County pauses new tax districts in unincorporated areas, citing need for community-focused planning

WENATCHEE — Citing the importance of thoughtful planning and inclusive dialogue, the Chelan County Board of Commissioners (BOCC) has enacted a six-month moratorium on the formation of new tax increment financing (TIF) areas or projects in the county’s unincorporated regions.

The decision follows growing concern among commissioners about the pace and scope of a proposed 3,326-acre TIF in Malaga by the Chelan-Douglas Regional Port Authority (CDRPA). While the Port’s proposal could bring millions in public infrastructure funding to the area, commissioners say they want to ensure that residents, local services, and long-term planning efforts are fully considered.

“This board was not brought into the conversation about the regional port’s proposed TIF until less than 60 days ago,” said County Commissioner Shon Smith. “We need time to do our due diligence, to determine how a TIF would impact essential county programs and how the regional port and county can partner on a TIF. The projected diversion of revenues from the county would impact all our departments, from criminal justice services and law enforcement to transportation and veterans services — and that greatly concerns us.”

The moratorium, approved unanimously during a regular board meeting July 29, was effective immediately. A public hearing is scheduled for 11 a.m. on Sept. 23 at the BOCC chambers (400 Douglas St.) to gather community input.

However, when reached by email, Port CEO Jim Kuntz emphasized the Port’s independent authority in the matter, writing, “The State of Washington has granted Ports the authority to form TIF Districts. We are proceeding with the necessary due diligence to form a Malaga TIF District by the end of the year. A formal vote will be taken by Port of Chelan County Commissioners this November/December.” While the county’s moratorium extends through early 2026, the Port’s timeline suggests it does not intend to delay its process in response.

TIFs are financing tools that allow governments to use future property tax revenue from new development to fund infrastructure improvements within a defined area. State law defines them as a way to encourage growth in distressed or underserved regions. The Port’s proposal would encompass the former Alcoa plant, Microsoft’s new data center campus, and the planned Helion fusion power facility — three projects already signaling major growth in the area. Over the next 25 years, the TIF is expected to redirect approximately $50.3 million in property tax revenue from the county to the Port.

Commissioners emphasized that they are not opposed to economic development, but want to ensure any TIF proposal supports both new investment and existing communities. County Commissioner Brad Hawkins, who also served two terms each in first the Washington State House and later the State Senate, all representing the district that includes this area, expressed concern that the timing and structure of the Malaga TIF may not align with the broader public interest — something he’s more than familiar with due to his time in the legislature.

“We question the benefits of a port-only TIF in an area that is already attracting big business, where construction is underway,” Hawkins said. “A port-only TIF gives the appearance that the port is cherry-picking an already growing area in our community. A moratorium is necessary to allow time to thoughtfully consider this TIF process and determine the best interests of the entire county.”

Indeed, the CDRPA’s mandate is to attract and support business and industry within the county, while Chelan County itself, as a governmental body, is mandated to provide law enforcement, social services, road maintenance and a host of other public interests. Diverting tax revenue away from the County strictly to fund the Port’s mandate would necessarily mean that tax money — perhaps used to re-pave a stretch of highway, provide animal control services or even perform upkeep on a park in an unincorporated area like Malaga — would be reduced for public use. 

The moratorium does not apply to incorporated cities and cannot exceed six months unless extended by resolution. It is intended to give the county time to align planning efforts across multiple fronts — including transportation, land use, and public services.

Commissioner Kevin Overbay, who represents Malaga, noted that the county is currently undertaking several long-range planning projects that will shape the area’s future. These include the development of a Malaga urban growth area (UGA), an update to the county’s Transportation Element, and a review of wastewater infrastructure needs — all of which are tied to the broader update of the Chelan County Comprehensive Plan.

The UGA alone has implications much broader than simply setting land boundaries. It defines how much and what kind of housing can be created in certain areas, designates areas for agricultural development, and even has region-specific laws that sometimes differ from regulations that govern other defined areas like county lines or city limits.

“These efforts are ongoing and will inform how we plan for housing, road improvements, and utility services in Malaga,” Overbay said. “It’s premature to move forward with a TIF until we have that full picture.”

Overbay emphasized that the county values its relationship with the Port, but must prioritize the needs of all residents.

“Chelan County and the regional port have very different directives,” he said. “We are mandated to provide essential services to residents throughout Chelan County. While we support the regional port’s mission and will work to maintain our relationship with the port, we need a clear, concise plan that prioritizes our residents, and that means giving the county an equal voice in the establishment of a TIF.”

Andrew Simpson: 509-433-7626 or andrew@ward.media