Lynnwood Council explores revenue options, talks Crisis Care Center at Sept. 17 meeting

• The Lynnwood Crisis Care Center is set to open in early 2026 under the operation of Sea Mar Community Health Centers, providing 16 recliners for stays of up to 23 hours. 

• The council reviewed a study showing that denser, mixed-use development generates far more property tax revenue per acre than single-family homes, which could contribute to a city’s fiscal health. 
• Staff explored new revenue generating options, including increased property taxes and utility rates and introducing a B&O tax. 

The Lynnwood City Council received updates Sept. 17 on the long-delayed Crisis Care Center, reviewed a study on land productivity and examined the city’s 2025-26 budget.

Crisis Care Center 

After years of setbacks, the Lynnwood Crisis Care Center is now expected to open in early 2026. Construction wrapped up in 2024, but the facility has sat vacant due to funding challenges. The center, located next to the Community Justice Center, will provide short-term stabilization for mental health and substance use crises.

Sea Mar Community Health Centers has been selected as the operator, bringing 45 years of behavioral health expertise across 66 statewide locations. Senior VP and Chief Behavioral Health Officer Claudia D’Allegri said the facility will begin with a 16-recliner, 23-hour stabilization model, averaging an 18-hour stay. A 16-bed unit for longer-term stays is planned for late 2026.

The $19.9 million project was fully funded through state and county grants, including $15 million from the state capital budget, $3 million from Snohomish County and $1.9 million from the Department of Commerce. In addition, the state allocated $39 million to support operations not covered by Medicaid. Lynnwood will not be responsible for operating costs, Sound BH-ASO Executive Director JanRose Ottaway Martin said. 

“This is a game changer,” Lynnwood Police Chief Cole Langdon said, noting the facility will ease pressure on emergency departments by providing “laser-focused and appropriate treatment.”

According to city documents, construction of the center was entirely funded through state and county grants: 

Martin praised Sea Mar’s experience. “You will be hard-pressed to find an agency that has a fuller understanding of the behavioral health continuum in Washington,” she said.

Land productivity

Councilmembers also heard a presentation from Lynnwood Community Planning Manager Karl Almgren and Chris Collier of the Housing Authority of Snohomish County on how land use impacts fiscal health. Staff presented findings on an analysis from consulting group Urban3. Using the group’s “value per acre” model — described as a “miles per gallon” for cities — the data showed that denser, mixed-use development produces significantly higher property tax revenue per acre than single-family housing or large commercial parcels.

For example, townhomes in Snohomish County generated $5.75 million per acre in property taxes, compared with $549,445 per acre for single-family homes.

Council President Nick Coelho said Lynnwood’s suburban model leaves the city cycling through budget shortfalls. “Year after year we’re asked to cut services or raise taxes, and it seems like something is broken,” he said. “As we densify, we are creating a more fiscally resilient city — and there’s urgency to that.”

Councilmember Patrick Decker voiced skepticism, arguing that local budget struggles suggest densification hasn’t improved the city’s finances. “The city is not the land,” he said. “The city is the people and what the people do with the land.”

Budget outlook

Finance Director Michelle Meyer presented updated budget projections showing Lynnwood facing a sharp downturn. Revenues for 2025-26 are now estimated at $134.5 million, down from earlier expectations, while expenditures sit at $146.3 million – resulting in an $11.8 million gap. 

Compared with January’s approved budget, revenue estimates dropped across the board:

• Sales tax: From $65.3 million adopted in January to $57.5 million, according to estimates from Sept. 17. 
• Permit fees: Adopted projections fell from $10.2 million to $5 million 
• Photo enforcement fines: From $20.3 million to $12.1 million
• Inmate housing: From $2.8 million to $1.5 million

To balance the books, Meyer proposed $11.7 million in spending cuts through 2026 and outlined potential new revenues. Options include tapping $3.8 million in “banked capacity” for property taxes, which could raise the average household property tax bill from $424 to $631 annually. A new Business and Occupation tax and a 2% utility rate increase — expected to generate $800,000 per year — are also on the table.

Parks and Recreation Director Joel Faber said despite department cuts, core services like the Lynnwood Senior Center will continue at current levels. But the city is consolidating staff roles, reducing front-desk positions and selling four vehicles to cut costs. “We just can’t afford the level of fleet we had,” Faber said. Annually, the city puts $14,000 per vehicle in a fund to keep up with maintenance and replacement. Even if the department suspended these payments, it would lead to higher catch-up costs in the future, he said. 

View the full meeting agenda here. 

A full recording of the meeting can be found on the city’s website.

— Contact Ashley at ashley@myedmondsnews.com.