New tax district close to approval
Liberty Lake and Spokane County are closing in on forming a joint taxing district that will fund public improvements and, hopefully, attract dollars and jobs to the region.
The proposed district includes 1,300 acres west of Liberty Lake – a portion of which Liberty Lake hopes to annex. While the land is mostly fields, developers plan to create a community with homes, apartments, offices, light industry and sales-tax generating retailers, said Wayne Frost, general manager of Centennial Properties Inc. a major landholder.
A proposed 100-acre retail site near George Gee Buick Pontiac GMC has already received serious looks from three retailers, Frost said. However, he noted, “No retailer has made an acquisition.”
The “tax increment financing” district would generate $15 million in basic infrastructure improvements, including roads and sewer and water lines. It could also pay for some trails, parks or public facilities, Frost said.
Loans would be repaid by capturing a portion of the revenue generated by the development, which increases property values. Proponents of the district include Spokane County Commissioner Todd Mielke.
Mielke, who as a lobbyist helped draft the state law that created TIF, said the financing allows cities to move forward with public improvements that might otherwise take years to fund. It also enables the region to better compete with cities like Post Falls and Coeur d’Alene, which already have urban renewal districts.
“We want to make sure that we don’t put ourselves at a competitive disadvantage,” Mielke said.
Opponents include the city of Spokane Valley, which sent a letter to Spokane County commissioners stating concerns about the district, including the impact the development will have on Spokane Valley roads.
The letter, signed by Spokane Valley Mayor Diana Wilhite, criticized using tax dollars to subsidize development without significant public discussion, and setting a precedent that favors some developers.
Landowners within the district include Dave Black of Tomlinson Black; Centennial Properties Inc., which is owned by Cowles Publishing Co., which also owns The Spokesman-Review; and others.
To enact a TIF, 75 percent of the taxing entities within the boundaries have to approve the arrangement. Schools are exempt from the district, but others, like fire districts, agree to take a portion of the tax they’d normally be entitled to until the district lapses.
So far, the Spokane Valley Fire Department, the Spokane County Library District and Liberty Lake voted to support the project. Spokane County commissioners will vote on the TIF today, although no public testimony is being taken.
Mielke said developers normally agree to pay any gap between tax revenue and the bond repayment bills. In this case, Jim Frank, of Greenstone Homes, is obtaining the financing himself and will be repaid with the taxes. Frank will make payments immediately, even if the tax revenue isn’t yet there, and has agreed to absorb any outstanding debt after the district lapses in 15 years, Mielke said.
Although the Liberty Lake City Council unanimously approved forming a TIF district, the measure generated criticism by two councilmen who argued that using public funds for private projects might not be in the best interest of the city.
“There is not justification for a public entity like a city to tax everyone in the city and say these people here get a refund of 75 percent,” Brian Sayrs said.
Councilman Dennis Paul likened using tax dollars to attract retailers to supporting “football stadiums” and “River Park Square.”
“This is not the way I’d like to see things being done,” Paul said.
Although the objections were noted, the consensus was that TIF could attract managed growth and secure a tax base that could support future services.
“It is an opportunity to attract those big retailers,” Peterson said.