# City of Bellingham Community and Economic Development Committee Meeting *A collaborative morning of economic partnerships and downtown revitalization* ## Meeting Overview The Community and Economic Development Committee convened on a Monday morning, December 9, 2024, at City Hall, with Committee Chair Jace Cotton leading discussions alongside Committee Members Hannah Stone and Hollie Huthman. The 42-minute meeting tackled three significant agenda items that would shape Bellingham's economic landscape and housing future: renewing an economic development partnership with regional allies, funding creative downtown activation projects, and updating the city's housing levy framework. This was a meeting about partnerships and progress—both the formal intergovernmental collaborations that have quietly driven regional economic development for over a decade, and the vibrant community-driven projects that promise to bring new energy to downtown streets and alleys. The committee would advance over $8 million in combined initiatives, from a tri-jurisdictional economic development agreement to indigenous art installations and housing assistance programs. ## The Economic Development Partnership: A Decade of Collaboration The meeting's first item was decidedly less glamorous than the art projects to follow, but arguably more foundational to the region's economic health. Committee Chair Cotton introduced Bill 24352, an interlocal agreement between the City of Bellingham, Whatcom County, and the Port of Bellingham for coordinated economic development funding—a partnership that has quietly operated since 2011. Tara Sundin, Community and Economic Development Manager, explained the evolution of what has come to be known internally as the "tri-funder agreement." "We came together in like 2010 or so to kind of join forces," she said. "We were all doing our own thing and decided to join forces and create this... department of the Port of Bellingham." The city's contribution to this $2 million annual program is relatively modest—$116,827 in 2025, with 3% annual increases through 2027. But that funding, Sundin explained, leverages much larger investments from the other partners. The Port of Bellingham contributes nearly $1 million annually, while Whatcom County provides over $850,000, primarily through rural sales tax revenues collected on behalf of all county cities. Council Member Hannah Stone pressed for clarity on the structure, noting the interlocal agreement was between the three jurisdictions but that Western Washington University's Small Business Development Center would receive the largest single allocation—over $427,000. Sundin confirmed that while WWU SBDC is highlighted because of its significant funding, they are not a direct party to the agreement but rather a contractor providing services through this collaborative framework. The discussion revealed some of the practical complexities of this partnership. Council Member Huthman (who was incorrectly identified as "Council Member Williams" in the transcript) questioned a $125,000 annual line item for broadband services, wondering if this represented the port's internet bill—a figure that would work out to over $10,000 per month. Sundin clarified that this was actually project funding, explaining that "they are working on behalf of... the county executive that really wanted the port working on broadband out into rural areas of Whatcom County." Stone also inquired about an anticipated state grant that could potentially impact the program, noting the legislature's consideration of an ADO (Associate Development Organization) grant. She expressed curiosity about other port-specific projects listed separately from the shared funding, including small cities grants and marine promotion activities. The committee's questions revealed the intricate web of regional economic development—federal grants, state programs, county sales tax revenues, and municipal contributions all flowing through a port-based economic development department that serves as the region's designated Associate Development Organization with the state Department of Commerce. Huthman moved to approve the interlocal agreement, and it passed unanimously, continuing a partnership that has operated successfully for over a decade. ## Downtown Activation: Art, Music, and Community The meeting's energy shifted dramatically when Darby Galligan, Senior Planner, presented the Lodging Tax Advisory Committee's recommendations for downtown activation projects. This was the second round of a new program using lodging tax revenue to fund projects that would "activate and beautify" downtown Bellingham. "We were so excited to see the projects that came out of the first round last summer," Galligan said. "The second round that closed this fall had a number of just really excellent projects. We were blown away." The LTAC jury had recommended three projects for a total of $235,000 in lodging tax funding, each representing a different approach to activating downtown spaces. ### Children of the Setting Sun Productions: Coast Salish Interactive Mural The largest and most complex recommendation was $160,000 for Children of the Setting Sun Productions to create an interactive Coast Salish mural. Originally, the group had requested the full $250,000 available, but the jury recommended a reduction because the proposed alley already had $100,000 in funding from another project—Paper Whale's alley activation—approved in the previous funding round. "We are of course excited to have our own Bellingham version of that," Galligan said, referencing the production company's impressive portfolio that includes projection mapping work on landmarks like the Eiffel Tower and Sydney Opera House. Council Member Stone raised important questions about this significant funding reduction—from $250,000 to $160,000, a 36% cut. She noted the ethical complexity of asking artists to reduce their vision, particularly when discussing the importance of "wanting to be respectful and value those contributions." Galligan explained that the jury had identified overlapping infrastructure needs between the two projects in the same alley. Elements like cleaning, garbage consolidation, and overhead lighting were already included in the Paper Whale project, allowing Children of the Setting Sun to focus on their artistic components. "The proposal originally was for two large murals," she said, "and the jury with the funding proposed would be for one large mural." Importantly, Galligan noted that Children of the Setting Sun had been notified of the reduction and "were absolutely thrilled to be considered for that amount." Council Member Huthman expressed particular excitement about this project from a cultural perspective. "I was so thrilled when I saw that the LTAC jury had selected the Children of the Setting Sun project as a step towards having more indigenous art downtown," she said. "We had such a rich history in this community that wasn't really represented in our downtown rich history and present influence of our indigenous neighbors." ### Bellingham Symphony Orchestra and Pickford Film Center Partnership The second project represented a collaboration between two established cultural institutions. The Bellingham Symphony Orchestra and Pickford Film Center proposed presenting silent films with live musical accompaniment, celebrating BSO's 50th anniversary. The full requested amount of $25,080 was recommended for funding. "The jury included a few people from tourism, and they were really impressed with the marketing budget," Galligan noted. "This is a very unique event that they do think will draw visitors and people from way outside the region, as well as people who are already avid Pickford and BSO fans." Stone, who had attended silent film presentations at the theater before, suggested expanding the concept to include the underutilized Commercial Street parking garage rooftop. "I think about the parking garage a lot on Commercial... there have been films shown on the rooftop there before," she said, noting both the views and the irony of an underutilized parking structure in a city where constituents frequently complain about parking shortages. ### Make.Shift Art Space: Radio History Celebration The third recommendation was for Make.Shift Art Space's "KZAX Presents: Radio Forever"—a celebration of community radio history. Interestingly, the jury recommended increasing their funding from $38,500 to $50,000. "They are such a scrappy organization and they're able to do so much with what they have to work with," Galligan explained. The increase was specifically to ensure artist compensation. "The jury thought it was really important that paying the artists be included in that scope... being able to make sure that they're not having to ask people once again to donate their talents and skills and be able to pay them for those pieces." ### Geographical Strategy and Impact Committee Chair Cotton raised an excellent strategic question about concentrating two major projects in the same alley. Galligan acknowledged this concern but explained the jury's reasoning: "We recognized that the importance of creating something that was really impactful and that would create a draw. So as much as we love to sprinkle, you know, fairy dust around the whole downtown... for the purposes of this funding, really wanting to concentrate that impact." She noted that this alley is "in the heart of the retail district that we're trying to create through our retail strategy" and provides connections "to the arts district and down to the waterfront." However, she also suggested that as projects move from conceptual to implementation, there might be opportunities "to wrap it around... to the street frontage, pull it down to that lower alley that across Holly Street that goes down towards the waterfront." ### The Broader Context Council Member Anderson inquired about four additional projects listed in the materials—including "Mondays at the Maritime," self-defense classes, and other community programming. Galligan clarified these were ranked highly by the jury but weren't included in the LTAC recommendations because they would require general fund rather than lodging tax funding. "The jury did rank those four projects very highly... they were recommended and we're looking at whether or not those might be able to be supported with general funds." Galligan also provided an update on a previous project—Lee Memorial Park Stairs—that had been withdrawn. When they began preparing the stairs outside the library for an art installation, "they determined that the condition of the stairs was not in good enough shape to be able to ensure the longevity of the art." With the Parks Department planning a master plan for the site, investing in repairs didn't make sense at that time. ## Housing Levy Administrative and Financial Plan Updates The final agenda item was more technical but equally significant for the city's housing future. Samya Lutz, Housing and Services Program Manager, presented updates to the Housing Levy Administrative and Financial Plan—the document that governs how the city spends over $4 million annually in housing levy funds, plus approximately $4 million in affordable housing sales tax revenue. "This administrative and financial plan is required by RCW for our affordable housing levy," Lutz explained. "It is not required for our affordable housing sales tax, but we thought it would bring more clarity and transparency to include that in this plan." ### Key Updates The proposed modifications incorporated several important changes: - References to the current Consolidated Plan, adopted by council in 2023 - Integration of the Affordable Housing Sales Tax, authorized in 2021 - Increased loan limits for manufactured homes, up to $118,000 - Explicit provisions for predevelopment loans - Various adjustments to align written policies with current practices One significant change was moving about 3% of funding from the services category to the homeownership category. "Thanks to the affordable housing sales tax, the services budget is able to stay steady," Lutz noted, even as levy funding for services decreased proportionally. ### Philosophical Questions About Housing Priorities The technical discussion evolved into a deeper conversation about housing policy philosophy. Council Member Stone sought confirmation that the changes remained aligned with what voters had approved. Lutz confirmed that the levy's basic structure—two-thirds for very low-income housing (under 50% of area median income) and one-third for households up to 80% AMI—remained unchanged. Council Member Lilliquist raised detailed questions about the $1.5 million monitoring reserve fund, questioning whether this amount was appropriate or if more money should be directed to actual housing projects and services. Lutz explained that this fund was created because the original levy was seven years but required 50-year affordability monitoring. "The purpose of that reserve fund is to make sure the city honors its commitment to monitor these projects for what they have set out to do over that full period of time." The most substantive policy discussion came from Council Member Stone, who challenged a fundamental assumption in the plan's first goal. The goal stated that "the greatest need in our community is to assist those with the lowest incomes," focusing on households at 50% or 80% of area median income. Stone argued for a broader understanding of vulnerability: "I think the greatest need in vulnerability is spread across our housing spectrum... We have the information which indicates that there is vulnerability there too," she said, referencing data showing 45% of households above the current income targets are still cost-burdened. "An equity approach considers the fact that a family at 95% of area median income, who loses its single earner due to a health crisis, now creates homeless or children at risk of homelessness, which creates a cycle of trauma and risk in those children," Stone explained. "But according to a strictly numerical assessment, that family was not lowest income, was not at risk, was not vulnerable." ### The Risk Prevention Perspective Committee Chair Cotton offered a different lens on the same challenge: "More and more, I've grappled with this because... I think about those who are most vulnerable. And when I think about the cost right now with keeping someone housed, right, to me that's the priority for me right now, because once someone is unhoused, the cost and energy to rehouse them is so much greater than keeping them in housing." Mayor Lund noted that the city is exploring ways to address higher-income cost burden through other funding sources: "One thing before the EDC board is an expansion of EDC funds to support housing affordability, and that would have potentially higher income targets... So we are seeking as a community other ways to expand cost burdened households." ### Managing Growing Demand Lutz provided important context about the program's success and resulting challenges: "Really at the time of initially having this, there was a lot of excitement. There's more money than the city had had to invest in these things. Now, even though the sales tax has been a fabulous addition, there's more money that we're expecting in our current round to be asked of us than we have available for services, for capital, you know, for really just about everything." This success story—the city's housing programs are now oversubscribed—reflects both the effectiveness of the programs and the scale of regional housing need. ## Closing and What's Ahead The committee concluded with unanimous approval of all three items, advancing them to the evening's full council meeting. Stone moved to approve the housing levy updates, emphasizing that the philosophical discussions about housing priorities would continue as the city reviews its comprehensive plan and other policy documents. Huthman, in supporting the LTAC recommendations, reminded the public about the funding source: "These are funds that come from hotel stays and that this funding can only be used for the sorts of things that help generate more hotel stays and also, of course, overall helps the economy of our downtown through visiting and going to coffee shops and restaurants and the whole ecosystem." Cotton announced that the next committee meeting would be at 1 p.m. for the Public Health, Safety and Justice Committee, and adjourned the meeting at 11:22 a.m. This Monday morning session captured the intersection of long-term regional partnerships, community-driven cultural initiatives, and the ongoing challenge of housing affordability. The unanimous votes reflected a committee in sync on the broad direction while acknowledging the complexity of implementation and the need for continued conversation about priorities and equity in serving the community's most vulnerable residents.