Tax break for new construction meant to fuel growth of jobs

EVERETT — County leaders have decided to allow a 10-year tax break for companies that bring new jobs to manufacturing and industrial areas around Snohomish County.

To qualify, businesses must build a new operation or expand an existing one and add at least 25 jobs paying $18 or more an hour. If they meet those requirements, taxes on new construction could be waived for up to 10 years.

The tax exemption is a pilot program taking place in “target areas” in Marysville, Arlington, Lake Stevens and Mill Creek, according to the county. The state Legislature last year passed a bill allowing the business incentive to be tested. It’s something local leaders have been pushing for over the past few years.

“It has the opportunity to spur jobs in Snohomish County. If it’s successful, it could be implemented elsewhere in the state,” County Councilman Ken Klein said. “One thing we’ve seen is that other states are more willing to offer incentives than we are.”

He was one of the councilmembers who voted in favor of the tax break in a 3-0 decision Wednesday.

The goal is to draw more advanced manufacturing jobs, especially to North Snohomish County.

A centerpiece of the pilot project is the proposed Arlington- Marysville Manufacturing Industrial Center, a 4,091-acre swath of developed and developable land spanning two cities. There are about 170 companies there now and more than 4,600 jobs. A third of the businesses are aerospace, the heartbeat of Snohomish County’s advanced manufacturing industry.

If the center were fully built out, planners say it could become the workplace for nearly 78,000 people, though that likely is decades down the road.

“I think the vision behind this is if you really look from the Canadian border to Olympia, there really isn’t an area for this kind of industrial space. Paine Field is largely built out,” Marysville Mayor Jon Nehring said. “We’ve got a lot of infrastructure but what we need are some incentives to let us compete with other states for some of these jobs.”

Taxes on existing property would continue to be paid, so the program wouldn’t decrease revenues for cities and county, Nehring said. They won’t collect taxes on new construction for a while, but, “the idea is if there’s no construction, there’s no taxes anyway,” Nehring said. “Having nothing on nothing equals nothing.”

It took support from state, county and city leaders to move the exemption through the levels of government, starting with the state bill and going on to the county and cities, Arlington Mayor Barbara Tolbert said.

The city councils in Arlington and Marysville are set to vote in April on allowing the tax break. They were waiting until the state and county passed their rules so the cities’ regulations would match.

“Before we pass it and go out and market this to businesses, we wanted to make sure we had certainty on what we could tell them,” Tolbert said.

Klein said the exemption could save businesses $10,000 or more a year, depending on the size of what they build.

“Maybe that’s enough to encourage a company to build here instead of in Tacoma or something,” he said. “It’s too soon to tell, but we have so much property available, in Arlington and Marysville specifically, that it’s potentially a large amount of success for these businesses.”

The next step is getting the Arlington-Marysville Manufacturing and Industrial Center formally designation by the Puget Sound Regional Council. The designation isn’t needed for the tax exemption, which would take effect as soon as the city councils vote on it. However, it would help the cities land grant money for road and technology improvements. Nehring hopes to have the designation by the end of the year.

“In Marysville, we’ve developed a lot of commercial, a lot of opportunities to shop locally, but now the next part is making sure people can work here,” Nehring said.

There are other projects in the works around the industrial center to draw new employers and help existing businesses, Tolbert said. The state has set aside $39.3 million to widen Highway 531 in the next decade and a new Arlington Valley Road is planned to better connect Arlington’s industrial area to Highway 9. There’s also a focus on manufacturing education at local schools and job placement agencies. That creates a pipeline of skilled employees to fill new jobs, Tolbert said.

Many skilled workers already live in North Snohomish County, Klein said. They need jobs that pay enough to support their families.

“The bottom line is that we want job growth in North Snohomish County specifically,” he said. “The reason why is we have the infrastructure in place to handle that growth and an educated workforce in the north end that’s ready to take these jobs on. It’s really another opportunity to work where we live.”

Kari Bray: 425-339-3439; kbray@heraldnet.com.