The Port and the City estimate that they will make an investment in 2006
dollars of more than $335 million over 20 years. The Port and City have
explored sources for those funds that primarily depend on revenues generated
from the incremental increased value of the development, while not creating
any long-term dependence on either the City’s or the Port’s the general tax
base.
The Port and City are building long-term financing models that will utilize
short and long-term debt to bridge gaps between urban investment costs to
stimulate development and long-term revenues. These investments will
stimulate substantial investment by the private sector.
The City of Bellingham has committed to construct necessary public infrastructure on the site and create a regulatory framework that attracts private investment. The Port of Bellingham has committed to undertake the cleanup of the property in its ownership and in the Whatcom Waterway, to build all marine infrastructure and to provide the City at no cost with the land for parks, public space and rights of way.
The financial modeling conducted during the summer of 2006 required that some land-use assumptions were made about the density and timing of development. Here are some of the financial modeling assumptions:
It also projected the development would occur over 20-30 years. Actual land-use decisions about density and development will occur during the Master Planning process. The economic model numbers are simply a set of shared assumptions that allowed the Port and City to project their costs and revenues.
To ensure the City and Port financial modeling during the summer of 2006 was based upon the same understanding, both governments agreed to show the costs and revenues in 2006 dollars. Of course, in reality, future inflation will likely increase those costs and revenues. Both governments also agreed to show what they anticipated were the actual costs, without adding in the extra costs of borrowing money, using bonds or other long-term financing options. Keeping the model more simplified allowed the Port and City to gain a better “big picture” understanding of the costs and revenues from this project.
Completing the financial modeling also required that the Port and City make some assumptions about how much of the property would be kept in public ownership and how much would be sold to the private sector. The Port and City are committed to keeping the shoreline areas in public ownership, whether it is being used for parks and trails or water-dependent businesses. Recognizing the Port, the City, Western Washington University, the Bellingham-Whatcom Housing Authority and the TerrAquarium as public uses, approximately 151 acres or 68 percent of the 220-acre site will remain in public ownership.
Local Infrastructure Financing Tool (LIFT) is a new form of tax increment financing used to pay for a portion of the public improvements within the Revenue Development Area (RDA) in order to promote economic development.
