Pullman, county agree on tax sharing

Whitman County Commissioners have reached a tax sharing agreement with the city of Pullman, effective as of July 1.

The commissioners voted unanimously in favor of the agreement at their regular meeting Monday, following the unanimous Pullman City Council vote June 2.

The agreement calls for Pullman and Whitman County to split retail taxes 50/50 from new businesses and to work together to establish those new businesses in a tax sharing area.

The tax sharing area surrounds the Pullman city limits and extends east from the city limits along the corridor of the Moscow Pullman Highway to the state line.

However, existing businesses within the area of the agreement — about 37 — do not fall under the terms of the agreement unless the business changes its conditional use permit.

“After the commencement date of this agreement, a change in the commercial use of an establishment located within the TSA, such that a new conditional use permit is required by the county, will constitute a new use and will “reclassify any sales and use tax revenue accordingly.”

Also in the agreement is protection for Whitman County with the Hawkins Property, 700 acres of undeveloped land on the north side of the highway on the Idaho border once targeted for a major retail center.

Whitman County entered an agreement with Hawkins Property Management several years ago to assist in developing infrastructure on the land.

“The new agreement recognizes the Hawkins agreement,” said Mark Workman, Pullman City Supervisor. “If something develops there, we would not share taxes. Nothing ever happened, and who knows if it ever will. But it provides that protection for the county.”

Another provision in the agreement is for Whitman County to modify cluster developments.

“The county will promptly initiate action to revise its current zoning regulations within the TSA to preclude the permitting or construction of residential structures within the TSA classified as ‘Cluster Residential Development’ after the date of adoption of the zoning ordinance or regulation,” the agreement states.

The county commissioners said this deal has been a long-time coming, noting it has been a 10-year endeavor to make it happen.

“It evolved over time,” said County Commissioner Art Swannack. “The biggest focus is that Pullman and Whitman County work together to develop the corridor. It’s the area we both felt was in our interest to work on.”

The corridor refers to the area along the Pullman-Moscow Highway, where 26 businesses currently stand. The corridor is the primary focus of development, Swannack said.

“It makes it so the city and county aren’t fighting over who gets the benefits of that corridor,” Swannack said.

Workman said there are no businesses that have plans to come into that corridor right now, but that could change, especially as the infrastructure is completed.

“Geographically it’s a good location for retail businesses,” he said. “At some point in the future it’s anticipated to be a vibrant commercial retail corridor. It’s a long-term plan.”

Swannack anticipates it would be another 10 years before major development occurs, noting there is infrastructure needed along the corridor. But he said both parties will see the benefits.

“We’ll both benefit because Pullman will not have higher costs and both Pullman and Whitman County can have businesses,” he said. “Without it, Pullman and Whitman County would have had to each look at its own interests. We’re both going to get some benefit out of this.”

Workman agreed.

“We set aside money to go toward infrastructure in the area. We’re equal contributors to that,” he said. “It’s both a win for the city of Pullman and for Whitman County. I think we’ve crafted a good agreement.”

Commissioner Michael Largent was thankful to see this completed.

“I would like to thank Commissioner Swannack for getting this off the dime,” he said. Largent assigned Swannack to the task after he was elected as a commissioner in 2013.

This agreement replaces the interlocal agreement for joint planning between the city of Pullman and Whitman County established February 4, 2004.

Workman said that agreement did not provide for the sharing of retail sales tax and involved much less area.

“It was just little isolated areas adjacent to Pullman,” he said. “It was just kind of a precursor to the current agreement.”

Workman is pleased with how this agreement has turned out. He said it is a 35-year agreement, with the tax sharing and provisions set for 24 years unless both parties agree to extend it.

“I wouldn’t be surprised if in 20 years it is extended by mutual consent,” he said. “I think both sides will feel like they are getting a win.”