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Home My WebLink AboutA008 - Council Action Form dated March 28, 2006 ITEM # G �� DATE: ��-7 ch 28, 2006 COUNCIL ACTION FORM T" Apprvucd Subject: RESOLUTION APPROVING A SPRINKLER RETROFIT TAX / ABATEMENT PROGRAM Background: As the fire department staff participated in extensive public input sessions regarding the proposed sprinkler retrofit program, they received numerous comments from impacted property owners regarding the importance of implementing a tax abatement program to, hopefully, offset some of the installation costs. The ordinance as currently proposed will require the installation of sprinklers in the four categories designated by the Fire Chief as the highest need (dormitories, institutions, high-rise buildings, and residences for the mobility impaired). The State Code allows for Urban Revitalization areas to be established to promote fire safety. This tool has been utilized by the City Council in other areas to accomplish objectives related to aesthetics in regards to multiple family residential units and commercial developments. Under this program, the City Council can establish a partial tax abatement program that will offer a three, five, or ten year tax abatement option for the property owner, should the installation of an International Building Code/International Fire Code (2003) compliant sprinkler system increase the value of a property by at least 5%. A program can be established that would offer abatement to any or all of the categories of structures that will be impacted by a retrofit ordinance, should it pass. Alternatives: 1. The City Council can approve a Sprinkler Retrofit Tax Abatement Program for those owners of "dormitories" that install an International Building Code/International Fire Code compliant sprinkler system by October 1, 2011. 2. The City Council can approve a Sprinkler Retrofit Tax Abatement Program for those owners of "high rise buildings" that install an International Building Code/International Fire Code compliant sprinkler system by October 1, 2011. 3. The City Council can approve a Sprinkler Retrofit Tax Abatement Program for those owners of "institutions" that install an International Building Code/International Fire Code compliant sprinkler system by October 1, 2011. 4. The City Council can approve a Sprinkler Retrofit Tax Abatement Program for those owners of "residences for mobility impaired" that install an International Building Code/International Fire Code compliant sprinkler system by October 1, 2011. 5. The City Council can approve a Sprinkler Retrofit Tax Abatement Program for those owners of all four high hazard categories identified by the Fire Chief that install an International Building Code/International Fire Code compliant sprinkler system by October 1, 2011. 6. The City Council can approve a Sprinkler Retrofit Tax Abatement Program for those owners of any combination of the four high hazard categories identified by the Fire Chief that install an International Building Code/International Fire Code compliant sprinkler system by October 1, 2011. 7. The City Council can reject the idea of providing a partial tax abatement to owners of property in any of the four high hazard categories that install a International Building Code/International Fire Code compliant sprinkler system by October 1, 2011. Manager's Recommended Action: The staff has emphasized on numerous occasions that the availability of this incentive program does not assure that sprinkler improvements will yield the necessary increase in property value (5%) to guarantee that the owner will qualify for any abatements to offset construction costs. However, from the many conversations with staff regarding this topic, it appears that the implementation of this abatement program remains very important to those property owners potentially impacted by this retrofit ordinance. Therefore, even though the actual financial benefit to the property owners is likely to be less than hoped, it is the recommendation of the City Manager that the City Council approve Alternate #5 that establishes a Sprinkler Retrofit Tax Abatement program for property owners of all four high hazard categories identified by the Fire Chief that install an International Building Code/International Fire Code compliant sprinkler system. This recommendation is contingent upon the City Council adopting some variation of a sprinkler retrofit ordinance presented in the previous agenda item. Regardless of which approach is adopted (5 years, 7 years, or 10 years), it is believed that the abatement program should serve as a incentive to accomplish the retrofitting sooner rather than later. Therefore, staff would recommend this abatement program be available for installation work accomplished prior to October 1, 2011. A summary of the Sprinkler Retrofit Tax Abatement Program is attached. If this program is approved, it should be remembered that the Council will have to create a separate urban revitalization area for each lot on which the sprinkler installation occurs. This is the same procedure we follow with the residential multi-family and commercial development tax abatement program. Council Action: SPRINKLER RETROFIT TAX ABATEMENT PROGRAM March 28, 2006 Who is eligible for the Program? Owners of properties of high-rise buildings, dormitories, institutions, and residences with occupants who have impractical evacuation capabilities will be eligible for this tax abatement program. The definitions of these categories are as follows: Existing High-rises: Buildings having occupied floors located more than 75 feet above the lowest level of fire department vehicle access. Institutions: Buildings housing more than 16 persons on a twenty-four hour basis to be cared for or provided a supervised environment because of their physical or mental condition, including hospitals, nursing homes, and assisted living facilities. Mobility Impaired: Buildings with 16 or more dwelling units of which 8 are occupied by one or more persons who have an impaired evacuation capability. The fire chief, or his/her designee, shall have the authority to determine whether a person is an occupant with an impaired evacuation capability as aforesaid, and to conduct a timed evacuation drill to determine the extent to which an apartment building may contain occupants with such impaired evacuation capabilities. Dormitories: A building in which sleeping accommodations are provided for more than 16 persons, who are not related by marriage or consanguinity, in one room or a series of closely associated rooms, with or without meals What type of improvement must be accomplished? In order to qualify for the tax abatement program, the property owner must install an International Building Code/International Fire Code (2003) compliant sprinkler system. How long is the abatement incentive available? In order to be considered for the tax abatement program, the installation of a code compliant sprinkler system must be completed prior to October 1, 2011. What tax abatement schedules are available? If the proper sprinkler system is installed prior to October 1, 2011, in one of the four property categories listed above that increases the value of the property by at least 5%, the property owner could chose from one of three tax abatement schedules: • a three-year 100% tax abatement schedule • a five-year partial abatement as is available in the other urban revitalization areas: For the first year— 100% For the second year- 80% For the third year— 60% For the fourth year— 40% For the fifth year— 20% • a ten-year partial abatement as is available in the other urban revitalization areas For the first year— 80% For the second year— 70% For the third year— 60% For the fourth year— 50% For the fifth year—40% For the sixth year—40% For the seventh year— 30% For the eighth year— 30% For the ninth year— 20% For tenth year— 20%