Public market LTAC funding pushed to business agenda after committee debate over eligibility

Committee members debated whether the Federal Way Public Market’s $26,000 request fits the lodging-tax (LTAC) legal standard before deciding to move the LTAC recommendation to the Aug. 12 council business agenda for fuller review. Economic development staff explained the LTAC recommendation was for $16,500 from the 2025 budget and $9,500 from 2026, and that the public-market applicant sought $26,000 to support community outreach and marketing. Cindy Laws, representing the Federal Way Public Market, described outreach activities, vendor recruitment and a proposed business-plan scope and said the total business-plan effort could cost roughly $200,000. Several council members and the city attorney raised concerns about LTAC eligibility. One committee member said the application appeared to “stretch the LTAC requirements,” noting the proposal’s marketing and canopy purchases seemed aimed at supporting a nonprofit-operated market that may not generate “heads and beds” (overnight visitors) directly. Director Groom and legal staff noted LTAC rules can be interpreted broadly (tourism marketing, events or operations of tourism-related facilities) but that ambiguity exists and that the council could change the funding source if it preferred. Councilmember Jack Wash said he would not support the LTAC allocation in committee, though he supported funding the project from other city funds; other members urged moving the item to the business agenda to allow the full council and city attorney to examine funding options such as reallocated ARPA funds or economic development budgets. Chair Huang Tran moved to forward the LTAC recommendation to the Aug. 12 business agenda for council consideration; the motion passed 3-0. Committee members did not finalize a funding source; staff were directed to return the item to council business with recommended options and supporting legal analysis.