Cities are responsible for roads, pipes and cops, generally speaking.
With the creation of a new program aimed at encouraging development, the city of Spokane is hoping to get involved in “jump-starting private investment” within its borders.
Spokane Mayor David Condon, who announced the program at the new Bennidito’s Brewpub on East Sprague Avenue, said the new economic incentive program is a way to build transparency and fairness into the city’s ability to provide funding, waive fees and contribute other incentives for projects big and small. The program was approved by the City Council last week.
“Citizens believe our economy is improving and told us there’s room for more growth,” he said. “Citizens unequivocally believe the role of government includes the need to drive jobs and economic growth.”
The program, Condon said, will encourage new businesses to locate here and existing businesses to grow. It will also clear up any confusion about which projects get public funds, he said, and which ones don’t.
Council President Ben Stuckart, who helped craft the program, agreed.
“We’ve developed something that adds clarity, consistency and transparency to those who are doing business with us and for those we serve,” Stuckart said. “The economic investment program is something that Spokane has needed for some time and will be a great tool as we encourage and attract new investments to Spokane and the new employment opportunities that this investment brings.”
In short, the program will separate large projects estimated at more than $5 million from smaller ones. The city will evaluate and score a proposed project on five criteria: sales and utility tax revenue generated by the project, job creation, public benefit, type of industry the project is part of, and the part of the city in which the project will be built.
The incentives will not be confined to downtown projects but to targeted areas, including the West Plains, East Sprague and Hillyard – centers and corridors with “infill location with existing infrastructure.”
Design standards, historic preservation, brownfield redevelopment and environmentally sustainable structures also score well.
The program will give points to manufacturing, aerospace or aviation, biotechnology, medical technology or tourism-related projects.
A project’s score will determine the amount of public funding and incentives committed to the project by the city. Tax revenue, job creation and public benefit will be more heavily weighted.
City leaders said although the program has been under construction for years, it was only earlier this year that its need became imperative.
In March, with his new downtown Spokane hotel nearly complete, Walt Worthy asked for $318,000 in public funds for soil pollution cleanup, money promised to him by Condon years before. Worthy asked for the money based on an informal handshake with Condon, who told Worthy that $3.3 million in city funds was available to his hotel project near the convention center.
When City Council members received the request from Worthy, they said it was unexpected and inappropriate, leading to a public scuffle and rejection of the funding by the council.
With the new program, city leaders say Worthy likely would have received the money with little trouble.
Scott Simmons, head of the city’s Business and Developer Services Division, said Worthy’s $130 million project would have scored 96 out of 150 points. The project scored well on its price tag, location and role in the tourism industry. It fared poorly on the quality of jobs it created and its design.
Simmons said it is unclear at this point how much the project would have received. By the time the program is officially set in motion in September, those details will be made clearer.
Condon noted that in 2013 and 2014, the city issued permits for $850 million in both private and public projects. Among them are the Worthy hotel, Gonzaga University’s new $45.4 million John J. Hemmingson Center, Rockwood Retirement Community’s $40 million Summit tower and the $37 million Convention Center expansion. He noted that the vast majority of projects that will be eligible to receive incentives are smaller, much like the redevelopment that Bennidito’s undertook to open a new location on East Sprague. Those, he said, are just as important as the big-ticket projects.
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