"Shopping center: Hawkins asks county to issue revenue bonds for $10+ million"

From today's Whitman County Gazette:

Hawkins Companies representatives from Boise Monday asked Whitman county commissioners to float revenue bonds of more than $10 million to help fund infrastructure at their company’s proposed shopping center in the Moscow-Pullman corridor on the Washington side of the state line.

County Commissioners will take public comment on the idea at their next two regular meetings, Jan. 14 and 22, and anticipate a decision by the end of the month.

“The county needs to get comfortable that they want to do this, and if they do we need to get moving forward with this,” Hawkins spokesman Jeff DeVoe said. “It’s our intention to get this shopping center built as soon as possible.”

DeVoe asked for the bond to fund an estimated $9.7 million to build roads, sidewalks, lighting and a water and sewer system at the site. DeVoe said Hawkins hopes to begin construction as early as the beginning of summer.

“It is our project, but understand that that infrastructure is the county’s, it belongs to the public,” said DeVoe.

That concerned some citizens in the audience, specifically Colton resident Art Schultheis, who asked how the extra cost of the infrastructure maintenance would be funded.

DeVoe replied water and sewer charges would pay for that upkeep. DeVoe said upkeep of roads would be “a part of what we pay our real property taxes to do.”

The bond plan was developed over the past six months in private meetings between DeVoe and Commissioner Jerry Finch.

The state’s open public meetings act requires the public to be notified when policy is discussed among more than one county commissioner, but allows for individual meetings.

“Much of the information here I have seen, but we felt it was now time to share this with the public,” said Finch.

Finch said DeVoe approached him about the bond as the company saw its resources used up by a lengthy pursuit of water for the development.

The development is currently awaiting a hearing on four water rights transfers from the state Pollution Control Hearings Board (PCHB).

“He told me, ‘we’re so pregnant with money into this project, we can’t afford to walk away’,” Finch told the Gazette Tuesday.

In addition to the mounting costs of the water transfer, DeVoe said the construction costs of the development is more expensive at the border site because the company typically develops land that already has arterial roads and utilities in place.

Removal of more than 2.4 million cubic yards of dirt on the site to cut down hills as much as 70 feet is a new cost to the company, DeVoe said.

The bond issue would be redeemed out of projected county income generated by the shopping center.

In asking for the bond, DeVoe presented figures showing the development would contribute nearly $1.8 million in annual sales tax and property tax income to the county.

Based on an estimate of four years to get the Hawkins development to full potential after breaking ground, DeVoe estimated the county would begin seeing an increase in general fund revenues of nearly $400,000 in year four of the bond.

The development would generate between half a million and $1 million in tax revenue annually until the bond is paid off, at which point the entire $1.8 million would go to the county.

Figures from county Assessor Joe Reynolds show the current property tax generated from the undeveloped site is $1,463 annually.

Citing a Port of Whitman-commissioned study by University of Idaho Economist Dr. Steve Peterson, Finch noted $80 million in retail sales annually leaves the Palouse in favor of shopping centers in Spokane and Lewiston.

“This is not a Whitman County project,” he said. “This is a good regional project.”

Finch said the project would “set the tenor” for development in the corridor.

“Without Hawkins, the corridor will be a series of steel buildings with a constant rotation of owners that would decay over the years,” he said.

Both Commissioners Finch and Partch stressed the importance of the development for retaining Whitman county youth. The large retail center, they added, will provide living-wage jobs in management, and will help retain and recruit top-flight employees for WSU and SEL.

“Whitman County is on the verge of an explosion of living wage jobs,” said Finch.

“I think this is our future financial security,” added Partch.

Partch said this project is the intended result of the county’s re-zoning of the Pullman-Moscow corridor to commercial a few years ago.

“Our choice was to do the easy thing and raise taxes, or to expand our tax base,” said Partch. “That’s economic development.”

Finch said the county’s bonding agent, Jack McLoughlin, is currently studying the viability of such a funding proposition.

“I can assure you that Whitman County’s going to do its due diligence on this,” said Finch.

Issuance of the bond will hinge on Hawkins obtaining water rights to the site, and a signed lease with Lowe’s Home Improvement store as an anchor tenant.

Getting those water rights is far from guaranteed. The Gazette reported last week that a state hearing board has been slated June 2-6 for the Hawkins project and a decision isn’t expected until at least six months after that.

Three of the transfers approved by the county Water Conservancy Board last July, and subsequently by the state Department of Ecology (DOE), were appealed by the city of Moscow.

The fourth transfer was denied by the DOE, and that decision has been appealed to the hearing board by Hawkins.

Moscow Public Works Director Les McDonald was at the Monday presentation on behalf of Mayor Nancy Chaney, and he assured the city’s appeals were based on a genuine concern for regional resources.

“The city’s interest really still is the water resources,” said McDonald. “I know there’s folks that doubt that.”

Whitman County Commissioners have speculated that Moscow’s appeal was based on an attempt to prevent commercial development on the west side of the border.

“You folks want to drill a huge well just across the state line,” a red-faced Finch replied to McDonald. “So there must be more water on the Idaho side of the line.”

When Moscow appealed the county planning department’s initial approval of the project, they cited a proposed well site north of the Palouse Empire Mall in Moscow would be negatively impacted by the development.

Impacts to the well site were also cited when the city appealed the county’s approval of James Toyota’s move from Moscow to the corridor.