Everett mayor delivers a mixed report on the city’s economic outlook

EVERETT — The economy is bleak and will remain so for the next three to four years — but there are good things still happening in Everett.

That’s the gist of the State of the City address delivered by Mayor Ray Stephanson at the Everett Golf and Country Club on Wednesday morning as his audience ate sausage and eggs.

The mayor reviewed the city’s bright spots for business and community leaders. Those include the strong aerospace industry, big civic projects in the works and consummation of a deal for Washington State University to settle into town and launch an engineering program.

The biggest disappointment, of course, was the announced closure of Kimberly-Clark Corp.’s pulp and tissue mill on the waterfront, he said. The company was in negotiations to sell the mill to Atlas Holdings Inc. when the deal suddenly fell apart in December.

Stephanson said the company had the city’s full support in search of a buyer. The deal fell through over higher-than-anticipated costs to clean up contamination in the waterway near the mill. Atlas wasn’t able to secure the loan to purchase the site after that information surfaced.

“I learned you never ask Ecology a question you don’t know the answer to,” he said, referring to the state Department of Ecology.

City leaders are now focused on a plan to redevelop the land. While the city wants it to remain focused as a job-producing site, it won’t be anything with smokestacks, Stephanson said. Instead, the city would like to see light industrial or high-end commercial businesses in that space.

Everett will be working closely with Kimberly-Clark to get the site cleaned up. The worst outcome, the mayor said, would be the land sitting vacant.

Stephanson reminded those gathered of financial decisions made by Everett leaders that have enabled the city to weather the financial downturn with less pain than other cities.

Those decisions include a reserve fund with $22 million set aside for emergencies and offering a business tax break to companies that add employees or bring their operations here.

Those bright bits were tempered with a dose of reality.

The stagnant economy is putting pressure on the city’s ability to pay for basic services. Stephanson predicted it would be three to four years at the earliest before the economy recovers.

“We’ve had to reset the financial reality of how we run the city,” Stephanson said.

Also, the mayor said, the city Business and Occupation Tax rate drops for manufacturing businesses with revenue more than $7 billion annually. So the city doesn’t expect a windfall from anticipated good performance this year by Boeing, Everett’s largest employer.

That tax break is in place to keep Boeing here.

“I’d rather have 25 percent of something than a 100 percent of nothing,” he said. “We made that decision to make sure aerospace is secure in this community for years to come.”

Reporter Debra Smith: 425-339-3197 or dsmith@heraldnet.com.