Economic Development
Recently, a port asked me if there was a clear way to explain the Washington public port’s statutory charge to perform economic development. Washington ports conduct a wide range of activities, from running transportation facilities such as marinas and airports, to providing utility services like water and fiber internet, to developing commercial and industrial lands for sale or lease, administering grants for economic development, and much more. However, one common thread throughout Washington Ports, regardless of location or size of the port, is that all ports promote themselves as economic development entities. Although all ports talk about economic development, it is often the case that economic development looks different from port to port. This month’s column is all about economic development and the port’s broad statutory charge.
A brief history lesson to start—Ports did not always have statutory authority to perform broad economic development activities. It was not until 1985 that Ports had the express statutory authority to conduct unspecified economic development. However, prior to 1985, Title 53 included several provisions authorizing ports to engage in specific kinds of economic development. For example, the original 1911 Act authorized port districts to acquire, construct, maintain, operate, develop, and regulate harbor improvements, transfer and terminal facilities, commercial transportation facilities, and industrial improvements. The 1911 Act also included broad leasing powers and authorized ports to create local improvement districts. In 1955, the adoption of RCW 53.25 granted specific powers to ports to establish industrial development districts (“IDDs”) for the development or redevelopment of marginal lands. In 1965, RCW 53.08.270 granted ports the express authority to acquire and operate park or recreational facilities, followed in 1984 by RCW 53.08.255 to allow ports to spend money and conduct promotion for tourism. 1 Then, in 1985, the legislature adopted RCW 53.08.245 to provide broad and unspecified economic development authority to ports.
The first sentence of RCW 53.08.245(1) succinctly sums up a port’s economic development authority—“It shall be in the public purpose for all port districts to engage in economic development.” “Economic development,” however, is not a defined term in the statute. The other provisions in RCW 53.08.245 discuss workforce development and job training. Given this language, one might think that ports are limited to economic development related to workforce development or job training, rather than brick-and-mortar economic development.
Washington Courts addressed this question concerning the scope of a port’s economic development power in Lane v. Port of Seattle, a 2013 case from Division 1 of the Court of Appeals. In that case, the court expressly rejected the argument that a port’s economic development power is limited to programs for job training and placement under RCW 53.08.245. The court indicated that the first sentence of RCW 53.08.245 authorizes economic development—full stop. The following sentences, according to the court, are simply permissive, indicating that economic development may include job training and placement. The court went on to indicate that the intent of the statute is not to limit a port’s activities to job training and placement but rather to resolve any doubt that the term “economic development” is broad enough to include job training and placement.
The court’s explanation makes sense when viewing the evolution of RCW 53.08.245 (which only added workforce development and job training language in a 2010 amendment, SHB 2651 (2010)). This explanation is also consistent with the statutory purpose of ports under RCW 53.04.010, as well as their other statutory powers, such as the authority to acquire and sell real estate, leasing, powers related to developing transportation, etc. Taken together, these provisions make it clear that ports have expansive authority in the area of economic development, including brick-and-mortar economic development.
Port powers have evolved since the original authorizing statute was passed in 1911, and over time, those powers have broadened. The breadth of port powers is why Washington ports can do so much cool stuff. If your port is more risk-tolerant and looking to engage in a novel project in the economic development sphere that “pushes the envelope” outside of what is traditionally considered economic development, then you may consider some of the following questions:
- Ask your port staff, “How can we get this done?”
- Ask your port attorney, “How can we make this work legally?”
- Does this proposal require legislation?
Also, you should be ready to answer the “why” question, or, said another way, you should be prepared to articulate the “public good” of the proposal in a public meeting. You may also solicit community input in a public hearing. It is critical that your port creates a clear record that answers the “why” question and shows your port has done its homework on the proposal. This is often best captured in a resolution, often in the recitals or factual background section of the resolution. Ultimately, whether to push the envelope in the economic development sphere is a business risk decision the port commission and leadership will have to weigh.
As always, if you have questions, work with your port’s legal counsel to address your specific questions. If you have a question for Knowing the Waters, please e-mail me at tschermetzler@csdlaw.com.
1 Note, that even after the passage of RCW 53.08.245, the legislature continued to expressly
grant ports authority to conduct different economic development activities, including in areas of
telecommunications (RCW 53.08.370), construction of roads and highways (RCW 53.08.330),
and brownfield renewal authority.
