Puget Sound Energy’s decision to cancel plans for development of a major facility in Des Moines “is obviously very disappointing,” Mayor Dave Kaplan told The Waterland Blog Tuesday (Nov. 13).
And, said City Manager Tony Piasecki, “we are going to pick ourselves up, dust ourselves off. We are going to sit down with the Port of Seattle and talk about our next move.”
The Puget Sound Business Journal reported Monday that economic concerns prompted PSE to back out of a deal to build a warehouse and substation at the Port of Seattle’s long-planned Des Moines Creek Business Park.
“It’s got to pencil out for PSE and it doesn’t pencil out,” Kaplan said. “One of these days one of these projects is actually going to happen. I look forward to seeing a bulldozer grading things.”
This is the second setback for plans for developing the business park in less than five years, both the result of the economic downturn.
In addition, the start of work on the Artemis Hotel on Pacific Highway South remains on hold while regulatory details beyond the city’s control are worked out.
The immediate impact on Des Moines from PSE’s move is a $500,000 loss in anticipated revenue for the 2013 city budget.
That money would have come from permitting fees and sales tax and business and occupancy tax revenues from initial design and construction activity.
Some of this one-time revenue had been slated for general operating costs, Kaplan noted, while the rest would have paid for inspections and other services related to the PSE development.
The city council now “must close the gap between one-time money we expected to receive and projected expenses,” he said. “There will have to be more belt-tightening before we adopt the final budget.”
Des Moines has pared budgets to the bone in recent years by reducing some programs and services – including controversial cuts in the police department.
Piasecki said the PSE development had also been projected to generate between $600,000 and $1.3 million in additional revenue between 2013 and 2015.
The exact total would have depended on sales tax revenue, based on a state formula that collects sales taxes at the point of a sales delivery. The PSE development would have included deliveries of utility wire, poles and pipes to the warehouse in addition to construction materiel.
Des Moines Economic Development Manager Marion Yoshino said that despite this temporary setback, the business park “is a prime location. We have been off the radar. More companies that are being flooded out in Kent should be aware of this location.”
Not only does the business park have centrally located accessibility to Sea-Tac International Airport, Interstate 5 and, soon, light rail, “Des Moines now has 20 percent off permit fees and no B&O tax for the first three years for new businesses,” she added.