HomeMy WebLinkAboutCity Council Committees - Economic Development Corporation - 02/06/1986 (3) CITY OF KENT
• ECONOMIC DEVELOPMENT CORPORATION
February 6, 1986
The regular meeting was called to order by Chairman Tim Leahy at 7:30 a.m.
Present: BOARD MEMBERS: Tim Leahy, Chairman of the Board
Tom Bailey
Walt Ramsey
OFFICERS: Steve DiJulio, General Counsel
Marie Jensen, Secretary of the Board
MINUTES OF DECEMBER 2, 1985
Bailey moved to approve the minutes of the Special Meeting held
December 16, 1985. Ramsey seconded, and the motion carried.
REYNOLDS METALS COMPANY
A letter has been received from Cynthia Weed of Preston, Thorgrimson, Bond
Counsel for Reynolds Metals Company, along with a Resolution to authorize the
execution and delivery of a first supplemental indenture in connection with
the $750,000 Reynolds Metals issue. DiJulio noted that he had reviewed the
matter and recommended that Resolution 1986-42 authorizing said execution be
adopted. Ramsey so moved. Bailey seconded, and the motion carried
SEATTLE/KING COUNTY NEWS BUREAU
letter has been distributed from Gerald Hoeck of the Convention and
Visitor's Bureau requesting that the Board consider a donation of $1 ,000
toward a proposed Seattle/King County News Bureau. It was determined that the
details of the proposal would be distributed and that this item would be
considered at the next meeting.
NEWS ITEMS
A c ipping from the Daily Journal of Commerce was distributed which pointed
out that in King County the City of Kent was second only to Seattle in the
amount of IRBs issued during 1985. Seattle issued 16.7 million dollars, Kent
issued 12.71 , Redmond 5.23 and Algona 2.2 million.
Bill Tonkin of Roberts, Shefelman, sent a report entitled, "Exempt Small Issue
Industrial Development Bonds Under the Proposed Tax Reform Act of 1985."
DiJulio clarified for Leahy that there was no change in the City's liability
or obligations. He noted that ceiling allocations will be a significant issue
and that the unavailability of Tax Exemptions would make these bonds less
attractive to the banks. Bailey noted that with the limitation of funds, the
major cities will have the inside track with the State and that economic
development corporations will be hard pressed. He suggested that we might
look to the future to consider what we might do to encourage and support
industry and developers even if issuance of industrial revenue bonds are not
part of that program. DiJulio noted that we would be limited as an economic
development corporation under the State act and that a coordinated effort
would be discussed at the Council level . DiJulio distributed an article from
the Wall Street Journal , dated February 5, briefly describing the tax exempt
• financing.
U.S. BUREAU OF ENGRAVING
DiJulio noted a letter from Seattle/King County Economic Development Council
concerning the possibility of the U.S. Bureau of Engraving locating a printing
plant in the Kent/Auburn area. DiJulio noted that this type of operation,
while providing employment, did not pay property taxes, would not be subject
to the City's permit processes, or L.I.D.s, and therefore may not be in the
best interest of the City. Bailey concurred, pointing out that for an
example, the post office on East Hill lacked adequate parking and caused
traffic congestion. It was pointed out the proposed printing plant would
require between 50 - 100 acres. DiJulio suggested that other comments should
be withheld until it is determined whether the plant would actually be located
within the City of Kent.
FINANCE
Seattle/King County Economic Development Council
DiJulio noted that the annual renewal contract had been received and that it
was basically unchanged, with Kent's contribution shown as $2,698 for 1986.
Bailey moved to approve the payment. Ramsey seconded, and the motion carried.
Financial Statement
The first financial statement for the corporation was distributed by DiJulio.
The statement shows the corporation's expenses and revenues from its inception
through 1985 with a projection for 1986. He noted that he would ask the
Corporation Treasurer, Tony McCarthy, to attend the next meeting to explain
this statement. He also noted that he would prepare correspondence for three
issues which closed late in 1984 relative to the annual debt service which
would be different from that which was identifi-ed in their issues. At that
time, the annual fee was 2/10 of 1 percent of the debt service. Now, under
the change in the law, this has been modified to 1/8 of 1 percent of the
outstanding principle.
Bailey asked what the anticipated income would be. DiJulio noted that an
average of $10,000 to $15,000 in service fees should be received for the next
ten years. Adequate reserves will have to be maintained to provide liability
coverage for the Board and for the expenses of General Counsel and Corporation
Secretary services. He opined that we should be in a position to continue to
be engaged in economic promotion. Bailey noted that some evaluation would be
in order and DiJulio stated that it might be that the Board would only meet
twice a year in the future to deal with conversions and financial statements.
He noted that he could foresee this Corporation as the financing conduit and
the Board might work with another consortium or group or organization, such as
the Council , the Mayor or the Planning Department. He explained that this
Corporation may not be the chief agency in the future due to the limitations
of our charter and limited staff. The charter could be amended or this
Corporation could contract with other agencies. Under present conditions the
Corporation cannot, for example, direct the Planning Department to organize a
program to attract certain kinds of industries. However, whatever is done in
• that area would impact this Corporation. This kind of direction might be in
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the City Administrator's office. However, the City Administrator has no
direct relationship to this corporation other than to report and to advise.
Business and Industry Show
i u io note tat there was no concrete support as yet for the 1986 Business
and Industry Show. It was noted that the corporation had supported this
endeavor last year in the amount of $3,725 which included the cost of booth
space. Leahy noted he would be willing to support the fair to that level
again.
The meeting was adjourned at 8:10 a.m.
R S
SECRETARY OF OHBOARD
0024C-01C
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`i- CEeIVED
0 1985
The Emerald City
December 5, 1985
Honorable Isabel Hogan
Mayor , City of Kent
220 Fourth Avenue South
Kent , WA 98032
Dear Mayor Hogan :
The Port of Seattle is taking the lead on a very exciting project
that we would like Kent to join us in sponsoring.
Enclosed is a description of the proposed SEATTLE/KING COUNTY
NEWS BUREAU. We think we have hit on the perfect way to promote
this area as a tourist attraction . In a joint public-private
effort , we propose to establish a fully-functioning news bureau
that would disseminate timely , lively information about what
there is to see and do in Seattle/King County.
Press releases , feature stories and photos would go to regional
and national newspapers , magazines , radio and T.V. stations . The
first phase of this effort would be timed to coicide with
Vancouver's EXPO 86. If successful, the NEWS BUREAU would
continue indefinitely.
So far , the Port , the City of Seattle, King County, the State of
Washington and several major private businesses have expressed
their interest in this project and have approved funds to support
it giving us a financial base today of $ 140 ,000. We request that
you consider a $1 , 000 contribution to the News Bureau .
As you can see from the proposal , we want to promote and
publicize every significant activity, event , tourist attraction
and personality in the County. We hope to bring statewide ,
regional and perhaps even national attention to our area.
Seattle-King County
Convention and Visitors Bureau
1815 Seventh Avenue/Seattle,Washington 98101/(206)447-7276
Page Two
We think this would be the most cost-effective--and most credible
way--to attract new visitors to our region.
If you have any questions about this proposal , please contact
Fred Burrow at the Seattle-King County Convention and Visitors
Bureau. His phone number is 447-4230. Someone from Fred' s
office will contact you within the next week to confirm your
support.
Sincerely,
• Gerald A. Hoeck , Director
Office of International Tourism
Port of Seattle
GAH: cm
Enclosures
•
PROJECT: SEATTLE/KING COUNTY NEWS BUREAU
t
S SBR
Page 2
SEATTLE/KING COUNTY NEWS BUREAU
Program Outline
Project Summary. Seattle/King County has been presented
with a tremendous opportunity through EXPO 86 to add to its
growing reputation as a first-class tourist/convention
destination . To capitalize on that situation, a plan to
establish a fully-functioning NEWS BUREAU to "tell our
story" through the news media has been developed by an ad
hoc planning committee .
The proposed joint public-private venture would result in
low-cost , high-impact results for all parties involved.
Overview
Purpose . The News Bureau' s primary purpose would be to
develop and disseminate timely , lively news and information
about Seattle/King County and the attractions they offer to
tourist and other interested parties , most notably
the travel trade (such as tour companies and bus companies ) .
Using the cost-effective techniques of public relations ,
including media relations , publicity , feature story
development , news/lifestyle interviews , the News Bureau
personnel would be able to :
1 . Greatly expand awareness of Seattle/King County as a
destination ; and
2. Position the area as a "must visit" .
Timing. Phase I (November 1985-October 1986 ) .
The first phase of the Seattle/King County News Bureau is
timed to coincide with the promotional period of EXPO 86.
News Bureau activities would be designed to complement the
publicity efforts of the Department of Trade and Economic
Development on behalf of the State ' s involvement with the
exposition .
If successful , the program would continue to function as a
cornerstone of the marketing communications effort conducted
on behalf of the City of Seattle and King County.
s
SBR
Page 3
Structure/Funding Sources . The Seattle/King County News
Bureau would be funded with equal annual contributions from
several sources :
FUNDING SOURCE ESTIMATED CONTRIBUTION
City of Seattle $ 301000
King County 30 , 000
Port of Seattle 30 , 000
State of Washington (Matching funds) 30 , 000
Private Sector/Other municipalities 30 ,000
TOTAL $1501000
The Seattle-King County Convention and Visitors Bureau would
administer the program, working in conjunction with the
Bureau ' s advertising and public relations firm. An advisory
board comprised of representatives from the major funding
. sources would approve program development and monitor
progress of the News Bureau .
Tactics
The News Bureau would place favorable stories in the news
media about Seattle and King County.
Media. . . . .Print
Consumer newspapers
Travel/business trade newspapers
Consumer magazines
Travel/business trade magazines
Travel "in-transit" publications
Newsletters (AAA, Chambers of Commerce and others)
Travel agent internal/external communications
Media. . . . .Electronic
TV/Radio news and news features
TV/Radio interviews (news and non-news)
TV/Radio lifestyle profiles
TV/Radio travel features
• TV/Radio targeted features : seniors , women , youth, etc .
i
SBR
Page 4
Stories would range from three-paragraph announcements of
specific news items to full-blown, full-color news stories
and features on events , places , people, attractions and
businesses that make Seattle/King County such a wonderful
place to visit .
Whenever feasible , releases aimed at the print media would
be accompanied by quality photographs illustrating everthing
from the Des Moines Water Festival to the Seafair Hydroplane
Race to the arrival of a major art exhibition in downtown
Bellevue.
Markets
Target Markets : California
Oregon
Washington State (outside King County)
Heavy Emphasis : Idaho
is Montana
Alaska
Nevada
Utah
Arizona
Less Emphasis : Other western states
Midwest , East , South
Foreign : Pacific Rim and Scandinavian countries
PROGRAM EVALUATION
Based on the coverage generated by other similar civic news
bureaus (such as Las Vegas ) , the Seattle/King County News
Bureau advisory board would establish a goal for ( 1 ) stories
placed; (2) radio and television coverage; ( 3) inquiries
generated . Every major activity would be carefully
monitored through the use of print and electronic clipping
services to determine results and impact .
• 1
t
SBR
Page 5
BUDGET
i SBR
Page 6
PRELIMINARY BUDGET
Personnel (based on 12-month , salary-only contracts )
1 half-time supervisor/administrator $ 27 , 500
1 full-time writer/publicist 32, 000
1 half-time publicist 17 ,000
1 photographer (two-thirds time) 20 , 000
1 full-time secretary 15 ,000
SUBTOTAL $ 111 , 500
Media Tour to Oregon & California
Travel expenses 8 , 000
Office Supplies/Postage 8, 000
Photography Supplies 6, 000
Hospitality/promotional hosting for media 7, 500
Telephone/Courier Svc/Delivery ( est . $500/mo) 6 , 000
Clipping Service (est . $250/mo) 3 , 000
TOTAL $ 150 . 000
• SBR
Page 7
SITUATION ANALYSIS
SBR
Page 8
SEATTLE/KING COUNTY NEWS BUREAU
Situation Analysis
Prepared for Ad Hoc Planning Committee for News Bureau by:
Jerry Hoeck , Port of Seattle
Present attendance projections for Expo 186 call for 5 million
visitors making 13. 75 million visits to the site .
Expo 186 officials say they expect 1 .2 million of those visitors
to come from the United States--with 500 , 000 from Washington
State , another 600 , 000 from California and Oregon , and the
remaining 100 , 000 from all other states . Obviously , they expect
the cities and towns along the I-5 corridor to generate the
vast majority of the U.S, customers and they are targeting their
• advertising and promotion in those markets .
Based upon this marketing pattern , Seattle and King County stand
to gain the most in stop-over tourist business if the attractions
of our area are pre-sold to potential Expo visitors prior to them
making their final travel decisions.
It should be pointed out , however , that all of the British
Columbia advertising in California and elsewhere (which begins in
September , 1985 ) will urge people to plan a British Columbia
vacation in connection with Expo 86. The emphasis is not merely
on Expo . They expect visitors to spend 3 . 5 days in Vancouver and
7 more days touring the province .
Therefore , if Seattle and King County do not do a pre-selling job
in the next 9 months , those hundreds of thousands of cars
carrying Expo-bound customers can easily pass through Seattle at
50 mph without stopping to enjoy the sights and activities of
the area.
The glaring weakness of Seattle/King County ' s existing tourism
promotion is the absence of any concerted publicity , public
relations or advertising campaign in California and Oregon to
make this destination a "must see" stop-over either going to or
returning from Vancouver .
SBR
Page 9
The Convention and Visitors Bureau does an excellent job
of indoctrinating the travel trade ( fam trips , trade shows ,
airline and cruise ship seminars , etc . ) and staffing information
booths . However , there are no funds or personnel to do a
day-to-day job of publicizing the area . We rely solely on
serving visiting travel writers and drop-in media . There is no
agency charged with generating a sustained publicity campaign
outside the borders of this state . As a result , Seattle and King
County receive only infrequent and sporadic mention in California
newspapers , on Oregon TV stations , or in other Western media . We
are an " unpublicized destination " because we choose not to
publicize .
Therefore , what is needed at this time--to capture a substantial
share of the Expo 186 tourist business--is a joint effort on the
part of the City of Seattle , King County, the Port of Seattle and
the private sector to mount a sustained publicity campaign on
this area over the next 12 months .
•
SBR
Page 10
Rationale for Seattle/King County News Bureau
In the next 6-7 months (September-March ) , as British Columbia
pours millions of dollars in advertising and promotion into West
Coast Markets , thousands of families from Los Angeles to Portland
will begin planning 1986 vacations to Expo 186 and Western Canada.
The majority will use private automobiles and they will begin to
set itineraries and decide what attractions and what cities they
want to see .
Seattle and King County can never hope to capture the attention
that this British Columbia promotional push will receive . It is
even doubtful that the area could generate enough funds to run
tie-in advertising in Seattle/King County , considering the size
and costs of the target markets .
We believe the most effective way to establish Seattle/King
County as a "good place to go on the way to Expo" would be to set
up the Seattle/King County News Bureau as soon as possible and ,
for the next year , flood news media up and down the Coast with
legitimate news stories and photos on the attractions and events
in this area.
Las Vegas has maintained a news bureau for many years and it is
the cornerstone of that city ' s successful promotion . The Las
Vegas News Bureau has a staff of 17 , including 9 photographers ,
and has an annual budget of $500 , 000 ( funded entirely by the
gaming hotels) .
This Seattle/King County News Bureau proposal calls for a budget
of $ 150 , 000 with a staff of four . It would be set up as a
separate entity , perhaps on the Seattle Center grounds , with a
small supervising board comprised of representatives of the City ,
County, Port and private sector.
The Seattle /King County News Bureau would be charged with
developing a publicity work plan immediately which would
encompass all events and attractions within the County for the
coming year . It would also schedule stories and photos to be
sold to media outside the area .
The main purpose of the Seattle/King County News Bureau would be
to create excitement about Seattle/King County as a destination
and to give Expo-bound tourists many reasons for staying in and
q1 visiting the region .
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C ohAMCU , n �indervva t Thetakes "
KENT
t: �
-- &d ruction has begun at The I hke's,a 141-acre, Bellevue;is the architect) ,
$175 million multi-residential community in the'Green River Plans also include preserving the 228th Street Woods
Valley.; - protecting access to the Green River.
Hamptbtt,J3ay,,a'3b4 unit project within the development,,is v The David F.Neely residence,which sits on the property
e�cp�ected to bd`,t omplet&I by the end of the year. F" be donated to the City of Kent.The residence is of historic i
'Thd'�site'# I&ate one mile nbrth-4est,of the Kent central , ,y since it was bttUt`thiriri the era'that'the Green lover Valley
business district and ,'bounded on the north by South 228th ":' 'settled, °I 4 .,•,' ' ;•,,,
Street, oh•the`south b zanies Street, on,the,west by the Greed,,, ` Initial permits for the projet ''were'filed in 1010.'riela:
River and on'the,east byy ark,irregular boundary one-third mile construction Were caused b'y'a fluctuating'housing marktt an
west of West Valleq]tt ih'' '' - ' financing to take advantage of lower Interest rates.
Cede ,ori'Const. Of ., 85$ 106th,,A, NE, t3ellevue, is the I *i � Centrhi expects to build three to four hundred units a yt
owner. : housing demand remains high enough:
The total fle4lo}hiitnt will have ti,400 attached and detached b:°�' � ° Site'development, including construction of"thelake ;,t
residential dhits eroutld,28 acres,old iman-made lakes and tecrea- '}."`' ,� roadways and utilitiesh `, �'
tional facilitie§.`Imprbiretnehts d ,cottneeted''luterfial�vhlk, as been completed'.
�,,, ,4,. , , „ ,,.. `''`� Funding fcti`thy'land acquisition was pi-ovid+ed by Was1
ways,bike trailis'hhd�spade . `� " "0 ton Federaf&fto and Lban Association and University Fet
Most of,the bui d llgs Wi 'e"Cape Cod"exterior ticsttgit Savgng5 Bank., d;Ipll7Celh,�tCa agreed to total project develnpt.
The Mithun 11 hri Emrich Group,2000 112th Ave. NE, ' funding: '�'a
Y1Of �j �� �F , chardson
�iI�1I�� M, I �� � r� �54 n<
SEAT''t"�' , lddustriai c` 'on; the City-of"f11{� pond IRBs for certhiifOfojbcis:' h,1 {',
revenue tfonds issued by juris- �.23 million; and,the Town, Job projections' are made 'by °$LPVt)ElN OItF An,diction s King County during of Algona with $2.2 million develd1wC,' " r� 4
1985,,. ed$36.84 million in sup IRBs are tax-exempt ,bonds B6ndbo1ddrs, ii►Ct': aid from'''4 Bids will be feceiv until
port,d i estimated 307 jobs, t e .issued b ublic co lViarch'I 6 by, the 'ginee,Alaska
,
h Y p corporations.The revel�i�p}�Crtlill' •ltp�'tht�pto'e�:�; '- �'; s of Eilgineets��c
Seattl King ;,County >lconomic private°motor seeks IRB financing fhet " t ��` ,.3�''•�t' p k
Develo t Council,reports. beeduse"df lower interest i cdsts. tion`ofJ l t �ll Bs.t ""�f` � � ted'�$ i�illia�tu to SS m;
°�'t '�h0d'C� t,06ter addition dt
The City'of Seattle Id in IRB Bdginning� in '1982,' Washington A�i�tit 'dtlz�t�i'ltlt�l �tirlsd -"'. :; ���d�f�0017:
closings with $16.7 million worth statd''hds '811owed cities, towns, tionso ittcltiding.Kiit' +County and `
of,bonds issued. It was followed countiesandfport districts to-set the Port iyf'Scattlel;`participate in tk ttwbtk rdtisists of colist
Lion 'o1''^t�''ntasoriry.�wall, .
by,the City of_Kent wih $12,71 up public corporations to issue the IRB pragtarh.
Marketing I113s to existing joist, ' and', ' addit
along with light-mechanical
C
A���r j` ��r�f l local businesses and start-ups is electrical work; landscaping,'
1 t part of the Seattle-King County.
EDC's ovi
all economic develop- some renovatioli '
• kility
$ids are directed to the Ui
w+Mtewe merit 'proam; Information ott, ,' ngirieer, Pouch 898, Anchc
n ` mIg entilFr available by tallin$ r 99506,or Bldg.21-700,Root.
447-HELP. ' Elmendorf AFB.
ANCHORAGE — 'the U. S. lighting and constructing,an air- Plans and specifications
Army Engineer Dist., Alaska, craft blast deflector&',,
will accept bids until 3'1m March This
"` 5 ro eetS procured from either locatio.
Is,• $ �af �s � r j
_ __ a payment of$34:
r r r r- Seattle-King County 1520 One Union Square
rrrrr
r r r r r Economic Development Seattle, Washington 98101
r r r r r (206) 447-0132
40 r-rrr- Council
'January 21, 1986
ii F D
( �JCJJ
Honorable Daniel P. Kelleher
Mayor
o ,nu City of Kent
220 Fourth Avenue South
001l,h„ Iw,,",,,� v„�,n.� Kent, WA 9,8031
Dear Mayor Kel lehers
. i�III:
III 11:1I h\I\tip Ills i,"1 \I ii,ii
Thank you for including the Seattle-King County Economic
" > Development Council in your 1986 budget and establishing your
I,Ikt(IONSpartnership for effective economic development in King County.
Il\RION \I . i
Enclosed is your service agreement with the Council for this year.
It is essentially the same as the draft agreement we sent to the
City of Kent during its budget deliberations. We desire to be as
effective as possible in assisting businesses in your
jurisdiction, working for improvements in the business climate anc
acting as a resource for your own economic development projects.
" Please sign both copies of this agreement ,and return one fully
tills 14.4 i.1 16aJ.A
executed copy to the Council, attention David A. Bell, Deputy
il.in nnaJ V1t 1(i
Executive Director. Feel free to call David or myself for any
questions that you may have.
You are a valued member of our coalition, and we look forward to .
u d. productive 186.
inter l y,
P. STEPHEN DUULIO - Ak,
enn eabody
Cit Attorney scut 3 Ve D i rest r �PP�
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EC MIC DEVELOPMENT CORPORATION
FIPCIAL STATEMENTS
IN t4ION THRU 12/31/85
Thru 12-31 1986
1984 1985 1986 Projection
Actual Actual Budget 12/31/86
BALANCESHEET ---------------------------------------------------------------------
Cash & Investments 9792.59 25,044.06 (2,698.00) 17,989.13
Receivable Due from
Economic Developer 4560.32
Accrued Interest on Investments 87.80
Vouchers Payable (3,119.20) (3,119.20)
------------- ------------ ---------- ----------
Retained Earnings 14352.91 22,012.66 (2,698.00) 14,869.93
------------- ---------- ----------
------------- ---------- ----------
STATEMENT OF
REWS & EXPENDITURES
Revenues (Schedule 2)
Application Fees 9,000.00 15,000.00
Administration Fees 5,000.00 8,128.77
Personal Service Fees 4,260.64 300.00
Interest Income 111.56 699.45
18,372.20 24,128.22 39,783.85 39,783.85
EXPENDITURES (Schedule 3)
Staff Expenses 4,019.29 316.30
Other Operating Expenses 750.00
King Co. EDC Participation 2,650.00 2,698.00
Promotion Expenses 12,752.17
Total 4,019.29 16,468.47 2,698.00 24,913.92
NET INCOME 14,352.91 7,659.75 37,085.85 14,869.93
-------------- ----------- ---------- ----=-----
-------------- ----------- ---------- ----------
s
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it f Kent
colic Development Corporation
alance Sheet
EVENUES
chedule 2
Thru 12-31
1984 1985 1986
Actual Actual Budget
pplication Fees
H & H Continental 1,500.00
Associated Grocers 1,500.00
Northwest Aluminum 1,500.00
Cascade Development 1,500.00
Plemmons Industries 1,500.00
Landry 1,500.00
Alaskan Freights & Consolidates
of Washington 1,500.00
Plemmons Industries 1,500.00
Brotherton Pleas 1,500.00
Meteor Building Associates 1,500.00
Elder/Quinn & McGill 1,500.00
World Wide Distributors 1,500.00
Reynolds Aluminum 1,500.00
HqJ11pn Distributing Center 1,500.00
Co ial Cedar 1,500.00
Cycles Limited 1,500.00
------------ =----------- ----------
otal 9,000.00 15,000.00
dministration Fees
Associated Grocers 2,500.00
H & H Continental 2,500.00
Brotherton Pleas 2,500.00
Cascade Development 2,500.00
Landry 3,128.77
otal 6,000.00 8,128.77
ersonal Service Fees
Associated Grocers 2,200.32
H & H Continental 2,060.32
Brotherton Pleas 100.00
Cascade Development 200.00
:)tal 4,260.64 300.00
iterest Income 111.56 699.45
18,372_20___ 24,128_22--^ 39,783_85_
City o£ Kent
Economic Development Corporation
BALANCE SKEET
Expenditures
Schedule 3
Thru 12-31 Total
1984 1985 EDC 1986
Actual Actual To-Date Budget
Staff Expenses
Legal Services 3,600.00 3,600.00
City Clerk Services 280.00 280.00
Licenses & Permits 31.65 31.65
Legal Advertising 107.64 316.30 423.94
Total 4,019.29 316.30 4,335.69
Ot Operating Expenses
ofessional Liability Insurance 750.00 760.00
King County EDC 2,650.00 2,650.00 2,698.00
Promotion Expenses 12,752.17 12,752.17
Total 4,019.29 16,468.47 20,487.76 2,698.00
--------- ---------- ------------ ---------
--------- ---------- ------------ ---------
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OFFICE OF ��.
January 28, 1986
,UHNN LIIPulctP CF 1) All Ling County Mayors and City Manager . 1986
Puyer Pnrer
III Yu.(burm.la
I ANRLN{L{UN NI,It.PKWcnl 2) Port of Seattle n�-�;,- -
Nn.hloylon\Iulook 3) Xing County
lallny.BYnL '^'�•�• + ,
-1W\I,eClwllman 4) Area Chambers *'
IwryORL\lIRUNA.A.Member
Stellle{a)(ounul
1fd 14.c I haam a
PAUI RARUk N.Member
►up Launy LoufuJ Dear Economic Development Associate:
SeiRruy -
00RELV NARCRIONC,\p)or
Ca)a1 IFcdnwnd
Ilwwrn B now, many of you have read about the U.S. Bureau of
f u)11\n HA\IJ I,1'rr•Wequ y
IIJIIII.I NJII„II.II I,JnI Engraving's , plans to consider the Greater Seattle area as one
11JR1e,r,R% of eleven U.S. cities for the location of a printing plant.
I
'�, n'of It Your Seattle-Xing County �EDC has been involved in support of
ALL\\Irf111 I.,r \I.x Pre.IJe" this project since mid-1985 -- . at the request of the
Uuumplun\,ulh.m,In.
RI\131H /\..Yi,.e Washington State, Department of Trade and Economic Development
(DTED) . Admittedly,' we and the state were surprised by this
I Ibpl l oun,J
4 AN1 \"'\'\ \'J"" initial publicity and announcement by the Bureau, as our
Cn>nl IW YJJ
I H%RI I.\ Willis.R.plu I understanding was that the project was very confidential.
.
%6.1, , L,C\t Hdl
I.,R,,.R\.11're.IJJ,u Our area qualified as a finalist based on submission of
"'e`''"""`''"'"'' representative sites in the lent-Auburn area which were
�Irl\U\1111I) I4e•IJ.nt
requested by DTED, and other materials assembled by both our
\""" Council and the State over a six-month period.
\\\l1 141113 Ih.iA I'.•I•w•i
LLdu,. . .ud.Y I/ufm.•. -
LtV%l11111kO%M.";.,INJ,binplo" Given recent information from the DTED this is our
l UI\RI 111 All\\R,AI l.wrJmew �
l..lnl+n llRJpe A..o.laie, understanding of how project support will proceed:
PHI 111%I A\IPHI I'L P,. Jen1
Ianlph.r,J J Aw w,
" " "" `"'''", 1 The Bureau will now make a second evaluation of the
Ih.N•"m.lnuym.
\RRN \I%)Hill I•,.•.IJ•m "Greater Seattle Area, " defined by potentially them as otentiall the
UJW ur/.or.IJlwu
I1\,111H\ill*\L.we,IJ.N three counties of Pierce, Snohomish and Xing.
pelcrnJeuwr I ompJn)
IOM PAL R Pre.,Jmi
41.I9foph." 2. The Bureau will in the near future provide evaluation
IuA U PHI I P-.u1Jn.ell,., •
,e]IIH{.unmYllil,ll•ll•p. criteria to the State DTED which will be utilized as
11d1f"1 IA
RI II INII guidelines for preparing area proposals, including timing for
H %0I\Ul
Rl\II
% II submissions and final decision on site selection by the
,
N.".{"u"1)Lb,ulne Bureau.
NORM RII L P.c,"Icnl
,eorll.l m Coumd
11"" ";"'"„':',:; 3. The state, in turn, will rely on its TEAM WASHINGTON
\I.HII1,11.,11 1.1.,I.1 Associate Development Group network "ADO's" to take the
\ ,111,✓PI P-0..o guidelines and solicit proposals. (This will involve our
NJ4111i�1,111\J,Yr.J I'J^ Council as an ADO, and our equivalents in Snohomish and
Pierce counties. ) We are now on hold until we get direction
I .e liu.\Luw wun,nK.11..
00110 A NAI°IR \u,l'rea.l.ni from the state. '
PL11.\.nl,,w•u RJI
RIIRI RI\\\I L\I I.P-0,o,
wa Wo'.p 11\I it kit 411 I.nnnu..uuui 4. We understand that the Bureau will only select one site
and proposal from our three-county region to evaluate against
the other ten contenders. Even so, based on the guidelines
1'1\I1111'll'I\IN11),
yet to be given to us, we will execute as broad a search and
solicitation• of proposals as possible, attempting to give
equitable consideration to all qualifying Xing County
communities.
5. As there may be more than one excellent proposal from
King County and the balance of the region, we have suggested
to the state that they and the Bureau be essentially
responsible for selecting the area's single finalist. On the
other hand, we should feel free to exert as much "influence"
as possible, i.e. including recruiting support from district
congressmen, if possible.
We are now on standby and expect to hear from the state soon.
At that time we will begin to notify candidate communities
and assemble proposals. Until then, please feel free to call
me or David Bell, Deputy Director and Director of Marketing,
who is handling our involvement.
Thank you for your interest.
Sincerely,
Penny P body
Executive Direct
pp/CH
Enclosure: Journal of Commerce article, "Seattle
Possible Plant Site"
Journal of Commerce
Jan. 20, 1986
Seattle
p ossible,
plant ,
We •7
WMMINOTON
fattle
or* sons of 11 ml
printins plant that will produce n a
quarter of the nation's paper
money supply, postage-stamps
-- and other documents,offirlak an-
nounced last week.= . •'.d.
The U.&Bureau of Bn�arjns
and Printias announced ih letters
to teonal congressmen that the
11 d were selected from among
80 municipalities in the West and
Southwest that were screened. ' .
No deadline has been set for
s*the site,an offidal said,
exp , "We're not under a
time constraint."
Three sites under consideration
for the plant are in Texas:Dallas,
Fort Worth•and Houston. Other
possible locations,besides Seattle.
are Phoenix; Denver;Us Vegas.
Nev.; Los Angeles; Salt Lak4 .
San Diego, and Oakland.
Calif.
The Treasury Department will
begin the final phase of site sdec-
don this month,considering fac-
tors such as access to airports,
local economy and environmental
conditions.The will be the facility
nry p _
seconderoduction plant.
a the main she in
The Project goals to bad a
modern plant to serve federal re-
serve banks in San Francisco,Dat-
las and Kansas City, Ro.
Plans all for a 350.000-sq. ft.
plant to be bunt on a site of be-
tween 50 and 100 acres.The build-
ing is to be uipped with between
0 pr and 2 preseach weighing
20 tons.
Initially. the plant will employ
200 people and generate 1,000
private-sector jobs, bureau of-
ficials said.
• Construction Is expected 0 take
two years, but a starting date has
not beat announced.
�r��r Seattle-King County 1520 one Union Square
r r rrr Economic Development Seattle, Washington 98101
r r r r r (206) 447-0132
rrrr- Council
January 21, 1986
1iECEIVED
IOHV\\ I I I IS Prludwt Honorable Daniel P. Kelleher
Mayor OFF ICE OF THE
\h....n- hh;a/OR
I-,�-RL NCI l UNNI 1 I Pil,ld.l" City of Kent
\1 a,hinylun,lul ual
220 Fourth Avenue South
lad\iIL I.h mn,n n
U(yI ORIS lulu"(,A Ml,nna Kent, WA 98031
Sl ntll l n,(nunal
I�J\Ill lha�l�,�l�l
PAI,1 H\RHI N(au t)"'"rIH"Aln Dear Mayor Kelleher:
(� n l uunlJ
Sclrtlery
IH yRI LN MARCHIUNL Mayor
RcdmouJ Thank you for including the Seattle-King County Economic
II IHNH ,I\,,,11, hi.Jn�.m Development Council in your 1986 budget and establishing your
Haunll N lllonal It InL
partnership for effective economic development in King County.
UIRI(I(IR,
J\\ HARION Mayor
loan of linn"Non Enclosed is your service agreement with the Council for this year.
\I I AN Hut(I,Sr Vnc 11rndlm
HlululRlun N—Inh In, It is essentially the same as the draft agreement we sent to the
„L fit NIA R LConan" City of Kent during its budget deliberations. We desire to be as
Sunldp,Amp Couu
I d, (owls I
OARY\AN HL SIN Ma„u effective as possible in assisting businesses in your
"""' '"" jurisdiction, working for improvements in the business climate anc
kiiARI IS\ (,IIIIIS R'gonol
NO-111 (1/'\I iLH acting as a resource for your own economic development projects.
I,AIO t,R 1N ,1'Ic.l,llni
Reny(,n I")(oun.d
)NUA lilt 1 LR %L PrluJllu Please sign both copies of this agreement and return one fully
Rllt Ih,trlll Iloill k
R„ant° I n1,1, executed copy to the Council, attention David A. Bell, Deputy
hull u.uuwal .\I 1(I(1
NANty WOB U„nA 1'n,1, o, Executive Director. Feel free to call David or myself for any
(n IJu nl�.I,."II of Itu,un..
AJnunulraunn,1m111,11,1,1 P'a,hing,lm questions that you may have.
Ll Il AM I RIINAR\RI luor4l1111o1
(,dnlan\IlW1 A,.oualN
I'M I LIS I\1,II11l Rl 11r„IJ,n, You are a valued member of our coalition, and we look forward to
I aulphe ll aIIJ 41,ul,nn
Sf,\NI11 M1I 111111, h \Ill Ih,vJl nl productive 186.
H,1 Hl,l,na(„nlp,n,
1 AHRV MM ill N,I'rludl ni
Zk
I 1 N\II(HAI l IS,\h.c 1'nadem
Nlyu h_.",t olnp.my
ION[PAIJR,11""danl
IIIICrk rJl,hllf
H(1NAI D PH!I PS (hanllllor r
I'ol(,unu u.l inn(umpa n
R 1NU1 I'll,I I L
I.,l nun17 I Allun,
VIIR,I RI(L.I1.,J,rn j 1 f:PP N
Swine(nI(HARI LS R111 LR,Mayor Enclosure ��Q�(�,(�"�.�J, �16
(ut ul Slaala 1 N p p
M 4 R lu SL(,Al L,Prc,lcllnl v
ew—
M A Slt•al.,In, cc: Dick Cushing 1p1/)' / d
I\hII S A 111(1RPI ('n,W`nl Manager, City of Kent "
N',I,hinglon Natural(,al J-"
(uNpany
I ll III I(yh,1'rr,iJcnl
whoa Inlu M1lauuln.wnnp,lul
<,I UR(A 4 1VAI AL H 1911 Ihr adm
Pa.'ln Non hull Hlll
ROHLRI\\AI I \(L,PI1vJlnl
\4alla.l 1'rui'<'rul.Croup
'I\I NRI(,HI (omnn.vonll
furl of Slal tle
L utull„e Uu111Ur
PLNLIOI'L PtAHUUV
r
i
ROBEKTS & SHEFELMAN
A PARTNERSHIP INCLUDING PROFESSIONAL CORPORATIONS
4100 SEAFISST FIFTH AVENUE PLAZA
JAMEB GAY N�ICHAEL D Kmvrz OF COUNSEL
ROHEI G MOCH EMILY VRIEZR GLUECH 80 F IT
0 FIFTH AVENUE ROBERT F BUCK
GE08GE M MACH BRNNET A.MCCONAUGHY** PAUL W KOVAL*
BRIAN L.COMSTOCK,PS JONI H OBTHRGAARD SEATTLE, WASHINGTON 98104-3178
TIMOTHY R CLIFFORD HUOR A SPTfZEH
LEE R VOORRHES,JR THOMAs M.WALBH
DAVID B.SWEENEY JULIE E.HOF$R• (200) 622-1018 RETIRED
WILLIAM G TONHIN J TAYLO$WAsaBURN THLHCOPIEH-(206)624-2686 VICTOR D LAWRENCH
GARY N.ACKERMAN,PS BRADLEY J BERG JAMEB C HARPER
ROGER A MYHLEBUST WILLIAM H CHAPMAN
ROGER W DuBROCH" GAIL T VOIGTLANDER*
JON W MACLEOD ROD P KASEGUMA JAMES P WRTER(1877-3959)
PAUL L.AHERN,JR MARILYN SHOWALTER January 21, 1986 F M ROBERTS(1880-1973)
WALTER T FEATHERLY III" Ley
HAROLD S SHEFELMAN(1896.1984)
-ALAHEA HAR "AI.ASKA AND WASRINGTON BARB '� �ALL OTR.R.WASRIXOTON BAR OXLY ANCHORAOR OFFICE
SUIT$1500
2550 DENALI STREET
P. Stephen DiJulio, City Atto �Ij ANCHORAG$,ALASKA 99503-2719
City of Kent � ,���(� TELECOPIER-(907)272-8332
220 Fourth Avenue South �/
Kent, WA 98032
Dear Steve:
You have undoubtedly read in the Wall Street Journal or
elsewhere that proposed federal tax law changes , many of which
are stated to have an effective date of January 1, 1986, have
created substantial uncertainty in the market for tax-exempt
bonds . The United States Senate has yet to act upon the Tax
Reform Act of 1985 passed by the House of Representatives ,
and no one can predict what the outcome of Senate action will
• be .
In the meantime, however, I thought it might be useful
for you to have a brief summary of changes that are proposed
under the Tax Reform Act of 1985 as enacted by the House,
particularly as they relate to exempt small issue industrial
development bond financing in the State of Washington. This
summary may also be useful to you in connection with all
tax-exempt financing where the obligations would be considered
"nonessential function bonds, " because the proposed Act applies
to all such bonds various restrictions and limitations which
had already been imposed on industrial development bonds by
both the Tax Equity and Fiscal Responsibility Act of 1982 and
the Deficit Reduction Act of 1984 .
If we can be of further help on any of these matters,
please let us know.
With best regards,
ROBERTS & SHEFELMAN
William G. Tonkin
WGT/rlt
Enclosure
RoBEATS & SHEFELMAN
A PARTNERSHIP INCLUDING PROFESSIONAL CORPORATIONS
4100 SSAPIRST FIFTH AVENUE PLAZA
JAMES GAY MICRAELD KDxTz OF COUNSEL
ROBERT G MOCH E14ILY VRIE2R GLUECE BOO FIFTH AvENuE ROBERT F BUCE
GEoROE M,MACx BENNET A MCCONAUGHY** PAUL W.KOVAL*
BRIAN cx,L.ComsTo Ps JONI H OSTEROAARD SEATTLE, WASHINGTON 98104.3176
TIMOTHY R.CLIFFORD HuOH D.SPITzRR
LEE R.VOORHEEs.JR THOMAS M WALaR
DAVID B SWEENEY JULIE E HOFRR* (206)622.1818 RETIRED
WILLIAM G TONEIN J.TAYLOE WASHBURN TELECOPIRB•t2o6)624-a666 VICTOR D LAwRENcz
GARY N ACEERMAN,Ps BRADLEY J BERG JAMES C HARFER
ROGER A MYxLEDL'sT WILLIAM H CHAPMAN
ROGER W.DuLSROcx• GAIL T VOIOTLANDER*
JON W MACLEOD Rol)P KASROUMA JAMES P WRTER(1877.1959)
PAUL L AHERN,JR MARILYN SHOWALTER F M ROBERTS(1680-1973)
WALTER T FEATHERLY UP HAROLD S.SHEFELMAN(1696-1964)
-ALAB$A HAft ALwBBw AND WABRINOTON BARS January 21, 1986
ALL 07E1898 WABHINOTON BAR ONLY ANCHORAGE OFFICE
SUITE 1500
2550 DENALI STREET
ANLHORAGE,ALAsxA 99503.2710
/907) 270.1358
TELECOPIER-(907)272-W32
EXEMPT SMALL ISSUE INDUSTRIAL DEVELOPMENT BONDS
UNDER THE PROPOSED TAX REFORM ACT OF 1985
1. General . The Tax Reform Act of 1985 as enacted by the
House of Representatives (the "proposed Act") establishes a
general rule that interest on governmental obligations issued
for nonessential functions ("nonessential function bonds") will
be taxable. A nonessential function bond is any bond (or bonds)
where an amount equal to or exceeding the lesser of ten percent
or $10,000,000 of the proceeds is used in a trade or business of
any person other than a qualified governmental unit, or where an
amount equal to or exceeding five percent or $5,000, 000 of the
proceeds is used to make loans to a person other than a quali-
fied governmental unit. Since 100% of the proceeds of indus-
trial development revenue bonds ("IDBs" ) are used in a trade or
business of persons other than qualified governmental units,
IDBs are nonessential function bonds. Unless a particular issue
of IDBs qualifies for one of certain exceptions carried forward
from prior law by the proposed Act, interest on such IDBs will
be taxable.
The proposed Act does continue the tax exemption for
certain nonessential function bonds, subject to some new
restrictions and limitations described below. Exempt small
issue IDBs (i .e. , IDBs of $1, 000, 000 or less or, with an elec-
tion by the issuer, up to $10, 000, 000) would continue to be
tax-exempt under the proposed Act. Indeed, the proposed Act
would repeal the scheduled termination dates for exempt small
issue IDBs. (Under existing law, exempt small issue IDBs for
nonmanufacturing facilities will lose their tax exemption after
December 31, 1986, and exempt small issue IDBs for manufacturing
facilities will lose their tax exemption after December 31,
1988 . )
r ` '
a
2 . New Restrictions and Limitations. All present-law
restrictions and limitations on exempt small issue IDBs would be
carried forward under the proposed Act. For example, proceeds
of exempt small issue IDBs must be used to acquire land or
property subject to the allowance for depreciation. Also,
nonessential function bonds, incuding IDBs, will not be exempt
from federal income taxation if (a) more than 25% of the pro-
ceeds are used to provide a facility the principal purpose of
which is retail food and beverage service, automobile sales or
service, or recreation or entertainment; (b) any portion of the
proceeds is used to provide certain prohibited facilities; (c)
tax-exempt facility-related bonds outstanding anywhere in the
United States , including the bonds to be issued, allocated to
any person who is an owner or principal user of the facilities
being financed during the three-year period beginning on the
later of the date of issuance or the date the facilities are
placed in service, exceed $40, 000, 000 ; (d) the state ceiling
allocation for nonessential purpose bonds is exceeded; (e) the
average maturity of the bonds exceeds 120% of the average
reasonably expected economic life of the facilities being
financed; (f) 25% or more of the proceeds are used to acquire
land or any interest therein; (g) any portion of the proceeds is
used to acquire existing facilities unless (with respect to
buildings and equipment which was part of the integrated opera-
tion therein prior to acquisition) an amount equal to at least
15% of the cost of such building and equipment is expended for
qualified rehabilitation within two years of the later of the
date the bonds are issued or the facilities are acquired; (h)
bond proceeds are not fully expended within six months from the
date of issuance and the issuer fails to calculate and rebate to
the United States the arbitrage earnings on bond proceeds; or
(i) payment of principal of or interest on the bonds is guaran-
teed in whole or in part by the United States or any agency or
instrumentality thereof. In addition, however, the proposed Act
would impose certain new restrictions and limitations described
below.
2 . 1 All Bond Proceeds Must be Spent on the Exempt
Purpose of the Issue. Under the proposed Act, 100% of the net
proceeds of the bonds (after deducting the costs of issuance and
amounts, if any, placed in a reasonably required reserve fund)
must be spent on the exempt purpose of the issue. Under present
law, it is required only that at least 90% of such net proceeds
be so expended, with 10% of the net proceeds being permitted to
be expended on what might be non-exempt purposes . This new
requirement, if enacted, will place a premium upon extremely
careful planning of the size of the bond issue. If bonds are
issued in excess of the amount needed for the exempt purpose of
the issue, the excess must be used within 30 days after acquisi-
tion of property or substantial completion of construction
- 2 -
(i .e. , when construction is 90% complete) to accomplish a
partial redemption of the outstanding bonds.
2 . 2 Temporary Periods for Arbitrage Investment of
Bond Proceeds are Shortened. Under present law, a general
three-year temporary period is allowed for investment of bond
proceeds at a yield materially higher than the yield on the
bonds . Under the proposed Act, that portion of IDB proceeds
intended for property acquisition is allowed a temporary period
of only 30 days from the date of issuance of the bonds . For
example, if bond proceeds were intended to be used to acquire a
new computer , rolling stock, or other moveable equipment for a
project, those proceeds could be invested at an unrestricted
yield for only 30 days .
In addition, the temporary period for unrestricted invest-
ment of bond proceeds to be used for construction (including
reconstruction or rehabilitation) of a project would be the
shortest of (a) the date of substantial completion of the
project (i .e. , 90% completion) , (b) the date when an amount
equal to the amount of the bonds (whether or not derived from
bond proceeds) has been spent on the project, or (c) three years
after the earlier of the date the bonds are issued or construc-
tion is commenced.
• If an IDB issue is used for both construction and acquisi-
tion of equipment, the total bond amount must be prorated for
purposes of these two permitted temporary investment periods .
2 . 3 New Expenditure Requirements for Tax Exemption.
The proposed Act would tax bonds retroactively to the date of
issuance if certain new requirements for expenditure of bond
proceeds are not met . First, an amount equal to five percent of
the net bond proceeds must be expended on the governmental
purpose of the issue within 30 days after the date the bonds are
issued. Also, all bond proceeds must be expended on the govern-
mental purpose of the issue within three years of the date the
bonds are issued. These provisions will require greater atten-
tion to the timing of the issue date so that five percent of the
net bond proceeds can be spent within 30 days .
2 .4 Limitation on Proceeds Used to Acquire Land. The
proposed Act specifies that interest on IDBs will not be exempt
if 25% or more of the net proceeds of the bonds is used to
acquire land, whereas present law bases this limitation on total
proceeds of the bonds . Thus, care would have to be taken that
amounts used for the acquisition of land do not equal 25% or
more of bond proceeds remaining after deducting costs of issu-
ance and amounts, if any, used to establish a reasonably
required reserve fund.
•
3 -
r r
x
2 . 5 Reduction of Aggregate Amount of Exempt Small
Issue IDBs Permitted Annually. Under present law, the aggregate
amount of exempt small issue IDBs, other technical IDBs and
student loan bonds that may be issued in the State of Washington
each year may not exceed $150 per capita or approximately
$640, 000, 000 . This ceiling amount has been more than adequate
in the past . However, the proposed Act would establish a
unified ceiling amount for all nonessential purpose bonds,
including single-family mortgage bonds , multi-family housing
bonds, and bonds issued for tax-exempt organizations such as
hospitals and educational institutions , as well as exempt small
issue IDBs . The aggregate ceiling amount would be $175 per
capita or approximately $750, 000, 000 per year . However, of this
aggregate amount, the proposed Act provides that at least $25
per capita or approximately $108, 000,000 must be reserved for
bonds issued for tax-exempt organizations. Also, the proposed
Act provides that at least $75 per capita or approximately
$324,000, 000 must be used for various kinds of housing bonds .
This means that not more than $75 per capita or approximately
$324,000,000 would be available for exempt small issue IDBs,
technical IDBs and student loan bonds . If enacted, the proposed
Act would thus cut in half the annual ceiling amount available
for exempt small issue IDBs, and that amount would be reduced
even further if state law or the Governor ' s proclamation sets
aside larger amounts for exempt organization bonds and housing
bonds .
• This means that, if issuers are concerned about promoting
industrial development in the State of Washington, they should
be alert to legislative action at the State level which would
establish ceiling amounts for exempt small issue IDBs . The
proposed Act would permit each State, within the limitations
stated above, to vary the allocation of the aggregate ceiling
amount among various kinds of nonessential purpose bonds . It is
expected that a first-come, first served, allocation method will
be employed within each category.
2 . 6 Cost Recovery Deductions are Further Restricted.
Under present law, cost recovery deductions for property
financed with tax-exempt bonds are required to be taken on a
straight-line basis over the relevant ACRS class life for the
property involved. Thus, an accelerated method of cost recovery
may not be used. Under the proposed Act, a new incentive
depreciation system is established for general applicability
which sets up ten classes of property for cost recovery pur-
poses . Salvage value of property would be treated as zero in
all cases . The proposed Act then sets up a nonincentive depre-
ciation system for property financed with tax-exempt bonds by
requiring that cost recovery be taken on a straight-line basis
over the next longer class life of property. This would require
taking depreciation over a period generally equal to the next
i
4 -
longer ADR midpoint life (i .e. , 12 years for personal property
with no ADR midpoint life and 40 years for real property) .
2 .7 Financial Institution Interest Deduction
Eliminated. The proposed Act would eliminate the interest
deduction presently permitted to banks and other financial
institutions for interest paid on funds borrowed to acquire
tax-exempt obligations, including exempt small issue IDBs .
Current law permits banks and other financial institutions to
deduct 80% of such interest . The effect of the proposed Act in
this respect will likely be to remove any economic incentive for
banks and other financial institutions to acquire exempt small
issue IDBs, thus eliminating an important market for such
bonds . Although other organizations and entities such as
tax-exempt mutual funds may continue to be interested in acquir-
ing exempt small issue IDBs , the credit and liquidity require-
ments of such entities will make the process of issuing exempt
small issue IDBs much more complex, time-consuming and expensive
for the companies involved.
3. Conclusion. The principal changes of the proposed Act
with respect to exempt small issue IDBs would be to impose
certain new technical restrictions and limitations on how such
bonds may be used, to cut in half the ceiling allocation avail-
able in the State of Washington for exempt small issue IDBs, and
to eliminate most banks and financial institutions from the
market for such bonds . However, the proposed Act does preserve
the basic tax exemption for exempt small issue IDBs and elimi-
nates current sunset dates for such bonds . If the Tax Reform
Act of 1985 is not substantially changed by the Senate, and once
a ceiling allocation system for nonessential purpose bonds is
put in place in the State of Washington pursuant to either a
Governor ' s proclamation or legislation, businesses in Washington
will continue to be able to finance qualified projects on a
tax-exempt basis.
0988R
s
5 -
Cult
Seattle.King County
R� L " r n ,� Economic Development
0 man / F r ��li
Council voi. i No. 7
For Economic Development �� ' = i January 1986
"Cooperation as a toolC6r/ ("mic survival" ended up
as the theme for the Seattle-Ling County Economic
Development Councils January Board of Directors
LOM meeting.
SUCTED King County Executive Tin Hill, Bellevue Mayor Cary
OFFICIALS Bozeman, Seattle City Councilman Norm Rice, and Port of
POINT TO Seattle Commissioner Henry Aronson each spoke to the
1® FOR Jan. 24th gathering billed as the first of six "Economic
Economic Update Luncheons" Dlanned bl the EDC duri'na 1986.
COOPERATION Dates for the Economic Updates which will be followed
by Board of Directors meetings) are March 28, May 30,
July 25, Sept. 26, and Nov. 21 . '
Each of the local elected officials agreed that
parochial ,disputes shouldn't be allowed to get in the
way of the regional cooperation that 's needed to keep
the local economy strong.
"To a large extent, the solutiops ,are known, " said
County Executive Hill, * "what's needed is a cooperative
`effort to get the job done."
Hill, who joined the EDC Board of Directors when he was
sworn in as County Executive, said he is committed to
being a team player on economic development issues.
Rice, who also serves .on the EDC Board of Directors.
noted that helping businesses thrive throughout King
County ' is in Seattle's 'own best interest. "The business
of Seattle 'is selling services to other businesses, "
Rice observed.
Mayor Bozeman, also an EDC Director, called for a
regional capital improvements plan, standardized land
use regulations, improved' labor force training and
retraining, and more cooperation from state officials
with local economic development efforts.
"I an always amazed at the lack of communication
between state and local elected officials, " Bozeman
said. "I think the state needs to be alerted that
economic development begins at home.
It was Aronson who put the cap on the Economic Update
program by calling for regio-al cooperation for economic
survival. Aronson wants Puet Sound' s deep water ports
to have an objective outside study conducted, weighing
continued competition of local ports versus uniting as a
single entity.
The first Economic Update came just two weeks after the
14th Annual Economic Development Forecast Luncheon &
U.N. Is Seminar held on Jan. 9. Jointly sponsored by the
FUTURE Seattle-King County Economic Development Council, the
IN 1986 event is remembered for the frank warning from
JEOPARDY William P. Gerberdint, president of the University of
Washington. A major state asset is in jeopardy,
Gerberding said. "I hope the business community
discovers this and acts upon it before its too late."
An audience of about 1 .000 heard Gerberding's remarks.
A panel to review and work with a yet-to-be named
outside consultant will be appointed soon in the C
Seattle-King County Economic Development Council ' s new
assignment to help County Executive Tim Hill reform the
EDC county ' s permitting processes .
WORKS The review group will be named by EDC Chairman John W.
TO HELP Ellis , President of Puget Sound Power & Light Company .
HILL The permitting processes of local government were
REFORM! identifed as a "discouraging" factor to business
PERMIT expansion in King County by the EDC ' s "Job Generators"
SYSTEM survey last- spring and summer .
"Economic Implications of Washington 2000" will be the
subject Hof Penny Peabody ' s address to the Education &
the Future Work III Conference.
Peabody , Executive Director of the Seattle-King County
Economic Development Council , will 'speak to the opening
day luncheon of the Feb . 26-27th conference being held
PEABODY at the Seattle Hyatt Hotel .
Td GIVE The title of her remarks stems from KING-TV ' s recent
MAJOR three hour special , Washington 2000. Portions of that
ADDRESS program will be shown by KING 5 News Anchors Jean
AT Enersen and Aaron Brown immediately before Peabody ' s
'EDUCATION luncheon address.
& THE The" Seattle-King 'County EDC is cooperating with
FUTURE OF conference ' sponsors , which include KING TV and Radio
WORK III' 1090 AM; Association of Washington Business; Washington
State Labor Council , AFL-CIO; Washington Roundtable; and
the Washington State Commission for Vocational
Education .
Fee for the two-day event , including lunches , is $75.
For further information call : 433-8590.
The Seattle-King County Economic Development Council is
also cooperating with the Association of Washington
Business in the publication of a Washington State
ALSO pictorial and business guide, highlighting the state ' s
OF favorable investment climate . The AWB project will
INTEREST include individual business profiles. For further
THIS information call Chuck Burton at 762--8309.
MONTH
Stimulating interest in training through apprenticeship
programs is the purpose of the March 26-28 Northwest
States Apprenticeship Conference, also being held at the
Seattle Hyatt Hotel (located near Seattle-Tacoma
International Airport) . Over 400 delegates representing
labor and management from the region will attend . For e'
further information call : 428-2933. -
Industrial Revenue Bonds (IRBs) issued by jurisdictions
in King County during 1985 totaled $36. 84 million in
support of an estimated 307 jobs, the Seattle-King
County Economic Development Council reports.
The City of Seattle led in IRB closings for 1985 with
$16. 7 million worth of bonds issued . It was followed by
IRBs the City of Kent with $12 . 71 million; the City of
HELP Redmond with with $5. 23 million; and the Town of Algona
LOCAL with $2.2 million.
BUSINESSES IRBs are tax-exempt bonds issued by public
6 PRODUCE corporations. The private sector seeks IRB financing
JOBS because of lower interest costs. Since 1982 , Washington
state has allowed cities, towns , counties , and port
districts to set up public 'corporations to issue IRBs
f'or certain projects.
Job projections are made by developers.
Bondholders are paid from revenues produced by the
project . There is no governmental' obligation or
liability to repay IRBs.
About a dozen local jurisdictions,_ including King_
County- and the Port of Seattle , participate in the IRB
program.
Marketing IRBs to existing local businesses and
start-ups is part of the Seattle-King County EDC overall
economic development program. Information on
eligibility is available by calling the EDC Business
Help Hotline, 447-HELP.
Over 65 percent of the Black-owned businesses in
Washington State and over 80 percent of the revenue they
ganerate are found in thb Seattle-King County area,
according to the most recent Survey of Black Owned
Business Enterprises by the U.S. Census Bureau.
The $9. 2 million payroll of Black-owned businesses in
BLACKSeattle-King County accounts for almost 80 percent of
OWNED WNED the state payroll of Black-owned businesses , which
O totals $11 .4 million . Local Black-owned businesses
BUSINESSES generate ' revenues of $37 .8 million. Black-owned
BOOST businesses statewide generate revneues of $51 .7 million .
ECONOMY According to the recently published survey , there are
OF SEATTLE 1 , 571 Black-owned businesses in Seattle-Ring County; and
& KING 2 , 433 statewide. The Census Bureau also reports that
COUNTY 163 local Black-owned businesses hale' paid employees;
statewide a total of 273 Black-owned businesses have
paid employees.
Although published in late 1985 , the Census Bureau data
on Black-owned businesses is from survey work conducted
in 1982. Previous to that , the last survey of
Black-owned businesses in the U.S . by the Census Bureau
was done in 1977 .
The Seattle-Ring County Economic Development Council ' s
ambitious 1986 fund raising campaign, launched last
month, is being headed by Seafirst ' s Roy A. Henderson.
Henderson, who serves on the EDC Board of Directors,
PUBLIC heads an effort that has already raised $95,000 in cash
& PRIVATE and pledges; almost one-fourth of the goal for 1986.
SECTORS The leadership of the local private sector has
CONTINUE committed itself to raising over 60 percent of the
EDC $650,000 needed to sustain second year operations of the
PARTNERSHIP Seattle-Ring County EDC.
The local public sector, including Ring County, Port of
Seattle, Metro, and the cities of Seattle, Auburn,
Bothell , Bellevue, Des Moines, Enumclaw, Issaquah,
Kirkland , Rent, Normandy Park, Renton, Redmond , and
Tukwila have agreed to 1986 contracts for EDC services
that provide a revenue base of approximately $175,000.
Local private sector memberships in the EDC are based
on a suggested fee schedule that was adopted by the
Board of Directors on Jan. 24: Questions about EDC
budget and financing are welcomed. Contact David Bell
at 4,47-0118.
The Seattle-King County Economic Development Council ' s
Strategic Action Task Force, chaired by Weyerhaeuser
Chief Economist Lynn 0. Michaelis meets again at 3 p.m.
Feb . 12th.
Organized last August,. the Strategic Action Task Force
TASK is charged with, preparing a multi-year plan of action _
FORCE for use by the EDC coaltion of business, government,
WORKS education and labor.
TO MAP Main purpose of the Feb. 12 meeting is for the full
STRATEGY task force to hear reports from the two working
subcommittees that have been preparing elements of the
plan. The two subcommittees are headed by Michaelis and
Jim Feldman , a staff assistant to Ring County Executive
Tim Hill .
The Task Force will present its work for consideration
by the full EDC Board of Directors at its next meeting
on March 28th.
"Strategies for Economic Development" is published
monthly by the Seattle-King County Economic Development
Council . It is prepared with funds made available under
the Job Training Partnership Act (JPTA) by the
Seattle-King County Private Industry Council.
PUBLISHER: PENNY PEABODY EDITOR:DAN FLYNN
rrrr Seattle-King County 1520 One Union Square
rrrrr.
rrrrr Economic Development Seattle, Washington 98101
r r r r r Council 206-447-0132
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