## Meeting Overview The Community and Economic Development Committee convened at 10:35 AM on December 8, 2025, in the Bellingham City Hall Council Chambers. Committee Chair Jace Cotton presided over the meeting, joined by committee members Daniel Hammill and Skip Williams. Council members Anderson, LaQuest, and Huffman were also present, with some participating online. The meeting lasted 37 minutes and focused on four key agenda items: tourism promotion funding, lodging tax budget recommendations, an economic development partnership amendment, and a federal housing performance report. The meeting carried particular significance as it addressed multiple funding streams that support Bellingham's economic vitality while grappling with the ongoing impacts of reduced Canadian tourism. Each agenda item moved forward with unanimous committee approval, setting the stage for evening council consideration. ## Tourism Promotion Area Budget: Navigating Canadian Tourism Decline Dylan Deane-Boyle, president of Bellingham Whatcom County Tourism, presented the organization's 2026 Tourism Promotion Area (TPA) budget request of $1,488,655. Community and Economic Development Manager Tara Sundin introduced the item by emphasizing that "these are funds that are collected from people that stay in our region" — a crucial distinction during budget-sensitive times. Deane-Boyle opened with a professionally produced video highlighting tourism's economic impact: 3.49 million visits in 2024 generating $775.9 million in visitor spending and supporting 7,724 jobs. "When you create a nice place to visit, you also create a nice place to live," the video emphasized, positioning tourism as community infrastructure rather than merely economic activity. The presentation revealed both strengths and challenges. Whatcom County maintains its position as the fifth-highest visitor spending county in Washington state, remarkable given its smaller population compared to higher-ranking counties. The organization's digital marketing generated impressive returns: "$784 for every dollar spent" in advertising return, with campaigns producing over 570,000 trips and 67,000 hotel room nights. However, the Canadian tourism decline cast a shadow over the discussion. Hotel occupancy data showed Bellingham down 3.6% through October compared to the previous year. "We know we have been hit extremely hard by the downturn in Canadian visitation," Deane-Boyle acknowledged. The U.S. Travel Association forecasts continued challenges, predicting Canadian travel to the U.S. will be down 22% by the end of 2025. Despite these headwinds, the organization demonstrated adaptability and innovation. They earned the "best marketing campaign award" at the State of Washington Tourism Conference for their scenic byways campaign. New initiatives include an AI travel assistant on their website and partnerships with the upcoming World Cup fan zone activities. "We are positioned in the region to host a large audience of folks, so hopefully be able to raise awareness of us as a destination during this summer," Deane-Boyle explained. The budget breakdown revealed strategic priorities: $731,000 for administration including personnel and the Potter Street visitor center, $684,655 for marketing and media placement, and $73,000 for visitor services. The sports development fund received significant allocation at $209,655, reflecting continued investment in events like the Bellingham Bells partnership and potential state baseball championships. Council Member Hammill raised questions about conflicting growth rate figures in the presentation materials, seeking clarification between visitor spending growth (3.4%), visitor volume growth (2.1%), and job growth (0.4%). Deane-Boyle clarified these represented different metrics: spending versus volume versus employment impact, with job growth having "leveled off in the last two years." Looking forward, there were cautious optimism signals. The U.S. Travel Association predicts 2% domestic travel growth in 2026, and Canadian travel might increase 6% — "the Canadian increase actually being higher than any of the other international markets." The organization maintains its welcoming Canadian campaign: "We are here when you're ready." Hammill moved to approve the budget, which passed unanimously. The committee recognized both the challenging environment and the organization's strategic response to market conditions. ## Lodging Tax Budget: Funding Community Assets Tara Sundin returned to present the Lodging Tax Advisory Committee's 2025 budget amendments and 2026 recommendations, totaling $2,818,157 in expenditures. The presentation began with unusual mid-year amendments — typically not brought to committee but necessitated by unforeseen circumstances. Two 2025 amendments required approval: increasing administration costs from $60,000 to $100,000 ("we just underestimated... the amount that it was going to cost to administer the program") and boosting World Cup fan zone activities from $50,000 to $150,000. The fan zone funding reflects Bellingham's participation in 2026 FIFA World Cup celebrations, with specific grant recommendations coming to council in February. The 2026 budget maintained consistent institutional funding: $500,000 for Bellingham Whatcom County Tourism, $526,147 for Mount Baker Theatre, and $210,000 for Whatcom Museum. Standard and startup tourism grants totaled $707,010, "pretty much on par with last year's funding." A notable disappointment emerged regarding Artist Home's signature music event, allocated $75,000 for its second year. "That event has been postponed for another year," Sundin explained. "That event relies heavily upon cross-border traffic. And so they are not confident in moving that event forward, especially when you're starting an event, it's a risky venture." The funding remains budgeted for future implementation when conditions improve. The most significant new investment was $450,000 for the Waterfront Skate Park — the first time lodging tax funds have supported a tourism-related facility since the Pickford Theater investment years ago. "This represents about 15% of the overall budget and we're pretty confident with the state of the art design that we're pursuing that this will be an attraction," Sundin said. The covered skate park will be unique in Washington state, potentially drawing year-round visitors during off-peak seasons. Downtown activation grants received $250,000 for their third and potentially final year. "We've been getting such strong response from our downtown activation grants," Sundin noted, expressing hope for program continuation when revenues recover. The lodging tax budget reflects the same Canadian tourism impact affecting the TPA budget — down 10% from previous years. However, the funding structure differs slightly from the TPA's room-night basis, being connected to room costs rather than occupancy volume. Hammill moved to approve both the 2025 amendments and 2026 budget recommendations, which passed unanimously. The committee recognized the strategic balance between maintaining institutional support and investing in new attractions that could help weather current tourism challenges. ## Regional Economic Partnership Amendment: Creative Funding Solutions The third agenda item addressed a creative solution to budget pressures through an amendment to the regional economic partnership interlocal agreement between the city, Whatcom County, and Port of Bellingham. Since 2011, these entities have jointly funded economic development activities, but starting in 2026, the county's Economic Development Investment (EDI) fund will cover all costs. Sundin presented this as financial innovation rather than service reduction: "This amendment, the administration was seeking some creative ways of maintaining level of service, but looking at other sources of revenue." The city had been "the oldest agency that was using its general fund to fund these economic development activities, and the EDI fund seemed to make the most sense." Crucially, Bellingham retains full partnership status. "Notwithstanding the absence of a financial contribution, the city shall remain a signatory to the agreement and a foundational partner in the regional economic partnership," the amendment states. This maintains the city's voice in regional economic development while freeing general fund resources for other priorities. "This doesn't change level of service either," Sundin emphasized. The arrangement reflects inter-governmental cooperation in addressing budget constraints while maintaining essential economic development functions. County agreement to fund these activities through EDI resources demonstrates regional commitment to collaborative economic development. Hammill praised the approach: "This makes sense. I think this is a good creative way to address this lack of funds with the EDI to maintain levels of service." His motion to approve passed unanimously. ## Housing Performance Report: Federal Accountability and Local Success Housing and Services Manager Samya Lutz concluded the meeting with the Consolidated Annual Performance and Evaluation Report (CAPER), required annually by the Federal Department of Housing and Urban Development. This comprehensive report covers federal HOME Investment Partnerships Program and Community Development Block Grant funding, plus local housing levy and affordable housing sales tax expenditures. The report covers July 1, 2024, to June 30, 2025, and includes one-time American Rescue Plan Act funds. Lutz emphasized that accomplishments are counted only when completed within the reporting year, creating timing disconnects with multi-year housing development projects. Housing development consumed 65% of overall expenditures with notable accomplishments: seven first-time home buyers assisted into ownership, 26 existing low-income homeowner properties repaired for health and safety, and 60 shelter units improved or added. However, rental housing development showed an apparent paradox: $10 million spent with zero completed units reported. "The big rental housing development projects can take up to five years," Lutz explained. "So we'll see expenditures going out the door even when there are zero units completed in a particular year." Projects like Millworks and Laurel Forest required final closeout payments, while active construction continues in the Bellis Fair area and other sites. "There'll be additional, you know, 100 units kind of under construction right now that will be reported in the future." Services reached thousands of households, representing 30% of funding. The Food Bank alone, receiving a small portion of its annual budget from these sources, "touched over 45,000 folks in this community." Other programs served approximately 2,000 households with rental assistance, senior services, mental health support, disability services, literacy, and job training. Operations and maintenance funding supports 138 units in previously developed affordable housing projects, ensuring long-term sustainability of public investments. Progress against the Administrative and Financial Plan shows strong performance at the two-thirds mark of the 10-year commitment. Home ownership assistance is on track, services exceed targets, and housing production and preservation appears likely to exceed the 850-unit goal with 753 units already completed. Council Member Laquette asked about rental unit rehabilitation, noting zero accomplishments against a 25-unit goal. "This program is really for non-profit providers, so it's not available to just any owner of rental units in the community," Lutz clarified. Recent examples include Dorothy Place and ongoing Lydia Place Gladstone House rehabilitation. Whatcom County's new small grants program also addresses these needs using different funding sources. The presentation highlighted successful federal partnership while demonstrating local capacity for housing and services delivery across multiple funding streams and program types. ## Closing & What's Ahead Chair Cotton efficiently managed the meeting, keeping discussion focused while allowing for clarifying questions. With all four agenda items receiving unanimous approval, the committee's recommendations move to the evening council meeting for final consideration. The meeting revealed both challenges and adaptive capacity in Bellingham's economic development approach. Canadian tourism decline affects multiple revenue streams, but the community continues investing in long-term assets like the waterfront skate park while maintaining essential services and partnerships. The efficient 37-minute meeting demonstrated committee preparation and staff competence in presenting complex budget and policy matters. With the Budget and Finance Committee scheduled to begin immediately afterward, the morning's work set the stage for comprehensive consideration of the city's financial commitments and economic development strategies. These agenda items reflect broader themes in municipal governance: balancing immediate needs with long-term investments, maintaining services despite revenue challenges, and leveraging inter-governmental partnerships to sustain community priorities. The unanimous approvals suggest committee consensus on these strategic directions as Bellingham navigates current economic headwinds while positioning for future opportunities.

### Meeting Overview The Bellingham City Council's Community and Economic Development Committee met on December 8, 2025, to review four tourism and economic development items, including approval of tourism promotion budgets, lodging tax allocations, and a housing services performance report. ### Key Terms and Concepts **Tourism Promotion Area (TPA):** A special district authorized by state law where qualifying businesses pay additional taxes specifically to fund destination marketing and tourism promotion activities. Collections from businesses within the city and unincorporated Whatcom County are pooled together for regional tourism marketing. **Lodging Tax Advisory Committee (LTAC):** A committee that reviews applications and makes recommendations for how lodging tax revenue should be spent on tourism promotion, events, facilities, and related activities that benefit the community and attract visitors. **Bellingham Fanzone:** A planned series of public events and activities in Bellingham to celebrate the 2026 World Cup, taking advantage of the tournament being hosted in nearby Seattle to attract visitors to the region. **Return on Ad Spend:** A marketing metric measuring how much economic activity is generated for every dollar spent on advertising. In this case, Visit Bellingham reported generating $784 in visitor spending for every dollar invested in marketing campaigns. **EDI Fund:** The Economic Development Investment Fund, funded by countywide rural sales tax revenue, which will now cover the city's contribution to regional economic development activities instead of using general fund money. **CAPER:** The Consolidated Annual Performance and Evaluation Report required by the federal Department of Housing and Urban Development to document how federal housing and community development funds were used and what was accomplished. **Canadian Cross-Border Traffic:** Visitors traveling from Canada to the Bellingham area, which has been significantly reduced (down 22% according to projections) due to various factors, impacting local tourism and hospitality businesses. **HOME Investment Partnerships Program:** A federal program providing funding to help communities create affordable housing opportunities for low-income households through activities like home buyer assistance, rental housing development, and housing rehabilitation. ### Key People at This Meeting | Name | Role / Affiliation | |---|---| | Jace Cotton | Committee Chair, Bellingham City Council | | Daniel Hammill | Committee Member, Third Ward Council | | Edwin "Skip" Williams | Committee Member, Fourth Ward Council | | Tara Sundin | Community and Economic Development Manager, City of Bellingham | | Dylan Deane-Boyle | President, Bellingham Whatcom County Tourism | | Samya Lutz | Housing and Services Program Manager, City of Bellingham | ### Background Context Bellingham's tourism industry is a significant economic driver, generating over $775 million in visitor spending and supporting more than 7,724 jobs in 2024. However, the sector faces challenges from reduced Canadian cross-border travel, which traditionally represents a major portion of visitors. The city uses multiple funding mechanisms - including tourism promotion area taxes, lodging taxes, and federal grants - to support both tourism marketing and affordable housing development. The Tourism Promotion Area was established in 2023, giving Visit Bellingham enhanced funding to conduct comprehensive digital marketing campaigns with measurable results. Meanwhile, lodging tax revenues support everything from major institutions like the Mount Baker Theatre to community events and now infrastructure projects like the waterfront skate park. The committee also oversees federal housing programs that have helped the city exceed its 10-year goal of creating or preserving 850 affordable housing units, with 753 units already completed at the two-thirds mark of the planning period. ### What Happened — The Short Version The committee approved three budget recommendations that will go to the full city council. First, they approved Visit Bellingham's $1.49 million tourism promotion budget for 2026, which funds marketing campaigns, visitor services, and sports development to attract tourists from outside the region. Second, they approved lodging tax budget changes including mid-year increases for 2025 (adding $40,000 for administration and $100,000 for World Cup activities) and the 2026 budget totaling $2.82 million. The 2026 budget includes funding for major institutions, tourism grants, and notably $450,000 toward a new waterfront skate park as a tourism-related facility. Third, they approved an amendment to an economic development partnership agreement where Whatcom County's rural sales tax fund will now cover Bellingham's share of regional economic development costs, freeing up city general fund money while maintaining the city's partnership role. Finally, staff presented the annual federal housing report showing accomplishments including helping seven first-time home buyers, repairing 26 homes, adding 60 shelter units, and spending $10 million on rental housing projects currently under construction. ### What to Watch Next • Full city council consideration of all three committee recommendations at the December 8 evening meeting • February 2026 council meeting when specific Bellingham Fanzone grant awards will be presented for approval • Continued monitoring of Canadian cross-border travel recovery and its impact on local tourism revenue

**Q:** What is the total amount of Visit Bellingham's proposed 2026 Tourism Promotion Area budget? **A:** $1,488,655, funded entirely through Tourism Promotion Area taxes collected from qualifying businesses. **Q:** How much visitor spending did Whatcom County generate in 2024? **A:** Over $775 million, making Whatcom County the fifth highest spending county for visitor spending in Washington state. **Q:** What was Visit Bellingham's return on ad spend in 2024? **A:** $784 for every dollar spent on advertising, with campaigns generating over 570,000 trips and 67,000 hotel room nights. **Q:** Who is Dylan Deane-Boyle? **A:** President of Bellingham Whatcom County Tourism (Visit Bellingham), the official non-profit destination marketing organization for Bellingham and Whatcom County. **Q:** How much is being recommended for the waterfront skate park from lodging tax funds? **A:** $450,000 in 2026, representing about 15% of the lodging tax budget and the first tourism-related facility investment since the Pickford. **Q:** What is the Bellingham Fanzone and how much funding was recommended? **A:** Public events celebrating the 2026 World Cup, with lodging tax funding increased from $50,000 to $150,000 for associated activities. **Q:** How much did Canadian travel to the US decline according to projections? **A:** Down 22% by the end of 2025, significantly impacting Bellingham's hospitality sector which relies heavily on cross-border visitors. **Q:** What does EDI stand for and how does it affect the city's budget? **A:** Economic Development Investment fund, funded by countywide rural sales tax, which will now cover the city's regional economic development costs instead of using general fund money. **Q:** How many affordable housing units has the city completed toward its 10-year goal? **A:** 753 units completed out of an 850-unit goal, putting the city on track to exceed its target at the two-thirds point of the planning period. **Q:** What was the value of earned media coverage Visit Bellingham generated in 2024? **A:** $3.9 million in earned media value, representing the equivalent cost if they had paid for the same media coverage. **Q:** How many volunteer hours did Visit Bellingham utilize in 2024? **A:** Over 1,100 volunteer hours, with expectations to break that record in the current year. **Q:** What is CAPER and why is it required? **A:** The Consolidated Annual Performance and Evaluation Report required by HUD to document spending and accomplishments from federal housing and community development programs. **Q:** How many jobs does tourism support in the region? **A:** More than 7,724 jobs are directly or indirectly related to tourism in Bellingham and Whatcom County. **Q:** What was notable about Bellingham's hotel occupancy in 2025? **A:** Down 3.6% through October compared to the same period in 2024, primarily due to reduced Canadian visitation. **Q:** Who made the motions to approve all three budget recommendations? **A:** Committee Member Daniel Hammill made all three motions, which were approved unanimously 3-0. **Q:** How much is recommended for tourism promotional grants in 2026? **A:** $707,010 total, split between $673,510 for standard grants and $33,500 for startup grants supporting various events and activities. **Q:** What happens next with these committee recommendations? **A:** All three recommendations go to the full city council for final approval at the December 8, 2025 evening meeting. **Q:** How many first-time home buyers were assisted through city housing programs in the reporting period? **A:** Seven first-time home buyers received assistance getting into home ownership through the city's programs. **Q:** What is the Tourism Promotion Area and when was it established for Bellingham? **A:** A special tax district for tourism marketing authorized by state law, established for Bellingham starting in 2023 to provide comprehensive funding for destination marketing. **Q:** How many tourism-related print materials did Visit Bellingham distribute in 2024? **A:** Over 103,000 travel guides and maps, with demand continuing to grow despite predictions that print materials would decline.