What’s in the cards for La Center?

Like Camas with its paper mill, city must diversify sources of tax revenue as population continues to grow

By Adam Littman, Columbian Staff Writer

Published:

 

Cardroom Taxes Paid to La Center

2006: $3.3 million

2007: $3.5 million

2008: $3.3 million

2009: $3 million

2010: $2.9 million

2011: $3.2 million

2012: $3.1 million

2013: $3 million

2014: $2.7 million

2015: $2.7 million

2016: $3.1 million

2017: $2.4 million *

2018: $1.6 million *

* estimated revenue

LA CENTER — The phrase “doom and gloom” has been thrown around in La Center recently.

It’s been used publicly at a city council meeting and in private during conversations between residents. The phrase has popped up specifically surrounding the 2018 budget.

The concern is coming from the city’s cardrooms, or, rather, what’s not coming from them. The city’s cardrooms once provided La Center with a majority of its tax revenue, at one point making up more than 70 percent of city revenue.

La Center’s cardrooms — Last Frontier Casino, Palace Casino, New Phoenix Casino and Chips Casino — have paid La Center upward of $3 million in taxes ever year for much of the last 15 years. That dipped during the recession, but the cardrooms bounced back and generated about $3 million in annual tax revenue from 2011-2013. Chips closed in January 2014, and New Phoenix closed three years later, in March.

The rooms, and in turn La Center, are facing a new issue: the Ilani Casino Resort. The 368,000-square-foot, $510 million casino was opened by the Cowlitz tribe on April 24 west of La Center at Exit 16 on Interstate 5.

John Bockmier, representative for the city’s cardrooms, has talked at recent La Center City Council meetings about how the cardrooms are struggling.

“I hope I am completely wrong,” he said. “I hope people can look back and say, ‘Hey, John, remember when you were completely wrong about the cardrooms hurting?’ I don’t think it’ll work out that way. The signs are there. We have a competitor we can’t compete with and declining sales.”

But it’s not all doom and gloom in La Center. While the impact of Ilani hangs over the city, across the freeway there is hope in the form of 152 acres of land, shovel-ready developable land. Land that can provide the key to La Center’s future financial success, which leads to one big question:

Is La Center heading for its Camas moment?

‘Get in the boat and row’

Nan Henriksen was the mayor of Camas from 1983 to 1992 and oversaw the city’s transition away from its traditional reliance on the Camas paper mill. It was a controversial decision at the time, and Henriksen said that such a change requires city leaders establishing a plan for how to make the transformation — and following through on it.

“It takes a lot of work, and it takes a lot of passion to make the vision happen,” she said. “Everyone has to get in the boat, and row together as hard as they can possibly row.”

Henriksen said Camas was in a similar position a few decades ago that La Center is in now, with the mill providing about 70 percent of the city’s property taxes.

“The looming reality was that the mill was going to go away,” she said. “It wasn’t a matter of ‘if.’ It was ‘when.’ There were so many citizens who liked Camas the way it was, but they didn’t understand how poverty-stricken the city would be if the mill went away.”

On Tuesday, Georgia-Pacific announced it plans to shut down several operations at the Camas mill and cut up to 300 jobs, leaving between 120 and 140 jobs at the mill that once employed as many as 2,400. Speaking the day after the Georgia-Pacific’s announcement, Henriksen said she was sad for the employees losing their jobs, but relieved that city leaders took steps to ensure something like that wouldn’t sink the entire city.

“I’m so thankful our big risk we took back then has paid off, and our industrial park is providing the tax base we need to maintain the quality of services Camas citizens have come to know and love for a century now,” she said.

Henriksen knows the challenges that La Center is facing, and said passionate leadership can steer the city in the right direction.

“I don’t envy them, but I do know it’s possible,” she said. “I’m thankful we took that bold step. I can’t imagine what Camas would be if we hadn’t.”

Need to diversify

While La Center isn’t aiming to become the next Camas, the city is facing a similar challenge as it looks to transition from a one-industry town into one with a diversified economy. In 20 years, Camas went from being a mill town to a city with tech companies, a revitalized downtown and more than 22,000 residents.

For La Center officials, they’re trying to figure out how keep up quality of life in the city while the cardrooms continue to struggle.

“The priority for the city is to attract new businesses and development,” said La Center Mayor Greg Thornton. “We need to diversify.”

Doug Boff, who was elected to the city council earlier this month, was a member of the La Center Planning Commission while it worked to develop a vision for the junction. Boff, who moved to La Center four years ago from the San Francisco area, was alarmed to hear how much of the city’s revenue was coming from cardrooms.

“In the private sector, a business that has 70 percent of business coming from one customer is not a good business model,” said Boff, who is retired after working as a manager in the production department of a mobile data system manufacturer.

Boff also spent some time in the East, and he said he visited some once-thriving towns that took a tailspin once the local steel mill went under.

“They had ghost towns,” he said. “You look at La Center, as nice as it is, and see 70 percent of revenue coming from one industry, and I can’t help but remember what I saw in Pennsylvania.”

Population boom

La Center isn’t heading in the direction of ghost town. More people are moving to the city, but that type of growth isn’t enough to make up for lost cardroom revenue. In fact, it’s just the opposite.

“Residential development takes place, and those new homes require city services, and taxes are not sufficient to cover the city’s cost for providing services, maintaining roads and parks,” Thornton said. “It puts more burden on the police department. Rooftops don’t pay for themselves.”

The rooftops keep coming. In 2018, the city expects to issue permits for 40 new homes after permitting for around 25 in both 2017 and 2016. Before that, the number of city permits for new homes was in the single digits, according to Thornton. The city has more than 3,000 residents, and that number is expected to more than double in the next 20 years, according to the city’s comprehensive plan; it estimates La Center will have 7,642 residents in 2036.

The city has implemented few new revenue sources to try to make up for lost cardroom revenue while looking to diversify the city’s economy. The city loaned $14 million from the general fund to the city’s wastewater treatment plant. In 2018, the plant will start repaying the city by giving $200,000 to the general fund.

City councilors also voted to implement an excise tax on some utilities, excluding sewer service. Some of those taxes started in October and others will start in January. In 2018, the city will also issue its first stormwater utility tax.

Those taxes aren’t really going to change the city’s financial outlook; they are more likely to provide first aid for La Center’s financial challenges while city officials work on the project expected to have the biggest financial impact on the city.

Junction development

The junction area, which is 2 miles from downtown, was annexed into the city in 2011. Jim Irish, mayor at that time, said city officials were talking about expansion in that area in the early 2000s. A sewer line extension to the junction, a key piece to developing the area, will soon be completed. That $5 million project was paid for by the Cowlitz tribe, which also paid for $32 million in upgrades at the junction, including new offramps, partial relocation of a few roads and a new overpass over Interstate 5.

The city has also been working with Eric Eisemann, a planning consultant, on ideas for junction development.

“We rezoned the area,” Boff said. “There’s one master zone and four sub-zones. We designed the zoning in such a way that there’s a lot of flexibility. We want to keep the channels of communication open (with developers).”

Boff said the planning commission envisions the junction having an office complex, light industrial, commercial and high-density housing, such as apartments or condos.

One potential hook to bring in guests could be the Main Street portion of the junction. Thornton said one part of the development is set aside for an outdoor shopping area that’s more pedestrian-friendly, with wider sidewalks, sightlines and greenery.

Thornton said the city hasn’t received any applications for development at the junction yet. The city hired a development director to help market the site, but Thornton knows it could take a “significant amount of time” for the development to show up.

Partnerships

Bockmier said the cardrooms are hopeful they can continue to be part of the city, even once — or if — it does turn things around.

“We want La Center to thrive,” he said. “We want them to diversify their revenue sources. The better La Center does, the better for everyone.”

Until development comes to the junction, Bockmier said the city and cardrooms both need to operate as efficiently as possible and help each other out where they can. City councilors declined to help out the cardrooms at their Oct. 25 meeting when they decided not to vote on cutting the cardrooms’ taxation rate from 10 percent to 5 percent for the last three months of the year. The ordinance didn’t have enough support to come to a vote.

The councilors were discussing a temporary tax cut because the cardrooms have outperformed expectations for this year, bringing in around $1.9 million to La Center so far, according to a third-quarter financial report from Suzanne Levis, finance director, at the meeting. That’s roughly the amount the city was expecting to get from the cardrooms for the entire year.

While the cardrooms are doing better than city officials were expecting, they’re still struggling, Bockmier said, as they had their worst September and October ever.

Just like how Bockmier said the city and cardrooms need to work together, Irish said, La Center and Ilani need to work together. He said that the two entities are neighbors, not foes. He also said it’s vital to the future of the city that people stop looking back at all the drama that unfolded before the casino opened and stop with all the “doom and gloom” talk.

“The casino going in up there is the stimulus for getting La Center to move forward,” Irish said. “It has to. We need to think about the citizens of La Center — not the cardrooms, not the businesses — and what brought them here. That’s what you need to push forward.”