In 2006, the Washington State Legislature enacted the Local Infrastructure Financing Tool (LIFT) which, through tax incentives, redirects a portion of sales taxes to designated local jurisdictions to pay for approved public infrastructure projects that promote community and economic development.
The Library Square development (formerly called Riverwest) in downtown Vancouver was one of nine projects in the state granted LIFT status. Local developer, Killian Pacific, came up with “a gorgeous design” according to Vancouver City Councilmember, Anne McEnerny-Ogle.
The project included the 90,000-square-foot Vancouver Community Library that exists today, along with an approximately 100,000-square-foot office building, a boutique hotel, a 135-unit condominium complex, restaurant, retail space and underground parking to accommodate as many as 900 vehicles in addition to a small, above-ground parking lot.
Fast forward to 2017 and much of that wish list has yet to materialize. Although regional, national and international investors have been marketed to, the project seems to have stalled – and that’s an issue considering the clock is ticking with regard to its LIFT status.
The LIFT program translates to a $500,000 tax credit per year for 25 years, which is $12.5 million over the course of its lifetime in addition to the City’s matching $12.5 million. Taking into account the sales and use tax forecasted with the Library Square development, $25 million over the course of 25 years was penciled out. It was determined from the outset that the money would finance a much-needed parking structure.
“When we looked at the net value of that whole project we thought, ‘Hey, we could do this,’” McEnerny-Ogle said.
No one could’ve predicted the recession that hit after the LIFT was enacted.
According to notes supplied by McEnerny-Ogle, “The initial LIFT legislation, approved in 2006, required Library Square to be under construction by 2014 to get the maximum benefits in tax credits. In late 2009, Killian Pacific, jointly with the City and FVRL (Fort Vancouver Regional Library) announced that the project was on hold due to decline in the regional and national economic conditions.”
Against the odds, the Vancouver Community Library opened in 2011, serviced by a 64-space, above-ground parking lot. Since then, additional spots have been earmarked on surrounding streets but the total is a far cry from the hundreds originally envisioned.
During the 2013 legislative session, the City requested – and was granted – a five year extension on LIFT status, buying more time to begin construction on the rest of the Library Square development.
At this point, construction must start by June 30 of this year. Since that doesn’t seem likely, the City is redirecting its efforts to save this lucrative tax incentive.
“We’re going to explore all options, but $500,000 for 25 years is such a wonderful opportunity so we requested a transfer to move LIFT from the library (development) to the waterfront (development),” McEnerny-Ogle said. “If the legislators can help at all, we would love to be able to use LIFT for waterfront parking.”
Referring to the Waterfront Development Project, McEnerny-Ogle admits it won’t be an easy task. When each jurisdiction applied for LIFT status, they had to submit a geographical area to define its use. Since the Waterfront project is outside that geographical area by several blocks, it’s uncertain whether the transfer request will be or can be granted.
For now, McEnerny-Ogle and other city officials are caught between a rock and a hard place, knowing that parking is desperately needed at Library Square but trying to save a large tax infusion for the City to utilize wherever they can.
“If we don’t get it, we won’t build a parking structure. We can’t afford it,” said McEnerny-Ogle. “We need that support. If we lose the LIFT, we just cannot afford to build a parking structure so that means that whole library piece will have to have surface parking.”
Lance Killian, president of Killian Pacific, knows all too well the frustration of the stalled design. Killian Pacific donated the land to the library and they hold a significant financial investment in the remaining property.
“We continue to collaborate with the City of Vancouver and CREDC (Columbia River Economic Development Council) to market the project and secure a user to kick off the next phase of the Library Square project,” Killian said. “At this time we do not have any firm commitments. Our intent remains to make the project a vibrant addition to downtown and the community.”
