Economic development faces budget crunch

EDMONDS – In perhaps the most difficult budget year in recent memory, one of the decisions facing Edmonds City Council members is to what extent to fund economic development – if at all.

“There’s a lot of folks competing for money in an environment in which there isn’t much money available,” said City Council president Dave Earling.

Three groups in the city perform duties related to drawing customers, tourists or new businesses to Edmonds: Team Edmonds, under the purview of the Greater Edmonds Chamber of Commerce; the Chamber itself, and the Edmonds Alliance for Economic Development.

Two of them, Team Edmonds and the Alliance, are asking the city for a total of $45,000 between them. The Snohomish County Economic Development Council is expected to ask Edmonds for a contribution as well, said City Council president Dave Earling. The city has contributed $10,000 each of the past two years.

The city is expected to approve the budget Dec. 3 or Dec. 10, Earling said.

Team Edmonds was created in 2001 by a group of businesspeople, property owners and others interested in economic development, said Chamber director Chris Guitton. They had met in 1999 to try to build on the momentum of the Hyett-Palma economic development visioning study done earlier that year, and because they were frustrated with the slow pace of such efforts in the city, Guitton said.

“It was people wanting to do things,” he said.

The group began fundraising in earnest this year and has raised $60,000 so far in mostly private funds, Guitton said. The organization did receive a match from the Port of Edmonds that so far has totaled nearly $13,000, Guitton said. With the money, Team Edmonds has purchased a series of ads that will appear on 90 buses in Everett, Kirkland, Bellevue and Seattle by the end of December. Each ad is based on the phrase “Feel free to … in Edmonds,” with words such as “have fun,” “window shop, sugar plum” and “paint the town” filling in the blank, and an accompanying photos.

Team Edmonds is asking for $25,000 from the city for 2003. Given the budget situation, Guitton expects it will get between zero and $5,000. He said he expects that the organization will still be able to raise enough money to carry on its functions if it doesn’t receive the city money, just not to the same extent as if it does.

The Port of Edmonds has budgeted $40,000 for economic development for 2003, but the Port Commission has yet to decide how it will be allocated, said port director Chris Keuss. That decision is expected Dec. 9, he said.

The Edmonds Alliance for Economic Development was formed in 1995 as a coalition of businesspeople and property owners to promote the city and recruit businesses. It grew into having a paid full-time director paid for by annual funding from a combination of the city, port and Chamber.

But the Alliance’s tangible accomplishments in the early years were few, and discontent with the organization among officials and businesspeople grew. In recent years the Alliance has focused on studies, the latest focusing on the potential benefits of city code changes for parking, increased building heights and higher density in downtown Edmonds.

Any change in code allowing for higher buildings downtown would be controversial, and Council member Richard Marin – who along with Council member Jeff Wilson is reviewing the Alliance’s report – said it’s unlikely to be approved.

“I really don’t believe there are four votes on the council to do that,” said Marin.

The Alliance’s proposed workplan for 2003 – if it receives funding – steers clear of the code changes and instead focuses on using information as a business recruiting tool.

Under the plan the Alliance would do three things: develop a data base of facts about Edmonds to dispense to interested businesses; create a full business recruitment plan, with the whole city in mind, including Highway 99; and survey how other cities pursue economic development.

Marin said the proposed plan is a better fit for the Alliance’s purpose. “What they brought to the council was very encouraging to me,” Marin said.

City Council member Lora Petso questioned Alliance director David Peterson at an Edmonds City Council meeting in October. Petso suggested that the same work could be done by volunteers. Peterson, one of two paid staff members for the Alliance, said answering that question is the object of the third part of the Alliance’s upcoming work plan – whether economic development is best undertaken by citizens, government or consultants.

Peterson is a professional economic development consultant.

Council member Deanna Dawson asked Peterson if there isn’t a conflict of interest in a paid organization studying whether it should continue to exist. Peterson responded that if the results of the study mean that the Alliance would fold up its tent, then so be it.

“We don’t feel any sense of nervousness about this,” he said.

The Alliance’s proposed workplan for 2003 was shaped in part by a reminder from Edmonds city attorney Scott Snyder that the Alliance’s report on code changes could be construed as the city paying an organization that then turns around and lobbies the city to take one position or another.

“I had concerns regarding the Appearance of Fairness doctrine,” Snyder said. If the Alliance receives funding for 2003, its contract with the city will include an anti-lobbying provision, he said.

As the Alliance was being formed in 1995, the Edmonds Visitors Bureau folded. It was expected that the Alliance would pick up the bureau’s tourism promotion function, Chamber director Guitton said. That didn’t happen, and a few years ago the Chamber assumed the role. The Chamber now receives some of the money from the city’s hotel-motel tax, which by law can be used only tourism promotion, to the tune of $26,000 in 2002 and a recommended $31,000 in 2003, Guitton said.

The Chamber has used the money to develop a series of promotional rack cards and street maps distributed at various places along the I-5 corridor, Guitton said. It has also purchased advertising in the November edition of “CEO” magazine and the December edition of “Seattle” magazine, and created tourism brochures and a calendar of city events, he said.