With sun shining, boats blaring and jets flying overhead, local lawmakers, port officials and Washington State Treasurer Mike Pellicciotti gathered at the Port of Vancouver’s Terminal 1 on Monday to celebrate economic development.
What caused such jubilation? A recently approved expansion to a state economic development law, tax increment financing.
Tax increment financing will be used to help rebuild the Port of Vancouver’s dock, which will one day be home to its public market.
“Our public market will become a recognizable icon and destination for the entire region,” said Julianna Marler, CEO of the Port of Vancouver. “By harnessing (tax increment financing), we can get there much sooner with this new financing tool championed by the leaders with me today.
“We’ll be able to rebuild the 100-year-old dock and have it ready for the new public marketplace in a few years,” she added.
Marler said the port expects the marketplace to bring in vendors who are affordable, making the waterfront accessible to a wider variety of folks.
“This Terminal 1 project — when it’s finished — will help ensure that this new beautiful waterfront of ours is accessible to every person in our community, and our state and beyond,” Sen. Annette Cleveland, D-Vancouver, said.
Tax increment financing is relatively new to Washington. Lawmakers approved it in 2021, though more limited tax increment financing tools existed before then.
Washington’s tax increment financing tool allows entities, like the Port of Vancouver, to create separate tax increment areas. When the properties in that designated area are developed, they generate more tax revenue because their land values increase. A portion of the additional revenues generated in those areas then goes toward a specific project. In this case, the revenues will go toward rebuilding Terminal 1’s dock.
The only properties within the port’s tax increment area are owned by the port.
Tax increment financing “is a foundational tool to the reimagining of Terminal 1,” Marler said.
Pellicciotti called tax increment financing a “smart financing tool that allows for private development infrastructure growth without costing additional tax dollars to the people of Washington.”
The tool can bring together public and private interests for long-term development, he added.
“If done the right way, (it) means that you can see things like the Vancouver waterfront develop in a way that really meets community needs,” the treasurer said.
This session, lawmakers worked to expand the financing tool so it could be used by entities like the port on projects like the public market it intends to build.
“Tax increment financing has finally become so successful that people accept that it’s a good tool,” said Rep. Sharon Wylie, D-Vancouver.
“Unfortunately, it had a flaw. It didn’t include the things that our wonderful port wanted to do,” said Wylie.
So Wylie carried the bill to expand the tax increment financing law through the Legislature, with the support of the area’s other lawmakers.
“To make this work, you have to start with a great project with great support,” said Wylie.
Pellicciotti says the Terminal 1 project will be beneficial for not just the local area but for the state as a whole.
Pointing to the tourism coming to the waterfront from across the state and from Oregon, as well, Pellicciotti said the developing area brings not just revenue but also a sense of energy.
“It’s something that obviously the community can be proud of, but also something that does provide a financial benefit to the state,” he said.
Vancouver isn’t the only locality to benefit from the state’s tax increment financing program. The relatively new financial tool is helping in other regions of the state and is expected to help other nearby cities and ports.
Sen. Lynda Wilson, R-Vancouver, mentioned that tax increment financing is being used across the state.
“Using (tax increment financing) can be an important tool allowing cities or counties or ports to make targeted infrastructure investments to spur economic development and then benefit their region,” she said.
The state’s tax increment financing program has sparked new, exciting development ideas around the state, said Pellicciotti.
“I think this is just the start,” he added.