The Spokane City Council has given its approval to provide $850,000 worth of public improvements that will help pave the way for an office park in East Spokane.
More than $36 million in private investment is expected for the 20-acre Iron Bridge campus on the north side of Trent Avenue at Erie Street along the Spokane River. Five office buildings, two parking garages and a restaurant space are planned for the development.
Those improvements are expected to boost regular property tax collections. A relatively new state law allows a portion of that incremental increase in regular property taxes to be diverted to pay for the cost of sidewalks, streets and other public works.
The diversion comes from the state, county and city shares of regular property taxes only, not the shares going to public schools or to bond issue collections.
It is the first time that "tax increment financing" has been approved in Spokane. The financing is also known as community revitalization financing and is allowed to promote economic growth.
Council members unanimously approved the project Monday night. Spokane County commissioners approved it in March.
Councilman Bob Apple said he was initially opposed to public involvement in a private venture but was later convinced that the tax money was going only to public improvements and would encourage economic growth.
The city is requiring the developer to provide a bank letter of credit as collateral guaranteeing repayment of 20-year bonds that are to be sold to finance the public improvements.
Council members said they wanted to be sure the city would not be left on the hook to repay the bonds. Councilwoman Mary Verner said there was still a bitter taste from the failure of the public-private financing of the River Park Square parking garage in the late 1990s.
"I think it's natural for us to be nervous after what we've been through," she said.
Kent Hull, of the Iron Bridge LLC, said the private improvements are already under way, with the first office building completed last year and the second now under construction. "I guarantee this is going to get built out," he told the council.
The public improvements include work on an old Union Pacific Railroad iron railroad bridge that would be converted for use as a spur trail across the river to connect the office park with the Centennial Trail on the northwest side of the river.