The City of Tacoma sweetened its bid to prevent Russell Investments from relocating by offering 330 virtually free parking spaces and other perks totaling up to $47.5 million in direct public support, city leaders revealed Tuesday.
The city’s offerings were part of a larger, multifaceted incentive plan delivered to Russell on Friday in hopes of keeping the Tacoma firm’s global corporate headquarters downtown. Boosters from Seattle and Tacoma had until the end of last month to make their best and final offer to woo the company.
When infrastructure benefits are added in, including some federal and state funds, the package could be worth up to $93 million.
“Our goal is to keep Russell,” City Manager Eric Anderson said at a City Council meeting Tuesday afternoon. “In order to keep Russell, we’re reducing their costs.”
The plan is divided into short-term and long-term options.
Running through 2018, the short-term option would offer less support and Russell would stay in its current building. The long-term option, extending out to 2028, would offer help with a new facility.
The shorter option would come with $16.6 million in direct public support, while the longer one would provide $47.5 million. The lion’s share of the incentive would come in the form of a break in the company’s business and occupation tax, valued at $14 million for the short-term option and $42.3 million for the longer option.
The parking component is complex. Even City Councilwoman Julie Anderson wanted to go over it a second time.
“I feel like such a dunce, like I didn’t take my vitamins this morning,” she said, asking the city manager to go over the numbers again.
The city would offer up 330 parking spaces, divided between the A Street Garage and Park Plaza North, for “$1 and other valuable consideration.” It’s not a gift, which would be illegal; the city is getting something in return – namely jobs, Eric Anderson explained.
Russell would have to keep its headquarters here for a number of years, depending on the option, certify quarterly that it has at least 700 employees working in Tacoma and provide the city with a quarterly report on efforts to reduce its overall commuter trips and parking needs. A minimum of 300 employees would have to use “alternative means” of getting to work – that is, something other than a single-occupancy car.
Failure to meet those numbers would have penalties attached. For each employee under those levels, Russell would have to repay the city for the market value of the parking stall.
And if the company moved away before the end of the agreement, there would be payback for the value of the parking benefits from day one.
The total value of the 330 spaces is about $450,000 per year, but Ilahie Holdings, which owns the building, would reimburse the city $225,000.
“When you boil it all down, it’s $225,000 less revenue (for the city),” Anderson said.
He praised all the effort that went into the proposal, calling it a “remarkably good piece of work” and a “community effort of the first order.”
The full breakdown of the various options can be found at the News Tribune’s Political Buzz blog (blogs.thenewstribune.com/politics).
Russell is expected to make a decision by the end of September.
Ian Demsky: 253-597-8872
ian.demsky@thenewstribune.com
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