9b - Tax Increment FinancingProposed Tax Increment
financing
City Council —April 2, 2024
Should the City create a Tax Increment Area to help fund public
projects in the Downtown/City Center area?
• RCW 39.114: H B 1189 enacted in 2021
• Cities, counties, and Ports can establish Tax Increment Areas (TIAs) to
fund public improvements that enable private development
• Ordinance must: 1) designate the increment area; and, 2) describe
proposed public projects funded with tax allocation revenue
• The increment area cannot exceed $200M in assessed valuation
Proposed Tax Increment Area
Q Tax Increment Ai
E-_J Tax Increment Ai
i ivnies I
HERE, Garmin, (c) GpenStreetMap contributors, and the
05 iser community
iource: Tiberius Solutions with data from the Kinq County Assessor's Office
TIA Proiect List 3.28.24
Proposed
Public Projects
1. Public
Parking
2. 1 Recreation
3. ' Mobility
4. Community
Building
S. Public Safety
■ Land acquisition
■ A stand-alone parking garaq
■ Public parking integrated into a private garage
• Shared parking agreements w/ other parties
■ Other equivalent projects that would add parki
■ New park or park expansion
■ Land acquisition
• Civic plaza
■ Park improvements
■ Other equivalent projects that would add
recreational amenities
• S 320tr' dip
■ Pedestrian promenade
■ Protected bike lanes
■ Transit shelters
■ Bicycle lockers
■ City Center Access
■ Other equivalent projects that would increase
mobility
6. I Placemaking , ■
Public market
Senior center
City Nall
Community Center north
Downtown meeting room
Other equivalent projects that would add an indoor
community space to the district
Improvements to benefit FWP❑
Improvements to benefit So. King Fire
Improvements to lessen code compliance issues
Other equivalent projects that would improve public
safet�r
Gateway features
Wayfinding signs
Pedestrian nodes/public spaces
Public art/ Special street furniture
Lighting (e.g. catenary lights, etc.)
Other equivalent projects that would improve
placemakinq
$27 - $30M
1388-420 stalls 9 $70k/sta(l)
$10-$16M
[$1 OM for civic plaza (Yakima
Central Plaza) & $6M for new
nark 1PIF studvll
$30M - $60M
$3M - $60M
$6M
$1M-$3M
2026-2028
2026 - 2035
2026 - 2035
2026 - 2040
2030-2045
2030-2045
• Current taxable assessed value in TIA is "frozen," and property taxes
from the frozen base value are paid to taxing districts.
• Increase in assessed value is "increment", and property taxes from
the increment value are paid to the TIA (tax allocation revenues)
• TIAs can collect property taxes for a maximum of 25 years
• TIAs do not raise taxes on any property, but redirects some taxes paid
a Tax I—ment Ai
Tax Increment Ai
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2025 2050
• State Schools (Part 1 and 2)
• King County Bonds (voted) levy
• Port Bond Fund levy
• Federal Way Public Schools (Maintenance & Operations,
Construction, and Bond levies)
• Library GO Bond levy
• South King Fire & Rescue (Maintenance & Operations and GO
Bond levies)
• County: Regular levy, Lid Lifts, Transportation, Conservation
Futures, Flood Zone, Ferry District, EMS
• Port General Fund
• Sound Transit
• City of Federal Way General Fund
• Library General Fund
• South King Fire & Rescue General Fund
Estimated Tax ImpaCt (Low -to -High Forecasts)
W`=� lasm go
Countywide Regular Levy $4,591,228 - $9,654,558 County Flood Zone
AFIS (Fingerprint ID) LID Lift
Parks LID Lift
Human Services/Vets LID Lift
Children/Family Justice Center LID Lift
Best Start for Kids LID Lift
Radio Communications LID Lift
Countywide Transport Levy
County Construction Futures
$0
$32 - $66
$0
$0
$2,017 - $4,240
$0
$354,528 - $745,454
$593,721 - $1,2481362
County Ferry District
Port General Fund
EMS (voted)
Sound Transit
City General Fund
Library General Fund
So King Fire
Tota
Low: Assumes full buildout from Trent
High: Assumes full buildout from Trent + other redevelopment occurring within the TIA
Impact A
$640,150 - $1,345,985
$74,138 - $155,883
$521,461 - $1,0961433
$11993,456 - $4,191,454
$1,484,312 - $3,120,926
$6,548,910 - $13,771,889
$2,231,044 - $41691,009
$11,885,164 - $24,989,833
$30,920,161 - $6510151961
Conservative Revenue Forecast
Assumptions:
1. Based on 2024 initiation
2. Redevelopment is limited to Trent
3. 8-year MFTE is utilized by Pt 3 buildings
Tax
Table 4 — Tax Allocation Revenues of the TIA (Nominal $�
Alternate Development Scenario
Assessed Value
Tax Allocation
Year
Total
Base Value
Increment
Levy Rate
Revenues
2023
$
195,802,900
$ 3.730590
$
-
2024
$
205,788,848
$205,788,848
$ 3.487226
$
-
2025
$
216,284,079
$ 205,788,848
$
10,495,231
$ 3.290391
$
34,533
2026
$
227,314,567
$205,788,848
$
21,525,719
$ 3.012184
$
64,839
2027
$
238,907,610
$205,788,848
$
33,118,762
$ 2.895675
$
95,901
2028
$
251,091,898
$205,788,848
$
45,303,050
$ 2.651069
$
120,102
2029
$
273,533,933
$ 205,788,848
$
67,745,085
$ 2.548528
$
172,650
2030
$
291,500,045
$205,788,848
$
85,711,197
$ 2.449975
$
209,990
2031
$
306,366,547
$ 205,788,848
$
100,577,699
$ 2.355220
$
236,883
2032
$
326,287,697
$ 205,788,848
$
120,498,849
$ 2.264036
$
272,814
2033
$ 342,928,370
$ 205,788,848
$
137,139,522
$
2.176389
$
298,469
2034
$ 464,603,684
$205,788,848
$
258,814,836
$
2.092129
$
541,474
2035
$ 488,298,472
$ 205,788,848
$
282,509,624
$
2.011276
$
568,205
2036
$ 513,201,694
$205,788,848
$
307,412,846
$
1.933408
$
594,354
2037
$ 868,342,479
$205,788,848
$
662,553,631
$
1.858555
$
1,231,392
2038
$1,129,170,653
$205,788,848
$
923,381,805
$
1.786943
$
1,650,030
2039
$1,186,758,356
$205,788,848
$
980,969,508
$
1.717900
$
1,685,207
2040
$1,503,291,030
$205,788,848
$1,297,502,182
$
1.651328
$
2,142,601
2041
$1,579,958,873
$205,788,848
$1,374,170,025
$
1,587535
$
2,181,543
2042
$1,660,536,776
$205,788,848
$1,454,747,928
$
1.526015
$
2,219,967
2043
$1,745,224,151
$205,788,848
$1,539,435,303
$
1.466879
$
2,258,165
2044
$1,834,230,583
$205,788,848
$1,628,441,735
$
1.410034
$
2,296,158
2045
$1,927,776,343
$ 205,788,848
$1,721,987,495
$
1.355392
$
2,333,968
2046
$2,026,092,936
$205,788,848
$1,820,304,088
$
1.302868
$
2,371,615
2047
$2,129,423,675
$205,788,848
$1,923,634,827
S
1.252379
$
2,409,119
2048
$ 2,238,024,283
$ 205,788,848
$ 2,032,235,435
$
1.203846
$
2,446,499
2049
$ 2,352,163,521
$ 205,788,848
$ 2,146,374,673
$
1.157151
$
2,483,679
Total $ 30,920,161
Less Conservative Revenue Forecast
Assumptions:
1. Same assumptions for Trent development
2. Assumes some level of other redevelopment activity
occurs during the TIA period & that all
redevelopment utilizes the 8-year MFTE provision
Exhibit 15. Impact on Overlapping Tax Levies, Proposed Federal Way TIA (Nominal $]
(3 of 3)
Tax City General Library Fire 39
Year EMS (Voted) Sound Transit Fund General Fund General Fund Total
2023 $ - $ - $ $ $ - $ -
2024 $ - $ - $ $ $ - $ -
2025 $ 81 $ 61 $ 263 $ 91 $ 480 $ 1,381
2026 $ (1,842) $ (1,372) $ (6,037) $ (2,062) $ (10,967) $ (29,969)
2027 $ (3,710) $ (2,763) $ (12,159) $ (4,152) $ (22,086) $ (60,356)
2028 $ (8,619) $ (6,418) $ (28,246) $ (9,646) $ (51,308) $ (133,532)
2029 $ (14,968) $ (11,145) $ (49,055) $ (16,752) $ (89,106) $ (231,903)
2030 $ (20,314) $ (15,126) $ (66,580) $ (22,735) $ (120,936) $ (314,739)
2031 $ (25,093) $ (18,684) $ (82,247) $ (28,083) $ (149,391) $ (388,791)
2032 $ (30,551) $ (22,748) $ (100,140) $ (34,192) $ (181,888) $ (473,362)
2033 $ (35,376) $ (26,341) $ (115,960) $ (39,591) $ (210,619) $ (548,130)
2034 $ (54,325) $ (40,450) $ (178,078) $ (60,798) $ (323,439) $ (941,737)
2035 $ (58,658) $ (43,676) $ (192,321) $ (65,647) $ (349,279) $ (908,958)
2036 $ (77,162) $ (57,454) $ (252,997) $ (86,356) $ (459,469) $ (1,195,709)
2037 $ (134,751) $ (100,334) $ (441,902) $ (150,808) $ (802,481) $ (2,088,294)
2038 $ (176,542) $ (131,452) $ (579,309) $ (197,580) $ (1,051,744) $ (2,736,691)
2039 $ (194,631) $ (144,921) $ (638,945) $ (217,826) $ (1,159,810) $ (3,017,681)
2040 $ (241,564) $ (179,867) $ (793,147) $ (270,353) $ (1,439,622) $ (3,745,626)
2041 $ (260,433) $ (193,916) $ (855,498) $ (291,471) $ (1,552,500) $ (4,039,023)
2042 $ (280,998) $ (209,229) $ (923,202) $ (314,488) $ (1,675,254) $ (4,358,276)
2043 $ (301,900) $ (224,793) $ (992,049) $ (337,882) $ (1,800,059) $ (4,682,837)
2044 $ (323,147) $ (240,613) $ (1,062,051) $ (361,662) $ (1,926,939) $ (5,012,783)
2045 $ (344,744) $ (256,695) $ (1,133,228) $ (385,834) $ (2,055,936) $ (5,348,218)
2046 $ (366,699) $ (273,042) $ (1,205,603) $ (410,407) $ (2,187,089) $ (5,689,245)
2047 $ (389,018) $ (289,660) $ (1,279,199) $ (435,387) $ (2,320,439) $ (6,035,969)
2048 $ (411,707) $ (306,555) $ (1,354,038) $ (460,781) $ (2,456,026) $ (6,388,494)
2049 $ (434,780) $ (323,735) $ (1,430,162) $ (486,605) $ (2,593,926) $ (6,747,019)
Total $ (4,191,454) $ (3,120,926) $ (13,771,889) $ (4,691,009) $ (24,989,833) $ (65,015,961)
Source: Tiberius Solutions
Tax Allocation Revenue
8
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1. The
City
has been discussing lessening the financial
impacts to So.
King
Fire
since October
and
made
a presentation to
the
Fire
Commissioners on 4 March 2024.
2. The City received a draft agreement from So. King Fire requesting
approximately $5.7M from the City and the adoption of Fire Impact
Fees.
3. The Mayor proposes to return 36C for $1 of tax increment collected
from So. King Fire's portion of the Tax Increment Area.
(Approximately $5.7M over 25 years)
4. This agreement would come to the Council within the next 60 days
following adoption of the proposed ordinance.
1. Forward the proposed Ordinance to the April 16, 2024 Council
meeting for enactment
2. Do not forward the proposed Ordiance and provide direction to
staff.
Mayor's Recommendation:
Option 1
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