City Center tax-increment finance study shows potential $24M TIG investment to support $66M of infrastructure; council briefed on schedule and homeowner impact

City Council heard an update April 7 on a feasibility study for using tax increment financing (TIF) to help fund public infrastructure in Lynnwood’s City Center.

Economic development staff and consultant Bob Stowe (CoDevelopment Strategies) described a draft analysis submitted to the state showing the tool could help finance part of three priority projects — improvements near 190th/4th and 30th/8th, a new 40th Avenue extension (Phase 1), and a roughly $10 million City Center park — by capturing property tax revenues generated by new private development inside a defined TIF area.

Why it matters: TIF can accelerate infrastructure needed to spur private development, but state law constrains the tool — including limits on overlapping areas and a cap on assessed valuation — and the revenues are generated only if private development occurs. The city’s draft study estimates the TIF would support about $24 million of the roughly $66 million in identified infrastructure cost under the moderate scenario. The analysis also modeled baseline and conservative development scenarios and accounted for interactions with Washington’s multifamily tax-exemption programs.

What the study showed

- Area and projects: The proposed TIF area covers roughly 68 acres in City Center. Stowe outlined three projects included in the analysis: a 190th/4th/30th circulation project (city share modeled at $10 million of bond funding), 40th Avenue Phase 1 (another $10 million), and City Center Park (modeled at $4 million). The consultant said the TIF-related portion would total $24 million toward the combined $66 million program.

- Revenues and scenarios: Stowe presented three development scenarios (baseline, moderate, conservative) and modeled the effect of different levels of multifamily tax-exemption usage. Under the moderate scenario the analysis shows nominal tax‑increment receipts accessible for debt service over 25 years in the low tens of millions (the report cited about $46 million of increment in present‑value modeling). Stowe explained the county and junior taxing districts receive an offset mechanism in state law sometimes called a "no-harm" provision designed to make them whole over time while allowing the city to collect increment for the interval specified in the ordinance.

- Homeowner example: Using an example home assessed at $632,000 (2025), Stowe presented an illustrative household impact for the modeled scenario. He said the city's modeled share translated to roughly $99 over 25 years (~$4/month) for that example, while combined allocations across multiple taxing districts could total higher amounts spread across those districts (Stowe characterized the combined figure in the presentation as approximately $580 over 25 years, or about $22/month when aggregated across districts).

- Legal and scheduling constraints: Stowe noted statutory rules — for example, jurisdictions may have no more than two active increment areas at a time and those areas may not overlap; a single area cannot exceed specified assessed-value thresholds at adoption; public improvements must begin within a statutory timetable (often five years) and total increment capture typically cannot exceed 25 years. He outlined the state review process (the draft analysis was submitted to the Office of the State Treasurer with a 90‑day review window) and a local schedule that would include public briefings and potential ordinance adoption later this spring if council chooses that path.

Council questions and outreach

Council members pressed for clarity about whether creating a TIF area commits the city to issuing bonds; staff and consultants repeatedly said designation alone does not pledge the city to debt — bonds would be a separate decision tied to demonstrated revenue and city bonding strategy. Stowe and Ben Walters (economic development manager) said staff has been briefing junior taxing districts (hospital district, fire district, library and others) and emphasized outreach is ongoing; several junior districts asked detailed questions about levy impacts and timing but have not signaled opposition, the presenters said. City staff also noted including the Enzo (under‑construction) parcel by meeting the statutory deadline could increase initial increment.

Next steps

Stowe and staff asked council to consider whether to proceed toward ordinance adoption by the June 1 legislative deadline (which affects county assessment allocations); if council favors pursuing the option, staff plans two public briefings and a return to council for ordinance consideration and public hearing. No action was taken at the work session.