OLYMPIA – Liberty Lake’s bid for a new Cabela’s store got a big boost this week when lawmakers approved an economic development bill in the final hours of Washington’s legislative session.
“It’s a huge win,” Liberty Lake Mayor Steve Peterson said of the bill, which must still be signed into law by the governor. The city hopes to use the money, he said, to help pay for a new Interstate 90 interchange and other public infrastructure.
It was an especially sweet victory, Peterson said, because Idaho lawmakers two weeks ago rejected a tax incentive intended to help Post Falls’ bid for the major outdoor-goods retailer.
“It bodes well,” for Liberty Lake’s chances, Peterson said. “It’s easy to promise the moon, but you’ve got to get it done. And the people in Idaho I don’t think are going to get rewarded in this case.”
The Washington bill would allow Liberty Lake and projects in Vancouver and Bellingham to issue millions of dollars in construction bonds. The bonds would be paid off with the state’s share of future sales taxes, plus local matches. The money could pay for roads, utility lines or other infrastructure critical to attracting companies.
The new businesses will bring jobs, more retail sales, property taxes and sales taxes, the mayor predicted.
“Believe me, people will look back 10 years from now and say why in the hell didn’t we do this before?” Peterson said. “This is just seed money. One million bucks, I can guarantee you, will bring back $5 million every single year in additional revenue.”
Attracting business with publicly financed infrastructure is common in many states, particularly in the South, but it’s much harder in Washington due to constitutional restrictions on how tax dollars can be spent.
“We’re going to see if this works in Washington state,” Rep. Kelli Linville, D-Bellingham, told lawmakers on the House floor last month. “We’re the only state that doesn’t do it.”
Lawmakers in Olympia have wrangled for years over such proposals. Some are leery about build-it-and-they-will-come snafus in other states. Others worry about communities getting themselves into debt – which is what bonds are – and not being able to attract the economic growth to pay it off.
To assuage those fears, lawmakers built some limits. Communities can commit no more than $1 million a year to bond payments. They must file annual public reports on the financing.
“This is a measured, cautious approach,” said Rep. Sharon Tomiko Santos, D-Seattle.
Liberty Lake plans to establish a 2 1/2-square-mile “river district” centered near the Sprague Avenue overpass to I-90, Peterson said.
The top priority with the bond money, he said, would be to help build a new freeway interchange there, between the existing Liberty Lake and Barker Road interchanges. Other potential projects include roads, sewers, water lines, data lines and sidewalks. Peterson estimated that the city could get at least $9 million in construction bonds with the $1 million annual sales tax.
Last December, the county approved a 1,300-acre tax-increment financing district of mostly vacant land between Liberty Lake and Spokane Valley. Such districts use increased property values from future development to pay for infrastructure to encourage that growth. But Stevenson said Thursday that relying on property taxes is a much slower, smaller way to raise the needed money, compared to sales tax from a major retailer.
Spokane area businesses, chambers of commerce and lawmakers pushed hard for the bill in Olympia this year. It helped that one of the state’s two most powerful lawmakers, Senate Majority Leader Lisa Brown, is from nearby Spokane.
“This was heavy lifting by a number of entities,” said Peterson.
He’s been nervous since January about whether the bill would actually pass.
“It’s like having a baby,” he said. “You sweat it all the way to the end.”