March 7, 2013 | Vol. 116 -- No. 46

Port district concept returns

Cheney Merchant’s Association members given overview of new attempt at creating an ‘economic development administration’

The last time creation of a Spokane County port district was floated to area voters, it was trounced 4 to 1 at the ballot box.

That was back in the early 1980s. Area officials are again hoping to put a measure before voters to create a special purpose district that would help Spokane become more competitive in attracting new businesses, spur local economic development and help deal with regional transportation issues.

“It’s something that can be a big economic boon for our area,” Cheney Merchants Association president and vice president of WF Burke Construction Groups Matt Boyd said at Monday evening’s association monthly meeting.

Boyd presented information from regional economic development organization Greater Spokane Incorporated on what a port district is, how it is established and what it can do. One of the things he emphasized a port district is not is something near water, a common misconception.

“If you were to give it another name, I would give it the economic development administration for our area,” Boyd said.

According to information from GSI, port districts can do a number of things like develop facilities for handling cargo and people, improving property for leasing to industrial and commercial businesses and providing air and water pollution control facilities. Port districts can also operate trade centers, provide environmental enhancement and protection and other economic stimulus options.

Port districts are formed via state statutes and can be countywide or less than countywide, the difference being those less than countywide must have a total property valuation of at least $150 million. A petition is filed with county commissioners containing at least 10 percent of signatures from those who voted in the previous general election, boundaries, district board and name are established, a public hearing is held and it then goes to the ballot.

Port districts raise revenue through a variety of ways such as service charges, lease and rental fees, grants and gifts and general obligation and revenue bonds. The main source however is usually one people aren’t too keen on currently – taxes.

Districts can generate a general port levy at no more than 45 cents per $1,000 of assessed property valuation of those within the district along with an industrial development district levy of the same amount for two, six-year periods.

GSI vice president of business development Robin Toth said many business leads they get from outside the state often require a proposed location be within a port district, putting the Spokane area at a disadvantage.

“We’ve been looking at this for several years because of the competition,” Toth said. “We lose out often to other areas who do have a port in place.”

One example is Genie Industries, manufacturer and exporter of industrial machinery best know for the blue “scissor lifts” telescoping work platforms. Genie was considering locating a new, 450,000 square foot facility in Spokane, but ended up in Moses Lake because the Grant County city had a port district.

Moses Lake’s district was created in 1966. With a tax levy of 43 cents/$1,000, 2012 revenues of $14.5 million and expenses of $15.3 million and 4,700 acres under management, the district has brought in numerous industries such as the Japan Air Lines pilot training program, Western Kraft-International Paper and paper bleaching corporation EKA Chemical. Besides Genie, it’s most recent successes are National Frozen Food, the Titan server farms and carbon-composite manufacturer SGL.

Other Eastern Washington port districts include Walla Walla, with a 37 cent/$1,000 levy, 8,000 acres and 2012 revenues and expenses of $9 million and $12 million – along with $10 million in the bank – and Benton County with 2,100 acres, 42.8 cents/$1,000 and a 2012 budget of $6 million.

A potential disadvantage brought up at the Cheney meeting centered on growth and the potential negative impacts it could bring to the region. A concern was also expressed about taxation, namely how the levy differed from the business and occupation tax.

Cheney businessman and former mayor Allen Gainer said while the business and occupation tax is split several ways, with some portion leaving the area, the district levy is all local.

“The port stays right here,” Gainer said.

“The B and O tax is calculated by your revenue stream and that can be 20 times your value,” Jarms Hardware owner Tom Jarms added, noting the port levy tax is based on property valuations.

GSI’s Toth said the next step in the port district discussion is educating the public. With that in mind, the organization will be working on distributing a public survey to gauge reaction and knowledge, and would use the results to determine how best to proceed.

Toth said it was difficult to place numbers on how many jobs would be created and how much revenue a Spokane County port district would bring in. Instead, what might be revealing is not what Spokane could have, but what the county has missed.

“You really have to get out to the residents of Spokane County,” Toth said stressing education. “We really have to start educating the residents what the cost is to them when you don’t have one.”

John McCallum can be reached at jmac@cheneyfreepress.com.

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