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INDUSTRIAL DEVELOPMENT DISTRICT ADVANCES

Duwamish River and Industrial District, 1999

Duwamish River and Industrial District, 1999

The first three proposals have been received and evaluated for the Industrial Development District (IDD). The IDD is a partnership involving the City of Seattle, King County, and the State of Washington that seeks innovative proposals for industrial development that have been challenging to implement due to regulatory, policy, or financial issues. I and my staff developed this idea as a project to add new vitality to Seattle’s industrial sector.

The IDD initiative seeks proposals that meet three criteria:

  • Provide positive economic benefit
  • Result in equal to or better measurable environmental performance than would result from current regulations
  • Are located on currently industrially zoned land

We chose this approach because it has become increasingly clear that prescriptive regulations tend to be very good at stopping bad things, but we need to promote good things – and government regulations do not have the nimbleness or flexibility to encourage innovation.  So we are setting broad parameters to foster creativity around the goal of providing jobs and economic activity while enhancing the environment.

The Office for Economic Development has selected two of the proposals to advance as pilot projects. The third proposal was judged to have too many uncertainties and potential pitfalls, and was not selected in this round; however, the parties will explore the concept further with possible applications to a future round of proposals.

The first proposal selected was submitted by the Port of Seattle. The Port suggests that the seismic standards that are used to evaluate piers and warehouses are too stringent. The standards are based on those developed for office and industrial buildings, but the Port structures generally have few people working in and around them, and are relatively low buildings that have minimal risks. They estimate that they could save up to $600 million in cost savings if seismic regulations for their facilities were designed to better reflect the unique nature of their structures. The first steps in this project are to better understand the risks and possible consequences from changing the standards (including the impact on resilience – the Port’s ability to bounce back after the earthquake), and then to develop new standards if it appears truly warranted. If this project turns out to be feasible, the potential benefits in jobs and cost savings could be quite large when the Port upgrades their facilities to serve larger ships.

The second proposal accepted was submitted by the Manufacturing Industrial Council (MIC), and proposes to limit the siting of daycare centers in industrial zones. The MIC notes that the standards for cleaning up industrial sites to accommodate the special health risks to growing children are very costly, and suggests that if companies were not required to meet these standards, they could save significant amounts of money. While at first this may seem like a weakening of environmental standards, the results could be counterintuitive. Sites continue to be polluted because cleanup is triggered by new development and the standards make that cost prohibitive. Slightly modifying the standards may mean each site is cleaned up to a somewhat ‘lower’ level, but it could mean that currently very polluted sites are more likely to be cleaned up. Ecology agrees that this makes sense, but there are questions as to whether it is appropriate to limit daycare centers and if this can be enforced into the future. 

Both of these are puzzles that require careful and thoughtful analysis to see if the results do justify the modification of the standards. The third proposal was more like what we expected to see, a proposal to save money on stormwater treatment and compliance by creating joint treatment facilities covering several properties. The argument is that there would be economies of scale, and that there would be environmental benefits because the facilities would come on line more quickly and in advance of actual construction on some of the sites. While the agencies were interested in this proposal, there were enough legal and policy concerns that they decided to develop a more general policy covering this issue prior to accepting a specific proposal.

The IDD is a hard concept to implement and a challenging one to work through. It asks whether a set of tradeoffs will actually result in both environmental and economic benefits, and the agencies are appropriately cautious in making decisions to proceed. Nonetheless, if these projects are found to meet the two benefit tests, the potential for positive outcomes is significant. And success in these ideas could stimulate many more ideas in the future.

The IDD is an exciting concept that can create jobs and enhance the environment.  It has special promise in the Duwamish, where the environmental cleanup can be leveraged for economic development. That is why not only the involved governments, but business, labor, and environmental organizations have come together to support getting this work underway.

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