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COMMISSION AGENDA MEMORANDUM Item No. 3b ACTION ITEM Date of Meeting September 12, 2017 DATE: August 25, 2017 TO: Dave Soike, Interim Executive Director FROM: Dave McFadden, Managing Director, Economic Development Division SUBJECT: Approve Port Economic Development Partnership Applications Amount of this request: $212,610 Total estimated project cost: $965,000 ACTION REQUESTED Request Commission authorization for the Executive Director to execute Economic Development Partnership Program contracts with the Cities of Des Moines, Issaquah, Kenmore, Renton, Shoreline and Skykomish to implement local economic development initiatives for an amount not to exceed $212,611, as detailed below. EXECUTIVE SUMMARY The following six cities have completed their partnership application and staff is recommending the Port execute contracts with these jurisdictions. Staff has reviewed each city application and is confident each local partnership initiative is impactful and ties to Port business interests. Other participating cities are finalizing applications for review at the September and October Commission meetings. Des Moines - $30,800 o Support Marina redevelopment - building on the work of 2016/2017 grant o Expand downtown parking study to include nighttime activity Issaquah - $34,500 o Initiate branding and wayfinding campaign which will increase tourism, attract visitors outside the region and increase hotel stays. o Chamber University funds to be used to develop and conduct business workshops to assist small businesses in Issaquah. o Global Passport enhance collaboration with eastside cities to increase exporting among small businesses. o Website Development update and redesign the city's website with an emphasis on economic development opportunities and business services. Kenmore - $22,320 o Repeat the successful Business Acceleration Training Program by the Kenmore Business Incubator that was funded by the Port in 2016-2017. Template revised September 22, 2016. COMMISSION AGENDA Action Item No. __3b__ Page 2 of 6 Meeting Date: September 12, 2017 o Update the Commercial Land Capacity Analysis to reflect recent downtown zoning changes. o Promote Kenmore's craft brewing scene with custom designed street banners and wayfinding signage visible to travelers on SR 522 and the Burke Gilman Trail. Renton - $65,000 o Business recruitment increase in stability of retail businesses and reduced number of vacant storefronts. o Implement Downtown revitalization program o Sunset Shines Marketing Campaign support public art installations and tactical place making activities. o Entrepreneurial Support provide training and assistance to encourage and attract new businesses. Shoreline - $54,990 o Further develop the Seasound Media Campus initiative o Support Home-based Business o Support Ridgecrest Right of Way Improvement Plan Skykomish - $5,000 o Promote tourism opportunities by developing site specific signage for historical and recreational sites. JUSTIFICATION In June 2016 the Commission created a new economic development grant fund that provides 38 King County cities per capita funding to advance local economic development throughout the region. Annual grant funding is being provided on a $1 per capita formula with a maximum of $65,000 while ensuring each city receives at least $5,000 (see allocations on next page) The Economic Development Partnership program is structured to drive meaningful outcomes: Provide some flexibility to define local economic development projects Tie to economic development (ideally the Century Agenda although not required) Require a 50 percent local match to ensure cities are also committed to project success Port staff met with cities in June to discuss 2016 results and kick off the 2017 grant cycle. This project supports the Century Agenda vision of adding 100,000 jobs through economic growth led by the Port of Seattle. Grant funds will be distributed to 38 city partners in King County so a larger team is working to create middle class jobs within the region. Through purposeful contracts with local governments, the Port can extend its economic development reach to all parts of King County. Template revised September 22, 2016; format updates October 19, 2016. COMMISSION AGENDA Action Item No. __3b__ Page 3 of 6 Meeting Date: September 12, 2017 Creating a Port Economic Development Partnership Program also honors the Port's commitment to create economic opportunity for all, partner with surrounding communities, and promote social responsibility. The new grant program also can help: Position the Puget Sound region as a premier international logistics hub; Advance this region as a leading tourism destination and business gateway; Promote small business growth; and Anchor Puget Sound urban-industrial land use to prevent sprawl in less developed areas. DETAILS The Port's new Port Economic Development Partnership Program grant program helps address the lack of economic development funding for local projects. The Port will also use this new program to accomplish Century Agenda goals through purposeful economic development partnerships with local cities. Project Objectives The Port Economic Development Partnership Program will help the Port advance regional economic vitality through focused partnerships with King County cities. Grants will be made to each city to pursue programs and projects that stimulate business development, job creation and community revitalization. Each participating city may in turn contract with local nonprofits (ex. Chamber of Commerce, Visitor Bureau, etc.) to carry out specific initiatives. Port Economic Development Partnership Programs can be used to support the following economic development activities: Business recruitment initiatives designed to attract new companies to a region or city Small business development (including incubator/accelerator projects) Industry retention and expansion assistance (ex. Maritime, Aerospace, etc.) Tourism development Downtown revitalization Commercial or industrial property development Other community or economic development projects that support new investment and job creation The Revised Code of Washington article 53.08.245 authorizes the port to engage in economic development programs. While RCW 53.08.245 specifically permits ports to engage with nonprofit corporations in furtherance of such programs, it does not address port engagement with other governmental agencies. Another port district statute, RCW 53.08.240 (2) permits the Port to enter into contracts with other municipal corporations (as well as counties, US government and State). The Interlocal Cooperation Act, Chapter 39.34 RCW, and specifically RCW 39.34.080, also permit such joint activity. The general requirement is that in all the joint activities, the two agencies must be able Template revised September 22, 2016; format updates October 19, 2016. COMMISSION AGENDA Action Item No. __3b__ Page 4 of 6 Meeting Date: September 12, 2017 to exercise the same power separately as they intend to exercise jointly. RCW 35.21.703 authorizes cities to enter into economic development programs. These statutes allow the Port to make funds available to King County cities for the purpose of advancing programs that are consistent with Port related/authorized activities. Contracts or inter-local agreements will identify the specific obligations of each party (and the specific use of the Port funds) to ensure that partnerships and initiatives pursued are appropriate. Schedule June 26 Meeting with cities to highlight 2016 results and provide overview on 2017 program June 27 Public information (including web content) about Port Economic Development Partnership Program available August to October 2017 Agreements negotiated and approved with King County Cities June 2017 to May 2018 Project implementation May 2017 Project evaluation ALTERNATIVES AND IMPLICATIONS CONSIDERED Alternative 1 Delay action until October Cost Implications: Alternative 1 would cost nothing. Pros: (1) This provides time for Port to see what all the cities are doing before the Commission makes numerous individual commitments (2) A later deadline gives cities more time to develop their initiatives and complete their partnership grant applications. Cons: (1) The Port may not know what every city intends to do with partnership funds until October and the comprehensive view of program impacts still may not be completely clear (2) The Century Agenda's success depends in part on teamwork. Without active economic development partnerships with King County cities the Port may not realize Century Agenda aspirations and goals. This is not the recommended alternative. Alternative 2 Have each city present its proposed partnership initiative to the Commission as a basis for contract approval. Template revised September 22, 2016; format updates October 19, 2016. COMMISSION AGENDA Action Item No. __3b__ Page 5 of 6 Meeting Date: September 12, 2017 Cost Implications: If the Commission approves (or declines) each city project it is difficult to pinpoint overall costs for the program. At the most, the cost would still be approximately $962,000 annually. Pros: (1) Allows the Commission to understand and approve each partnership project (2) Builds rapport between applicant cities and the Port Commission Cons: (1) It may be unwieldy to schedule 38 cities into Commission meetings (2) This process will likely create delays in overall project implementation This is not the recommended alternative. Alternative 3 Approve partnership agreements for the three cities that are ready to implement economic development projects Cost Implications: The cost of these agreements is $124,320. If the Port entered into agreement with the other cities the program would cost approximately $965,000 annually (not including staff time) Pros: (1) Taking action on these agreements today is consistent with process timelines staff shared with cities at application workshops and in program literature. (2) Supporting agreements with three cities allows these jurisdictions to start work on their economic development initiatives right away. Cons: (1) It will be hard for the Commission to contrast details of each city grant and see how the broader grant program is being implemented when contracts are approved over several Commission meetings. This is the recommended alternative. FINANCIAL IMPLICATIONS Annual Budget Status and Source of Funds The Port Economic Development Partnership Program is a new initiative that will cost approximately $965,000 to implement in 2017. The Port property tax levy will be used to support the 2017 grant program. Template revised September 22, 2016; format updates October 19, 2016. COMMISSION AGENDA Action Item No. __3b__ Page 6 of 6 Meeting Date: September 12, 2017 Future Revenues and Expenses (Total cost of ownership) The Port Economic Development Partnership Program is anticipated to operate annually. It will likely cost between $950,000 and $1,000,000 per year unless the Commission changes or eliminates the program. ATTACHMENTS TO THIS REQUEST (1) 2016 Summary Economic Development Partnership Grant report PREVIOUS COMMISSION ACTIONS OR BRIEFINGS August 15 Commission authorized Executive Director to execute six city contracts totaling $235,785 June 27, 2017 Commission briefing on 2016 results November 8, 2017 Commission authorized CEO to execute four city contracts totaling $81,770 October 11, 2016 Commission authorized CEO to execute fifteen city contracts totaling $411,170 September 27, 2016 - Commission authorized CEO to execute three city contracts worth $132,350 August 23, 2016 Commission authorized CEO to execute nine city contracts worth $294,335 June 14, 2016 Commission authorized the Chief Executive Officer to: (1) establish a new economic development grant fund; (2) authorize up to $1,000,000 for 2016 grants to King County cities; and (3) perform necessary project management and contract administration to support the new grant program. Template revised September 22, 2016; format updates October 19, 2016.
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