Road loan could be path to progress

Traffic flows on Interstate 5 at 179th Street on Monday. Clark County is debating whether to borrow money to spur development in the area. (N. Scott Trimble/The Columbian)

Clark County commissioners are trying to decide whether to take out a mortgage to pay for a new shopping center and employment complex near the county fairgrounds.

“Mortgage” isn’t, of course, the technical term. But with development stalled and the county starving for cash, the only way for government to pave the way for major projects at 179th Street and Interstate 5 could be with a $41 million loan.

The upside: an estimated 4,900 new jobs, including those created by another $60 million in bond-funded projects elsewhere.

That adds up to about $100 million in loans.

The downside: 20 years of bond payments, which, along with the other loans, could reduce the county’s annual road-building budget by 24 percent.

“It’s just like your house,” Deputy Administrator Glenn Olson said. “If you take out a big mortgage, you’re going to be eating at McDonald’s.”

That’s assuming the projects are built, including a proposed $100 million shopping center on 43 acres southeast of the intersection by Vancouver developer Killian Pacific.

If that firm pulled out and no one else came in, the county’s tax revenues wouldn’t grow as expected, and things could be worse.

To borrow, or not to borrow? The county’s three commissioners are divided.

“I see this as the worst of all possible times economically,” Commissioner Betty Sue Morris said at a work session last week. “I doubt you would commit yourself at this point to an extensive remodel of your home. … I think that we are in the same situation.”

Morris said she’d support a smaller bond package of between $30 million to $40 million.

That would be enough to finish paying for a few projects the county has very publicly committed to: extending 139th Street across Interstate 5 at Salmon Creek, and improving three intersections in the fast-growing Prairie High School area.

Commissioner Steve Stuart, however, called bond proposals like the one on 179th Street “an opportunity to invest so this economic downturn turns up.”

The United States, he said, invests too little in infrastructure. And Clark County could use the jobs.

“We set aggressive targets for job growth in our 20-year plan,” Stuart said. “If we are going to achieve that, we are going to have to be aggressive.”

Commissioner Marc Boldt, who last week asked county staff for more figures, said Monday that he’d accept Morris’s smaller bond package but would be “very shaky” on bigger loans. Boldt added he’d want to reduce the loan amount by spending up to $10 million from real estate excise taxes.

Borrowing money to build roads — and hopefully collecting extra taxes — would be new for Clark County.

Deputy county Administrator Glenn Olson said he’s not aware of the county having ever issued road bonds before.

But other governments, such as the city of Vancouver, do it regularly. Vancouver has borrowed $52 million for the purpose since 1996, according to Lloyd Tyler, its chief financial officer.

Also, if the county takes out that $100 million loan, the financing costs might slow the building of other long-term projects, such as improvements on Northeast Highway 99 or 50th Avenue.

Public Works Director Pete Capell said that would depend on whether the cost of road-building rises faster than the interest rate.

The county has been assuming 4 percent inflation and a 5 percent interest rate, he said — not a big difference.

“I think there are reasons to do it and reasons not to do it, but I don’t think that delaying other future projects are a primary reason,” Capell said.

Deputy Treasurer John Payne said Monday that he didn’t think issuing the bonds would hurt the county’s near-perfect credit rating.

For the moment, he said, the bigger obstacle is that the county can’t borrow money at any price.

For the last three weeks, he said, bond markets had been refusing to lend to almost any government in the country.

“Until the credit market opens up, we can’t get any money,” he said.

He’s hoping things improve before February, when a separate $5 million credit line used by the county will have to be renewed.

Payne didn’t want to predict if that would happen.

“I would hope with all the money the federal government is pouring into it, it’ll free up pretty soon,” he said.