Mixed-use project considered

A 50-acre commercial development could boost Sultan's lagging sales-tax revenues but not before continued residential growth puts a heavy strain on the city's $2 million budget.

Sultan city officials, feeling pressures that come from increased residential growth without accompanying commercial development, hope a proposed mixed-use project on the east side of town will be the linchpin in future retail endeavors.

For about a year, the city has held discussions with Stanton Northwest, which hopes to develop parcels off Highway 2, reaching out to travelers going to and from the mountains and Eastern Washington.

But city land-use codes preclude the mixed-use project Stanton has suggested. The group is considering a retail center that could encircle a large grocery, with condominiums and apartments nearby. Concept drawings to give city officials an idea of what could be built include a small hotel.

If Stanton builds, city officials say a larger retailer might consider locating in Sultan. They won't say who they're talking with, other than to say it's not Wal-Mart.

City officials first need to decide whether to adjust the area's zoning, which currently doesn't allow housing in the industrial/retail part of town. If the answer is yes, as is expected, it could take much of this year to put through the necessary code changes, as well as changes to the city's master plan for the area, before Stanton could even apply for building permits.

In the meantime, the city will be watching as more than 600 homes are built — mostly along Sultan Basin Road — over the next three years, with an additional 700 proposed and waiting for additional sewage capacity. New single-family homes are selling in the mid- to high $300,000s. Sultan's population on April 1, 2006, was 4,440. .

While developers pay user fees associated with the strain that new homes put on a city's infrastructure, in the past those fees haven't been enough to keep up with needed improvements. That has put the city in a tough spot, said Mayor Ben Tolson.

"This city is maturing," Tolson said the day after a packed City Hall meeting heard how crime rates continue to rise and police staffing isn't keeping up with growth. "We've taken some great steps, but there are definitely growth pains that the city is undergoing."

The city's lack of commercial development in the past has been linked to developers crying there weren't enough homes to support business. But that has quickly changed, and new homes, as Tolson is learning, don't bring in the revenues needed to run a fast-growing city.

Less than half the city's budget comes from property and sales taxes. Estimated property taxes for 2007 are $637,000, while 2007 sales taxes are estimated at $321,600. Looking at a couple of cities whose populations are close to that of Sultan, Stanwood's annual sales-tax revenues are closer to $850,000, and Duvall brings in about $600,000 annually in sales tax, Tolson said. A successful city, as Sultan officials are learning, needs its sales-tax revenue to roughly equal what it receives in property taxes. Sales-tax revenue is crucial for keeping up with infrastructure needs, officials say.

New homes have put growth pressure on the city's services, including water, sewer and police. The city's comprehensive-growth plan calls for at least 2.6 uniformed officers per 1,000 residents, not including the police chief. This year, the force finally will be back to eight uniformed officers, but residents still expect that longtime Police Chief Fred Walser will be needed to patrol a shift.

Walser has worked for years to boost his budget, now about $1 million annually, yet residents continue to vote down levies that would allow hiring more officers.

"We do a good job," Walser said. "But you see that our traffic stops are much lower than in the past because of fewer officers."

Some residents continue to distrust city government when it comes to development. In years past it was alleged that developers were given the run of the town with little oversight. That allegation gained some credence last year as the City Council dissolved its planning board and took on the planning role itself.

"It was clear that certain planning members knew what would be discussed and what the desired outcome was before the meetings," said Josie Fallgatter, a member of that abandoned planning board. "And there were public-participation problems."

Fallgatter said developers would be present for meetings to discuss issues that weren't on the agenda, and that raised suspicion.

The city has since created a new planning board more varied in its membership. Where the old board was mostly real-estate agents and property owners, the new one includes a school-board member and a state Department of Ecology employee.

Fallgatter says transparency is improving among city departments and that a new city administrator hired at the end of last year from Woodinville should make things better.

Tolson, who's up for re-election in the fall, acknowledges there's plenty of room for improvement.

"Ultimately, what happens is the mayor's responsibility," he said. "But I feel confident and pleased with the direction we're moving."

Christopher Schwarzen: 425-783-0577 or cschwarzen@seattletimes.com