Tax Increment Financing in Federal Way

Tax Increment Financing (TIF)

The City has big plans for Downtown Federal Way and establishing a Tax Increment Area (TIA) is an innovative strategy to fund the necessary improvements to catalyze redevelopment - transforming the suburban, auto-oriented and underachieving area of Federal Way into a walkable, vibrant, and memorable central gathering place. The soon-to-be-open Sound Transit station in downtown Federal Way along with the City's investment provides the opportunity to change the pace and trajectory of the future of Federal Way. The use of the TIA funding would help implement this change.

The theory of Tax Increment Areas is that the growth of investment, and therefore property taxes, will fund the public improvements in the area and that those promised public improvements have a direct impact on developer’s decisions to invest in the area and the timing of those investments. A TIA causes a minimal increase in property taxes, estimated at an average annual impact of $2 for a property valued at $575,000, the median home price in Federal Way.

The additional funding source of the tax increment area tool would allow for infrastructure and public amenity projects to be that will provide the incentives for private development to occur in the TIA.

Proposed Project List

Public Parking	A stand-alone parking garage, public parking integrated into a private garage, shared parking agreements w/ other parties, other equivalent projects that would add parking
Recreation	New park or park expansion, civic plaza, park improvements, other equivalent projects that would add recreational amenities
Mobility	S 320^th dip, pedestrian promenade, protected bike lanes, transit shelters, bicycle lockers, City Center Access, other equivalent projects that would increase mobility
Community Building	Public market, senior center, City Hall, community center north, downtown meeting room, other equivalent projects that would add an indoor community space to the district
Public Safety	Improvements to benefit FWPD, improvements to benefit So. King Fire, improvements to lessen code compliance issues, other equivalent projects that would improve public safety
Placemaking	Gateway features, wayfinding signs, pedestrian nodes/public spaces, public art, lighting (e.g. catenary lights, etc.), special street furniture, other equivalent projects that would improve placemaking

The city has been working with a consulting team to evaluate the TIA. Part of that evaluation is the estimates of foregone revenue to the impacted taxing districts. This impact does not reduce any property taxes presently being received but would not allocate future property tax revenues in the TIA to the overlapping taxing districts until the TIA is terminated in 25 years.

See the FAQs to the right for more information about Tax Increment Financing.

Tax Increment Financing (TIF)

Proposed Project List

Public Parking	A stand-alone parking garage, public parking integrated into a private garage, shared parking agreements w/ other parties, other equivalent projects that would add parking
Recreation	New park or park expansion, civic plaza, park improvements, other equivalent projects that would add recreational amenities
Mobility	S 320^th dip, pedestrian promenade, protected bike lanes, transit shelters, bicycle lockers, City Center Access, other equivalent projects that would increase mobility
Community Building	Public market, senior center, City Hall, community center north, downtown meeting room, other equivalent projects that would add an indoor community space to the district
Public Safety	Improvements to benefit FWPD, improvements to benefit So. King Fire, improvements to lessen code compliance issues, other equivalent projects that would improve public safety
Placemaking	Gateway features, wayfinding signs, pedestrian nodes/public spaces, public art, lighting (e.g. catenary lights, etc.), special street furniture, other equivalent projects that would improve placemaking