Council approves property tax exemption for Lynnwood City Center development

The Lynnwood City Council at its April 8 business meeting approved a tax exemption request for City Center housing development ENSO, a move that could save the developer at least $6.4 million.

The council unanimously supported ENSO’s request to use an eight-year variation of the Lynnwood’s Multi-Unit Housing Property Tax Exemption (MFTE) program. The MFTE program in Lynnwood was instituted in 2007 to increase housing supply.

Renderings of ENSO

The council approved a similar request in March 2024, when it agreed to use the MFTE program in a 12-year agreement with Alderwood Mall-area developer Koz. In exchange, Koz will set aside 20 units for households at or below 80% of area median income, and another 20 units will be available to households at more than 80% but below 115% of area median income. 

Unlike Koz, ENSO sought to use an eight-year variation of the program that does not require it to include affordable housing units. ENSO is also taking advantage of Opportunity Zone funding, a 2017 federal program that grants tax benefits for developers building in economically distressed communities. The Opportunity Zone program does not require that the housing be affordable or for low-income households. 

Council President George Hurst called the program a “tax haven for the rich.” 

The Lynnwood City Council discusses the ENSO project

The lack of affordable housing drew criticism from councilmembers at an April 1 work session, when the council also received a briefing on the city’s insufficient housing supply and high rent. Staff explained that while ENSO development company ACG Acquisitions LLC had been interested in participating in the 12-year program, its lenders were not. 

Further, staff explained that the city would need to have a valid reason for denying ENSO’s application as the complex meets MFTE participation requirements. 

Council President George Hurst

At the beginning of Monday’s meeting, Council President George Hurst motioned to add a conversation about possible revisions to the MFTE program to the end of the evening’s agenda. The motion passed 4-3, with Hurst, Council Vice President Julieta Altamirano-Crosby and Councilmembers Nick Coelho and Josh Binda in favor and Councilmembers Shirley Sutton, David Parshall and Patrick Decker against. Following an executive session pertaining to city employment, Decker motioned to postpone the discussion to the next business meeting. The motion was unanimously approved. 

Council Vice President Julieta Altamirano-Crosby

Responding to an inquiry by Altamirano-Crosby about the amount of taxes the development will not be required to pay, staff estimated that the property would be exempt from an estimated $800,000 annually totalling about $6.4 million over eight years. It was also noted by staff that ACG will still be required to pay $5 million on impact, utility connection and building permitting fees. 

Councilmember Patrick Decker

Decker, who asked about the quantity of jobs in businesses being displaced by the project (87 full time employees and 26 part time employees), said that the new residents would also be increasing the area’s sales tax revenue. 

A document provided by development staff during a previous meeting that described MFTE requirements referred to a requirement that 50% of the units created must have permanent residential ownership occupancy. Staff explained that this was an error and that the ownership requirement was revoked by city council in 2012. 

Another council discussion item related the ENSO development’s request for tax exemption pertained to the quantity of planned parking spots. Within six of its seven stories, ENSO will contain a total of 316 dwelling units and 397 parking spots. Coelho said that for an area serviced by the Alderwood Zip, the Swift Orange Line, Community Transit and the light rail, the figure seemed like a lot. ENSO will be located at 198th Street Southwest and 40th Avenue West, within the City Center –an area being designed for walkability and transit-oriented transportation. 

Councilmember Nick Coelho

“There’s literally no reason anyone needs a car in this development and it strikes me as a lot of wasted space,” Coelho said.“That’s a lot of housing that just doesn’t get built and it’s just going to sit empty. Seems strange.” He  suggested that the council explore density bonuses or reevaluate city code pertaining to parking minimums.

Decker pushed back against this assertion, saying that different people have different transportation needs. 

“Individuals across Lynnwood should make their own decision about whether they need a car,  just as we could say any member of the council doesn’t need a car,” Decker said. “It’s equally true that we all have cars for probably the same reasons that many people in this development will choose to have cars.”

ENSO intends to begin construction this summer and complete construction in about two years. 

The Lynnwood City Council

In other business, the council voted to approve a new city land acknowledgement. As explained in a March 20 work session, the decision to update the acknowledgement was spurred by a desire for community input and historical backing that was specific to Lynnwood. 

The statement reads as follows: 

“We acknowledge that the City of Lynnwood is located on the traditional lands of the Snohomish Tribe and the confederation of Tulalip Tribes and their families. For generations, these Indigenous communities have lived on this land, and we recognize, support, and advocate alongside them.

We also acknowledge the forced removal of Indigenous communities from their Homelands as a result of the 1855 Treaty of Point Elliott. We understand that Land Acknowledgements are only the first step in our efforts to support Coast Salish tribes and educate non-Natives about their lived history. We strive to achieve this through building relationships with Indigenous communities, supporting Indigenous commerce, government-to-government partnerships, and lifting indigenous voices to create equity for all.

Through these actions, we hope to not only pay respect to the past but also collaborate in creating a sustainable future, hand in hand with the first protectors of our shared environment.”

Councilmember Patrick Decker

In a 6-0-1 vote, every councilmember except Decker chose to approve the acknowledgement. Decker said he abstained on the basis that he did not know enough since he was absent during the March 20 presentation. He also posed a series of questions he said were standard asks for proposals brought to the council for consideration. He inquired about legal liability for the city, how the statement would provide residents “material improvements” and how the statement would provide “real diversity.”  Mayor Christine Frizzell asked Decker to send his list to Equity and Social Justice Advisor Doug Raiford, who could answer his questions in an email form. 

A commemorative photo taken after the Arbor Day proclamation.
A commemorative photo taken after the Volunteer Week proclamation.

Finally, the council read proclamations acknowledging Arbor Day and National Volunteer week.

–By Jasmine Contreras-Lewis

Leave a Reply

Your email address will not be published. Required fields are marked *

Real first and last names — as well as city of residence — are required for all commenters.
This is so we can verify your identity before approving your comment.