Bold port plan to create thousands of jobs in Woodland Bottoms runs into opposition

Critics complain "TIA" would siphon tax dollars from county, fire districts; the reality is more complex than that, and this bold initiative deserves consideration, negotiation

The Port of Woodland has a plan that its consultant says could create 5,000 permanent jobs, more than 10,000 construction jobs and millions of dollars in state and local tax revenue over the next 25 years.

To attract employers and create this economic boom, the port wants to undertake $377 million in road, water, sewer, power, railroad and other public infrastructure projects in the Woodland Bottoms area.

For a county that has long needed hope and more family wage jobs, you’d expect this would be welcome news.

But the Cowlitz County commissioners, two rural fire districts, Woodland city officials and many Woodlanders oppose it. They’ve accused the port of trying to hijack tens of millions of dollars in tax revenue from other agencies to help pay for its infrastructure plan.

“A lot of this looks to me like pie-in-the-sky, and a considerable portion will come at the county’s expense,” County Commissioner Steve Ferrell said at a recent commissioners meeting.

County Commissioner Rick Dahl compared the port to banking clients who have maxed out their credit cards and are seeking new ones “to get themselves out of a fix — a credit card that takes from the county, the city of Woodland, from fire (agencies), the library.”

These comments distort and oversimplify a complex issue, but they reflect strong opposition that could derail one of the the boldest economic development initiatives ever proposed in Cowlitz County.

Critics have roused so much public opposition that Port Commissioner Rob Rich moved Thursday morning to scuttle the year-long effort, even though the port developed the project with good intentions to create jobs and improve public facilities, he said.

“We did not do this to steal money,” he noted. “But the public has been clear, direct and focused and very respectful” in its opposition. He told me he has not met one member of the public who supports it.

Rich’s motion died when fellow commissioner Robert (Bob) Wile declined to second it. Port Commissioner Paul D. Cline was absent.

“I’m not ready to give up,” Wile said, noting that the city of Woodland would get millions of dollars in new streets and other facilities that otherwise might take years to construct.

“Every ounce of what we are doing, we’re doing for the community.”

The port’s plan does, indeed, pose financial risks and may be Polyannish. There clearly are issues that need further discussion before the port commission makes a go/no-go decision, which for now is scheduled for later this spring.

Ultimately, though, this debate is a frustrating example of our county’s lack of vision and inability to work together. The antagonism, some of it based on misinformation, proves once again that we have become the county of “No.” And it is threatening a little port’s effort to think and act big.

The Port of Woodland is the smallest of three port districts in the county, with a staff of 14 (10 full-time) employees and ownership of 425 acres of industrial and agricultural property. It is governed by an elected three-member board of commissioners.

Under the leadership of Executive Director Jennifer Wray-Keene, it has aggressively recruited new employer/tenants. It landed four new companies in the last several months — fishing rod, heavy equipment, cabinet, and heavy haul equipment firms — bringing the port’s tenant portfolio to 18 companies and farms that employ 300 people.

About a year ago, the port began investigating an ambitious economic growth strategy made possible by a mechanism the Legislature authorized in 2021. It’s called tax increment financing.

Tax increment financing is a tool local governments can use to pay for public improvements — e.g. roads, sewer and water lines, fiber optic cables — needed to attract new businesses. It’s based on the idea that you need to spend money up front to attract investment or, to quote the Field of Dreams film mantra, “build it and they will come.”

The process starts by a governing agency — the port in this case — designating an area as a TIA (tax increment area), then identifying and “freezing” the “base” value of all properties within that zone. When new development, improvements or general land prices increase property values, the corresponding '“incremental” increase in property tax revenues is put in a special fund to pay for the public infrastructure improvements for a period up to 25 years.

An example: If a parcel is currently taxed at $1,000 annually, then increases in value so that the tax bill rises to $1,500, the agency sponsoring the TIA gets to pocket the $500 increase and all other increases for 25 years.)

The downside here is that TIAs can set different levels of government against one another. This is because the sponsoring agency gets to keep the incremental gain in revenue for the life of the TIA. In effect, TIAs permit tax shifts to enable one entity to spur development by piggybacking off the taxing authority of another.

School and diking districts are unaffected and get to keep their entire share of property taxes. But counties, cities and fire, cemetery and other small taxing districts lose that incremental gain in funding to the TIA sponsoring agency.

The TIA process is used in 49 states — all but Arizona — to encourage job creation. Since Washington authorized tax increment financing four years ago, 22 such projects have been submitted to the state Treasurer’s Officer for review. (The state checks them for financial soundness, but it does not have veto power over establishing them.)

The Port of Vancouver for example, established a 17-acre TIA to pay for about half of an estimated $50 million in improvements needed to redevelop an old Columbia River waterfront terminal into a parklike area with a new dock and trails. It hopes these amenities and others attract $570 million private investment in a public market, apartments, hotel and office and retail space.

The City of Ridgefield is using a 939-acre TIA to pay for about half of $95.5 million for road improvements at the Interstate Pioneer Street interchange, where a Costco opened last year.

By comparison to these projects, the Port of Woodland project is colossal.

It envisions 34 road, water, sewer, power and other public improvements in a 5,148-acre TIA area that encompasses most of the Woodland Bottoms. Its Portland-based consultant, Tiberius Solutions, estimates this will lead to $510 million in private development and nearly double the assessed value of the property in the TIA to $2.3 billion.

The overall increase in employment in the proposed TIA is estimated to be 5,012 FTEs, generating $398 million in labor income (2024 dollars) when completed and tenanted, according to Tiberius’ projections.

(One speculative aspect of this, however: Port documents list nine site-specific private commercial and industrial developments that it projects will be built in the TIA by 2035. But the port has no formal agreements with those firms and is not disclosing the identities of the prospective developers. Nor does its plan indicate how much land the enterprises would occupy.)

Assuming that the development takes place and land values rise as projected, the TIA would raise an estimated $75 million over 25 years, according to Tiberius. The port intends to use that money as a local match to get grants to cover the remaining costs of its $377 million infrastructure investments.

Nearly all the projected TIA revenue to the port would be in incremental taxes “foregone” by other agencies and shifted to the port over the next quarter century. They include revenues that otherwise would go to the county operating and road funds ( $30.7 million); city of Woodland ($2.9 million) and Clark-Cowlitz Fire & Rescue ($3 million), according to the Port’s TIA report.

This all sounds like a lot of money, but it isn’t that much on an annual basis over 25 years. And the TIA affects only a small portion of most of these entities’ tax base. (There’s one major exception. See below.)

There are important (and often forgotten) flip sides to all this:

• A portion of the “foregone” revenues likely would not even come to exist without the increase in property values caused by infrastructure and private investments finances through the TIA, according to Tiberius’ analysis. How much is not known, but it’s likely a lot. For example, fire and EMS district taxes on the Ridgefield Costco site have increased from $4,300 prior to the TIA to $43,000 currently. The Clark-Cowlitz Fire District is miffed it’s not getting that money, but most of that revenue likely wouldn’t exist had the TIA not made development possible.

• Development within the port’s TIA would lower Woodland School District levy rates and generate an extra $35 million for the state school fund, according to Tiberius. Again, school districts are exempt from TIA impacts.

• The TIA’s economic benefits could ripple through the community in higher sales tax receipts, improved local opportunity, and reduced social problems. A lot of street and utility projects the TIA would finance are for the betterment of an entire community, not just the port and its tenants.

There’s no denying, however, that the TIA would hit one fire agency especially hard. Cowlitz Fire District 1, a volunteer agency that protects the Woodland Bottoms and the lower, unincorporated Lower Lewis River Valley, would forgo $21.2 million in revenues over 25 years — or $849,000 a year, Tiberius estimates. (Again, this assumes TIA-instigated development increases property values.)

‘We vehemently oppose this project,” said Cowlitz 1 Chief Eric Dehning, the only paid member of the agency.

The law requires the port to “mitigate” revenue impacts to fire and EMS agencies in which a TIA affects more than 20 percent of their assessed value. Up to 30% of Fire District 1s assessed value would be affected by the port’s TIA.

Development in the Woodland Bottoms will spur a need for a new fire station, additional equipment, and likely some paid staff, all while the TIA saps money from the agency, Dehning said.

”No one knows what mitigation is,” Dehning said.

(In Ridgefield’s case, the city is dedicating $2 million toward a new fire station to compensate Clark-Cowlitz Fire & Rescue for the agency’s TIA-related revenue losses, according to the Vancouver Columbian.)

The public should get to vote on the port’s TIA, especially because voters approve Fire District property tax rates, Dehning said. The port, he said, is attempting to “swoop in and take the tax dollars (from other agencies) without the voice of the people.”

What are the chances the Port’s initiative would succeed?

For starters, it’s encouraging to know that Tiberius Solutions, the port of Woodland’s consultant, has considerable experience helping governments set up TIAs. It consulted on the Port of Vancouver and Ridgefield TIA projects, for example.

The state Treasurer’s office did not raise any red flags about the consultant’s projections or work for the Woodland TIA.

Tiberius and the Treasurer’s Office do however, identify and acknowledge risks to the project. They include the potential for economic slowdowns to delay private investment; escalating project costs due to inflation; uncertainty about interest rates on borrowing; and the inherent difficulty of projecting future land values.

I’ll add another: How much will the economic chaos caused by Trump administration policies retard economic growth?

There are many other questions: Is this project too big for a small port? Do Woodlanders want that more commercial and industrial development in the Woodland Bottoms, which still is largely an agricultural area despite rapid housing expansion driven by growth from Clark County? Will grants and other funding be sufficient to cover the bulk of the TIA costs? Can the rest of Woodland cope with the growth and congestion the TIA may instigate?

The conflict over this project is somewhat due to an old-fashioned failure to explain, communicate and cooperate.

Some of the port’s own messaging has been disingenuous, such as its claims that the TIA is not a new tax. (It’s not, but its a tax shift that could send some other agencies in search of new revenue.) Except for Commissioner Rich, port officials have failed to comment to me and other media. No port representative attended the mid-March meeting at which the county commissioners disparaged the port’s effort.

On the other hand, the county commissioners’ rhetoric is misleading, too. (The port has remaining debt capacity, which it will use to raise $14 million for the TIA. It has not, as Dahl suggested, committed the equivalent of maxing out its credit card.)

It’s time for negotiations and discussion and an end of the discord. Contention, misinformation and turf wars have torpedoed other efforts to boost the community’s fortunes in the past (eg. Kalama methanol project, energy projects at the Port of Longview.) There already are enough impediments to development without the addition of infighting among local agencies.

The Port of Woodland deserves credit for its bold attempt to bring jobs and improved quality of life to the community. It should be encouraged to continue evaluating, altering and explaining how it can make this important — and legislatively sanctioned — strategy work for Cowlitz County.

The last thing the county needs is to discourage one of this area’s few dynamos for development.