Concerned with maintaining the city’s economic vitality in the face of a severe recession, Issaquah City Council unanimously approved extending an incentive to commercial development projects in the city during a Feb. 16 meeting.
The Council voted 6-0 to continuing their program of paying the Transportation Impact Fee (TIF) on the first 10,000 square feet of a new development. Councilmember Maureen McCarry was absent from the meeting.
The money for the city to pay this fee for developers has been coming from public funding originally budgeted for the now-defunct SE Bypass project. Local funding budgeted for that project, originally $1.58 million, would remain committed to the program until March 1, 2011.
So far, the program has cost the city $268,000, for 17 building projects.
Planning Director Mark Hinthorne conceded the projects hadn’t been as small, or targeted on revitalizing empty Front Street storefronts, as originally envisioned. But he said the general feedback had been positive overall and the program should be continued in a “somewhat better but uncertain” economy.
“We’re happy to get any economic activity we can in this economic downturn,” Hinthorne said.
The three largest projects over 10,000 square feet receiving the TIF funding exemption are the Highmark Medical Building on State Route 900 ($52,300 in TIF fees paid by the city), the Issaquah High School reconstruction ($14,600) and Overlake Center ‘D’ Building ($35,700) along E. Lake Sammamish Pkwy Southeast.
Responding to a query from Council Vice President Fred Butler, Hinthorne sought to dispel the notion that the TIF funding exemption was a reserve fund sitting in a bank account and available for alternative means.
“It’s the complexities of the budgeting process,” he said. “It’s a financial commitment the city has already made.”
Issaquah’s Transportation Impact Fees were first adopted in 1997 to help pay for public improvements that would be utilized by new development.
Funding in the past has been dedicated to public transportation, roads and bike lanes.
The fee exemption won’t be extended to all new development, however. Issaquah Highlands resident Chris Hawkins, hosting a blog called Issaquah Highlands Watch, observed that master-developer Port Blakely Communities pre-paid their TIF in anticipation of commercial development that has not occurred yet.
Port Blakely Communities senior advisor Judd Kirk said the fees were paid upfront to jump-start community infrastructure development, such as Grand Ridge Elementary or the Sunset Interchange with Interstate 90.
“We’re happy with the decision to have the roads be built when we needed them,” he said.
