Richland moves toward development funding

The city of Richland on Tuesday (August 25) took another step toward applying for a state program that would help pay for new development north of the Richland Airport.

The program would generate revenue to pay for $8.5 million in public improvements in Richland’s Revitalization Area for Industrial Science and Education, or RAISE.

The area encompasses the Horn Rapids Industrial Park, Horn Rapids Business Center, a portion of the Tri-Cities Research District and the Port of Benton.

If the Department of Revenue approves the city’s application into the program, the state would pay up to $327,000 annually — half the debt service on 20-year bonds to install streets, sidewalks, sewers, utilities and fiber-optic lines in the area. The city, likely with participation by Benton County and the Port of Benton, would provide a local match to cover the other half.

The project wouldn’t increase local tax rates, but 0.05 percent of the 8.3 percent sales tax rate in Richland would be shifted from the state’s share to the city’s share.

The city council on Tuesday voted unanimously to create the revitalization area, and the Benton County Commission on Monday voted 2-1 to pursue partnering with the city on the project.

Commissioner Max Benitz Jr. dissented because the port, though interested, hasn’t yet committed to participating, and he didn’t want to obligate it to. The port will be able to decide whether to join sometime after the Sept. 1 application date, but the county agreed to partner with the city to strengthen its application for the program.

The state, city, county and port would use tax revenue generated from new development within the area to pay back the bonds. The county and port’s contributions each would be capped at $73,000 a year.

The revitalization area would need to have about $155 million in new private development to generate that amount of new tax revenue, Gary Ballew, economic development manager for Richland, told the city council last week. There has been that much private investment in the area over the past five years, he said.

If no private development came into the area — and no new tax revenue was generated — the city could use other sources to cover the local match and keep the state contribution. But the city would be on the hook for the local match on its own, without the county or port having to contribute.

Several businesses such as Henningsen Cold Storage and Solaris group already have contacted the city about doing new private development in the area. Those projects were in the works regardless of the chance to be in the state’s program, Ballew said.

But they would be able to happen sooner because of the revenue the program would generate to pay for the public infrastructure, he said.

Council members expressed comfort with the risks involved with the project.

“The projects we would do with this kind of funding are projects we would have in the queue anyway and we want to do at some point in time,” Councilman Ed Revell said. “The only thing this does is allow us a tool to start those projects sooner.”

Source: Tri-City Herald

This entry was posted in Real Estate News and tagged , , , , , , , , . Bookmark the permalink.