Port Commission adds directive to work toward collaboration with local taxing districts
information released
Port of Chelan County Commissioners voted to approve Resolution 2025-07, which initiates the Malaga Tax Increment Area (TIA) during the regularly scheduled December 23, 2025, Commission meeting (Commissioner Etherington, Commissioner Baldwin – yay; Commissioner DeRock – nay).
The vote was immediately followed by a second motion initiated by Commissioner Richard DeRock that directs staff to continue working toward an Interlocal Agreement with Chelan County and the junior taxing districts, with the goal of reviewing a draft agreement at the next Board meeting, January 13, 2026. The vote was originally scheduled for December 9, 2025, but Commissioners delayed the decision to consider the testimony provided during four public meetings.
“As Chair of the Port of Chelan County, I will commit to holding an annual meeting with the junior taxing districts as part of our regular budget and strategic plan review process. This standing meeting will help us answer two questions: First, should TIA revenues be used? And second, if we do, what are the impacts on the junior taxing districts? This input will be carefully considered as an important factor in the broader vision,” explained Port of Chelan County Chair JC Baldwin.
“After considerable discussions with local taxing districts and members of the public, we believe that approving the TIA is in the best interest of Malaga and Chelan County,” explained Donn Etherington, Chelan County Port Commissioner representing District 1, which serves Malaga. “The Malaga community is historically underserved, is growing, and current infrastructure is not capable of meeting future demand. Existing funding to support growth is limited or non-existent in other budgets.”
On December 16, 2025, Chelan County Commissioners presented Port leadership with a proposal that would generate similar revenue for infrastructure while alleviating projected impacts on the junior taxing districts. All three Port of Chelan County Commissioners expressed appreciation for the proposal and indicated optimism that it could provide an alternative TIA model.
“We appreciate the thoughtful time and attention County leadership put into crafting this proposal. We are currently reviewing it, and our preliminary review is positive, but additional vetting is needed to ensure it’s both legal and viable,” explained Commissioner Etherington. “In the interim, we believe forming the Malaga TIA before the end of 2025 is important. In 2026, the State Legislature will be considering amendments to the TIA statute, which could result in reducing the effectiveness of TIAs as an economic development tool.”
The second motion, made by Commissioner DeRock, commits the Port of Chelan County to work collaboratively with the County and junior taxing districts to continue to vet the County’s proposal and develop an Interlocal Agreement for revenue sharing. Port of Chelan County Commissioners will review the Interlocal Agreement as soon as January 13, 2026.
“We need to diversify to ensure economic development in Malaga is not limited to datacenters. To do that, we need to develop sewer and water infrastructure. But I am not comfortable doing that at the expense of our junior taxing districts. This proposal from the County potentially gets us around that, which gives me peace of mind. I am in favor of finding a solution that mitigates impact and am hopeful that this could be viable,” explained Commissioner DeRock.
The second motion passed unanimously.
A Tax Increment Area (TIA) is a designated geography where the future increase in property tax revenue generated by future growth is used to finance prioritized public improvements. It is a way to generate necessary funding from the companies moving into the TIA to support the growth.
Tax Increment Financing (TIF) was first outlined as statute in RCW 39.114 in 2021 as a way for designated TIAs to fund infrastructure necessary for growth by using property taxes generated by that future growth. The new infrastructure attracts development, which then pays for the cost of the public improvements and infrastructure.
Proposed projects that could be funded by the TIF include a sewer treatment plan, road safety improvements, a water utility system and transmission lines, and a community park. The full list of projects can be found here.
The Chelan Douglas Regional Port Authority is the economic development leader throughout Chelan and Douglas Counties, focused on building a thriving economy with prosperous and sustainable growth for our neighbors, communities, and region today and in the future. We use data to promote investments, develop infrastructure to support businesses and communities, and facilitate initiatives that deliver measurable economic benefits for shared prosperity.
