Options for TDR in Puyallup Presentation for: Options for TDR in Puyallup Puyallup City Council February 13, 2018

Overview Objectives TDR recap Policy questions for council input Infrastructure financing opportunities

growth In 2016 Pierce was the fastest growing county in the United States. The county gained 11,785 new residents. Growth remains strong as economic vitality of region flourishes.

New Map1 Tacoma Puget Sound Puyallup River What will this growth look like?

New Map3 Tacoma Puget Sound Puyallup River Future land use in Puyallup River valley if farming areas are built out to suburban densities. Is this the kind of community we want? If not, then let’s explore options for achieving a more sustainable vision for growth and keeping our working lands working to support our communities.

Tacoma Puget Sound Puyallup River Conserved Prime Farmland May 2014 TDR Brownbag

= TDR and Zoning Development rights Potential for residential development Can be traded = 10 Development Rights 100-acre farm 1 house per 10 acres

TDR overview Real estate tool Gives landowners choices Market-based solutions Real estate tool Gives landowners choices Can sell the development potential from property to a developer who can achieve higher density in an area where it’s desired 100% voluntary, market- based, respects private property rights

Ingredients for success Clear conservation priorities (supply) Market for growth (demand) Policy linking TDR to growth Incentives Business model

Sending areas In-city + Conservation benefits for community + Can allow farming to continue on designated ag land Credits tend to be expensive Dilutes conservation potential Doesn’t give the city access to funding through the regional infrastructure financing program Higher administrative complexity Policy questions Sending areas Receiving areas Incentives Administration

Sending areas County + Conservation benefits for community (protection of farms that supply farmers markets/grocery stores/restaurants; lands of ecological importance) + Flood control benefits = County preference is for ILA Conservation is “out there” (outside of city) Doesn’t give the city access to funding through the regional infrastructure financing program Policy questions Sending areas Receiving areas Incentives Administration

Sending areas Regional + City can access new revenue for infrastructure + City has discretion to prioritize conservation = County preference is for ILA = City can choose alternative to ILA Conservation is “out there” (outside of city) Complex tool (but help is available) Policy questions Sending areas Receiving areas Incentives Administration

Receiving areas Downtown Regional Growth Center Was focus of 2011-2012 TDR project work South Hill Regional Growth Center Growth potential Any area seeking upzone Zoning changes from R-5 to 4:1, e.g. Other commercial areas (e.g. River Road) Policy questions Sending areas Receiving areas Incentives Administration

Incentives Additional density Units Building height / FAR / additional square footage Setback reductions Cost savings Parking requirement relaxation Property tax exemptions Policy questions Sending areas Receiving areas Incentives Administration

Administration Continuum of involvement: City-run program Light touch (County program) – City process permits, in coordination with county TDR program Hands on/staff intensive (In-City program) – recruit participants, provide market info, connect buyers and sellers, operate a TDR bank Public-private partnership City retains permitting role Partner leads marketing, outreach, deal-making Can be cost effective depending on scale of program Policy questions Sending areas Receiving areas Incentives Administration

Regional TDR Cities need infrastructure to support growth Public improvements are expensive

LCLIP TDR TIF + = LCLIP Land Conservation and Local Infrastructure Program Financial incentive for cities to use TDR Forterra designed LCLIP to give cities access to new revenue to support growth

LCLIP Time Increment Base Assessed Value Incremental Assessed Value $ LCLIP start LCLIP end (25 years later) City retains a portion of county’s share of property tax revenue on new construction City commits to accepting TDR credits Puyallup: 73 to 364 credits Program runs up to 25 years

LCLIP City retains a portion of county’s share of property tax revenue on new construction City commits to accepting TDR credits Puyallup: 73 to 364 credits Program runs up to 25 years

LCLIP City Tax Revenue Growth without LCLIP New Property Tax Revenues Counties retain at least 25% of new revenues Cities can retain up to 75% of new county property tax revenues accruing from new development in a defined area City Tax Revenue Growth with LCLIP City Tax Revenue Growth without LCLIP City can spend revenue on public improvements. Infrastructure can include parks, transportation, streetscapes, utilities, security, maintenance. Works with LIFT

LCLIP Adopted: Seattle In the process: Tacoma Tukwila Shoreline Bothell Mountlake Terrace

LCLIP Feasibility study: How much revenue? How many credits? Where to use it? When to start? What are the risks?

questions Contact: Nick Bratton nbratton@forterra.org 206-905-6941 Morgan Shook shook@econw.com 206-388-0082