The city of Vancouver is getting a boost to its Local Infrastructure Financing Tool program. Although a bill signed by Democratic Gov. Jay Inslee last week was news to city staff, the potential impact is “huge,” according to Community and Economic Development Director Chad Eiken.
“It basically buys us more time to get a private project up and running,” Eiken said.
The LIFT program lets nine selected local governments in Washington use tax revenue generated by private industry activity in designated areas to help fund public infrastructure improvements. Vancouver’s LIFT development area is known as the Library Square project — formerly known as Riverwest.
The project is multi-phase and multi-use. So far, the Vancouver Community Library is the only completed phase. The public infrastructure project identified to accompany Library Square is a parking garage, which would replace what was envisioned to be a temporary parking lot off East Evergreen Boulevard.
The garage would be on the same empty block as the new downtown elementary school planned by Vancouver Public Schools. The site is owned by Vancouver developer Killian Pacific, which was the original partner for the LIFT program. Plans were put on hold in 2008 during the Great Recession.
“What we really need is a private project that will generate state and local taxes,” Eiken said, thus giving the city enough money to build the garage.
Thanks to the LIFT program, Vancouver can earn up to $500,000 in state tax reimbursement once the city issues its LIFT tax. The city will impose a sales and use tax to earn credit against state taxes, essentially letting the city keep a portion of the sales and property taxes generated by development in the designated region. Vancouver has not yet issued its LIFT tax.
The amended legislation championed by Rep. Norm Johnson, R-Yakima, will now allow the city to carry over any revenue generated past the $500,000 threshold.
“LIFT was designed as a state financing tool to boost jobs, encourage economic development and redevelopment in Washington communities that have struggled from economic hardship,” Johnson said in a statement. “It’s been a great program, but restrictions have prevented cities from moving forward with the ability to use excess local revenues to calculate state dollar matching funds past the first year of the project. This legislation removes that barrier.”
Given the potential for revenue surges in large project years, Eiken said, this could help keep the LIFT program going on site. But the city still needs to secure a partner to fully take advantage of the benefits. Eiken said they’re looking for either an office tenant or retailer to locate in the square. Next in the preferential line is multifamily housing, but housing alone doesn’t generate enough tax to hit the $500,000 threshold, he added.
The city is in talks with a few different developers at the moment, Eiken said, “but nothing firm.”
Vancouver has a little more breathing room now to firm up those plans and begin development on site.