Monday, November 10, 2025
WENATCHEE — A major standoff has developed between Chelan-Douglas Regional Port Authority and the Chelan County Board of Commissioners over a proposed 3,326-acre Tax Increment Area (TIA) in the rapidly growing Malaga area — an area the port projects will generate about $195.7 million in diverted tax revenues over 25 years.
County commissioners made a counter-offer this week: The County would pay the port $1.5 million annually for 25 years if the port abandons its TIA plan. You can read that proposal in its entirety here. The port rejected the offer and instead urged the county and other affected local taxing districts to raise taxes to make up for the revenue lost if the TIA moves forward.
Commissioner Kevin Overbay, who represents the affected Malaga area, said he found two things troubling with the port’s letter. “First of all, we don’t wish to create an additional tax burden on our residents, and I find it irresponsible for anyone to suggest in such a cavalier manner that this is a solution,” Overbay said. “Secondly, what the port is referring to is a levy lid lift, which is not new guidance. A levy lid lift is passed only by a vote of the people. The community has spoken out against this TIF proposal. They want to see county, fire and library services protected, not be burdened with paying more taxes because of the port’s speculative plans.”
But under Washington law, a taxing district’s regular property-tax levy is limited under RCW 84.55.010, unless adjusted under certain conditions — like when property value increases within a designated increment area under RCW 39.114. The July 16, 2025 guidance from the state Department of Revenue confirmed that when a TIA or LTIF creates an “increment area,” the levy limit for a district inside that area can be increased in the same way that new construction or annexations can expand the base. That process is distinct from a traditional levy lid lift under RCW 84.55.050, which requires voter approval.
The port’s letter to the county (which you can read in full here) cites that guidance to argue that affected taxing districts may adjust their levy rates to recoup incremental revenue otherwise diverted into a TIA.
Commissioners Shon Smith and Brad Hawkins echoed Overbay’s sentiments. Hawkins said, “We presented a very reasonable alternative to allow the port to pursue and bond for important economic development projects in the Malaga area without harming law enforcement, firefighting and county road services. They blew us off. It’s sad and disgusting.”
Smith characterized the offer as “a $37.5 million olive branch,” saying, “We had hoped the regional port would put all residents first. We are looking out for the junior taxing districts and our residents. No one wants to see critical services jeopardized or taxes increased right now, especially in response to a port-sponsored TIA.”
The proposed TIA would divert revenue from the county general fund, road fund and junior taxing districts — including the Wenatchee Valley Fire District and NCW Regional Libraries — to the port over the next 25 years. County officials proposed using “.09 funds” (a portion of state-shared sales tax returned to the county for economic development under RCW 82.14.370) to instead pay the port without affecting general-fund services. Because that offer was rejected, county officials say their alternatives are now exhausted.
Andrew Simpson: 509-433-7626 or andrew@ward.media
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