Public benefits proposed near development

Creation of a property tax financing district for public improvements at a new Kendall Yards mixed-use development – and for nearby business areas as well – may be a complicated arrangement on paper.

But to Cecilia Kralik, the idea is simple: economic growth.

“It’s a great tool to grow our city,” said Kralik, manager of a family-owned antique shop on north Monroe Street and president of the North Monroe Business District organization.

“It will increase economic development for our city and community,” she said during the last of four public meetings on the proposed community revitalization district.

Spokane City Hall officials are proposing the financing district to use a portion of property taxes from Kendall Yards and surrounding areas for at least $11 million in public improvements.

The district boundaries, if approved by the City Council, would include neighborhoods and business areas to the north and east of Kendall Yards, a major project approved for the north bank of the Spokane River west of Monroe Street.

A portion of taxes raised inside Kendall Yards would pay for improvements there, while a portion of taxes from outside the development would go for neighborhood improvements, said John Pilcher, the city’s chief operating officer.

Because major developments can bring large increases in property tax collections, state law allows local governments to use up to 75 percent of the increased tax collections to pay for public improvements over 20 years as an incentive.

City and county general funds would retain existing property tax collections and also keep 25 percent of any increase under what’s commonly called a “tax-increment financing district.”

An initial phase of the Kendall Yards project between Monroe and Maple streets would include 340,000 square feet of commercial space and fewer than 400 residential units. But the full development approved by the city hearing examiner last year could bring as many as 2,600 residences and 1 million square feet of commercial space over 20 years.

Under the current arrangement, Kendall Yards would finance its own public improvements and then use property taxes generated by the district to pay off a portion of them.

Outside the 78-acre development, estimates show that increased taxes could raise $2 million for neighboring projects.

City officials want to use that money over a number of years as matching money for local, state and federal grants, many of them involving transportation enhancements. They say they could get $4 or more in matches for every dollar taken from the tax district.

Pedestrian street improvements to four blocks of west Broadway Avenue from Ash to Chestnut streets have been ranked as the top priority for projects adjacent to Kendall Yards that could be financed through the property tax-increment district.

The north Monroe corridor from Boone to Cora avenues is No. 2 on the latest 14-point priority list.

The project would include curb “bump-outs” to make it easier for pedestrians to cross Monroe. Other improvements would include decorative pavement, trees, lighting, underground utilities as needed and other pedestrian amenities.

Currently, the north Monroe area is going through a city and community planning process to fine-tune the ideas.

But critics of the tax-increment financing district say it amounts to a subsidy for the developer.

John Osborn, of the Bridge-Summit Alliance, said he has asked for and received agreement from Mayor Dennis Hession that the city will plan for traffic improvements outside Kendall Yards to ensure that the influx of new residents does not create hazards.

“The community is being asked to basically subsidize this development,” Osborn said.

Lisa Capoccia, a resident of the West Central neighborhood, said she generally supports the tax district but believes a portion of the incremental taxes raised due to Kendall Yards’ higher value should be used for improvements to the nearby neighborhood.

Rick Hastings, of Friends of the Falls, said he wants some of the tax district money to be used for enhancements along the river gorge that borders Kendall Yards.

Enhancements to the Centennial Trail are listed as the 10th priority on the current list. Public access at Lower Crossing below Kendall Yards is No. 13 on the list.

Officially, City Hall is calling the area the West Quadrant Tax Increment Finance District.

A public hearing is expected as early as May 14 before the City Council.

Other projects on the list are “traffic-calming” devices on Elm, Cannon and Chestnut streets from Bridge to Dean avenues, No. 3; street amenities on Sinto Avenue from Chestnut to Maple streets, No. 4; demolition of the Post Street Bridge and replacement with a pedestrian bridge, No. 5; street amenities on Bridge Street from Monroe to Post streets, No. 6; public market or business incubator along Bridge Street, No. 7.

Also, business incubator in the Maxwell-Elm business area, No. 8; street amenities along Maple and Ash streets from Broadway to Nora avenues, No. 9; street amenities along additional portions of Broadway and Mallon avenues, No. 11; street and underground utility improvements in the north bank area between Howard and Washington streets, No. 12; and realignment of the street connection between Lincoln and Monroe streets, No. 14.

In addition, Spokane County would use its share of the taxes for improvements, including parking, lighting and benches, near the courthouse and for small parks and plazas in the area.