to establish agencies to administer a program in which low income housing tax credits (LIHTC) through the IRS were provided over a 10-year period to eligible developments in order to construct or substantially rehabilitate housing. Maximum rents and household incomes are then restricted to various levels, depending upon the application submitted by the developer, but in no case exceed 60% of the area median family Income. In the state of Washington, this program is administered by the Washington State Housing Finance Commission (WSHFC). Unlike HUD programs, no funding is provided to the owner other than through housing tax credits, although some owners have also been able to utilize payments available through the Section 8 voucher or certificate program, or Section 8 HAP Contracts. Similar rent restriction programs have been developed using tax exempt bond financing and other beneficial funding sources as a means of incenting developers and owners to provide low income and affordable housing. Market Area Description:
The project is located in Tacoma, approximately 1 mile west of the Tacoma CBD. The neighborhood is a mix of commercial uses along primary corridors such as Martin Luther King Jr Way and single family and multi-family uses in the surrounding neighborhoods. Access is average.
Rent Gap:
The following chart summarizes the rent gap between market rents and the concluded achievable rents at the income restriction levels:
Unit Type Studio 1 BR 1 BR 1 BR
Restriction Level 50% 50% 50% 50%
PROJECTION OF ACHIEVABLE RENT Projected Net Max Rent Market Rent Rent $581 $1,000 $581 $607 $1,225 $607 $607 $1,300 $607 $607 $1,250 $607
Difference $419 $618 $693 $643
Spread 42% 50% 53% 51%
Capture Rate:
The Capture Rate is projected to be 0.3% based on 100% of the proposed units being set aside at 50% and based upon the current population. It is expected that some of the units will be market rate, so the calculated capture rate represents the maximum rate the subject’s units would achieve. See the Market Analysis Section for discussion.
Subject Competitive Position:
The subject’s units will be above market expectations in terms of quality and appeal for the Hilltop Neighborhood. The subject’s location affords tenants good access to employment centers, shopping, and services. The subject’s competitive position is concluded to be good.
Restricted Rent Vacancy:
The rent restricted comparables’ income levels range from 30% to 60% of AMI. Managers report a tight market with substantial waitlists and strong interest by potential tenants.
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Executive Summary
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3
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Nam e Subject 1216 Martin Luther King Jr Way Tacoma, WA Olympus Hotel 815 Pacific Avenue Tacoma , WA Tahoma View 11208 1st Avenue Court East Tacoma, WA Orchard Hills 5701 Orchard St. W Tacoma, WA Redw ood Juniper 3015 N Pearl St Tacoma, WA Hillside Gardens 1708 S G St Tacoma, WA Total (Excluding Subject)
Restricted Rent Com parable Sum m ary Unit Count Year Built Incom e Levels 28 2016 50% Proposed
Vacancy N/A
50
1909/Renovated 2008
45%
2%
51
1998
30% & 50%
0%
176
1989
50% & 60%
0%
155
1968
60%
0%
26
2003
30%, 50% 60%
0%
Weighted Avg. Vacancy (Excl. Subject):
0.22%
458
LIH Absorption Conclusion:
Based on the reported vacancy at other LIHTC projects and conversations with property managers in the area, an absorption rate of 10 units a month is forecast for the subject.
Project Viability:
The rent restricted units at the project will provide housing for tenants earning 50% or less than AMI. Demand is high for affordable housing in the market as rents continue to outpace income growth. Based on the market demand for affordable housing, concluded market rate rents and projected restricted rents, the project is viable.
Current Market Need:
Demand is evident for the subject’s low income housing profile. The best indicator of this is vacancy rates found at the other LIH projects in the market. Conversations with managers at other projects indicate strong demand. Market rents have trended upward over the past three years and the need of these tenants has not been met by market rate housing in the subject’s area.
Below Market Rate Supply:
The supply of affordable housing is low and there are no other planned projects within the subject’s immediate area which will serve the same tenant base. Demand appears to continue to outpace supply.
Marketability Conclusion:
Marketability is good overall, with the project design being suitable for the targeted tenant profile.
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SCOPE OF WORK The following report and attached exhibits summarize the conclusions regarding the achievable rents under both the restricted and unrestricted scenarios. Rent restrictions are projected based on income restrictions at 50% of area median income set forth by Washington State Housing Commission. The research and analysis examines regional and local market characteristics; specific demographic features; forecasts demand for new multi-family units; and provides an overview of existing and planned competitive supply for the target population. Results of the market study will be used to evaluate whether development “as planned” is a viable option for the subject property at this time. The study may also be used as part of any planning approval and/or financing requests for the property. Report objectives, assumptions and limitations are listed below. The Scope of Work rule in the Uniform Standards of Professional Appraisal Practice requires appraisers to identify the appraisal problem to be solved and determine the scope of work necessary to develop credible assignment results. The subject property was identified in the Executive Summary. The information below identifies the appraisal problem and addresses the scope of work conducted for this report. Problem Identification Client:
Tacoma Community Redevelopment Authority.
Intended Users:
The client is the intended user of this report. In addition to the client, additional intended users include the Washington State Housing Finance Commission, The Washington State Housing Trust Fund, and other yetunidentified equity investors.
Intended Use:
The intended use is to determine the market rent and the achievable restricted rents for the proposed units for use in internal decision-making.
Effective Date:
December 16, 2015
Date of Report:
December 20, 2015
Special Assumptions & Conditions The assignment focuses on a general assessment of the market and is not intended to evaluate the “financial feasibility” of the project. Detailed financial pro forma and other pertinent information had not been finalized as of the date of this report and an evaluation of “financial feasibility” is also beyond the scope of this analysis. Report conclusions are based in part on descriptive information supplied by the client as referenced in this document. The use of Extraordinary Assumptions or Hypothetical Conditions might affect the assignment results. Extraordinary Assumptions:
It is an assumption of this report that the project's development will not materially deviate from the building specifications and descriptions provided to the appraiser. It is further assumed that the project will be constructed in a workmanlike manner and will comport with market expectations with regards to fit and finish. No other extraordinary assumptions were employed in this appraisal.
Hypothetical Conditions:
The rent projections presented in this report are based on the hypothetical condition that the subject is built and, in the case of the rent
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Scope of Work restrictions, that the project is subject to a regulatory agreement which limits tenancy based on income qualification at 50% of the Area Median Income. It is a further condition that under both scenarios the project is operating at stabilized occupancy. Inspection:
The author of this report made a physical inspection of each of the subjects on December 16, 2015.
Information Analyzed:
In addition to documents provided for this assignment, information provided by government authorities was used to research aspects of the subject’s legal and economic character. Market data used in the valuation section was identified and researched using internal records, comparable data services, and conversations with market participants. Other sources of information relating to the subject and the valuation process are also indicated throughout the report.
Compliance and Competency Provision
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The authors of this report possess the education, knowledge, technical skills, and practical experience to complete this assignment competently, in conformance with the stated regulations.
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REGIONAL DESCRIPTION Located on the western side of Washington State, the Central Puget Sound area consists of King, Snohomish, Pierce, and Kitsap Counties. Within the Central Puget Sound area are four distinct areas: the Seattle-BellevueEverett MD (Metropolitan Division), consisting of King and Snohomish Counties: the Tacoma MD, comprised of Pierce County; and the BremertonSilverdale MSA (Metropolitan Statistical Area), which includes all of Kitsap County. The Central Puget Sound area is a single integrated economy with businesses serving regional and international markets.
POPULATION The Central Puget Sound Region is home to an estimated 3,800,000 residents; nearly half of Washington’s total population. King County is the state's most populous county with an estimated 2014 population of 2,017,250 residents. The largest city in the region is Seattle, with an estimated population of 640,500. Seattle is also the largest city in the state. Pierce County ranks second in population with 821,300 residents, and has the second largest city in the region, Tacoma, with an estimated population of 200,900 residents. Central Puget Sound Population Year King County Seattle Bellevue Snohomish County Everett Pierce County Tacoma Kitsap County Bremerton Total
1990 1,507,319 516,259 86,872 465,642 69,974 586,203 176,664 189,731 38,142 2,748,895
2000 1,737,047 563,374 109,569 606,031 91,488 700,819 193,556 231,966 37,259 3,275,863
2010 1,931,249 608,660 122,363 713,335 103,019 795,225 198,397 251,133 37,729 3,690,942
2014 2,017,250 640,500 134,400 741,000 104,900 821,300 200,900 255,900 38,180 3,835,450
Annual Grow th 2000-2010 2010-2015 1.1% 1.1% 0.8% 1.3% 1.2% 2.5% 1.8% 1.0% 1.3% 0.5% 1.3% 0.8% 0.3% 0.3% 0.8% 0.5% 0.1% 0.3% 1.3% 0.8%
Sources: Office of Financial M anagement, State of Washington; U.S. Census Bureau, Population Division
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Regional Description Demographic Trends Overall population growth in the Seattle MSA between 2001 and 2010 was slightly higher than the national average, at 1.3% compared to 1.1%, respectively. The effects of the recession are reflected in the area’s population growth. In 2009, while the Seattle economy was a comparative bright spot on the economic landscape, Seattle grew at a rate of 1.7%, compared to 0.8% growth for the U.S. By 2010 however, population growth slowed to normal levels at 0.8% to 0.9%, slightly above the national rate of 0.8%. Between 2010 and 2015, the annual growth rate is projected to have been 1.4%, above the average of 0.6%. Population growth is forecast to remain strong in Seattle over the next five years, with forecasts calling for the metro area to maintain population growth slightly more than twice the national average. Over the fiveyear forecast period between 2015 and 2020, King County population growth rates are expected to be in higher than the 2010 rate, with the average growth forecast to be 1.45% per year. Seattle’s growth is expected to be 1.51%. Snohomish County is projected to experience growth at 1.2%. Pierce County, by contrast is expected to grow at a slower rate of 0.9% over the next 5 years. Tacoma's growth projections are the lowest in the region at 0.72%. The statewide growth rate is expected to be 1.0% compared to 0.75% nationwide (Esri forecast data). According to ESRI, the median household income for the Central Puget Sound Region was $68,251 in 2015. The forecast for 2020 is $78,990 reflecting an annual income growth rate of 3.1%. Central Puget Sound Median Household Incom e Area 2015 2020 Annual Change King County $73,529 $83,106 2.60% Snohomish County $70,063 $79,720 2.76% Pierce County $58,763 $68,390 3.28% Central Puget Sound $68,251 $78,990 3.15% State $59,229 $69,388 3.43% National $53,217 $60,683 2.81% Source: Esri
According to the 3rd quarter 2014 American Chamber of Commerce Researchers Association (ACCRA) Cost of Living Index, the Central Puget Sound’s cost of living is 131.3, up from the 2013 Cost of Living Index of 117.8. The national average is 100. The ACCRA Cost of Living Index compares groceries, housing, utilities, transportation, health care and miscellaneous goods and services for over 330 urban areas.
ECONOMY While the Central Puget Sound Region economy includes a broad range of industries, local leaders have identified clusters that are essential to the region’s current and future prosperity. These are: Aerospace and Boeing - Historically, the economy for the region has been heavily dependent upon aerospace technology and aircraft manufacturing. Boeing is important to the Puget Sound region because (1) the bulk of its output is exported, (2) it is the region’s largest private employer, (3) most of its workers earn high wages and salaries, injecting large amounts of money into the local economy, and (4) Boeing’s business is highly cyclical. Although the Puget Sound economy has diversified and is no longer as dependent on Boeing employment as it once was, the local economy remains strongly affected by the up and down cycles of Boeing and the aerospace industry.
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Regional Description High Technology and Biotechnology - The Puget Sound area is also the home of Microsoft, the world’s largest software producer and among the most valuable companies in the world. There is a substantial computer–related presence in the region beyond Microsoft, including Amazon.com, Expedia.com, Drugstore.com, Nintendo, and RealNetworks. Even major Microsoft competitors, such as Google, have established a presence in the local area. The software employment has grown at a remarkably steady rate over the past 20 years; this steady expansion has helped ameliorate the cyclical fluctuations in employment related to Boeing. However, the current recession has caused Microsoft and other software producers to implement significant reductions in their work forces; this is a trend not seen in the history of this sector in the Puget Sound region. Tourism - Washington State and the cultural amenities of Seattle and other Puget Sound cities have translated into a growing tourist industry in the region. Seattle serves as the jumping off point for tourists visiting other locations in the Pacific Northwest and Alaska. In addition, the city is becoming an increasingly important gateway to the United States for tourists from Asia. Trade - Washington is the most trade–dependent state in the nation. Trade accounts for more than one– quarter of the state’s economic activity, and one out of every three jobs is related to international trade. Government and the Military - Government agencies (federal, state, and local) make up a substantial portion of the regional workforce. King, Snohomish, and Pierce counties have between 14% and 20% of their workforces in governmental positions. Kitsap County, with its substantial military presence, has one– third of its work force in government. Notably, however, federal employment has declined over the past several years.
EMPLOYMENT Employment data for both the Seattle/Bellevue/Everett MD and the Tacoma MD are presented on the following tables. April 2015 Non-Farm Employment Seattle/Bellevue/Everett Metropolitan Division
13%
0%5% 11%
4% 10% 18% 13% 6% 15%
5%
Mining and Logging Construction Manufacturing Trade, Transportation & Utilities Information Financial Activities Professional & Business Services Education and Health Services Leisure and Hospitality Other Services Government
Seattle/Bellevue/Everett Metropolitan District In the Seattle-Bellevue-Everett MD, employment has risen for each category in 2015 YTD over the same period in 2014. The largest gains were in construction (a 14.6% increase) on top of a 7% increase last year.
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Regional Description Construction had been a particularly powerful driver over the past three years but employment growth as stabilized over the past several years. Trade, Transportation and Utilities also suggest a continued rebound in the economic recovery of the country as a whole. Seattle-Bellevue- Everett MD Non-Farm Em ploym ent (Seasonally Adjusted) Prelim inary Revised Annual Change Apr-15 Apr-14 Total Non-Farm Em ploym ent 1,590,100 1,529,900 60,200 3.8% Total Private Employment 1,375,600 1,319,700 55,900 4.1% Goods-Producing 257,300 243,300 14,000 5.4% Mining and Logging 700 700 0 0.0% Construction 86,200 73,600 12,600 14.6% Manufacturing 170,400 169,000 1,400 0.8% Service-Providing 1,332,800 1,286,600 46,200 3.5% Trade, Transportation & Utilities 286,700 274,000 12,700 4.4% Information 92,300 89,900 2,400 2.6% Financial Activities 86,200 83,500 2,700 3.1% Professional & Business Services 239,700 227,600 12,100 5.0% Education and Health Services 205,200 200,500 4,700 2.3% Leisure and Hospitality 151,400 146,100 5,300 3.5% Other Services 56,800 54,800 2,000 3.5% Governm ent 214,500 210,200 4,300 2.0% Federal 22,500 22,300 200 0.9% State 66,600 65,100 1,500 2.3% Local 125,400 122,800 2,600 2.1% Source: Washingt on Employment Security Dept. Labor Area Summary
Tacoma Metropolitan District April 2015 Non-Farm Employment Tacoma Metropolitan District
0% 8% 7%
24%
5% 1% 6%
5%
10%
12% 22%
Mining and Logging Construction Manufacturing Trade, Transportation & Utilities Information Financial Activities Professional & Business Services Education and Health Services Leisure and Hospitality Other Services Government
The Tacoma MD also experienced similar job growth to that of Seattle when comparing 2014 to 2015. All sectors reporting increases with the exceptions of manufacturing (down 0.6%), hospitality (down 0.3%) and federal government employment (down 0.9%). The strongest gains were in construction (a 12.8% growth). Total private job growth was 3.7% for the area.
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Regional Description Tacom a Metropolitan District Non-Farm Em ploym ent (Seasonally Adjusted) Prelim inary Revised Annual Change Apr-15 Apr-14 Total Non-Farm Em ploym ent 297,000 286,800 10,200 3.4% Total Private Employment 238,300 229,500 8,800 3.7% Goods-Producing 37,900 35,400 2,500 6.6% Mining and Logging 300 300 0 0.0% Construction 20,300 17,700 2,600 12.8% Manufacturing 17,300 17,400 -100 -0.6% 7,700 3.0% Service-Providing 259,100 251,400 Trade, Transportation & Utilities 13,500 13,000 500 3.7% Information 3,000 2,900 100 3.3% Financial Activities 15,100 14,400 700 4.6% Professional & Business Services 25,800 24,600 1,200 4.7% Education and Health Services 53,800 51,700 2,100 3.9% Leisure and Hospitality 29,000 29,100 -100 -0.3% Other Services 13,400 13,200 200 1.5% Governm ent 58,700 57,300 1,400 2.4% Federal 11,600 11,700 -100 -0.9% State 12,100 11,700 400 3.3% Local 35,000 33,900 1,100 3.1% Source: Washington Employment Security Dept. Labor Area Summary
Central Puget Sound Unemployment Non-seasonally adjusted unemployment rate for May 2015 for Washington State was 5.0%, down from the average of 6.3% in 2014. The trend indicates slow but steady improvement for all areas.
Seattle/Bellevue/Everett MD Tacoma MD Bremerton MD Washington State
Central Puget Sound Historic Unem ploym ent Rates 2008 2009 2010 2011 2012 2013 4.7% 9.0% 9.5% 8.4% 7.1% 5.3% 5.8% 5.1% 5.5%
9.7% 7.7% 9.3%
10.2% 8.2% 9.9%
9.8% 7.9% 9.2%
8.9% 7.4% 8.1%
8.1% 6.8% 7.0%
2014 4.7%
May-15 3.4%
6.7% 5.8% 6.3%
6.2% 5.3% 5.0%
Source: Employment Security Department , Washingt on St ate
Central Puget Sound Historic Unemployment
12.0% 10.0% 8.0%
Seattle/Bellevue/Everett MD
6.0%
Tacoma MD
4.0%
Bremerton MD
2.0%
Washington State
0.0% 2011
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2012
2013
2014
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Regional Description
SUMMARY According to a Labor Market and Economic Analysis report from the Washington State Employment Security Department, the economy continues its recovery. However, the progress of the recovery depends on one’s location. The recovery in Seattle has outpaced outlying areas. Overall, King County’s early recovery was driven in large part by manufacturing, professional and business services. More recently, growth has shifted to professional and business services, retail and leisure and hospitality. Government payrolls continue to decline due primarily to weak revenues. Manufacturing employment has also slowed. Aircraft production at Renton is expected to continue into the future, though not without some uncertainty. In spite of these reservations, the area is expected to fare better than other markets in the country, due to the Puget Sound’s solid employment base and diversified industry base.
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REGIONAL MAP
Subject
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LOCAL AREA DESCRIPTION Introduction The subject is located west of downtown Tacoma in the neighborhood known as Hilltop, named for its location on a bluff overlooking Commencement Bay and the Port of Tacoma. The neighborhood is listed on the national register of historic places. The area features proximity to both I-5 and I-705, and is adjacent to the Tacoma CBD, which is located on the narrow slope between Hilltop and the Port of Tacoma on Commencement Bay.
Land Use Patterns Commercial Uses The east boundary of Hilltop and its biggest commercial corridor is Tacoma Avenue, though there is significant commercial development throughout the area. Commercial uses in the area consist primarily of older office and retail development. Commercial buildings range from new to 50+ years old and range from average to good condition. Residential There is a substantial amount of residential development located in the subject’s market area. The subject market area was primarily built out during the early 1900s to 1930s. Originally, single family and small multiplexes were the primary housing in the area. More recently, new multi-family and townhome
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Local Area Description projects have replaced these older structures. Multi-family developments within proximity to the subject were generally built in the 1900 to 1940s or 1980s. Much of the existing construction is midrise in nature. Institutions & Community Services In addition to typical urban services, the Hilltop neighborhood has a significant institutional presence. Most of Tacoma’s hospitals located in the neighborhood and include St. Joseph, Group Health, Mary Bridge, and Tacoma General. Although located in downtown east of Hilltop, the University of Washington's Tacoma campus is a major area land use. Other institutions on Hilltop include Bates Technical College, the Pierce County Jail, and a National Guard Troop Command. Hilltop History Although the Hilltop has good access characteristics and strong proximity to the central business district amenities and employment, the area has faced historical challenges related to crime. In recent decades, a number of forces have reduced the area’s crime rate. These include neighborhood watch efforts, increasing police presence, rising property values, and gradual redevelopment. Demographic Character The chart below summarizes the demographic character of various radii around the subject. Infill development has allowed rapid population growth in recent years, which is expected to continue at a more moderate pace over the next five years. Median household incomes in the immediate area are dramatically lower here than the state as a whole ($45,000).
Population Population 2010 Population 2015 Population 2020
Market Area Dem ographics 1 Mile Ring 3 Mile Ring 24,020 95,153 24,861 98,103 25,981 102,102
Change 2010 to 2015 Change 2015 to 2020 Households # Households 2010 # Households 2015 # Households 2020 Change 2010 to 2015 Change 2015 to 2020 Housing Units (Current) Total Housing Units Ow ner Occupied Renter Occupied Income Median Household Income Average Household Income Source: ESRI
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5 Mile Ring 234,355 241,037 250,260
3.5% 4.5%
3.1% 4.1%
2.9% 3.8%
10,912 11,566 12,220
39,049 40,741 42,627
93,347 96,683 100,736
6.0% 5.7%
4.3% 4.6%
3.6% 4.2%
11,566 26.5% 73.5%
40,741 46.0% 54.0%
96,684 52.3% 47.7%
$30,383 $45,041
$43,013 $57,759
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Local Area Description Subject’s Immediate Area The subject is situated within the Hilltop neighborhood. The subject is located in immediate proximity of St. Joseph Medical Center and Bates Technical College and is within walking distances of city government buildings, the University of Washington Tacoma, the Greater Tacoma Convention Center, and three more hospitals. Surrounding uses include mainly a mix of older and newer retail uses along Martin Luther King Jr Way and single family residential uses within the surrounding neighborhoods. Conclusion The subject is located in an established area of Tacoma situated in the Hilltop neighborhood near downtown Tacoma. The area has faced historical challenges, but should benefit from strong locational influences over the long term. Overall, the subject’s neighborhood supports the subject use.
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LOCAL AREA MAP
Subject
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SITE & IMPROVEMENT DESCRIPTIONS Site Description Site Description:
The subject site is comprised of one parcel zoned NRX (Neighborhood Commercial Mixed Use District) with a total of 6,500 SF. The subject is located 0.6 miles west of the Tacoma CBD. The overall site rating is fair relative to the market.
Size:
6,500 SF (0.15 ac), according to the Pierce County Assessor's Office.
Usable Site:
6,500 SF/0.15 ac based on observed conditions during the site visit.
Topography:
Level
Parcel Shape:
Rectangular
Excess/Surplus Land:
None
Frontage:
Martin Luther King Jr Way
Corner Parcel:
No
Adjacent Properties:
Surrounding uses include retail uses.
Utilities:
All utilities are available to the site.
Street Improvements:
Martin Luther King Jr Way is a two-lane, two-way street with sidewalks, curbs, gutters and street lights.
Accessibility/Exposure:
Access to the subject site is average. Exposure of the subject is average.
Environmental Issues:
Scriber Creek crosses the southwestern corner of the parcel. Scriber Creek is identified as a Category I Stream in the Lynnwood Municipal Code. Creek buffers vary depending on the type of creek identified. Wetlands classification, surveying and determinations of buffer areas are beyond the competency of the appraiser. Additional research is strongly advised.
Flood Plain:
The northwestern corner of the parcel is in Flood Zone X per FEMA Flood Map, Community Panel Number #5301480025B, dated December 1, 1983. The area identified below is within the flood zone. The “Floodway Fringe Area” identified by the county closely correlates with the creek buffer and set back area.
Census Tract Number:
0614.00
ZONING Code Requirements Zoning Designation:
NRX (Neighborhood Commercial Mixed Use District)
Zoning Authority:
Tacoma
Zoning Description:
The purpose of the mixed use zone is extensive and includes the following: to provide for a predominantly residential neighborhood, to discourage removal of existing single-family residential structures; and to encourage in-fill residential development. This district is designed
71567
Wilcox LaMotte Valuation & Advisory
21
Site Description and Description of Improvements for areas characterized by an established mix of housing types and limited neighborhood commercial uses, in areas which were formerly zoned to permit residential development at densities greater than single-family, where redevelopment removed many existing singledwelling structures and where there is continued development pressure that threatens single-family dwellings. Multi-family is a permitted use within the NCX zone. However, it is not permitted at street level along Martin Luther King Jr. Way, an arterial designated as a Core Pedestrian Street. Live/work units are permitted. Minimum Lot Area:
No Minimum
Density:
Min: 40 dwelling units/acre
Height Limits:
45'. An additional 20' is available for affordable housing (20% of the units set aside for tenants earning
