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Federal Way committee backs resolution to extend interfund loan for former Target property

FedRAC (Federal Way Finance & Economic Development Advisory Committee) · January 28, 2026

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Summary

FedRAC voted to forward a resolution authorizing a two‑year, interest‑only interfund loan (paying internal interest at ~3.8%) for the former Target property to document intent for auditors and provide time for the buyer (Trent Development) to complete a planned purchase by Jan. 2027; staff outlined options if the sale falls through.

Federal Way’s finance director presented a detailed recap of the city’s ownership and financing history for the former Target property and the committee voted Jan. 27 to forward a resolution extending an interfund loan for two years.

Finance Director Steve Groom summarized the chronology: the city bought the property in 2013 for approximately $8.2 million; a partial sale in 2017 left roughly $4.8 million outstanding on city records. Groom said the city has an executed purchase agreement with Trent Development for a $10 million purchase by Jan. 1, 2027, which, if completed, would allow the city to extinguish the interfund loan. Because the prior interfund authorization expired in November, staff proposed extending the interfund loan on an interest‑only basis for two years and paying interest internally at the city’s current portfolio yield (about 3.8%), producing an estimated annual interest payment of roughly $184,000.

Groom reviewed alternatives if the sale fails: seek external financing (example bank quotes near 4.1%) or pursue bond financing or resale of the property. Committee members asked for detailed historical accounting of the property transactions, legal costs and any boundary adjustments; staff agreed to return with more precise records. The committee moved to forward the resolution to the Feb. 3 consent agenda; the voice vote carried.

Next steps: the resolution will be considered by the full council on Feb. 3. Staff will supply a clearer transaction history and any supporting legal/closing documentation requested by council members.