Investigation of alleged $5.6M Tacos Guaymas tax scheme began in 2014 on Broadway

Some of the customers ordering at Broadway’s Tacos Guaymas on September 30th, 2014 weren’t there for the affordable Mexican food served inside a bustling but tiny Capitol Hill restaurant space. Eight times, according to the office of Attorney General Bob Ferguson, investigators from the Department of Revenue visited the restaurant that Tuesday.

Last week, founder and owner of the Tacos Guaymas chain Salvador Sahagun was charged with six counts of first-degree theft and three counts of possessing and using sales suppression software in what the AG says was a multi-year scheme to pocket more than $5.6 million in sales tax from cash transactions. Continue reading

‘Real progress’ — Task force recommends $75M Seattle business tax for housing and homelessness services

Seattle’s Progressive Revenue Task Force has finalized a set of recommendations for a so-called “head tax” that could raise $75 million a year to help create housing and provide homelessness services. UPDATE: The final report (PDF) released March 9th pushes the amount the city should raise to an estimated $150 million — $75 million of which would come from the head tax.

The recommendations were finalized last week in advance of a deadline legislated last year as the City Council agreed to back away from an earlier plan to tax large businesses a per-employee tax that would have raised only around $25 million per year.

“We believe it is imperative to raise a substantial amount of revenue -– enough to make a measurable and significant impact on the crisis –- so that the community sees tangible results from this new investment,” the task force report reads. “People are tired of half-measures and want to see real progress.” Continue reading

Price of pop from Capitol Hill’s Mystery Soda Machine hits $1.00

A can of sugary, delicious Coca Cola, or Mr. Pibb, or Orange Crush from Capitol Hill’s Mystery Soda Machine(tm) now costs $1.00.

The latest bump in price for the E John vending machine comes along with Seattle’s new soda tax — 1.75 pennies for every ounce of sugary drinks purchased. Gatorade shoppers are appalled — though there is no reason the excise tax has to be passed along to consumers. The soda industry is now worried the tax might spread to the entire state and mystery soda machines in cities from here to Pullman.

The secret organization that stocks and operates the Capitol Hill machine could not be reached for comment.

Seattle ‘Employee Hours Tax’ at center of budget debate — UPDATE

Seattle City Council budget chair Lisa Herbold’s job is to take the mayor’s budget proposal and shape it for the city’s most important priorities. This week, her committee will put the final touches on Seattle’s budget “balancing” process.

A new employee hours tax — sometimes referred to as a head tax — stands at the center of the effort.

“If we pass the Employee Hours Tax…  starting in 2018 we can begin to invest nearly $50 million each year and create 2,000 additional units of affordable housing over four years,” Herbold writes in an update on the budget process, “for both low-wage working families and formerly homeless individuals. This would more than double what the Housing Levy funds each year.”

UPDATE 2:10 PM: During Tuesday’s budget committee meeting, Council members voted against the employee hours tax proposal in a 5-4 vote. Those who opposed were Harrell, Juarez, Johnson, Bagshaw and Gonzalez. However, Harrell, Johnson and Gonzalez expressed support for coming back to the HOMES tax early in 2018.

While many in Seattle’s business communities have voiced opposition to the HOMES tax, Council members Kshama Sawant, Mike O’Brien, Kirsten Harris-Talley and Herbold have been planning a budget including its implementation.

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With Capitol Hill commercial rents also soaring, Seattle looks at tax breaks for landlords with small biz tenants

Since 2008, commercial rents have risen 42% in Capitol Hill’s 98122 zip code, making it the third most expensive zip code for businesses in the city. The second most expensive retail rents are now in 98102, while other neighborhoods, like Ballard, have seen retail rents increase by more than double.

To ensure small businesses are not drowned out in the rising tide, Mayor Ed Murray convened a task force in April to explore what the city could do to help. The results, released during a Wednesday morning media conference, are relatively modest compared the mayor’s housing affordability plan, but Murray said it was an important starting point.

Recommendations from the Commercial Affordability Advisory Committee include a new entity to support small businesses, tax incentives for property owners to keep small businesses as tenants, and “fast track” permitting requirements for small business projects. Defining what exactly constitutes a small business would still need to be determined, but the recommendations appear to target support for micro-business projects like Melrose Market.

In the short term, the city will be directing $122,000 annually to a low-cost lending program for businesses with five or fewer employees and fund a commercial affordability consulting team to give businesses and small property owners technical advice. Not included in the recommendations — commercial rent control. Continue reading

Proposed business tax changes would boost Seattle Police

Two proposed ordinances that will increase costs for Seattle businesses to raise funding for growing the Seattle Police Department are scheduled for discussion Wednesday by a Seattle City Council committee. Both ordinances have the objective of increasing revenue for the city to help defray the cost of resources needed for SPD, including 200 more police officers and 911 staffing center needs that a City Hall rep tells CHS have been neglected for some time.

The first ordinance proposes a 3.2% increase in tax rates for most Seattle businesses over a two-year period. City Budget Office director Ben Noble said the proposed tax increase would raise approximately $8 million of more than $20 million total needed to pay for the SPD resources. Continue reading

How Capitol Hill property owners could pay for half of the Broadway streetcar extension

First Hill Streetcar AnimationBroadwayStreetcar_factsheet_090315_optionb-01-306x550Designs are nearly complete for the Broadway extension to the First Hill Streetcar that will include a new stop at Harrison and a new terminus at Roy in 2017. The question remains how to fund it.

While some small business owners say it would be a nonstarter, the City of Seattle commissioned a study last year to explore how Capitol Hill property owners might foot part of the bill through a “local improvement district.”

On Tuesday, the City Council transportation committee authorized the City to accept a $4 million state grant to put towards construction of the two stops. Combined with a $10 million federal grant, that puts the Broadway Streetcar about $10 million short of its expected cost. A LID could make up the difference by having the City issue a bond to be repaid by property owners near the project. Assessments would be made based on property value and proximity to the stops.

Here’s how it works. First, the LID needs a boundary. In the case of the Broadway Streetcar, analysts from Valbridge Property Advisors recommended an area that extends two or three blocks on either side of Broadway from Prospect to Boren. Continue reading

3,000 down, 17,000 to go? Mayor proposes $290 million Seattle Housing Levy

Screen Shot 2016-02-03 at 6.06.29 PMMayor Ed Murray introduced his proposal Wednesday for a doubling of the Seattle Housing Levy to create a $290 million pool “to preserve and produce affordable housing” as the city moves forward on its goal to create 20,000 affordable units by 2025.

“Expanding the Housing Levy is the most important thing we will do this year to support affordability in Seattle,” Murray said in the plan’s announcement. “We know what works – build more affordable homes for low-income families, preserve the affordable housing we have, and keep people from falling into homelessness – and we must renew our commitment and expand the levy so we can do even more.”

A community meeting on the proposal will be held on Capitol Hill later this month. The levy could go to voters as early as August.

CHS reported on the mayor’s levy plans in January as officials responded to the growing Seattle homelessness crisis with calls for more funding. District 3 rep Kshama Sawant has called on City Hall “to allocate $10 million for additional shelter beds” immediately, a call that has — so far — gone unheeded. Sawant also last week repeated her calls for Seattle to move forward with rent control and using the city’s “bonding capacity” to build affordable housing.

Wednesday’s announcement will bring a new 7-year ballot measure to Seattle voters later this year:

Responding to a broad range of affordability needs in Seattle, Mayor Murray’s initial 2016 Housing Levy proposal will produce affordable housing for seniors, people with disabilities, low-wage workers, and people experiencing homelessness. The Levy also provides funding for homelessness prevention and homeownership assistance. The program areas include:

  • Rental Production and Preservation ($201 million capital funding; $39 million operating funding):The Levy proposal will produce and preserve 2,150 apartments affordable for at least 50 years, and reinvest in 350 existing affordable apartments. The proposal also provides operating funds to supplement tenant-paid rent in 475 apartments serving extremely low-income residents. Continue reading

Murray plans big property tax boost, Sawant calls for emergency $10M in Seattle homelessness crisis — UPDATE

As volunteers and officials prepare for this year’s One Night Count of homeless people living on the streets of Seattle and King County overnight Thursday, Seattle leaders are calling for increased funding to help create more housing and shelter in the region and calling for more to be done across the state.

Sleeping between graffiti

Tuesday night, Mayor Ed Murray said he will ask Seattle voters to approve a doubling of the housing levy last approved in 2009. “Beginning tonight at City Hall, we are holding community meetings across Seattle to share our city’s vision for how we bring affordable housing to every neighborhood,” Murray said. “And in just a few weeks, I will lay out my vision for the renewal of Seattle’s Housing Levy. I am proposing that we double the levy so that we can do much more — including permanent housing for those who are homeless.”

“Perhaps as a city, there is nothing more important that we can do this year than pass this levy,” Murray added.

The around $190 million proposal will undoubtedly face opposition from property owners who have complained about the steadily increasing number of levies stacked on Seattle land. In February, for example, Seattle voters will be faced with two school levies to replace expiring funding. According to the Seattle Times, there will be a record $228.5 million in voter-approved levy taxes collected in the city in 2016. But the paper’s analysis concludes that Seattle ranks extremely low in the nation when it comes to its effective tax rate. “Seattle property taxes are high because our homes are worth so much, not because we’re being gouged by an excessively high rate,” the Times reports.

And, landlords, it could be worse.

“The Mayor has said that the only way we can generate additional funds for the homeless is by taking resources away from other social needs,” District 3 rep Kshama Sawant said in a statement on homelessness released Thursday morning. Continue reading

Capitol Hill area average property values near $1 million after biggest hike in a decade

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(Source: King County Assesor)

It won’t come as a surprise to anyone house hunting on Capitol Hill that it is still very much a seller’s market. Property values on Capitol Hill have gone up 15% this year — the largest single percentage jump in at least a decade, according to data from the King County Assessor’s office.

On north Capitol Hill, the average property value (includes land and structures) reached $976,400 in 2015. The “Capitol Hill” area as defined by the assessor is roughly bound by Roy St up to the Montlake Cut, and Interlaken Park to I-5.

In the “Central Area,” which includes a good chunk of Capitol Hill, average property values rose 14% in 2015 to $516,800. The area is roughly located south of Roy St to I-90 and west east of I-5 to 32nd Ave. Continue reading