Downtown on a shoestring

Tax increment financing is one economic tool that could benefit new Vancouver projects

Helen Devery
JD White Co.

By initiating a plan in 1996 for just five blocks of city-owned land, the City of Vancouver started somewhere small in hopes of igniting the rejuvenation of Vancouver’s downtown core. The Community Resource Team and development panel assembled to guide and develop the plan for those five blocks challenged the city to think on a broader scale. Although in the grand scheme of planning, a 30-block area was still quite small, the Esther Short Plan generated the kind of revitalization downtown Vancouver needed, with major new investments in the core of our city. Projects sparked by the plan and the City’s rejuvenation of Esther Short Park include Heritage Place, West Coast Bank Building, Vancouvercenter, Esther Short Commons, the Vancouver Farmers Market, Hilton Vancouver Hotel and Convention Center, the new Columbian building and Esther Street improvements. These projects total more than $200 million – all within seven years of the plan’s adoption.

In many states, including Oregon, redevelopment projects such as those undertaken in downtown Vancouver can benefit from tax increment financing. Tax increment financing is a tool used by local government to stimulate economic growth. It allows a municipality to invest in a public infrastructure project in order to stimulate private investment and thereby increase tax revenues. The municipality captures the tax revenues generated by the private investment to pay for the infrastructure project.

Although Washington was one of the few states in the nation that did not allow the use of tax increment financing, a bipartisan bill that selected three pilot projects to test its use passed the state legislature in early March. Vancouver’s mixed-use Riverwest project is one of the three; it would rise on the site of the Carr auto dealership at Evergreen Boulevard and C Street near Interstate 5 and would include housing, offices, retail space, a public plaza and possibly a new library.

For the Esther Short Plan, the city used a limited number of existing economic development tools to spark revitalization, and each of the projects used at least one of these tools to become a reality; most used several. The combination varied according to the purpose and needs of a given project. Most benefited from expedited permitting.


Several of the new projects in and around the downtown core have a housing component – Heritage Place, Esther Short Commons, the West Coast Bank building, Vancouvercenter and Anthem Park. Some benefited from tax abatement or from housing tax credits. Projects in downtown Vancouver that involve constructing, rehabilitating or redeveloping multi-family homes can be exempted from property taxes by the city for up to 10 years. Public improvements, such as new parking, also can help new projects.

Building on this success and using the framework put in place with the original plan, the city worked with the Community Resource Team and the development panel to develop a next, much larger phase of the original Esther Short Plan: the Vancouver City Center Vision (VCCV). Completed in 2005, it expands the vision to the remainder of downtown Vancouver from Interstate 5 on the east to the Port of Vancouver on the west, and from Fourth Plain Boulevard on the north to the Columbia River on the south, for a total of 130 blocks (over 400 acres) in the City Center plan, compared to 30 in the Esther Short plan. The VCCV plan provides short-term revitalization strategies to rejuvenate the physical and retail environments of Main Street and Broadway; the plan also contains longer-term redevelopment scenarios for the waterfront. The city is working on the environmental review of this new plan, with adoption in 2006 anticipated. The incentives for revitalization contained in the original plan remain available. The first project recommended in the plan, revitalizing and returning Main Street to a two-way street, is currently being designed.

Helen Devery, planning manager for The JD White Company Inc., has worked on planning projects in Southwest Washington since 1993, and has been a part of the consulting team working with the city of Vancouver to develop plans for downtown Vancouver since 1996.