PORT OF SEATTLE 

 

 

 

 

 

 

 

 

 

   

MEMORANDUM 

 
 

COMMISSION AGENDA   

 

 

Item No. 

 

6i

 

 
 

 

 

 

 

 

Date of Meeting: 

 

August 25, 2009

 

DATE: 

August 21, 2009 

 

TO: 

 

Tay Yoshitani, Chief Executive Officer 

 

FROM:

 

Clare Gallagher, State Government Relations Manager 

 

 

Elizabeth Morrison, Senior Manager, Corporate Finance 

 
 

SUBJECT: 

Resolution No. 3627, Second Reading and Final Passage.  Opting Out of Tax 
Redistribution for Local Revitalization Areas 

 
 

BACKGROUND 

 
This past legislative session, the Washington Legislature adopted SB 5045, Community 
Revitalization Financing, which permits Washington local governments, including port districts, 
to form “local revitalization areas” (RA) to finance public infrastructure designed to attract 
private investment and economic development.  This new tool is based on tax increment 
financing (TIF).  Traditional TIF financing taps increased tax revenue generated by private 
development, and applies those taxes to pay bonds issued to finance the public infrastructure 
supporting the development.   
 
Under SB 5045, the state will provide grants in the form of a state sales credit to local 
jurisdictions for infrastructure improvements.  The city would be allowed to keep up to $500,000 
per year in sales tax money that otherwise would go to the state.  That money must be matched, 
dollar for dollar, by local tax revenue.  That local tax revenue can include pledged new tax 
revenue resulting from the new development from the city applying for the grant, other grant 
monies or private contributions, as well as new tax revenue collected by overlapping tax 
jurisdictions such as port districts or transit districts for up to the 25 years of the project .  
 
SB 5045 allows local taxing districts that do not wish to redistribute the increased property and 
sales taxes within the RA to take official action to opt out.  By opting out, the Port would collect 
its full portion of property tax generated on the improved property.  Per the law, the proposing 
jurisdiction is required to provide notice, hold a public hearing and allow taxing districts to opt 
out of the revitalization area financing within a 30-day time frame before adoption of the RA. 
 
While the legislation offers only one opportunity to either participate in the proposed new RA or 
to opt out, nothing in the legislation prohibits the Port from participating in development through 

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