Corvallis Considers Property Tax Break for Downtown Development

Corvallis City Council is considering a partial property tax exemption for the Gordon Hotel & Residences complex, a downtown development project. City staff recommends approving the request from Obie Companies, which amounts to $3,409,596 over ten years. The matter is scheduled for discussion at the City Council meeting on February 18.

This request is submitted under the City's Multi-Unit Property Tax Exemption ordinance (MUPTE), established in 2023 to encourage apartment development. This is the first such request under the ordinance.

The proposed complex will include retail spaces, restaurants, 75 hotel rooms, and 92 new apartments (17 studios, 56 one-bedrooms, and 19 two-bedrooms).

The tax exemption applies only to the apartment portion of the complex, according to a memo from Corvallis' Community Development Director Paul Bilotta.

Bilotta stated that the three lots slated for the project currently have a taxable value of $924,757, generating $4,668.20 annually in city taxes. This would change with the new complex.

"The projected net taxable value of the hotel component is $18,925,122.22, which is estimated to generate $95,534.56 annually to the City of Corvallis. Following the 10-year exemption period, the total projected net taxable value of the entire project is $37,003,228.28 and is estimated to generate $186,793.36 annually to the City of Corvallis," Bilotta said.

The hotel is also estimated to generate about $670,000 per year in transit lodging tax, with approximately $350,000 going to the City of Corvallis, $150,000 to Visit Corvallis, and $170,000 to Benton County.

The developer will invest $46,904,118 in the complex, and the tax break would offset 7.1% of that amount. Ten percent of the tax break will be allocated back to the City to fund future affordable housing projects.