Civic and business leaders are fighting to stay above water as the ripples of an economic recession hit Kirkland’s shores.
New numbers show the city’s economic performance is following the national downturn with a steep drop in retail sales during the holiday season and record-low housing starts. While legislators in Olympia and Washington, D.C. are still trying to determine if any stimulus money will flow through the sluices into towns and cities, local mayors and city councils are simply trying to hang-on to what they’ve got.
In Kirkland during a City Council Study Session Feb. 17, City Finance Director Tracey Dunlap gave the latest news in a budget update. With the holiday season usually considered the busiest time of the year for retailers, new sales-tax revenue numbers indicate 2008 was unusually slow. One of the city’s largest revenue streams, November’s number indicates a 19 percent drop from a year ago. A yearly-average drop of 1.76 percent had been expected. December is likely to be even worse due to the slumping national economy and the heavy snows that made travel on Kirkland streets difficult in the run-up to Christmas. Every business sector in the city experienced a decline in November, including home construction, which saw only four applications for single-family homes.
The dismal business climate in downtown Kirkland prompted The Grape Choice owner Penny Sweet and nearly 50 other business owners and members of the community to meet Feb. 20 for an economic brainstorming meeting.
Barkz the dog stop owner Paula Heddle called in an open letter for the meeting to come up with ideas to increase business and create a better business environment for local businesses. The group plans to meet on a monthly basis to cross-promote their businesses and help keep new ones afloat, or even thrive.
“We’ve got a lot of new talent and a positive outlook about what we can do here,” Sweet said.
A few bright spots on the horizon are tax revenues related to several large development projects scheduled to begin this year and over-budgeting for fuel purchases, based on last year’s record-high gas prices. But the city faces difficult choices if the economy continues to shrink.
“It will be important to remain nimble to the events as they occur,” Dunlap said, “and focus on … service levels and financial integrity in the long run.”
State budget problems force Totem Lake rethink
The economic impact of the state’s projected $8 billion shortfall also reverberated in City Hall during a remarkable exchange between the council and City Manager David Ramsay.
Deliberating with legislative adviser Erin Leonhart, it emerged a change was in the works for a $3 million state grant for local jobs development, part of a $15 million city infrastructure development package for Totem Lake Mall. But development there ground to a halt three years ago and Ramsay said he was getting “difficult” questions from lawmakers on why they shouldn’t pull the money.
“We do believe these funds are in jeopardy, if they remain where they are,” he said.
Kirkland legislators Rep. Roger Goodman and Rep. Larry Springer met with House Budget chairman Hans Dunshee (D-Snohomish) on behalf of the city to preserve the funding for the redevelopment of Parkplace Shopping Center. But that had several council members shaking their heads, who felt it undermined the city’s position for managing the Parkplace development process.
“That’s way, way ahead of any decision-making or discussion that we’ve had,” said Councilmember Jessica Greenway.
“Well, what d’ya know,” said Mayor Jim Lauinger.
Dunlap will present a yearly financial summary of the city’s economic health for all of 2008 at the City Council’s annual retreat March 20-21.
