A ‘win for development’: Spokane County, city pursue tax revenue sharing in 3 areas

(as reported by Rebecca White in the Spokesman-Review)

 

Spokane County has agreed to equally share tax revenue with Spokane from three areas that are projected to grow: the West Plains,northeast Spokane and the University District.

The agreement, which commissioners approved last Tuesday and which Spokane City Council will vote on Nov. 4, will help Spokane County and the city of Spokane avoid competing against each other, and instead compete against other cities across the Pacific Northwest for new businesses, County Commissioner Al French said.

“Now we don’t care if a business locates in the city or the county,” French said. “(Competing) is old thinking, and it’s been getting in our way.”

The three areas where the tax revenue sharing will occur, if the council approves the plan, are known as public development authorities. These are public bodies that help build infrastructure, encourage growth and recruit businesses. They are paid for with taxes local governments collect within their boundaries.

Recently, the West Plains Public Development Authority has seen several new businesses announce plans come to the area.

A $181 million Amazon fulfillment center is under development on Spokane County land in the West Plains, and French said it will bring in 1,500 jobs, 3,000 during the holidays.

Mullen Technologies recently announced plans to manufacture electric cars and lithium batteries, hire some 860 workers and develop an “energy business park” on city land on the West Plains.

Todd Coleman, executive director of the West Plains PDA, said his group is also in talks with Boeing and aims to recruit businesses that pay more than the median wage in Spokane. He said the PDA’s role is to be the main organization a new business works with when trying to develop in the West Plains, instead of having to deal with several city and county governments at the same time.

Spokane County and the city of Spokane were already members of the West Plains Public Development Authority. But under the old agreement, the taxes from businesses inside the PDA would go to whichever government’s boundaries they were inside.

Under the new agreement, incremental tax revenue increases from both locations would be split equally between the two governments.

French called the original agreement an “oversight,” saying the intention was always to recruit businesses as a team and not fight over tax revenue.

“It was supposed to be that way from the beginning,” he said. “We want to be equal partners.”

Under the new agreement, taxes are split equally between both governments, regardless of where a business opens inside the PDA.

Each government will get 12.5% of the sales or property taxes, and the PDA will get 75% to reinvest in itself. Once the PDA grows past $600,000 in revenue for three consecutive years, the two governments are allowed to renegotiate the agreement and keep larger shares of the tax revenue for themselves.

Todd Coleman, executive director of the West Plains PDA, said it has predicted the revenue will be about $400,000 for the next six years.

 

County Commissioner Josh Kerns said the agreements aren’t meant to enrich either government, but puts them in the best position to help recruit businesses, development and jobs to the region. He said the agreements, which are similar for both the West Plains and Northeast PDAs, help the city and county avoid conflicts over businesses.

“If we can avoid a fight before it even happens, let’s do it,” he said.

Kerns will be the representative for the Northeast PDA, which was created by the city of Spokane and has existed since 2011.

Under the new agreement, the public development authority would expand to include county land and the board would change to include both city and county leaders. Spokane and Spokane County will also split 25% of incremental revenue increases and the Northeast PDA will be allowed to keep 75% until the PDA is annually bringing in more than $600,000 in revenue a year.

David Guthrie, executive director of the Northeast PDA, said it is more focused on bringing back industry and development in an area that’s been economically depressed since hundreds of railroad jobs left the Hillyard neighborhood. The PDA is also working on helping build infrastructure in areas that don’t have roads or water.

While the Northeast hasn’t seen the new influx of businesses the West Plain has, Guthrie anticipates the completion of the North Spokane Corridor will change that. He called the project the “wall of construction” and said locals have been skeptical that the $1.5 billion project first conceived in 1946 will ever be finished. The project is scheduled to be completed in 2029. As that date gets closer, he expects many, many more businesses to move in.

“As we get closer to completion, we’ll see improvements and more economic activity,” he said.

Last week, the county also voted to join the University District Public Development Authority.

Lars Gilberts, CEO of the University District PDA, said the members who were on the board will be a part of the University District’s nonprofit, and the board will mostly be made up of governing officials, allowing them to make more decisions without going to council for approval. Once the city of Spokane also approves the agreement, the governing board will shrink from 23 to 7.

The county also agreed to pay $50,000 a year to the University District PDA, and Commissioner Mary Kuney will be the county’s representative on the board.

Kuney called all three agreements a “win for development” and said she’s been working with leaders from the PDA, the mayor’s office and City Council President Ben Stuckart on the changes to the University District PDA.

Stuckart, who had previously been critical of the agreements, said he changed his mind after commissioners agreed to allow local governments to keep a larger portion of the revenue in the Northeast and West Plains PDA once they are more self-sustaining.

He said council had already been briefed on the changes and that council members hadn’t raised any concerns. The final reading and vote for all three PDA changes is scheduled for Nov. 4.