Hawkins: County signs intent letter for taxes

Whitman County Commissioners Monday signed a letter of intent with the Department of Revenue, declaring its intention to use any taxes from the long-stalled Hawkins project near the state line.

The story of the Hawkins project near the state line on the Pullman-Moscow corridor dates back to May 2008 when Commissioners Pat O'Neill, Greg Partch and Michael Largent approved a deal to pay Hawkins $9.1 million to reimburse infrastructure construction costs for the development of a 714,000-square foot shopping center proposed by the Boise-based Hawkins Companies. The ownership of the infrastructure, which was to include roads and utilities, would, under the agreement, be transferred to the county upon completion.

Whitman County is pledged funding of up to $200,000 a year from a state tax refund program once the site begins generating sales.

“Depending on the amount of sales tax coming from that project, we get two percent back of the portion of sales tax from that project,” Commissioner Art Swannack explained Monday.

The project, however, has yet to come to fruition. Hawkins was ready to build, but the commercial real estate collapse prevented the company from signing construction contracts.

In 2012, the county commissioners agreed to amend the original deal to $15 million in reimbursements for infrastructure, with Hawkins guaranteeing two big box stores – Lowe's having been named as one of them – or 250,000 square feet of retail buildings. The deal was approved on a two to one vote, with Commissioner Largent opposed. That deal also had a sunset clause, which has expired, leaving the county only on the hook for the original $9.1 million deal, Swannack said.

The letter signed Monday pledges that the commission intends to collect taxes, should there be any sales tax generated at the site. They are required to sign the letter every year now.

“We're not imposing that right now, but we're preserving the option into the future,” Swannack said. “We have to annually tell the legislature we're going to do it or we intend to do it.”

Swannack said the state tax refund program from which the county would receive a refund if sales tax was generated has a sunset of 2022.

“After 2022, it's up to the legislature,” he said.

Swannack also explained that signing this letter could enable the county to fund the Hawkins project, should it ever come to fruition.

“It enables the county to have an easier time to pay its obligation under the contract,” he said. “Right now, we have no indication that anything is going to happen, but we are preserving into the future.”

The commissioners said they have not heard anything from Hawkins for a while, nor do they expect to at this time. There is no sunset on the original 2008 deal.

Largent said Monday if he could go back, he would change his vote from 2008.

“The first time, I voted for it,” he said. “In retrospect, I would change that to include a sunset.”