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High-end shoppers fill North Bend coffers
High-end shopping at the Factory Stores at North Bend helped boost the city's sales tax revenue in 2007, said Elena Montgomery, the city's finance director.
Montgomery predicted that the expansion of that shopping area will keep revenues up.
The successful new Coach store, which sells upscale accessories, contributed to a strong holiday shopping season, and may encourage other high-end retailers to set up shop in the mall, Montgomery said.
"It stands to reason that once they have Coach in there, and Nike, they'll be able to draw more of those kinds of names," she said.
North Bend's city sales and use tax revenues in 2007 were up 13 percent over the previous year. Revenue from the Factory Stores and Safeway plaza accounted for about half of the $1.7 million the city collected in 2007, Montgomery said.
More storefronts will come to the area with Trace Development's purchase of the undeveloped areas in the Safeway center.
"They are going forward in developing room for several small businesses and one large anchor, which will hopefully be a drug chain," Montgomery said. "That will be beneficial for the city."
Sales tax revenue was down in the first two months of this year; Montgomery attributed this to skyrocketing gas prices, as well as bad winter weather keeping shoppers away.
"When the news gives the weather reports for [Snoqualmie] Pass, the perception is that, if the Pass is having issues, so are we, and that's not really the case," she said. Montgomery expects sales tax revenue to pick up this spring and summer.
One of the city's revenue sources that has declined significantly is the Real Estate Excise Tax, or REET. With a downturn in real estate sales, comes reduced REET funding, which pays for capital projects like street improvements.
"Even though the house values are not supposed to be going down as much in the Puget Sound area, there has been a lack of activity," Montgomery said. "So we have seen our REET revenues go down by 21 percent."
If the real estate market doesn't rebound, city officials will have to decide whether to shelve capital projects or look for alternative ways to pay for them. They can divert money from the city's general fund, or borrow money in hopes that the REET revenue stream will improve.