Malaga TIF passes on split Port vote

WENATCHEE — The Port of Chelan County commissioners voted Tuesday to approve a tax increment area in Malaga, establishing the framework for tax increment financing while directing staff to return in mid-January with an interlocal agreement intended to protect junior taxing districts.

The Chelan Douglas Regional Port Authority meets as a joint body, with both Chelan and Douglas county commissioners present. Because Malaga lies entirely within Chelan County, only the three Port of Chelan County commissioners — Donn Etherington, J.C. Baldwin and Richard DeRock — voted on the measure.

The vote followed a lengthy and often emotional public comment period in which speakers urged the Port to delay approval until a mitigation agreement is finalized, warning the financing tool could shift costs to property taxpayers and strain local services.

County mitigation proposal becomes central

Port CEO Jim Kuntz recapped the Port’s timeline, saying the Malaga TIF concept was introduced in May and that the Port has engaged in “50-plus interactions” through meetings, briefings and other outreach.

Kuntz described a mitigation model developed by Chelan County that would allow taxing districts to retain new-construction revenues and avoid the TIF capturing revenue from a levy lid lift. Under the concept, taxing districts would receive new-construction revenue first, while the Port’s tax allocation revenue would be delayed until the following year’s higher base.

“This is not a Port proposal — it is Chelan County making a proposal to us,” Kuntz said, adding, “I’m optimistic we can get to an interlocal agreement that mitigates the concerns.”

Kuntz said adopting the tax increment area now was important, citing the possibility of legislative changes during the upcoming session that could make the tool less effective. He also pointed to language added to the resolution allowing early termination if unintended tax impacts emerge.

Public comment: Timing, trust and services

Public comment opened with remarks from Danielle Ouellette, a retired educator, who emphasized accountability and public trust. “Those of us who pay your salary need to be listened to when these decisions are made,” Ouellette said.

Tammy Donaghue, a commissioner with the Malaga Three Lakes Water District, warned of downstream impacts to essential services. “We need to keep our fire districts funded, our library funded, and our roads funded,” she said.

The Wenatchee Valley Firefighters union’s Clint Webley, speaking personally, urged collaboration. “I ask that you continue to work with our other elected officials to come to a solution that works for everyone,” he said.

Chelan County Commissioner Shon Smith opposed the action, focusing first on timing. “There is no statutory deadline which necessitates acting today,” Smith said, arguing the vote was unnecessary two days before Christmas. He also raised concerns about the county’s comprehensive plan update and potential fiscal impacts on county services.

Chelan County Community Development Director Deanna Walter, a former county assessor, urged delay to allow time to formalize an interlocal agreement that would preserve operating funds for taxing districts.

Wenatchee Valley Fire Department Chief Brian Brett echoed that request, calling the urgency “self-imposed” and saying, “If you choose to move forward, please make it contingent upon an interlocal agreement.”

Commissioners weigh adoption, mitigation and next steps

After public comment, Etherington supported adoption, framing the TIF as a local mitigation tool. “The money stays in Malaga to be used to mitigate the impacts of development,” he said.

DeRock focused on infrastructure constraints, particularly sewer. “If we want anything beyond data centers, we have to have sewer infrastructure,” he said. While expressing concern about unintended tax impacts, DeRock said, “The county proposal is stronger and avoids the negative impacts we’re concerned about,” and called for a defined return date.

Baldwin opposed delaying the vote, citing concern that legislative changes could undermine the tool. “I’m encouraged by the County’s proposal and the willingness to collaborate,” she said, and committed to “an annual meeting with junior taxing districts as part of our planning process.”

Vote and follow-up direction

Commissioners first approved the resolution by majority vote, with DeRock voting no. After additional discussion, the board re-motioned to reflect its intent to pursue a mitigation agreement. The tax increment area was approved again, this time with DeRock voting yes.

Commissioners then directed staff to work with Chelan County and junior taxing districts to develop an interlocal agreement for board consideration in mid-January, with Jan. 13 discussed as a target date.

Before adjourning, Kuntz said the decision was not made lightly and reiterated the Port’s intent to continue working with partners. Commissioners thanked the public for sustained participation and described the process as a meaningful example of civic engagement.

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