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City rebuts the Czar's financial analysis for PACC | Letters
I’m writing to provide a correction to several key claims made in Matthew Jarvis’ “If I Were Czar” column about the proposed performing arts and conference center (PACC).
Contrary to his assertion otherwise, the city has outlined a funding plan for the proposed project’s $31.75 million cost (which is a total cost — design, permitting and construction — not just construction as Mr. Jarvis states), and that preliminary plan was a critical piece of the lengthy discussions, leading up to the city council’s March 19 decision to commission schematic designs. For a PDF of the preliminary funding plan, visit www.cityoffederalway.com/PACC.
The preliminary funding plan shows $5 million in infrastructure-related costs (for example, street and drainage improvements, and public open space requirements) that would be funded from existing funds earmarked for those purposes and the state’s Local Infrastructure Financing Tool matching funds.
Additionally, there is another $11,385,000 in existing funds that would be directed to the project. These range from internal sources such as the Real Estate Excise Tax and Downtown Redevelopment Fund, and external sources such as existing and potential grants, a loan from the Community Development Block Grant Section 108 loan and the sale of the hotel pad portion of the property.
That leaves a balance of $15,365,000 to be funded through various fundraising efforts. The preliminary funding plan identifies four fundraising categories — naming rights, state capital grants, other grants, and a local capital campaign — and shows three scenarios of success from low ($6 million) to medium ($9.25 million) to high ($12.5 million). The funding gap in each scenario ranges from $2.8 million (low), to $6.12 million (medium) and $9.37 million (high). Each of these is considerably lower than the $17.5 million Mr. Jarvis cites, though, still very significant numbers.
The preliminary funding plan looks at the use of a well-known federal program called New Markets Tax Credits to fill in that final piece of the project budget. The NMTC program is designed to provide gap financing for local projects like this that provide strong community benefits and has funded many projects in our region, including the Tacoma LeMay Car Museum, projects at the Pike Place Market, the Wing Luke Museum and White Center Square.
If the project is successful in attaining NMTC eligibility, it would zero out the funding gap in both the low and medium fundraising scenarios, cited above. In the most conservative estimate, it would leave a $3 million gap.
Those are the correct numbers as they now stand. It is important to note that this is a preliminary funding plan that will be further refined as we progress in this current step of developing the schematic designs.
When the schematics are presented to council, in roughly four to six months, both the public and the city council will have the opportunity to review those numbers and discuss whether moving forward to the construction phase will achieve our shared community goal of catalyzing further downtown redevelopment.
Chris Carrel, Communication and Government Affairs Coordinator, City of Federal Way