As the dust settled from the tumultuous appointment process of a new councilmember, the Lynnwood City Council resumed business as usual at its April 7 work session. With major decisions on city projects scheduled within the next two months, the council dove head first into discussion on topics such as property taxes, annexation and housing. 

Tax increment financing

In 2024, the city began looking into the feasibility of using tax increment financing (TIF) to pay for city projects. Tax increment funding was passed into state law in 2021 and allows local governments to pay for public projects using property taxes from a designated area as valuation increases. 

If the council approves the idea, TIF could potentially generate around $24 million for city projects. According to city documents,  funding is proposed for  the following projects, which are expected to cost around $66 million–: a project to build two new streets, 194th Street and 38th Ave., 42nd Ave. Phase 1 and the City Center Park. 

When governments establish a tax increment area (TIA), it “freezes” the existing property valuation and continues to deliver property taxes to the tax districts in that area. As property value increases, the city collects those additional property taxes to fund its projects, said Bob Stowe, founder of Stowe Development and Strategies – a consulting firm the city hired to explore the feasibility of implementing TIF. 

The proposed 68-acre tax increment area (TIA) lies to the west of where 196th Street Southwest connects to I-5. According to Stowe’s presentation, the current assessed value is $177 million. 

Funds collected through this model can only be used to pay for public improvement projects or to pay back bond issues for public improvements, Stowe told the council Monday. State law excludes state taxes and voter-approved levy funds from being collected by the city under tax increment financing. 

Additionally, the city is limited to two, non-overlapping tax increment areas. The values of these areas can not exceed $200 million or 20% of the city’s total assessed valuation at the time of an ordinance adoption, whichever is less, Stowe said. 

A study done last year by Stowe Development and Strategies and ECOnorthwest found that it was feasible for Lynnwood to establish a tax increment area in the future, according to city documents. Under the direction of the City Council’s  Finance Committee, city staff partnered with these consultants to submit the project analysis to the state treasurer. The treasurer’s office has a May 12 deadline to complete its review – and the city must approve a TIF ordinance by June 1 to use this funding model starting in 2026. 

Annexation of the former Alderwood Middle School property

Edmonds School District is in the process of building a new middle school on the land where Alderwood Middle School used to be. The property isn’t within Lynnwood’s borders, sitting in an unincorporated portion of Snohomish County. 

District Director of Capital Projects Taine Wilton told the council the school district believes it would be beneficial for Lynnwood to annex the property,That’s because Lynnwood’s development processes would allow the district to complete construction faster than the county’s regulations would allow. 

There’s a need for a new middle school following a vote in 2024 to move sixth graders to middle school for the 2028-29 school year. (Edmonds School District middle schools currently include only seventh and eighth grades.) Annexing into Lynnwood makes it more likely for the district to keep its promise to voters to have a new middle school ready for students within that timeframe. 

The county has reviewed the district’s petition for annexation, and now it’s up to the council to decide whether to annex the land. A vote is scheduled for the April 15 council meeting. 

Project labor agreements and Community Workforce Agreements

The city is considering making it a requirement to include pre-hire workforce agreements in all city projects. These agreements allow construction site owners to establish pre-determined wage standards and other conditions to be included in each contractor’s bid before the project begins. 

Daniel Villiao – CEO of Intelligent Partnerships, who previously worked in labor relations for the Trump and Biden administrations – gave the council a presentation on workforce agreements and how the city could use it as a tool to streamline its projects, among other benefits. 

While workforce agreements often work in tandem with local unions, it is not a requirement to do so, Villiao said. 

Pre-labor agreements are “administrative reporting processes,” not “construction deliverables,” Villiao told the council. The primary focus is compliance tracking, ensuring all employers adhere to the standards outlined in the agreement throughout the entire process. 

Councilmember George Hurst was the one to suggest the city implement these agreements, stating it could be a way to bring more high-wage jobs to Lynnwood. 

“[Lynnwood has] a high poverty level and we also have a lot of service jobs that just pay minimum wage,” Hurst said Monday. “So any way we can bring in and encourage higher-wage jobs into our city would be wonderful.” 

Proposed fire sprinkler and landscaping code updates

City Planning Manager Karl Almgren was joined by two deputy fire marshals from South County Fire to talk about ways the city could encourage fire safety while the city undergoes rapid growth. 

Based on a recommendation from South County Fire, city staff proposed Lynnwood require fire sprinklers in all new residential construction, including single-family homes. Currently, Lynnwood’s code only requires sprinklers in large residential buildings over over 5,000 square feet. 

Lynnwood is in the process of a massive restructuring of its development code – drafting a new Unified Development Code to condense and clarify the city’s development regulations and requirements. The new code is being designed to ensure that the city complies  with the state’s new housing laws requiring more density to address the state’s housing affordability crisis. 

“As housing gets tighter with middle housing, that increases the chance that housing is going to catch fire when another one does,” South County Fire Deputy Dale Rodman said. Requiring sprinklers in all new development would decrease the likelihood of widespread house fires as housing density increases in Lynnwood, he added. 

Almgren also introduced the council to the concept of a “green factor” in its new development code. The green factor is a score-based code system, assigning a higher “score” to developments with green landscaping, such as water-efficient lawns or tree retention. 

The council faces a June 30 deadline to approve its Unified Development Code, as required by state law. City staff scheduled an online open house for April 29 so residents can learn more about the code update and notify staff of any questions or concerns. More information on this event will be released in the next few days, city spokesperson Nathan MacDonald said.

In other business, the council interviewed Kresha Green, an applicant for the city’s Human Services Commission. 

Additionally, the council reviewed its Commute Trip Reduction Plan, which aims to reduce the number of single-rider vehicle commutes in the city. Proposed changes require employers to provide new resources and commute options for their employees. 

The city also received an update on the Precision Tune Auto Care property it purchased in 2020 for its 196th Street improvement project. That project is now completed, and the city ended up not using the property.

Since the property was previously home to a gas station and auto shop, the soil is contaminated, according to a city study. Cleaning the property to use for parks or development purposes would be intensive and expensive, Lynnwood Economic Development Manager Ben Wolters told the council. 

As an alternative, city staff are proposing the council sell the land as surplus property. The council is scheduled to vote on the matter April 15. 

The full April 7 meeting can be watched on the city’s website.

— Contact Ashley at ashley@myedmondsnews.com.