Hawkins bumps request for county fund support

Now seeking $15 million:

Construction could begin at Hawkins Companies’ long-proposed stateline strip mall next spring, if Whitman County will pick up another $5.9 million of the cost.

In May 2008, commissioners agreed to fund $9.1 million worth of public infrastructure for Hawkins’ 714,000-square-foot shopping center site. Jeff DeVoe, project lead for the Boise development firm, asked commissioners Monday to up that amount to $15 million.

Before the commercial real estate collapse which spun out of the 2008 recession, Hawkins was ready to build. DeVoe said the company was within two weeks of signing construction contracts when the collapse hit.

At that time, he said, Hawkins could have absorbed construction costs over the original $9.1 million.

“Now, not so much,” said DeVoe.

Under the original $9.1 million deal with the county, Hawkins pledged to bring a Lowe’s or equivalent big box store to the development. The $15 million deal includes guarantees of two big box stores or 250,000 square feet of retail buildings.

DeVoe stressed his firm has not yet contracted with any stores for the site.

Commissioners agreed to consider the proposal, and decide quickly.

On a two to one vote, commissioners pledged to have a decision by Jan. 9. Commissioner Michael Largent cast the dissenting vote.

DeVoe urged a quick decision, saying it would help his company pitch the site to large retailers at trade shows over the next two months.

“They call us up all the time and say ‘You know that project you’ve got up there? When are you going to do something,’” he said.

Retailers are hungry to come here, he said, because the Palouse is a “captured market” with no other big box competition nearby.

A delay could prompt developers to build stores in Moscow.

“There’s room for one major retail shopping center in that corridor,” DeVoe told commissioners Monday. “And if it doesn’t go in Whitman County, it will go to Moscow.”

He pointed to Moscow’s recent repeal of its ordinance that limited big box stores like those planned for the Hawkins development. Under the ordinance, Wal-Mart has begun expansion of its Moscow store.

“If we wait and lose a key tenant, this project will no longer be viable in Whitman County,” said DeVoe.

Commissioner Pat O’Neill proposed the Jan. 9 deadline. Tuesday, he said the short timeline is to keep the Hawkins development on the west side of the state line.

“Moscow’s on the move,” Commissioner Pat O’Neill said Tuesday. “You don’t think they’ve been contacting some of the same people Hawkins is?”

In his power point pitch to commissioners, DeVoe included a video clip of Moscow City Councilman Wayne Krauss urging repeal of the ordinance.

“In four years the Hawkins Development hasn’t turned a piece of dirt. Thank goodness,” said Krauss

DeVoe also pointed to an article in Friday’s Moscow-Pullman Daily News that said the city is rezoning land behind the Wal-Mart complex for commercial development.

Commissioner Michael Largent refused to second O’Neill’s proposal Monday.

“I didn’t think there was any way to justify putting a hard timeline on a negotiation,” said Largent.

Partch cast the deciding vote.

“We need to push ourselves,” said Commissioner Greg Partch. “It’s out in the public now. The clock is ticking.”

Partch said commissioners had planned to hear Hawkins’ proposal in an executive session, but opened it up on the advice of Prosecutor Denis Tracy.

“Denis said you either do it in public or you don’t talk about it,” said Partch.

Commissioners said DeVoe first approached them about the additional funding commitment just before Thanksgiving.

“Is it worth the risk this doesn’t happen?” DeVoe asked rhetorically Monday.

The county’s $15 million would be repaid through new sales and property tax revenues from the site and from a state Department of Revenue grant that would give the county $200,000 per year over the life of a bond based on its increased sales tax revenue. Commissioners also planned to use .09 economic development funds from the state.

Jack McLaughlin, Whitman County’s bond agent with D.A. Davidson, told commissioners Monday the annual bond fund payments, including interest and fees, would increase from an estimated $800,000 to $1.3 million. The bond fund would pay investors who purchase the bonds.

“They may look at the county with a wary eye, being that $1.3 million is 10 percent of your budget,” McLaughlin commented.

McLaughlin estimated the project would net Whitman County $11 million of tax revenue over the next 20 years.

Treasurer Bob Lothspeich said projections under the $9.1 million plan were that the center would generate $701,288 in sales tax in first year, and would ramp up to more than $2 million as the project expanded.

Lothspeich noted the company’s new plans would produce different rates of return. DeVoe said the second big box store would come “pretty darn close” to covering the increased yearly payment.

Wal-Mart and Shopko, both at Pullman, combined to contribute just over $500,000 to the county’s coffers over the past year.

“What other new tax source does the county have if we don’t move forward?” asked O’Neill. “There’s nothing.”