Marysville Mayor Jon Nehring appeared virtually in front of the House Finance Committee on Tuesday. (TVW)

Marysville Mayor Jon Nehring appeared virtually in front of the House Finance Committee on Tuesday. (TVW)

Arlington, Marysville push state to extend key tax break

City leaders ask lawmakers to back incentive used to attract new businesses to industrial center

OLYMPIA — An effort began Tuesday to let Arlington and Marysville continue offering new manufacturing businesses a tax break if they create high-paying jobs in the Cascade Industrial Center.

“It is critical now more than ever,” Marysville Mayor Jon Nehring told lawmakers at a hearing on a bill to extend and expand the tax break set to expire next year. “This is where the job growth in Snohomish County will be coming.”

Nehring appeared virtually in front of the House Finance Committee which is considering House Bill 1386 sponsored by Rep. Emily Wicks, D-Everett. Arlington Mayor Barb Tolbert and Snohomish County Council Chairwoman Stephanie Wright also testified in support of the legislation.

No one testified against the bill which is scheduled to be voted on by the panel Thursday.

“I felt like the hearing went well,” Tolbert said afterwards. “I think it is even more important to Snohomish County now given the reduction of jobs we’ve seen in the aerospace industry and the projections of how long it will take to build it back up.”

The tax break, enacted in 2015, is targeted for the industrial center, now roughly 4,000 contiguous acres overlapping the two cities’ borders in and around Arlington Municipal Airport. Except for the airport, the majority of the center is owned by private landowners.

As crafted, it provided property owners an exemption for up to a decade on the city and county portion of property taxes due on the value of improvements, such as construction of new facilities. Exemptions could last 10 years

Under the current law, companies must create at least 25 jobs paying an average wage of $18 an hour. Firms had until Dec. 31, 2022, to apply.

House Bill 1386 would extend the availability of the tax break through Dec. 31, 2030. Firms would now need to pay an average wage of $23 per hour and offer health care benefits.

This bill expands the categories of businesses eligible for an exemption. And it directs cities to give priority to applicants that pay workers at prevailing wage, contract with women-, minority- and veteran-owned businesses, use state-registered apprenticeship programs, and hire locally.

And it makes clear a tax break can be canceled if a company fails to maintain 25 family-wage jobs.

This provision ensures “job promises made means job promises kept,” Wicks told the committee.

Ironically, no firm can qualify for the incentive today because the current law specifically limits it to certain-sized cities in a county with a population between 700,000 and 800,000. Only Arlington, Marysville and Lake Stevens qualify. But because Snohomish County’s population exceeds 800,000 — and has exceeded it since 2018 — the tax break cannot be offered by any at this time.

The proposed legislation addresses that by applying to certain-sized cities in a county with a population of 800,000 to 900,000.

The bill comes as the Cascade Industrial Center has become a focus of several new projects, including a purchase last year by a firm associated with Blue Origin, the Kent-based spacecraft company owned by Amazon founder Jeff Bezos.

And there’s a huge new undertaking in the works, dubbed Project Roxy and rumored to be a future Amazon hub. Plans filed with the city show a 2.8 million-square-foot distribution center on 75 acres and forecast for hiring of 1,000 workers.

Meanwhile, the potential of the tax break to attract new businesses to underdeveloped industrial areas didn’t go unnoticed in the hearing.

Rep. Drew Stokesbary, R-Auburn, asked Nehring if he’d support amending the bill to allow cities in other areas of the state to offer such an incentive.

“Absolutely,” Nehring said, then adding as long as it does not impede action this session. “We’ve got businesses that can’t qualify now because the growth of population means no one can comply.”

Jerry Cornfield: jcornfield@heraldnet.com | @dospueblos

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