FERNDALE - Lummi Nation was on the verge of jump-starting major retail development along Slater Road but canceled the possible sale of 25 acres to a major retailer because the tribe and the city of Ferndale failed to reach agreement on how to divide sales tax revenue.
The Lummis haven't divulged the potential purchaser or plans for the property at the southwest corner of Slater and Rural Avenue. But drafts of the agreement discuss significant sales tax receipts and traffic impact fees, which suggest a big-box store.
The store would have been the first of many envisioned between Rural Avenue and Interstate 5, and along the freeway to the south.
The Lummis are applying for trust status for 80 acres of land east of Rural. Ferndale officials say the tribe intends to lease that land for intensive retail development similar to, but smaller than, the Tulalips' Quil Ceda Village outside of Marysville. The Lummis say they currently have no plans for the 80 acres.
The Ferndale City Council on Wednesday, May 15, approved a proposal to give the Lummis 25 percent of the tax the city would receive from retail sales on the 25-acre property.
But the Lummi Indian Business Council rejected the deal, according to a Lummi press release issued Thursday. Lummi officials at the Ferndale meeting said the tribe also wanted half of the sales tax on an additional 21 acres between Rural and I-5 and within the city limits. Also, the tribe wanted to reserve the right to buy other properties in the city and put them into trust.
When land goes into trust, it becomes the property of the federal government. The tribe controls the land and has jurisdiction over it. State and local environmental and building regulations do not apply.
Because of the special status given to trust land, especially the inability of cities to collect property, hotel and some other taxes, Ferndale wanted an agreement that limited future trust applications in the city.
In part to alleviate the fears of some city officials, City Council member Lloyd Zimmerman asked Lummi Chairman Tim Ballew what plans the tribe had to buy up land within the city.
"We don't have an aggressive prioritized list of acquisition," Ballew said. But, he added, "If there's land that is acquired, the practice is to put it into trust."
Ferndale Administrator Greg Young said the city was vulnerable to significant land purchases by the tribe that would erode the city's tax base and its ability to deliver basic services. With the Silver Reef Hotel Casino Spa, the tribe has the means to reclaim land it historically held from the Cascade Mountains to the San Juan Islands - including land in Ferndale.
"Unless there's something that said (you) wouldn't, some people could assume that that could be what happens," Young said.
The Lummis said the advantages that trust lands offer businesses would make the properties in south Ferndale more attractive to retail developers and spur economic development along Slater. That would benefit the city, they said.
"It's true that Ferndale gets 100 percent of the sales tax (now)," said Evan Morse, a Lummi staffer who accompanied Ballew to the Ferndale meeting. "There's nothing there now. ... If another developer could have developed that property, it would already be so.
"If Ferndale's aspirations are to forever collect 100 percent of zero sales tax, and collect the property tax on an empty field, then you're right. Not reaching an agreement with the Lummi will accomplish that," Morse said. "It would really help both Ferndale and Lummi to work together because right now, trying to go it alone won't serve either."
Council member Jon Mutchler said Slater will be developed, whether or not the Lummis are involved.
"I think everything has its season. And nothing has happened at Slater yet. I'm fully confident something will happen at Slater sometime," Mutchler said. "It might happen sooner with this (agreement), but I'm confident that it will."
Lummi officials say they will continue to negotiate with Ferndale.
"The Lummi Nation will never agree to the terms proposed (Wednesday) by the Ferndale City Council," Ballew said in the press release. "But (Wednesday's) actions will not deter the tribe from continuing to reach out to the city in the hope that Lummi and Ferndale can find a common ground that benefits both communities."
Reach RALPH SCHWARTZ at firstname.lastname@example.org or call 715-2298.