Tacoma's deal for DaVita will include neighborhood facelift
By John Gillie; The News Tribune
Expect to see a more appealing Pacific Avenue between South Eighth and South 15th Street within a couple of years as a result of the City of Tacoma’s successful effort to keep its second-largest downtown employer.
A sidewalk-to-sidewalk facelift of downtown’s main street is part of the incentive package that persuaded DaVita Inc. to stay in downtown Tacoma.
DaVita, which operates a network of 1,400 kidney treatment centers nationwide, last week announced it will sign a new lease on the former Schoenfeld Furniture Store at South 15th Street and Pacific Avenue, and lease three floors of the nearby Columbia Bank Building to house its accounting and billing staff.
The company now employs some 900 workers in the former furniture store building, and it expects to add more over the next decade.
The El Segundo, Calif. company (now moving its headquarters to Denver) had searched the area for new quarters before deciding to stay put and to expand downtown.
Elly Walkowiak, project manager for the City of Tacoma Department of Economic Development, said that in addition to the Pacific Avenue makeover, the city added several other inducements, including: business and occupation tax forgiveness based on the number of new employees the company hires, federal tax benefits and low interest loans so that the Oakland, Calif., owner of the Schoenfeld Building can upgrade the former furniture store.
The city is still putting together the funding package for the Pacific Avenue upgrade, she said. The city expects to draw from local, state and federal sources for the project. That project is also likely to include a new transportation center and parking garage near the Tacoma Dome to serve commuters and downtown workers.
Walkowiak said the total cost of the project is likely to exceed $35 million.
The Pacific Avenue project could also help keep downtown’s largest employer, Russell Investments, downtown.
Russell is considering offers from both Seattle and Tacoma for its headquarters. Russell was founded in Tacoma in 1936 and has its headquarters on A Street now.
The DaVita deal includes a yearly $500 business and occupation tax forgiveness per new employee. That tax forgiveness will last for five years. To qualify, those employees must make $16.19 an hour or more.
Tacoma projects that DaVita could hire about 400 new workers during the 10-year-lease period. About 270 or so would meet the income qualifications, she said.
The city also told DaVita that it would be eligible for a one-time $1,500 tax credit from the federal government for each new employee who works and lives in the downtown area. The city is estimating about 20 new hires could qualify.
The building owner, Horizon Properties, is potentially eligible for about $2 million in federal Section 108 low-interest loans to pay the costs of updating the Schoenfeld Building to meet DaVita’s needs. The interest rate on that loan is likely to be about 2 percent, including administrative fees from the city.
In addition to the low interest rate, which could translate to a lower rental rate for DaVita, the federal money means that the building owner won’t have to search for conventional loans for the rehab, a difficult task in today’s environment, said Walkowiak.