The Journal’s View: Incentives add up to keep Spokane area in contention
-July 19th, 2018
While the Washington state constitution doesn’t allow us to put up the millions of dollars in tax breaks and incentives for private development we’re seeing offered by other states and cities to lure economic development, we can celebrate what incentives are available here and aggressively market them.
In a recent conversation with the Journal’s editors, Spokane Mayor David Condon pointed out that there are some incentives available within the city specifically—historic preservation and multifamily tax incentives—that can add up to hundreds of thousands of dollars, which can be enough to help some projects pencil out.
Other incentives are available for projects of citywide significance, public development authorities, tax-increment financing districts, opportunity zones, and targeted investment areas.
The multifamily incentive, for example, allows a property tax exemption for multifamily projects with a certain component of affordable housing.
Among incentives included in the financing package for the historic Ridpath Hotel conversion to 206 apartments and four condominium units, the 12-year multifamily exemption alone has an estimated value of more than $500,000.
Currently in the city of Spokane, developments valued at over $5 million go through a “projects of citywide significance” evaluation that recommends infrastructure incentives based on anticipated revenue, job creation, land use, industry, location, and special considerations.
Developments recognized by the City Council as projects of citywide significance include the Wonder Spokane LLC adaptive reuse project, which received $171,000; the Catalyst project, which received $500,000; and the Otis Hotel project, which received $83,000.
Spokane County has entered a revenue-sharing agreement with the city and Spokane International Airport in the West Plains/Airport Area Public Development Authority to help fund infrastructure improvements.
The county and city also are working toward a similar revenue-sharing agreement in the Northeast PDA, also known as The Yard.
Also in the county, one of the latest beneficiaries of tax-increment financing authority is the 433-acre district that includes the new Costco Wholesale Corp. a development on Newport Highway, north of the Spokane city limits.
In such districts, developers that construct public improvements, such as infrastructure, can be reimbursed through increases in tax revenue that such developments accelerate.
As we said last month, 11 recently designated opportunity zones in Spokane County have the potential to attract private investment sooner rather than later through a combination of capital gains tax deferrals and exemptions for qualifying projects started before 2026.
Many of the 10 opportunity zones that are within the city of Spokane overlap with the city’s targeted investment areas, which, in addition to citywide incentives also offer qualifying projects a limited waiver of right-of-way improvements, tax-increment financing, brownfield redevelopment, and urban utility installation.
The city of Spokane’s planning and development office and regional economic development organization Greater Spokane Incorporated can provide information and guidance regarding incentives available to developers and companies looking to start, move, or grow here.
While our state’s constitutional restrictions on funding private development are rightly intended to limit risks to public funds and resources, the incentives we do have available here show that the Spokane area aggressively encourages economic development. We might still be underdogs when it comes to tax breaks and incentives, but we’re definitely in the game.