Politics from the Palouse to Puget Sound

Tuesday, February 05, 2008

"Whitman County steps in to move Hawkins project forward; Shopping center has been embroiled in water rights disputes with Moscow"

From today's Lewiston Tribune:
A proposed shopping center in the Moscow-Pullman corridor is expected to generate enough tax dollars on its own to pay for $9.1 million worth of infrastructure financed through Whitman County, officials said Monday.

"It won't cost the (other) taxpayers anything," Sharron Cunningham, the county's director of administrative services, said after commissioners Michael Largent, Greg Partch and Jerry Finch signed a preliminary development agreement with Jeff De Voe of Hawkins Companies.

The development hinges, among other things, on whether a water source can be secured.

Hawkins, a Boise-based company, wants to build a 714,000-square-foot shopping center, with a Lowe's home improvement center as the initial anchor, on 204 acres abutting the Idaho border and Moscow city limits. Because of delays revolving around water rights disputes with Moscow and resulting rising construction costs, Hawkins asked the county last month to foot the bill for water and sewer service, roads, curbs and gutters.

The commissioners agreed to the request during their Monday morning meeting.

In addition to detailing financing of the infrastructure, the preliminary agreement hints of possible cooperation with Moscow officials. Construction might be modified, the agreement reads, "if an alternative water and/or sewer system is found and both parties agree to this change."

There had been early talk of Moscow providing water and sewer hookups to the shopping center. But that potential appeared to evaporate when the city failed to act and Moscow Mayor Nancy Chaney later signed an appeal of Hawkins' attempts to secure water rights to drill its own wells.

Members of the Moscow City Council were expected Monday night to take action on the appeals after formal mediation with Hawkins representatives last week. However, any decision by the Moscow City Council on the issue occurred after press time. All negotiations have been behind closed doors.

The agreement calls for the company to build all improvements and then be reimbursed by the county. The county, in turn, will issue bonds. The bonds, Cunningham explained, are purchased by a private entity or entities intending to make a profit off interest. "They're purchasing the debt," she said.

Cunningham said Hawkins, upon start of the project, will immediately begin paying construction taxes to the county, plus property taxes and eventually sales taxes in amounts expected to pay the $9.1 million bond plus interest.

De Voe said Hawkins wants to begin construction this year.

Finch, one of the most vocal advocates of the Hawkins development, said the shopping center could be the beginning of more retail construction throughout the eight-mile corridor between the two university towns. Cunningham confirmed that success of such development could translate into much-needed county revenue stability and even a possible surplus.

"We can project all we want," she said, "but we have to cover the debt first."

According to county estimates, tax revenues over the 20 years of the bonds will exceed $9 million above costs in principal and interest. If the Hawkins development fails, according to county documents, other money sources are available, including money from the state and real estate excise taxes.

The infrastructure agreement will be null and void, according to the preliminary agreement, if Hawkins fails to secure water rights, or "firm commitments from Lowe's (or reasonably suitable replacement) to either lease or purchase a portion of the development."

All the infrastructure improvements and water rights for the development will be transferred from Hawkins to the county at no charge, according to the preliminary agreement. The county is exploring the creation of a water district to supply the development, according to the agreement. In addition, Hawkins has agreed to build a rural fire station on the site, according to the agreement, and donate the land and building to Whitman County Rural Fire District 12.

All of this, Finch said, wouldn't have happened if Moscow officials had simply agreed to supply water and sewer service to Hawkins. Moscow's water rights appeals further impeded progress, said Finch, to the point where he feared Hawkins Companies might abandon the project if Whitman County hadn't stepped in with help.

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