Jacob Dimond / jake@yelmonline.com
Todd Stancil, Yelm City Administrator, announced during a Yelm City Council study session on Tuesday, June 2, that a professional services agreement would be brought forward during the next city council meeting on Tuesday, June 9, relating to TIF expert Bob Stowe.
Stancil presented some background information on the development agreement for the master planned community and said it’s larger than anything the City of Yelm has worked on before in previous history.
“We are in a development agreement negotiation,” Stancil said. “This is a 300-page document with Blue Fern that will essentially dictate how things are done for the next 25 years up there. We’ve got one shot to get this right.”
According to Stancil, the development agreement comes down to “who is paying for what” and “who is responsible for what.” He noted the size of the document is unlike anything Yelm Public Services is used to reviewing, and added the city has had development agreements before — but nothing to this magnitude.
“We spent tons of time reaching out, trying to get some news eyes on it, some help, to see what’s normal and what’s not normal,” Stancil said. “We’ve looked at other development agreements for other master planned communities and some of them are 1,000 pages long. They’re even bigger than ours.”
Additionally, Stancil said a lot of cities have used real estate attorneys to represent their side of negotiations in these agreements. The city will also look at incremental financing options, whether its tax increment funding (TIF) or other methods.
“There’s a lot of moving pieces to that. What we have found is that there aren’t a lot of people who are overly familiar with this type of financing,” Stancil said. “Our bond attorney is familiar with that type of financing, but not something they are extremely well-versed in. At the recommendation of our city attorney, at the recommendation of our bond attorney, they’ve encouraged us to contract to get some help to help the city go the right way.”
Stancil added that the City of Yelm and Bob Stowe spoke over a year ago when the conversation about implementing a TIF was first introduced.
“Bob is known as kind of the ‘it expert’ in TIFs,” Stancil said. “He has worked with the last 10 cities that have used a TIF. He has helped them implement it, determine if it’ll work — everything.”
Stancil said that Stowe has been working with TIFs since 2016, and noted his company is called Stowe Development and Strategies. Stowe previously worked as Bothell’s City Manager.
“We can’t have this bond count against our debt capacity as a city. It would take probably more than our debt capacity even is, so that’s not even an option to have it count against our debt,” Stancil said. “What we’re looking at now is that a developer could take on that debt with agreements to reimburse them for what they put up front to build in this case would be the boulevard.”
He added the development agreement is “essentially tied” to how Blue Fern Development is going to build its boulevard. Stancil claimed the development agreement cannot be completed until incremental financing is figured out.
“So that’s where we’ve kind of re-focused back on the financing portion to really see what is going to work for everybody,” Stancil said. “When I say everybody, to make it shorter, the city, the county and the fire district all have to agree to participate in this incremental financing. They are required to participate. None of those three can opt-out. What that means is those three are giving up a portion of revenue over the period of this bond, that they would normally collect, before it’s paid off.”
Stancil believes there are benefits for the City and County from having a development, such as sales tax and growth. For the fire district, on the other hand, approximately 80% of its funding comes from property tax revenues.
“For a fire department to give up this much revenue over time, there has to be a negotiation with the fire department to somehow offset the impact for them,” Stancil said. “That is again where Bob comes in.”
DePinto said the fire district currently isn’t collecting anything off that, and noted it will still receive impact fees.
“The actual ask for this phase with Bob is $20,000. That’s the draft agreement and to figure out how we’re going to pay for this thing. If we need Bob longer, we would come back to council and do that in phases,” Stancil said. “Bob will also come to council, present to council and explain to council, when we do get incremental financing, the in’s and out’s, the details and how it works. You will see Bob at some point down the road.
“One of the pieces, if we do go down the TIF road, you can use TIF funding to get back anything used to develop the TIF. For example, if we did pay Bob to get us to the finish line on the TIF, the TIF money could pay the city back for what we pay Bob.”
Councilor Griselda Arias thanked Stancil and DePinto for seeking outside counsel relating to the funding method of Blue Fern Development’s 640 acre parcel.
“I just want to say, maybe this is closing out the conversation, but I just want to say that I really, really applaud the city,” she said. “I applaud you for recognizing when you could be out of depth and for getting the right people in the room. So many things go wrong when doing anything like this because we can’t recognize that we’re out of our depth. I applaud you guys for that.”
On another note, Stancil and Yelm Public Services Director Cody Colt will attend a Rainier City Council work session on Wednesday, June 10, to discuss the ongoing conversations about the 640-acre plot.
“They’ve invited the public to come and comment on the project in Rainier boundaries. It’s been blowing up on Facebook a little bit,” Colt said. “We’re meeting with the superintendent on Thursday to go over some ground rules on what we’re going to be a part of and what we’re not. We’re not there to discuss this development. That’s irrelevant. That’s not up to their people of Rainier to decide that. What they need to decide is if they want to keep it in… the Rainier School District or not.”
