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News / Business / Clark County Business

Clark County paves way for development north of Vancouver

Council passes plan to pay for infrastructure upgrades on 2,000 acres near 179th Street/I-5 interchange

By Jake Thomas, Columbian political reporter
Published: August 21, 2019, 7:06pm

The Clark County Council on Tuesday moved forward on a public-private partnership intended to pave the way for the development of more than 2,000 acres north of Vancouver.

For a decade, the crescent-shaped area near the 179th Street/Interstate 5 interchange has been in urban holding, a planning designation that essentially blocks development until funding is secured for infrastructure upgrades to accommodate additional traffic.

As Clark County has grown, property owners have asked the county to lift that designation, and developers have stepped forward with offers to pay for improvements. Since January, the county council has been evaluating ways to raise $66.5 million for five road improvement projects needed before development could occur. The funding options have relied on varying degrees of public and private contributions.

Late Tuesday night, the county reached its first significant milestone to secure funding when the council voted 4-1 in favor of a resolution that outlines how to pay for the infrastructure improvements.

Under the county’s plan, developers would pay $26.6 million, including $6.8 million in advanced traffic impact fees and $5.3 million in surcharges through developer agreements. The county would pay $39.9 million through various funds and grants, with no increase in property taxes.

Actual construction is still years off; the county still needs to finalize the arrangement and developers need to go through the permitting process. In the meantime, here are some things to know.

Who’s for it, and who isn’t?

At Tuesday night’s meeting, developers and their representatives hailed the partnership between the county and private business. Ron Arp, the president of local business group Identity Clark County, praised the project for its potential to create jobs and broaden the tax base, likening it to Vancouver’s waterfront project or tech center.

“This is a very exciting project as we see it,” he said.

The council also heard from residents who were worried about the impacts of the development. At the end of the night, Councilor Temple Lentz, the council’s sole Democrat, voted against the resolution out of concerns that it would not produce promised economic development and over questions about the project’s overall transparency and viability.

“Projections for this project have been made with an assumption of 100 percent success,” she said. “And I am unfamiliar with any other industry where the only plan is complete success and there’s no risk-management plan.”

She said the county could be doing more to recruit a large employer or develop land to draw employers. While she said Clark County needs more housing, Lentz said the new development would create “market-rate, upper-middle-class housing” and some retail, instead of workforce or starter housing. She also said it would add to congestion and commute times without increasing family-wage jobs.

Developer requirements

Included in the package are respective agreements between the county and four developers (Holt, Hinton, Killian Pacific and Wollam) that commit them to paying a total of $12.05 million in surcharges and advance traffic-impact fees by December 2023.

As the council has discussed the project, critics have questioned why developers can’t just pay for all of it.

“The simple answer to that suggestion is that would be contrary to law in Washington,” Senior Deputy Prosecutor Christine Cook said during the meeting, adding that fees have to be proportionate to the impact of the new development.

Speaking after the meeting, Jamie Howsley, an attorney for two of the developers, described the agreements as a unique circumstance.

“Certainly, it’s never been done in Clark County, and it’s probably never been done in Washington, as far as I know,” he said.

Local attorney David McDonald has sent letters to the county criticizing the agreements for not requiring more of developers and questioning if they would pencil out. During the meeting, Randy Printz, an attorney for Holt (one of the developers), questioned McDonald’s characterization.

Councilor John Blom said the developers’ agreements contain provisions that require them to connect to trails and mass transit.

“We are looking at residential development different and better than we ever have before,” he said.

The package approved on Tuesday will also mean higher traffic-impact fees, which are paid by developers to offset increased demand on roads.

Beginning in 2020, developers in the Mt. Vista traffic-impact fee district, which includes the 2,000-acre area in urban holding, will have to pay $9,300 for a new single-family dwelling. The increase will put the county’s rate among the state’s three jurisdictions with the highest rates.

What will be built there?

Under the developers’ agreements, more than 1,000 housing units will be built along with a commercial center by four developers. According to an economic study commissioned by the county, building out all the land in urban holding will produce 5,650 housing units, 7,670 jobs and $34 million annually in local and state tax revenue.

Materials presented at the meeting show that while the zoning in the surrounding Mt. Vista area is primarily residential, there are more than 1,600 acres zoned for commercial, industrial and businesses purposes. The expectation from the county is that infrastructure improvements will catalyze economic development in the area.

However, higher traffic-impact fees might complicate that. In July, Lance Killian, chief visionary officer for Killian Pacific (one of the developers), wrote to the council with concerns that the increased traffic-impact-fee rate will “have a material negative impact on the viability of commercial development.”

“The added costs will make it a less desirable location to locate a commercial establishment and therefore impact the likelihood and the overall velocity of commercial development in this area,” he wrote.

Past and future funding

In response to questions from Lentz, Matt Hermen, a county planner, explained that in 2014, the county enacted a traffic-impact-fee waiver program to encourage job creation, which he said resulted in an increased burden to residential development.

In response, he said, the then-county commission decreased the number of projects in the county’s capital facilities plan and the level of service, changes that he said remain in effect.

As the county has moved forward with plans to lift the urban-holding designation, staff have identified another four, long-range projects that would cost $97 million. Responding to Lentz, Clark County Director of Public Works Ahmad Qayoumi said the increased traffic-impact-fee rate would be used to pay the $66.5 million needed for five initial road-improvement projects and the additional projects. Lentz said she was concerned about the situation.

“What started as a $66 million project to lift urban holding for four housing developments and strip of retail has morphed into a $163 million project that lifts all of urban holding — but we are only talking about how to fund a third of it,” she said.

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Blom said each development will be reviewed and that lifting the urban-holding designation was “one piece of the puzzle” of relieving the county’s housing problems.

Councilor Gary Medvigy added that Lentz’s concerns were well taken and said the county would move forward with public participation.

“This isn’t going to be a fast process,” he said.

Columbian political reporter