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Council hears update on financial district

By John Larson

Tacoma Weekly
jlarson@tacomaweekly.com
Published on: August 14, 2008

When Russell Investments announced earlier this year that it had outgrown its downtown Tacoma headquarters and might relocate, a group of local government officials and business leaders, operating under the name Tacoma Partnership, sprang into action. Several steps have been taken this year aimed at keeping the financial services giant from leaving town. During its Aug. 12 meeting, Tacoma City Council’s Economic Development Committee received a status report on the effort.

A major component is the establishment of an international financial services area, a section of downtown where Russell and potentially other firms in its industry could locate and take advantage of certain incentives. The council passed an ordinance that paves the way for scaling back the city business and occupation tax on companies providing international financial services, and eventually eliminating it by 2013.

The city has allocated $1 million in its current budget for right-of-way and streetscape improvements to match a projected $5 million in federal funds.

It has also received approval from the U.S. Department of Housing and Urban Development to allocate $820,000 in Special Purpose Grant funds towards this development project. The council will consider the specific use of the funds when the development agreement is entered into.

“It is an extraordinary record of accomplishment in a very short time,” commented City Manager Eric Anderson.

The state will allow a limited number of cities to utilize what is called a local infrastructure finance tool, a funding source in which taxes collected within a specific area can be directed toward certain physical improvements.

Ellie Walkowiak from the city’s Community and Economic Development department told the committee that two weeks ago state officials requested all cities that applied for this to re-submit projections on the amount of sales taxes they expect to collect within the designated areas. City staff resubmitted this information, she said. “We have done everything the state staff has asked us to do.”

The state will announce which cities can use the finance tool on Sept. 18.

Several actions await approval of the state legislature. One is amending legislation to allow a $3,000 annual credit for each full-time equivalent employee of a financial services firm against the state business and occupation tax.

City staff will soon file an application for a Remedial Action Grant with the state Department of Ecology.

Two citizens offered testimony during the meeting.

Mark Martinez from Pierce County Building and Construction Trades Council asked if prevailing wages would be paid on projects and if apprenticeship opportunities would be available for workers wishing to develop their skills. Anderson told him the answer to both questions is yes. Much of the work will be within public rights of way, he said, which requires the city to ensure prevailing wages and apprenticeships are part of the project.

Jacob Carton from Jobs With Justice, an activist group aligned with organized labor, said his organization supports public funding for infrastructure projects. He expressed concern that jobs created through this project would not pay adequate wages.

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