Lake Stevens looks at sales-tax hit

LAKE STEVENS — Three large stores at Frontier Village are either closing or moving, and Lake Stevens city officials are crunching the numbers to see how it will affect their budget.

Craft Star, an arts and crafts store, is closed. The last day for Joe’s, a sporting goods store, is Thursday. Bridges Pets, a large pet store, plans to move to Snohomish; its last day in Lake Stevens is June 15.

City officials plan to discuss the loss of the stores’ sales-tax revenue at a meeting of the City Council on Tuesday, city administrator Jan Berg said.

“We’ve looked at the effect of Joe’s and we didn’t feel we need to make any changes in our budget,” Berg said.

Joe’s is the largest of the three stores. But it’s the cumulative effect of the three that they’re calculating, she said.

“I don’t think it’s going to have a huge effect, but it will definitely have an impact,” Mayor Vern Little said. “We trimmed back on the budget and are fairly conservative anyway.”

State laws prohibit cities from disclosing dollar amounts paid in taxes by any particular business.

Frontier Village, which joined the city only a little more than two years ago, is the city’s largest retail area. Still, the city survived for years before without it.

“It’s like when you don’t get a lot of sales tax in the first place, it doesn’t affect you as much,” Berg said.

Lake Stevens is putting a large annexation before voters in the fall. The area south of Frontier Village and between the lake and Highway 204 and extending south of 20th Street SE has 10,061 people, nine square miles and little retail space.

Other than a $230,000 infusion from the state for adding more than 10,000 people at once, the area will not be a moneymaker for the city, Berg said. Still, losing the stores would not affect the city’s ability to serve the area, Berg said.

Assuming tax revenues from the area stay the same, and based on estimated costs for services such as police protection, the city would go up and down over the break-even line for about five years in its service of the area, Berg said. It then would go into the red, Berg said.

Still, it makes sense to go ahead and add the area to the city now, officials reason, partly because of the payment from the state and because the area lies within the city’s designated growth boundary.

Bill Sheets: 425-339-3439, sheets@heraldnet.com.

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