Name: Bellingham City Council - Community and Economic Development Committee meeting, Apr 27, 2026
Start: 2026-04-27
End: 2026-04-27
Location: City of Bellingham

City Council - Community and Economic Development Committee

Mon, April 27, 2026

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Meeting summaryAI-generated

City Council Community and Economic Development Committee — April 27, 2026

This was a regular committee meeting chaired by Council Member Jace Cotton (At-Large), covering two substantive items: adoption of the annual federal and local housing funding action plan, and a presentation on downtown commercial vacancy trends.

2026 Action Plan: CDBG, HOME, Housing Levy, and Affordable Housing Sales Tax Funds

Samuel Lutz from the Planning and Community Development Department presented the 2026 Action Plan, the city's annual blueprint — required by the U.S. Department of Housing and Urban Development — for spending federal Community Development Block Grant (CDBG) and HOME Investment Partnership Program funds alongside local sources including the Bellingham Housing Levy and the affordable housing sales tax. The local sources make up the majority of the total funding. The plan must align with the city's five-year Consolidated Plan, and the Community Development Advisory Board (CADB) plays a central role in reviewing applications and prioritizing allocations.

What the money funds: The largest share goes to rental housing production — over 200 units across four projects totaling more than $15 million, most of it previously committed carry-over funding:

Lake Whatcom Center's Lincoln Street Supportive Housing — 38 units, 37 serving highly vulnerable, extremely low-income individuals; construction starting soon.

Opportunity Council's Cedar Commons (Bellis Fair Senior Housing, Phase 2) — Phase 1 is leasing up now; Phase 2 will offer primarily one-bedroom units at 30–60% of Area Median Income (AMI).

Bellingham Housing Authority's Unity Street Redevelopment — 64 primarily one-bedroom units at 30–60% AMI; expected to break ground before year-end.

Mercy Housing Northwest's Holly Street Senior Housing (Old Town) — recently awarded Low-Income Housing Tax Credits; moving forward.

The plan also sets aside funding for a new tiny house village and for land acquisition or predevelopment to keep the housing pipeline active. No new applications were received this year, which staff explained was not alarming — a major partner chose to wait one year, and substantial commitments were made the prior year.

The second-largest category is rental assistance and supportive services, funded primarily by local sources. Programs include permanent supportive housing, homeless day services and shelters, rental assistance, flexible family stabilization funding, and basic-needs services such as Meals on Wheels and the Max Higbee Center. This is the second year of a two-year funding commitment cycle; CADB's most substantive debate concerned how to allocate HOME ARP (COVID-era) funds among three agencies offering homelessness prevention services — ultimately approving all three with some adjustments, by a unanimous CADB vote.

Other categories include housing preservation (home rehabilitation for low-income homeowners, manufactured home repair, emergency rental repairs), homeownership (Kulshan Community Land Trust's Fernlea Court — 18 homes under construction — and down payment assistance through the Washington State Housing Finance Commission), community public facilities (primarily CDBG funds for acquisition of a day center), and administration and contingency (supporting fair housing education, home sharing, and a buffer for projects that may not proceed as planned).

Staff noted that federal allocations weren't confirmed until April 6 and came in roughly $5,000 above last year's combined total — a stable but not growing federal funding picture.

Council discussion touched on the pipeline of future projects. Council Member Lilliquist expressed concern about long lead times (some projects opening in 2028) and the need for more development partners and alternative funding models. He advocated for mixed-income projects — for example, adding market-rate floors atop subsidized buildings — and flagged city-owned properties (the tiny house village site, Baker View Park, and the WTA's former Base Camp property/future transit center) as future pipeline opportunities. Staff responded that the primary constraint is funding, not developer capacity or land — several experienced developers (Compass Housing, Mercy Housing, the Housing Authority) have properties lined up, and the city is actively working to pace out tax credit applications regionally with Whatcom County. Staff acknowledged that smaller nonprofit operators do face capacity constraints, as evidenced by only one response to a recent RFP for the I Street duplex.

Council Member Williams requested a copy of the slide deck to share with constituents, and staff offered to present to community groups on request.

Vote: Council Member Huthman moved to recommend approval of the resolution; no formal second was recorded in the transcript. The motion passed unanimously (3–0 among committee members present). The positive recommendation will be forwarded to the full council.

Downtown Occupancy Trends and Strategies to Address Vacancies

Community and Economic Development Manager Tara Sundine, Senior Planner Darby Gallagher, and researcher Sarah McPherson presented findings from a new downtown vacancy study conducted as part of the Downtown Forward initiative. GIS analyst Kate Newell contributed data analysis. This was an informational presentation with no binding vote.

The study: Staff surveyed all ground-floor commercial spaces within the downtown main street boundary — an area of just under 2 million square feet, notably large for a city Bellingham's size (for context, Bellis Fair Mall is roughly 750,000 sq. ft.). The survey involved on-site field work in October, comparison with business license data, and interviews with brokers and property owners.

Key finding — 10% vacancy rate: The overall ground-floor vacancy rate is approximately 10%, which falls within the industry's "balanced" range of 5–10%, though above 11% would signal weakness. For comparison: downtown Everett is at 10%, Spokane's measured areas at 6.4%, and downtown Seattle at roughly 20%. However, the downtown core has a higher vacancy cluster of approximately 14%, which staff flagged as more concerning.

Staff broke the 10% vacancy into three categories:

Market-ready spaces (44%) — smaller footprints (under 6,000 sq. ft.) that tend to turn over quickly and are well-suited to current tenant demand.

Large-footprint vacancies (19%) — three highly visible properties exceeding 10,000 sq. ft. (including the Greenhouse space and Boundary Bay's former space) that don't fit current market preferences for smaller, lower-overhead spaces. Subdivision or redevelopment was identified as a potential path.

Stalled assets (37%) — spaces vacant for more than five years due to environmental complications (many former auto repair sites), complex ownership structures (especially commercial condo arrangements), and other obstacles that prevent progress.

Staff also flagged factors beyond raw vacancy that affect the perception of downtown vitality: 13 banks occupying prominent corners, 13 acres of surface parking lots, 11 vacant lots (contiguous and symbolically impactful), underdeveloped properties, and businesses with limited or unusual hours.

On the positive side, staff highlighted growing business clusters (e.g., the Pickford Film Center and adjacent restaurants), strong entrepreneurial culture, and a shift toward livelier evenings and weekends — a reversal from the old pattern of a busy lunch hour and dead nights.

Strategies: Staff outlined existing tools the city already uses (multifamily tax exemption, traffic impact fee reductions in the urban village, eliminated parking minimums, Opportunity Zone designation, B&O tax reductions, alley cleanups, bike police patrols) and proposed near-term additions for 2026–27, including: better promotion of existing incentives, a potential deepened B&O tax reduction in the pedestrian core (a mayor's proposal expected to come before council this year), review of ground-floor commercial requirements (adding more supply to an already oversupplied market was flagged as counterproductive), the downtown connections transportation plan, expedited plan review in the core, a potential revival of a shared "business advocate" position with the Downtown Bellingham Partnership, a pre-application assistance program to help property owners subdivide large spaces, a downtown activation grant program, and window wrap funding for vacant storefronts.

On vacancy taxes: Mayor Kim Lund specifically addressed the frequently-asked question of why the city doesn't use a vacancy tax. She explained that Washington State's uniformity clause requires all property within a class to be taxed equally, which prevents cities from singling out vacant properties for higher taxation — unlike Vancouver, B.C., which has used such a tool successfully. This has been a lobbying priority for the city in Olympia, and that advocacy will continue.

Council discussion was cut short by time constraints. Council Member Huthman noted the permitting process as an underaddressed challenge for small businesses and flagged the examples of Greenhouse and Backcountry Essentials — both of which moved within downtown and purchased their buildings — as a model worth incentivizing. Council Member Cotton noted ongoing legislative work related to these issues. The committee agreed to schedule a follow-up session for fuller discussion; no formal motion or direction to staff was required.

Key Takeaways

$15 million+ and 200+ housing units are in active development through the 2026 Action Plan, though most projects won't open until 2027–2028, raising near-term pipeline concerns.

Federal funding held steady — CDBG and HOME allocations came in about $5,000 above last year, but staff emphasized that funding, not land or developer capacity, remains the primary constraint on affordable housing production.

Downtown vacancy is 10% overall — within the "balanced" range nationally, but the core cluster runs closer to 14%, and 37% of vacancies are "stalled" due to environmental or ownership complications that are difficult to solve quickly.

A B&O tax reduction proposal for the downtown pedestrian core is expected to come before the full council later this year, as part of a broader strategy to reduce barriers for businesses.

A vacancy tax is legally unavailable to Washington cities under the state's uniformity clause; Bellingham will continue to lobby the state legislature for a change.

AI-generated summary from voice-to-text transcript. Not the official record. Verify important details with the source documents linked above.

What happened at this meeting

A resolution relating to the adoption of the 2026 Action Plan, the use of Community Development Block Grant (CDBG), HOME Investment Partnership Program (HOME), Bellingham Housing Levy and affordable housing sales tax funds, the allocation of funds to support selected City housing and human services agencies and directing the Mayor to submit the 2026 Action Plan to the U.S. Department of Housing and

# 2026 Action Plan Summary

Samuel Lutz from Planning and Community Development presented the 2026 Action Plan, an annual federal requirement for allocating approximately $15 million in Community Development Block Grant and Home Investment Partnership Program funds across four major housing projects totaling over 200 units, including supportive housing, senior housing, and rental assistance initiatives. Key projects include Lake Wacom Center's Lincoln Street supportive housing (38 units), Bellingham Housing Authority's Unity Street redevelopment (64 units), Opportunity Council's Cedar Commons senior housing, and Mercy Housing Northwest's Holly Street Senior Housing, along with a new tiny house village and permanent supportive housing facilities. Lutz emphasized that more than half the budget reflects prior-year commitments for large capital projects, that community needs significantly exceed available funding, and that no new housing development applications were received this year. The Community Development Advisory Board discussed mixed-income housing strategies and HOME ARP funding allocation, with Council Members Huffman, Williams, and Hamill questioning federal funding changes and the lack of new development applications. The motion to approve the 2026 Action Plan resolution passed unanimously with all members in favor.

A presentation on downtown occupancy trends and strategies to address vacancies

# Summary: Downtown Occupancy Trends and Vacancy Strategies

Community and Economic Development Manager Terara Sundine, Senior Planner Darby Gallaghan, and temporary employee Sarah McPherson presented findings from the Downtown Forward Initiative showing Bellingham's downtown has a 10% ground floor vacancy rate (14% in the core), which falls within the healthy 5-10% industry standard range. The study of nearly 2 million square feet of ground floor space identified three vacancy types: 44% market-ready spaces, 19% large footprint properties mismatched to current demand, and 37% stalled assets with environmental or ownership complications. Staff attributed vacancies and downtown vibrancy challenges to broader trends including the shift from in-office work, changing consumer preferences, rising labor and construction costs, and clustering of vacant properties that create negative perceptions. To address the issue, staff recommended maintaining existing programs (bike patrols, cleanups), expanding business incentives, and exploring B&O tax reductions and expedited permitting, while noting that state property tax uniformity laws prevent implementation of vacancy taxes despite their success in other jurisdictions. Mayor Lond and Council Member Huffman expressed support for continuing current strategies and exploring additional approaches, with the committee scheduling a follow-up meeting for further discussion.

Agenda items (2)

Procedural (2)

24898ProceduralA resolution relating to the adoption of the 2026 Action Plan, the use of Community Development Block Grant (CDBG), HOME Investment Partnership Program (HOME), Bellingham Housing Levy and affordable housing sales tax funds, the allocation of funds to support selected City housing and human services agencies and directing the Mayor to submit the 2026 Action Plan to the U.S. Department of Housing and

The city is asking the council to approve a spending plan for federal housing grants and local affordable housing funds, which will direct money to various local agencies that provide housing and human services to residents in need.

What happened

24912ProceduralA presentation on downtown occupancy trends and strategies to address vacancies

City staff will present information about how many storefronts and offices downtown are empty and discuss potential ideas to fill those vacancies and bring more activity to the downtown area.

What happened

Additional votes recorded in minutes

Recommend approval of resolution adopting 2026 Action Plan (CDBG, HOME, Housing Levy funds)

aye 3

Edwin H. 'Skip' Williamsaye

Hollie Huthmanaye

Jace Cottonaye

Verbatim transcript available

225 transcript segments indexed

Great. We have two agenda items before us today. Um the first is a resolution. This is a long title. A resolution relating to the adoption of the 2026 action plan, the use of community development block grant, home investment partnership program, Bingham housing levy and affordable housing sales tax, the allocation of funds to support selected city housing and human services agencies, and directing the mayor to submit the 2026 action plan to the US Department of Housing and Urban Development.

City of Bellingham Community and Economic Development Committee minutes April 27, 2026, 2:35 PM Chair: Jace Cotton Phone: 360-778-8200 Members: Hollie Huthman, Edwin H. "Skip" Williams Email: ccmail@cob.org Web: cob.org/council City Council committee meetings Standing committee members receive reports and information, ask questions, and vote on a recommended action for consideration by the full Council at the regular meeting.

There is no public comment period during committee sessions. Call to order and roll call Council President Stone called the meeting to order at 2:45 p.m. Present: Committee Chair Jace Cotton, At-Large Committee Member Hollie Huthman, Second Ward Committee Member Edwin H.

Um, and I'll first recognize Samuel uh Lutz. >> Thank you very much. Samuel Lutz, Planning and Community Development Department. Um, thank you for that introductory statement and apologies for the long title.

"Skip" Williams, Fourth Ward 24898 1. A resolution relating to the adoption of the 2026 Action Plan, the use of Community Development Block Grant (CDBG), HOME Investment Partnership Program (HOME), Bellingham Housing Levy and affordable housing sales tax funds, the allocation of funds to support selected City housing and human services agencies and directing the Mayor to submit the 2026 Action Plan to the U.S.

Um, this is the annual action plan that is required by the Federal Department of Housing and Urban Development. Um, it is detailing how the city of Bellingham intends to spend those federal community development block grant and home investment partnership program funds which are allocated to the city each year.

Department of Housing and Urban Development Summary: Tara Sundin, Community and Economic Development Manager, and Samya Lutz, Housing and Human Services Manager, presented the resolution, which adopts the 2026 Action Plan, the use of Community Development Block Grant (CDBG), HOME Investment Partnership Program (HOME), Bellingham Housing Levy and affordable housing sales tax funds, the allocation of funds to support selected City housing and human services agencies and directing the Mayor to submit the 2026 Action Plan to the U.S.

But it also includes local locally derived funding um from the city of Bellingham which is in fact the prepundonderance of the funding included in the action plan. Um, it's important to note that the action plan activities must be consistent with the five-year consolidated plan.

Um, that plan is linked in the memo that's in your council packet. Um, and the community development advisory board or CADB as is shown on this slide plays a key role in the process. Uh, really helping us stay grounded in that consolidated plan.

Department of Housing and Urban Development. Council Members discussed the resolution and asked questions. The presentation is available here. Action: Hollie Huthman moved to recommend approval of the resolution.

Page 1 of 2 MOTION CARRIED 3-0. 24912 2. A presentation on downtown occupancy trends and strategies to address vacancies Summary: Tara Sundin, Community and Economic Development Manager, Darby Galligan, Senior Planner, and Sarah MacPherson, Limited term Temp presented downtown occupancy trends and strategies to address vacancies.

That five-year plan is really where we have very uh detailed and robust public comments um and analysis. And then the activities shown in each annual action plan are sort of how we carry out those goals and priorities in that five-year plan which are detailed here.

Council Members discussed the presentation and asked questions. This item will return for additional discussion. The presentation is available here. Adjournment There being no further business, the meeting adjourned at 3:56 p.m.

Um, there's also a one-pager included in your council packet called a summary of goals, needs, and strategies. Um, and those are really the fundamental basis for uh what we do daily in the housing services uh team.

And um hopefully you'll see these clearly in all the activities that we discuss here that are shown in the action plan. Uh unfortunately, there are far greater needs in the city. um that fall under these goals and priorities, then we have funding to address.

Um but this plan shows our best effort to balance these community priorities with the restrictions of the funding that we have um and the constraints therein. So the action plan reflects many many sources of revenue um all of which have their own rules.

Um they're governed by both federal law, state law, and local ordinance. Um and as well as our administrative and financing plan that is uh particular to the housing levy and the affordable housing sales tax.

Uh folded into the budget this year are significant um prior committed funds um from previous years. In fact, more than half of this budget um reflects projects and activities that were committed to in prior years.

Um especially those large capital development projects that take many years to get going. Um but um we'll talk more about that in the subsequent slides. So looking at the program uses uh you'll see as is typical that rental housing production is the predominance here of the funding.

Um the second largest category is the rental assistance and supportive services. Uh home buyer is about 8% of the total funding. And then the last three categories share between two and 3% the housing preservation, community facilities and admin categories.

So in your packet there's a resolution with two exhibits. Um exhibit A is the summary budget and then there is uh this section within exhibit A the um operation and maintenance rental assistance and supportive services program that has more detail um shown in exhibit B.

So please uh refer to those um in addition to this presentation um as we go through because these are really the details of the specific activities that will be carried out in this next program year. So focusing on housing production this supports that consolidated plan goal of reducing housing cost burden.

Um it's really uh focusing on those existing projects as I mentioned and I'll talk briefly about each of them. Uh the Lake Wacom Center's Lincoln Street supportive housing um is due to start construction soon.

Um it's a 38 unit apartment complex of which 37 of those units will serve uh highly vulnerable in individuals who are served through Lake Walom Center's programs um and are extremely lowincome. one of the units as a manager's unit in that project.

Um, opportunity council's Bellis Fair senior housing project is now referred to as Ced Cedar Commons. Um, the first phase of this project is just about done. They're leasing up now. Hopefully, you've had a chance to drive by that area.

Um, but the second phase of that project is included in this next action plan. Um it will be primarily um one-bedroom units serving between 30 and 60% of area median income. The Bellingham Housing Authorities's Unity Street redevelopment um where their offices were once located is moving forward with 64 primarily one-bedroom units serving a broad range of individuals um and households.

Um, again, low income, 30 to 60% area median, and that should start construction before the end of the year. Likewise, with the Mercy Housing Northwest's project in the Oldtown neighborhood, um, being referred to as Holly Street Senior Housing, this was our broad um, priority for the low-income housing tax credits.

Um, and it was awarded funding this year. So, that is going forward as well. And then uh together all of these reflect over 200 units of housing and over 15 million in funding. Um no new applications were received this year.

However, um there are some city priorities that you can see included um the development of a new tiny ho house village as well as um some set aides for existing um purchasing existing land or um sorry acquisition of land or predevelopment for new projects so that we can keep our pipeline going into the future.

And then moving to the preservation program. This is really um reflecting ongoing programs that we carry out every year. The home rehabilitation program serves existing homeowners who are low-income and have needed health and safety repairs.

our partnership with the opportunity council for their manufactured home repair program and emergency repair program for those who operate existing rental housing that needs um quick small repairs um are projected to go forward.

And then there are a couple carryover projects that may be continuing into this next action plan year. The Lydia Place Gladstone facility and Sun Houses Nevada Street permanent supportive housing. um that's a three-bedroom home serving um serving very low income there.

This category again is the second largest. Um it uses all of available funding sources. Um it reflects um multiple goals from the consolidated plan. Predominantly providing houses sorry providing services to support housing stability and helping vulnerable households meet basic needs.

It also touches on the goals of increasing safety for vulnerable groups and reducing housing cost burden uh through the provision of rental assistance. Um because the majority of the funding for this program comes from our local sources, the affordable housing sales tax and the housing levy.

Um the predominance of services funded through this program really need to be housing related. Um but you'll see in exhibit B that programs in this category support a wide wide variety of things in our community.

everything from the Grace program, uh, permanent supportive housing facilities with sight-based services, homeless day services and shelters, including tiny house villages, rental assistance, and flexible funding for families um, who need that to stay stably housed.

Um, and programs helping with basic needs like meals on wheels, uh, Max Higgby Center, just to name a couple. Um, this is the second year of what's typically a two-year commitment cycle for notices of funding availability released.

In this case, released in the fall of 2024, and the majority of funding is carryover funding from the commitments last year. The exception to this is with the prevention, the homelessness prevention program that's funded through the home ARP uh funding that was allocated in the wake of COVID.

Um, and in one big chunk that's anticipated to last through our consolidated planning period roughly. And we did publish a new notice of funding availability. CADB was very involved in that review of that NOA and the applications that came in for that um and spent a significant amount of time um in that review process.

Um I also want to note that not reflected here is an additional $100,000 for the food bank that was in a a different general fund category that will be moving forward this year as well. Um and clearly this category of services is one where the needs just far far outstrip um the availability of funding.

Um and this is again our our attempt to balance the consolidated plan goals with what's available. Shifting to the community public facilities category. Um it supports the consolidated plan goal of helping vulnerable households meet their basic needs and increasing safety for vulnerable groups.

Um this category is entirely funded by federal funds through the community development block grant program. Um and the plan proposed for utilizing these funds this year is um for the predominance to go into acquisition of a day center um and then for some to stay set aside um for other community facilities projects that may come up throughout the year.

The home ownership program um supports the consolidated plan goal of reducing housing cost burden. We do have um a couple programs carrying forward. The major one is Colion Community Land Trust Lefrenia Court um project in the Birwood neighborhood where 18 homes are currently under construction.

Uh we also have a partnership with the Washington State Housing Finance Commission that provides down payment assistance to any low-income household um who is interested in utilizing it either through Culsian Community Lantress or through local banks.

Um so there's both carryover funding and new funding going into that program. We anticipate quite a few houses um going through that in the coming year. Um and then some funds are set aside um for uh additional projects.

We had three um projects apply um to our notice of funding availability for home ownership, none of which exhibited readiness to proceed, but we wanted to include some funding in case um those projects are able to move forward.

And lastly, um the administrative and contingency category. There is more administrative funding that comes through the city's general fund budget that supports things, but this is really the area that we're able to um support things like fair housing, education.

This is fair housing month. Hopefully, you all have seen the posters um in city hall and there's a few other events happening. Um, so city staff's involvement with that falls under this category of helping to prevent discrimination and increased protections for low-income renters.

And things like our home sharing program are also part of that. Um, and the contingencies that are part of this action plan allow um for times when projects just are not able to move forward for one reason or another.

and we can shift funds and still um move forward with meeting community needs even um uh when something is not able to move forward as planned. So that is the end of the presentation and I'd appreciate your consideration of the resolution.

>> I'll first turn to committee for questions or comments. >> Uh Council Member Huffman, >> thank you. Thank you for the presentation. Um, as with every year, um, CADB puts quite a bit, uh, community development advisory board puts quite a bit of work into reviewing, um, requests for funding and and prioritizing where that funding goes.

Um, and there are challenges every year. this year, were there any particular challenges or conversations about need um that might have been different than other years or did this seem like an average year?

Were there differences? Were there changes at a federal level that are affecting um this funding? Um interested in hearing more about that process. >> Yeah, so unfortunately we didn't have the federal allocation until April 6th.

Um, so we didn't know exactly how much we had available from the federal government, but we assumed it was close to last year's. And in fact, it's about $5,000 more than last year combined um home and and CDBG together.

Um, CADB's most robust discussions were around the home ARP funding and the homeless prevention uh programs that utilize that funding. There were three applications. Um each of those agencies has existing programs and um CADB desired to kind of um more or less equalize the funding um increase the funding for an agency that didn't have as much and decrease the funding for an agency that had a lot more of that funding.

Um they voted to approve the action plan um unanimously. uh the the discussion around the specifics of those three agencies was very robust and I'd encourage you to listen to the last discussion in April um to hear the details of that discussion but they supported all three agencies and had slightly differing opinions as to um exactly how much funding should go to each agency um and in the end supported this this action plan uh unanimously to go forward to you.

Council member Williams. >> Yes. I just want to say thank you for the presentation. Um, every time I've met with you, I I always get really good information. Even though we know the challenge is great.

Um, and my only question is, can I get a copy of this slide show so I can use it? cuz um a lot of um people that have reacted to me, we don't do enough, we need more, but I'm always amazed at how much we are doing.

And even though it's it's not, how could I say this? It's not totally at 100% of what we need. We do a heck of a lot of of of of work in this area. At least I believe that we do. And I want to congratulate you on that.

So, like I said, if I could get this slideshow, I I would greatly appreciate it. It's available in the X drive. Um, but I'm happy to send it to you as well. Um, and I'll just say we have a great team in the housing and services uh, program and community development in general.

Um, and that team is available to go out in the community and do presentations. We've done that in a number of places, but um if you hear of a group of people that's interested to hear more about the breadth of programs the city is involved in, um we'd love to to join and and pass on more information.

>> Sorry, >> I was going to also ask for the slideshow. So, thank you, Council Member Williams. Um and to have that in the record and available for the public is great. Um but yeah, I I do I agree. I think it's we get to have a a front row seat to see all of the amazing things that the city does um in regarding regarding housing and services.

Um but it's often very quiet work and so I I the more that we can help share the story of the work that we're doing um the better. But um one one question I noticed that you had mentioned that there weren't any new applications for any um housing development projects.

Is that unusual this year? And um is there is there are there potentially reasons for that? >> Uh we typically know about projects that are underway or being considered um for many years um before they might show up on a plan or um in the community.

Um there are a number of players in the community that do housing development and we're in regular communication with them. Um we do know of one that's in the planning phases for a fairly large development.

They chose to wait one year before coming forward. Um so not entirely a surprise. And because we moved forward with such substantial um development commitments last year um to have two major projects um go in the same year was a big commitment and we forward committed some funding.

So, um, that's another reason I think that we we see what we see this year. >> And I just wanted to add, we um work in concert with Walcomm County and we the next uh 9% tax credit project is slated to happen outside of Bellingham.

So, we're constantly working on that pipeline. So, we know what's happening in Bellingham the next couple of projects, but we'll have to wait for the next 9%. >> Okay, great. So, not necessarily a sign that things are slowing down, just >> No, >> the average maybe getting thrown off by a little bit last year, a little bit more the next year.

Okay, great. Um, I will go ahead and move to recommend approval on the resolution in support of the 2026 action plan. Thank you for that motion, Council Member Huffman. Any further discussion? Seeing Oh, a couple.

Okay. Uh, I'll start with Council Member Hamill. >> Yeah, thanks uh for the presentation. I just had a question regarding the rental assistance slide that had the just or the public safety sales tax. It's 188,000 plus that was allocated to that.

Is that all is that number all pursuant and allocated to housing and housing related services? >> That's the amount the mayor's office um allocated particularly for the homeless day response. >> Thank youquest.

>> Yeah, I have a question and a plea. Um, Miss Sundine, you sort of answered part of it. I was going to ask about the pipeline. Um, I think that the housing authorities Union Street project is not slated to open until 2028.

Um, the um, which one? This is the the Holly Street Senior Center near the current Lighthouse Mission. I think that's also maybe 28. So, I mean, I'm worried about the pipeline because these projects, even though it's carryover funding for us from the previous year, it's not going to show up yet.

Right now, the Bellisphere project, I think, is probably the next one that may come online. I'm I'm worried about the pipeline. And speaking to that, I'm I'm wondering um it seems to me that we didn't get any offers or responses at NOA because all of our partners are probably busy with something.

The Coulson Land Trust has got a big project they're working on up Ferndale for example as well as the FER court. So I mean our partners are busy. I I I think we need more partners. I think we need to look at ways of finding creating and standing up those partners.

Public development authority I've talked about or other partners. Um so what can you say about the pipeline and the capacity for our partners to keep filling that pipeline? >> Uh for capacity is an issue particularly for the smaller organization that organizations that aren't developers for the larger like affordable housing developers like Mercy Housing, the housing authority, uh Catholic housing.

Catholic housing is working in Lynden. That's our next 9%. We have Compass Housing, which is different than Compass Services. Um, that is going to be new to Bellingham, and that's who we're working with on Forest Street.

They purchase. So, that's they actually have property for two phases. So, that's pipeline. We have um the housing authority is secured land up in King Mountain. We're working on uh supporting our our partners um on other acquisitions and Seymar has some property out in Cordata and they're in communication with us about future pipeline.

I think those are the majority of what's what's in the in the hopper. So what we actually have is enough housing developers right now. Um we don't have enough money. I mean, it comes down to really that.

So, we're trying to we're pacing out. We're gonna we're gonna try and maximize every opportunity we can to get both the 9% tax credit and the 4% tax credit and projects in Watcom County. So, I feel pretty good actually about the pipeline and we're constantly looking for new opportunities, starting to talk about um getting options on property.

In addition to that pipeline, we have to keep our eye on preservation needs of the existing housing stock that we have. So, I think we're okay on the the larger housing developers, but I I think you're right on the smaller um operators.

We saw, by the way, on our our RFP for the I Street duplex, we we only received one response back and we're working with that agency, but that tells us that those smaller operators have capacity issues.

Well, so often or seems like in your comments you indicated that one of our late rate limiting factors is the litec funds the 9% or 4% tranches powers that be up in DC decide what those allocations will be and they hand them down by some formula and that's our rate limiting factor.

One of the reason to pivot to alternative funding mechanisms is so we're not all litc dependent. a PDA for example if it could make a business case can get private funding rather than LITC funding. Um so I think we could grow the pipeline in that way.

One of the things I also have complained about as a shortcoming of of LITC and our usual funding mechanisms is I think none of these projects are explicitly mixed income projects. If I had a magic wand, what I would do is I would put another story on top of the Unity Street project of market rate housing to create mixed income opportunities, you know, together.

I think that's how Bellingham should grow rather than having, oh, this is low-income housing and this is market rate housing. Um, and again, another kind of entity or another kind of model or something we could have in, I think, mixed income projects.

It would be better if we had mixed income projects. And there's a funding complexity that that makes developers run away from uh you know I've already have to put together five different public funding mechanisms and now I got to do a private funding mechanisms in the mix too.

Um you know I'm thinking you've also left out at least three uh pipelines or things that could be and will be and should be in the pipeline in the future. Publicly owned properties. So, right now where um the tiny home village is that one day should pivot to not host the tiny home but a permanently affordable housing uh on city- owned property or property we maybe deed away to an entity.

There's the um Baker View um park property which you know there's a component there for housing. There's reasons why it's not ready to go but that should be in the pipeline. We should be planning for the pipeline.

And then also WTA now owns a former base camp property and the hope and intent there is to build a new transit center larger than the current one with housing above it. That will also need a partner. We will also need capacity and a developer for that.

And that would also be nice if it was both lowincome subsidized and market rate uh housing mixed income together. So, I'm I'm thinking about those larger pictures and I don't know if we have the tools to create the outcomes I want, which is to fill all those pipeline spots quickly and with mixed income projects and in all the places, you know, as soon as possible.

I don't know, maybe there's no question in there, but I'm if you have any response to that. This is a fine plan. I'm still worried about making a better plan in the future. >> So, we do I definitely agree with you on the pipeline.

We've been working on it for a few years and it's a pipeline that we're trying to build a 15-year pipeline. That also means that not everything gets built out in one year. I it's hard it's hard to be patient.

I will say that the mill work site down in the waterfront district um is a mixed income. I think what you're wanting is mixed all in the same building. And if we could think about mixed a little bit more broadly than mixing it all in the same building, you will we we can reach success there.

Um there's complexities with the way these LITC properties are financed. Um but they are in themselves they are mixed income. Every single one of them are. They're just mixed at maybe different incomes than what you're looking for, but they're mixed at 30% AMI, 40% AMI, 50% AMI, and 60% AMI.

And sometimes they can go a little bit higher than that. um with uh anyways technical um when you're talking about market rate developers which the the market without subsidy is reaching the 80 to 100% AMI without our help in the rental market.

So, anytime I get a chance to say that, I want to make sure that we say it so that you guys are repeating that too because that is being produced by the market by the forprofit market developers for rental.

>> Well, so it's easy for me to say, but like I said, if I had the Unity Street project, I would add a fourth story. I would condemn minivize the property and I would have private money build market housing on that fourth floor using all the economies of scale for the fact that I've already built the platform already built the podium already built it and I'd have that many more units downtown and that would be mixed income in the sense I'm talking about which is unsubsidized self-supportive normal housing for people who have jobs that can pay for their own housing and then affordable housing for people who the economy is not serving well or who for some reason don't have the income that's necessary.

So, I still think there's a better option out there and we're not getting there yet with the tools we have, but that's not a knock on this program what we are getting with these tools. >> Just just to move us along here, um uh I'll just add one comment, right?

We know our primary constraint right now is not property, it's not developer capacity, it's dollars. And so, um, yeah, I think we can come up with lots of good ideas how we fund them. That's I think we have work to do.

Um, so we have a motion to approve the resolution in support of the 2026 action plan. And seeing no further discussion, hopefully. All in favor, please say I. >> I. I. >> I'll bring forward that positive recommendation this evening.

And thank you again for the presentation and the work. Um, okay. So, next up we have an equally fascinating presentation. Um, this is a presentation on downtown occupancy trends and strategies to address vacancies.

As part of the downtown forward initiative, the city initiated a project to better understand and address commercial vacancies. The study involved calculating the overall ground floor vacancy rate, comparing the rate against industry standards, and exploring underlining causes.

Um, and the report ends by offering a variety of potential strategies. Um, and with that, I will first recognize um, community and economic development manager uh, Terara Sundine. >> Hi, good afternoon.

Thanks for having us. Darby Gallagghan, senior planner is joining me today as well as Sarah McFersonson. Sarah um was a was past tense a a temporary employee and she worked for our division and took on this project.

It was so nice to have somebody dedicated to doing what is a pretty robust lift and hard to to peel off the back burner for us. So we were grateful to have Sarah join us. Not presenting today um but an important team member is Kate Newell with our GIS staff.

Um, as you can see, this is a pretty datadriven um, project and she was very helpful. Um, as well as our downtown forward team, especially the communication staff. Uh, as you can see, the the purpose was to examine occupancy trends in downtown.

It's part of our downtown forward initiative. This is just one of many things that we're keeping an eye on in downtown. We're really focused on vacancy today. The purpose was to build a shared awareness of the real and/or the perceived problem.

So at the beginning of this, we ourselves didn't really know what what the vacancy rates were. So we wanted to make sure we had the facts and we were able to address those facts as uh as well as perceptions.

We wanted to look at underlying causes and to explore strategies that we as a city can undertake to address the challenge. So I think this is pretty straightforward for you. Um vacancies create visual blight.

Empty storefronts break up sidewalk activity and and it reduces that engagement between pedestrian and and storefronts and that interface that weakens the vibrancy and removes eyes on the street. And we're all familiar with when we don't have eyes on the street.

Sometimes spaces can feel less safe or there's a perception that a space might be less safe. There's a clear financial impact. Empty spaces means less investment. Less money coming in to the property owner means less um lessens their ability to take care of those properties to remove graffiti.

Basic upkeep in the in the spaces. That's pretty obvious. It also means less um people working downtown. It means less money to agencies like ourselves and we use those receipts to hire police officers as an example.

Then there's the perception issue and we all know that that's as important as this financial or physical impacts and perceptions can feel very very real. Uh that perception issue leads to lack of investment.

So if if there is a lack of confidence in whether that's somebody that wants to buy property in a market or um develop property or start a business and they see too much vacancy that uh that perception is that this might not be a great place to invest and we're all all of us when we're looking at spending our money want to make sure that it's a a successful um endeavor.

So that's the that's kind of the obvious like why are we after this? And I think you guys have probably all been to had a dinner conversation or conversation with constituents or friends. We all have opinions on vacancies.

We all notice them. We all notice different ones as we realize with Sarah coming on board. Some of us are more focused on some than others. But it's a real issue um in our community. It's also one that I want to mention is being discussed nationwide.

This is a topic that's coming up in our main streets throughout the state of Washington as well as these topics at the big you know international develop uh downtown association conferences particularly postcoid and then I I just want to touch on market trends.

uh cities are constantly evolving and I think it's something that we need to um make note of maybe more frequently. Um we're looking at today's market, but I was thinking um some folks still refer to the mall and when the mall came in, what it did to our downtown.

Well, look, the mall is struggling as well and so they're having to pivot. um think about what the the storefront shopkeepers were thinking um back when the department store was created. And so that even that impacted our downtown, right?

When the department store came into downtown. Um so that's that is a constant. It's going to there's some whatever's happening today is going to change again. But what's happening today is we know people are buying things online.

They're not shopping the way they used to shop. They're looking for experiences um rather than just buying products. Um tenants are are strapped these days because labor costs are higher than they used to be.

And in Bellingham, the minimum wage is higher than it used to be. And that puts pressure on our um businesses downtown. So things are more expensive for them. It's more expensive at if you own a building.

If you've ever if you've remodeled anything recently, your own house or or your own business, you know that things are more expensive. So all of that that strain is have is making businesses think differently about how much space they take on.

They might and we know they want smaller spaces these days. The way inventory rolls into our community is really different than it used to be. a shop owner doesn't need to have that deep uh space behind them that goes all the way to the alley that's that's filled with inventory.

So things are playing out really differently today. The other big change is that we no longer really have the 5day work week in the office like we used to and co really moved us forward on that. We know that we we see that play out with our parking garage right now.

I believe we're at we're o we're we're oversold um by 100%. So we're at 200%. That tells us that not everyone's coming downtown um 5 days a week to go to their job. And that plays out um in in how you experience downtown.

Derby and I have witnessed this change that went from downtown being very different um during the day, very busy during lunchtime, you guys probably remember this. Um and it was dead at night and felt dead on the weekends and now it feels really lively which is a good thing for um after work hours and on weekends.

So it's constantly evolving and so we're keeping an eye on those market trends. Um, and this was all this all led to us wanting to kind of initiate this project. So, Darby's gonna take us through the methodology before turning it over to Sarah.

>> Great. Um, thank you, Tara. I'll scoot this up a little bit. Um, so the project boundary that we landed on is shown in this map here and it is reflective of the main street boundary that we use um in partnership with the downtown Bellingham Partnership.

The reason that we landed on this boundary is because it has the core of downtown and some of the peripheral areas as well as some key um retail and commercial areas of Oldtown and a little tiny portion of the waterfront.

Uh one thing that's really important to note is that Bellingham has a very large downtown for a city of our size. Um we're looking at um just under 2 million square feet of ground floor space. That's um a a lot of property to fill.

I think in comparison uh Bellis Fair Mall is around 750,000 square feet. So just to give a little context there. And that really is just from evolution over time from um industrial uses, autooriented uses shifting over to retail.

Oh, you have the Oh, I have the clicker. Um for methodology um we began last le last September um by reviewing literature case studies looking at um how other cities are calculating vacancy and best practices as well as case studies around um how they are approaching those problems.

Then in October, there was a fields um survey. Thank you, Sarah. She's going to talk about that a little bit more to actually do an on-site review of all of the ground floor spaces. And then those results were compared with interviews with brokers and property owners to kind of truth what was going on there.

Um Sarah also had the opportunity to um conduct those interviews to learn a little bit more about um what those professionals are seeing in the field and market trends, regulatory challenges and suggestions that they might have.

Um finally, um those responses were cataloged. There was also a acknowledgement that sometimes vacancy isn't the only thing going on. So, um Sarah did a great job of cataloging other um other situations that might be having an impact on vibrancy such as underdeveloped properties, maybe properties that aren't vacant but aren't really providing a strong streetside presence.

Um so, we talk about that a little bit in the report as well. Um the rest of the process was really focused on data analysis, um strategy development. We wanted to not pluck strategies from other communities that aren't as relevant.

Right? Sometimes we hear about um things that sound really great but aren't really targeted to what our problems are. So, we were really mindful of connecting strategies to what is going on here in Bellingham.

So, that was quite a bit of research. Um and Tara's going to talk a little bit more about those priorities and how they're going to play into our work program. But now I'll turn it over to Sarah um to splash you with that data and what we found and how we're starting to talk about um vacancies here in Bellingham.

>> Starby and thank you Tara. It's such an honor to be here and such an honor to have been able to work with this incredible team. Um, I just wanted to touch on a a couple of the micro trends that are here in Bellingham because we do hear a lot about the macro trends, but um, in this stakeholder insight survey, which you all can probably obtain a copy of, um, which will be attached to the report, um, there were several themes that came out of that.

Um, one was that there we're in a tenant driven market right now. there's more there's greater supply of um tenant spaces than there are um uh there's greater demand for so prices are um leveling out for tenants.

Um but that also means that the property owners have to be more flexible and entice those tenants to come into their buildings. Um there's also tenants that are seeking ownership and you can see examples of that um in terms of the greenhouse the new greenhouse space and also the backcountry essentials.

Um brokers have routinely said that um multiple clients are interested in purchasing as opposed to um leasing a property and having to deal with some of the uncertainties of that. Um there's a tolerance for a broader mix of uses such as child care, health care, um education, um things that we wouldn't have imagined uh 20 years ago in a downtown.

Uh and there's also consistent demand for office space. So we didn't measure uh uh office space vacancy for this study, but I want to say that um every broker that we talked to um spoke about the high demand for office space downtown.

Uh and then there's also this um environment that we have that makes downtown Bellingham so unique and such a destination and that is that it's fostered small business um one to five employees and entrepreneurship and that's throughout Bellingham not just downtown.

Um so I'm gonna I'm gonna jump to the punchline and just let you know um through our uh survey and also research um we identified a vacancy rate of about 10%. um that is ground floor only. Um and um once we discovered what our number was, it was clear that there was something else going on.

And that was um first of all, before I get there, I'll say that there is a um broader context by which real estate um industries uh um analysts will describe vacancy rates and what's considered healthy.

And typically that's um between five and 10% um is considered balanced. But um if you move above 11% that starts to signal a weaker demand and higher rents and a broader economic conditions. Um and then also um healthy depends on the use and the condition of the buildings themselves.

So, um, just to give you a little bit of context, um, Spokane also, um, they were measuring areas outside of their downtown has a vacancy rate of about 6.4%, downtown Everett 10%, downtown Seattle 20% and probably even beyond that, um, since I last checked.

So um when we started to look at our 10% um it became clear there were certain categories of vacancies uh 44% of that 10% just follow me um were market ready and I'll describe what the criteria was that we used in order to qualify each of these but we had 44% market ready we had 19% of those be large footprint properties that's pretty self described and then we also had this category of stalled assets.

So market ready as it might sound um is these are these are spaces that turn over really quickly like less than five five years and we were using business tax or business license data in order to kind of identify how quickly um businesses were in and out.

And then we um we also looked at the floor plates and more than half of them were less than 6,000 square feet um or 3,000 square feet but all of them are under 6,000 square ft and they also accommodate a single restaurant or store or office.

So you can see the spatial distribution of them throughout the downtown area. Uh the large footprint vacancies, there are three properties that fell within this category that make up 19% of that 10%. Um so they exceed 10,000 square feet.

They're highly visible. Um and they don't easily fit current market demand. Um as Tara was saying, most tenants are looking for small spaces with low overhead. So they're interested in um sub. So, one of the ideas is what would it cost to subdivide or possibly redevelop those larger print footprint vacancies over time.

So, you can also see a map of those greenhouse boundary bay and what was the third one? See, writer stalled assets. This is the this makes up 37% of that 10%. These are vacant over five years and they're challenging because of environmental conditions.

A lot of them are auto repair sites. Um there are ownership dynamics um and really complicated commercial condominium arrangements which then lead to um a lack of ability to kind of move forward and make decisions on the property.

This is just a rollup of what I just described. Um, and you can see a spatial distribution of all the vacancies within the downtown project area. But I also want to get to this point which Terry me Tara mentioned which is that we often talk about vacancies and um the real estate um industry groups are often doing vacancies or looking at vacancy studies throughout the country.

But I think what we might start doing is also looking at what other factors are impacting um this feeling of inactivity. And so um we started identifying these one of which is the pending transactions.

These are spaces that look vacant but as to the passer by but actually are in transition. There's also underoccupied businesses in downtown. We all know um what some of those are or they have very unique hours of operation.

Um we have 13 banks that cover the corners of downtown. Um we have 13 acres of surface parking lots. We have 11 vacant lots um which thankfully is not a predominant um issue but they are contiguous and are very symbolic um in terms of their impact on downtown.

And then we have the low density lots. And I just want to point to a couple quick case studies where whereby you see this impact between both the vacant property and those additional impacts, those factors that impact our um our perception of um activity downtown.

This one's at Magnolia and commercial. This is a large building that has an aging facade and also very complicated commercial uh condominium arrangement. Um making it very difficult for anybody to move forward with any sort of maintenance plan or coordinated effort to um obtain a tenant uh on the corner in particular.

So if you're standing at the corner, this building is in front of you. You'll also notice that there's the um the city parking garage to one direction. the bus terminal to another direction. You have the holes vacant lot and you have an under occupied very large underoccupied office uh building that's just to the north.

And then the second case study I just wanted to point point out um is this Cornwall corridor which obviously there are a number of vacancies but you also have it bookended by surface parking on both ends the base camp property which will ultimately be redeveloped um but right now is foul and then under occupied spaces um within it and you you again have four banks um that are located within this corridor.

So as we identified the spatial distribution of all these vacancies, it became clear that um although our overall vacancy rate was 10% um within the down downtown core, we noticed that there was um a higher vacancy rate uh clustered within the center um which is hard to ignore.

um that vacancy rate is closer to 14% and um certainly can dictate um what kind of strategies that we would pursue in order to kind of alleviate some of the issues that we're facing. The last thing I just wanted to mention is it's not all doom and gloom.

It's there's so many bright spots. Um you know you have the investment of the of place that has brought about many work um uh employees and workers who are patronizing local businesses. We have a number of cluster business clusters that are keeping and retaining customers for longer periods of time.

You can see that with the Pickford Center um and the adjacent restaurants. And then you have just this wealth of like incredibly talented um uh shop owners who really know how to merchandise and who could serve as educators for others.

So um I I didn't want to be um presenting a a really dark picture. I think that it's just a matter of linking these um these hot spots to the the darker zones and I'll hand it back over to Darby. >> Thank you.

Uh, Terara Sundine, that's all right. Um, I'm just going to walk you through the implementation strategy at a real high level. It's attached to the report. It's it's an appendix E. It's listed out in there.

There's a lot more strategies than I'm going to speak to today. Uh, as we went through the data and the research that Sarah did for us, um, we developed some criteria to run these strategies through. Of course, we wanted to make sure that they had an impact on our project objectives, which was which are to increase occupancy, improve perceptions, and ultimately increase investment.

Um they Sarah talked about the the size and scale or maybe it was Derby of our downtown is very very large. So we we wanted to prioritize that core area which is still quite large for a city our size and then of course look make sure that it was feasible and that we had the resources to do it.

Um I'm going to focus on um before I focus on 2026 and 7 start by saying we have a number of existing strategies over the course of number of years that we have adopted deployed. Um and so we wanted to start by saying let's keep what we do have.

I don't think there is a program that the state of Washington has allowed us to do that we have not taken advantage of. Okay. So in downtown um we have the multifamily tax exemption. I think it's the single most effective tool that we've adopted to incent uh development to incentivize where people um pursue land for the development of housing.

Why is housing important when I'm why are you even talking about housing? Because this brings customer base to the downtown. It's it's having more people in our downtown that's going to help us fill up these other spaces.

Downtown um is an urban village. I heard Tim speak to it previously. Um because it's an urban village, it gets tra uh traffic impact fee reductions. That's less cost to tenants. Uh we also don't have too many rules um in downtown.

There's not a height limit for for many properties. We've already reduced parking well eliminated part parking city wisewide but we had previously reduced parking in downtown. So there's not a lot of regulatory barriers.

We've taken a lot of that away already. This is a federal uh federally designated opportunity zone. We hope to keep that um designation and we're going to be making an application to keep the downtown and waterfront census tract as as a uh opportunity zone.

That's a federal more of a capital gains um program and then our BNO tax. In addition to those are incentives to the developers predominantly and sometimes the businesses, we want to keep um investing in our downtown with our cleaning and beautifification contracts.

Um keep it beautiful, continue to invest um the bike patrol, the bike uh police police patrols, bike patrols. Um probably our one of our favorite programs with business and property owners downtown. we will bring that back um under downtown forward last year and keep those alley cleanups going.

So, we want to keep make sure we don't lose ground on what we're already doing. In addition, um in 2026, we um think we need to probably do a better job on promoting our incentives. We tend to adopt and move on to all the other important work that we have to do and we forget that we need to keep getting the word out.

keep getting the word out to businesses that are making decisions throughout the year or years. The mayor is really interested in the BNO tax uh reduction that we already have on the books for our urban villages and going deeper and maybe for a longer period of time.

Uh, so I think you should expect a proposal coming before you this year to go um further with the BNO tax exemption or reduction in the pedestrian core. We want to make sure we're not requiring more ground floor commercial than we need or we should have as a community.

We have 200,000 square ft that's empty. So bringing more supply on isn't necessarily helpful. And so we'll want to make sure that we're evaluating that that that'll be work that the planning and community development staff will undertake this year.

Public works is initiating the downtown connections plan. How how that relates here is we need to make sure that our transportation infrastructure that's the infrastructure for pedestrians and bikes and cars and transit link up or line up with the land use goals.

I want to make sure that they're working in concert and that one's not working at odds with the other so that that and potentially that plan will lead to invest further investments that could help the business community be uh looking at expediting plan review in that core area in 2027.

These are a few of these items require funding. So that you're seeing them in 2027 as we we go through this next budget process ourselves in working with our partner um in the in the case of the top bullet there, the downtown Bellingham partnership in the city had once had a retail advocate position.

Um we're we're saying business advocate now because retail comes with like a connotation that it's very specific and we want it to be a little bit broader. This was a position that was shared by both entities.

Um it was vacant during COVID and um we realized along with the leadership of the downtown Bellingham partnership that it wasn't really wise to refill that position when we had a shutdown uh downtown and the priority for the partnership and the city at that time was public safety.

So, we shifted resources at that time, but we we do want to re-evaluate it bringing that position back on those large spaces that Sarah spoke to. Um, they it might sound simple to like, oh, just just create smaller spaces.

Um, but there are challenges with that and we think that there could be value in bringing our building official, our fire marshal and a planner on board with the property owner and uh their architect to help problem solve and and help them through that process.

The last two bullets are some effective um activations, ways that the city can help spruce up and bring life to our downtown through the downtown activation grant program. Also, window wraps. We will need um funding um to work through or to to launch those programs again.

And then just um want to mention our partnership with downtown Bellingham partnership. There are a number of strategies that we identified that would be more appropriately led by their organization than our organization.

So, an example is they've um uh been they've developed these block groups, I think they're called, um and they've been meeting with it's a very business uh forward uh endeavor endeavor and they recognize that they could do some more work to engage with property owners and also the brokerage community and that they would be probably better suited to advise and develop tools toolkits for those groups.

So, some examples there. And then I wanted to say that um ultimately, you know, here here we are leading this vacancy study and strategy, but the city is not the owner of a lot of the buildings ourselves, right?

So, um, let's recognize that it's the property owners that determine how spaces are managed, how they're improved, when they go to market, how they go to market, what price, what condition they go to market.

And then ultimately it's the businesses that need to choose to invest in activities um that that are are generating activities that are generating the services and experiences for our community. And I think what we need to do is make sure that um we reduce all the barriers we possibly can and create the uh atmosphere and the culture and the the neighborhood for them to invest in.

We want them to choose to invest their money here. We want customers to choose to spend their time here. And with that, I wanted to um turn this over to U. Mayor Lond, I think she would like to say a few things before turning it back to Council Member Cotton.

Thank you. >> Thank you, Tara, Darby, Sarah. Uh I know how much work has gone into doing this study and preparing this presentation and it's been a real team effort. Um, so my appreciation, I just wanted to say I'm excited to continue the existing strategies that the city has already made investments in which are considerable, but also excited to explore what else we can do in the coming year.

And you know, one thing I just wanted to touch on because it's it's a frequent constituent um conversation that I that I hear within the community or comes into the council and mayor's inbox and that's about the vacancy tax.

um there's a gen a genuine curiosity about why can't we employ this tool and I think we'd be remiss to give this presentation um if if we didn't do a little bit of context um background for for the community about the state's requirement that all property taxes um within a class be uniformly applied.

And it's that uniformity clause that really um limits Washington state city's um ability to employ a vacancy tax which has been a very successful strategy in other states. Um our neighbors to the north in Vancouver BC have had success employing that.

And because that isn't an option, that will remain and has been a key lobbying priority uh with our partners in Olympia to make the changes. Uh that would be um different approaches have been considered over different years, but it's something we'll continue to work on in addition to some of the other strategies that relate directly to our downtown core.

But I just wanted to highlight that for the public while we were talking about this. Thank you. >> Thank you, Mayor London, for this excellent presentation all around. Um, I'll first turn to committee members.

Council member Huffman. >> Thank you for the presentation. Um, when we were when we scheduled 10 minutes for the discussion, I don't think they anticipated how many questions I would have on this subject.

So, we'll talk more um in person maybe in in a little office meeting. But, um and thank you, Mary Lynn, for bringing up the vacancy tax. That was one of my uh discussion points that I would hope I was hoping that we would talk about today and yeah, making it clear that that this has been a lobbying priority um for the last two years for the city of Bellingham.

So, thank you, mayor, for for getting out on front on that. Um um but uh I'm going to I'll keep it to something brief because we're already behind time. Yeah. >> Actually just want to ask I know this is a topic that we have all had great interest in.

It's been and I apologize for cutting in. I'm just looking at time where we have 40 minutes for our committee the whole item and 30 minutes for executive session. Not wanting staff to have to say too much past five.

I think there are lots of questions and discussion points. So, I just want to pose to the chair that this may be an item if staff would oblige to come back um at our next meeting to allow time for discussion.

But, so I just want to offer that as an option. Thanks for that, Council Meerson. And I'm like I might be the only one that wants to spend a lot of time on it and so I'm I'm okay doing it not in a meeting with all of us if >> Yeah.

Coun if you want to wrap up that thought and then if there's willingness to schedule a follow-up with the committee. I think there was probably interest from multiple members. So, um but wrap up that that question and then maybe we can conclude.

>> Well, I'll just leave it at um you know, if if we're going to have a followup uh on this a follow-up conversation with the full council, just want to say thank you to the people that brought this forward, brought the idea of this study forward and this analysis.

I think it's incredibly valuable. Um, you know, as a downtown person myself, I anecdotally hear a lot um downtown a lot of uh thoughts about challenges and how to tackle those challenges and um and priorities.

And I think it is so helpful to have this comprehensive analysis and framework to organize how we we find solutions for problems where our biggest priorities are. Um you know what the what the things we can tackle are that are lower cost which are a little bit more feasible these days um with with our budget situation.

But um so big thank you to to doing this this study. I think it's incredibly helpful. Um, and I think just one thing I wanted to throw out um, if I was being surveyed um, for this analysis, two things I didn't really see on there, and maybe we can talk about this more, um, at another meeting, but one thing that came to mind was, um, expediting permitting, the permitting process for small businesses downtown.

I know that that's that comes up as a challenge that a lot of small business owners are facing particularly starting a business um downtown or expanding and maybe that will be part of the business advocates role um is is helping with something like that.

I think that would be amazing. Sometimes business owners are very passionate about the thing that we're starting the business for, not necessarily experts in bureaucracy um and can so can always use some help with that.

Um, and then and I think the other thing that really popped out for me was the fact that two of our downtown businesses, Greenhouse and um, Backcountry Essentials were existing downtown, moved within downtown, which really highlights that commitment to to being downtown and also purchase the buildings that they're in.

Um great benefit to that having the businesses that are occupying the building also own the building. Um just for you know multitude of reasons uh the care of the building you know the specific interest in um in that building and um and how how that space is used.

Um so thinking about are there potential ways that we can encourage more uh businesses to find themselves owning their buildings as well. Um I'll leave it there and potentially we can talk further. I will ask the rest of the council to hold the discussion and um if there's willingness to come back um we will do that.

I'll just say this was a topic uh frequently in our legislative work group and um there were a number of bills that we were watching very closely that will be coming back and so there will be opportunities for lots more work on this topic um as well.

So thank you all so much um and with that I will conclude our committee and um pass it back to you President St. >> Thank you very much council cotton. Um and I just wanted to confirm with staff you don't need any formal direction or motion from council to bring that back.