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City will utilize revenue tool for downtown development
The Federal Way City Council had the first reading of a Local Infrastructure Financing Tool (LIFT) ordinance during its May 7 meeting, with the second reading and adoption of the new ordinance set for May 21.
LIFT allows the financing of "public infrastructure to spur economic development through a combination of state and local funds," according to city finance director Tho Krause.
LIFT funds can be used toward public infrastructure, right-of-way improvements, open spaces, public parking facilities, roads, plazas, and pedestrian or bike trails.
"This authorizes an imposition on the local sales and use tax to be credited against the state's sales and use tax," Krause said. "This results in no net change to the taxpayer. This allocation is for up to $1 million in state funds per year for 25 years. It's a one to one match, so if the city provides one million (dollars), the state gives one million dollars."
According to Krause, part of LIFT involves the creation of a revenue development area (RDA). Within this designated area, taxes that would normally go to the state are instead directed back into the city's coffers, according to Krause.
"It basically just shifts the amounts going to the state back to the city," Krause said. "So no property owners would incur additional taxes, and no residents would incur additional taxes."
Krause said the city would receive approximately $2 million from the state at this time because the city already has $2 million of city funds sitting in the downtown redevelopment fund.
"With or without the PACC (performing arts and conference center), we can use these monies for other projects," Krause explained.