Brown echoed that sentiment, pointing out that because of the Great Recession, the LIFT program has never been able to work as it was originally intended to.
“When this legislation was passed (in 2006), everybody assumed these projects would be well underway, completed and generating revenue by 2014,” he said. “But then along came one of the worst recessions in American history. So everything, especially on the commercial side, pretty much came to a screeching halt.”
Nine projects across the state are enrolled in the LIFT program, including Library Square. Through the program, the city of Vancouver is eligible for a credit of up to $500,000 a year, until the bill expires.
“This is really a rather substantial amount of revenue that will be beneficial to Vancouver and our community,” noted Cleveland.
Library Square is envisioned by the city and developer Killian Pacific as a $165 million mixed-use project that includes multi-story buildings, office and retail space, condominiums and a hotel. The LIFT funded piece of the development is a $15 million underground parking structure that would accommodate 300-400 vehicles.
Brown warned that without an extension of the LIFT program, the community could be left with a watered down version of Library Square, because the project is already behind schedule (due to the economy).
“The full potential of the site is going to generate a heck of a lot more in property taxes and sales taxes than a three-story office building, which is what will happen (if the program isn’t extended),” said Brown.
A memorandum authored by city of Vancouver staff seems to back up Brown’s concern. According to the memo, due to the project’s delay, the city would need to utilize the LIFT credit at least two years beyond the current expiration date of 2039 in order to effectively finance the underground parking structure.
“If there is no parking garage, the programmed uses at the desired densities cannot be achieved,” wrote Alisa Pyszka, economic development division manager for the city, in an email to the VBJ. “Instead, a more traditional development of surface parking and a 90,000-square-foot office building is all that could be built… The full program (with the garage) generates $22 million for the state, versus a lesser program (without the garage) that generates $7 million. This then translates for local agencies as well.”
“This is a great example of a state program that helps a city build a project and maximize the potential of an urban site,” Brown added. “This isn’t a gift of state money; it’s an investment of state money to help us do more [at Library Square] than what would otherwise happen. And in the long-term, nobody gets more out of it than the state does in terms of revenues.”
Cleveland said that her bill has received bipartisan support, and she is optimistic that it will pass.
“We have to look at tools (like LIFT) that help to encourage economic development, to ensure they are maximized to the fullest,” she said. “That’s really what this bill is about.”