In a historic agreement, the Cowlitz Tribe will soon incorporate land from La Center, east of Interstate 5, into tribal ownership.
In a 4-0 vote, with one member abstaining during an April 24 meeting, La Center’s City Council agreed to amend a 2016 agreement to now allow the tribe to take city land into trust.
Located east and northeast of the Interstate 5 junction, across ilani Casino and Resort, the properties that will be taken into trust span 50 to 55 acres and will be zoned for commercial use. The tribe intends to develop the land for both tribal and leased businesses. The tribe bought the properties a few years ago but will own it as sovereign land once taken into trust.
The City and tribe made an agreement in 2016, in which the tribe paid for Interstate 5 renovations and a sewer extension on the city’s western boundary. As part of the deal, the Cowlitz Tribe was prohibited from making the land in question sovereign, thus enabling the tribe to make all decisions pertaining to the land. Under the new agreement, the Cowlitz Tribe will make the land sovereign and pay the City a certain amount to compensate for lost sales tax revenue from new businesses it otherwise would have collected.
La Center Mayor Tom Strobehn said the city has grown too dependent on tax revenue from poker tables. He said the new agreement will help the city diversify its revenue streams and receive mitigation payments from commercial sales. The mayor fears that if the Cowlitz-owned ilani casino competes with the current poker table establishments, a major portion of revenue will be lost for the city.
“At present, we cannot continue the route that we have been going without the revenue,” Strobehn said. “…We are depending on card rooms, [and] about 40% of our revenue stream relies on poker players. And at present, the Cowlitz do not offer poker. So you can imagine what that could do to a city if they decided to offer poker, right?”
Under Washington State tax laws, La Center receives 0.7% of the 8.4% sales tax; the rest of the revenue goes to the county and state. Under the new mitigation agreement, the Cowlitz Tribe will give the city an extra 0.5% sales tax gain, for a total of 1.2% sales tax revenue from leased businesses, as it is subject to Washington State excise taxes. In addition, tribe-owned businesses will pay 1% of sales tax to the city.
Based on expected revenue per commercial property acreage, the agreement will boost La Center’s annual revenue from approximately $111,500 to anywhere between $313,500 and $376,000 once businesses are developed.
Part of the revenue boost includes an approximate $171,000 savings from no longer paying operational costs for the properties. The mitigation payments are to be indefinite and could be revised should the tribe decide to use the land for non-commercial purposes.
The mayor said the Cowlitz Tribe is prepared to assist La Center’s school and fire districts, which will lose future property tax revenue. School district Superintendent Peter Rosenkranz told the City Council the tribe has donated roughly $390,000 to the schools in the past three years.
Former City Councilor Dennis Hill spoke against the deal before the council. He was concerned that once the deal had been made, it could not be taken back. He suggested the council hold out for more revenue than what was proposed.
“Of all of our city property for commercial [use], that is the prime property, and to give that up for a few hundred thousand [annually], I think it’s a mistake,” Hill said.
Councilor Sean Boyle said the new deal would help put La Center on the map while increasing the city’s revenue stream.
“I don’t think that I’ve seen any development happen at the junction,” Boyle said. “I know we’ve had plans for it. We do have hopes and dreams, but they’re not providing revenue to the city. I feel in my heart that this is going to be a good relationship going forward…”
Councilor KC Kasberg said the tribe has the resources to develop the commercial properties, which would help alleviate costs for the city after the deal is made.
“The capital just isn’t out there to buy pieces of land like that and have developers come in,” Kasberg said. “Also the developers are probably a little bit nervous to come in and try and build something like that, right across the road from a tribal casino that could put up a competing business on their side … I think that the risk is not worth the reward as far as turning an agreement like this down.”
The new agreement specifies that 25% of the zoned acreage east of the junction will not be incorporated as sovereign, as La Center may expand its boundaries west of its current city limits. The date the land will become sovereign depends on the federal government. The Cowlitz Tribe will work with the Bureau of Indian Affairs to finalize the process.
Strobehn told The Reflector that this new deal is a big step forward, both economically and in its relationship with the city’s neighbors.
“This is building a relationship with the tribe that’s long overdue, and I’m happy to be a part of it,” Strobehn said.
