Kerns said commissioners have directed county officials to schedule a meeting with city lawmakers in an effort to resurrect the deal to expand the boundaries. If there’s not agreement, Kerns said, the county would pursue its own public development authority on the North Side without city involvement.

“The way they want to do profit sharing would hurt the future financial stability of the city,” Stuckart said. “I think we’d be giving up too much general fund revenue for police and firefighters, libraries, parks, planning.”

But that would be a departure from the agreement that’s working on the West Plains, said City Council President Ben Stuckart. That agreement allows the tax revenue to remain with the government whose property the business sits on. Agreeing to give up tax dollars on city property for an extended period of time doesn’t make sense, Stuckart said.

“Let’s just make sure we don’t put ourselves into a situation where the county and council members down the road are fighting over these businesses,” Kerns said.

Kerns said the county would like that portion of tax revenue to be split evenly between the city and county for all properties within the borders, not based on municipal boundaries. That would keep the two governments from competing to attract firms to their sections within the authority’s borders, he said.

Within a public development authority’s borders, any additional tax revenues that result from higher property values and increased sales are split into two pots – one for the governments who agree to administer and support the area, and the other back into the area for infrastructure costs.

“Unfortunately, we’ve run into some roadblocks. Folks want to tweak things,” said County Commissioner Josh Kerns, who said he’s been working with Mayor David Condon and other city officials to strike a deal on expanding the northeast authority’s boundaries. “There’s different reasons for wanting to make those tweaks. I can see it from both sides.”

Talks to expand the 500-acre boundaries of the Northeast Public Development Authority have stalled between Spokane County and City Hall over a disagreement about what tax revenue to share.

An organization aimed at revitalizing the Hillyard neighborhood and other parts of northeast Spokane – an area long neglected for road and public works upgrades – now has a professional leader as City Hall hopes to spur commercial development.

But the agreement that installs that leader is causing a spat between at least one city lawmaker and the region’s chamber of commerce, Greater Spokane Incorporated (GSI), over control of tax dollars captured to revitalize the neighborhoods in the shadow of railyards and help them flourish in the future.

David Guthrie’s hiring as executive director of the Northeast Public Development Authority was approved last month by the citizen board that oversees the organization.

The development authority, established under city law in 2011, was created to capture increasing tax revenue to help attract and spur industrial business to that corner of town. However, Guthrie will be a contract employee of GSI, which has the power to evaluate his performance and can choose whether to end his employment without input from the citizen board.

The contract between the development authority and GSI gives the chamber “sole authority to fire” the executive director, and makes the new leader subject to the chamber’s “performance review system.”

GSI’s chief executive, Todd Mielke, said that legal language was included for any potential discovery of illegal activity, in which case his organization would be liable for damages. The citizen board will be establishing Guthrie’s goals, not GSI, he said.

“The intent is NEPDA has established the goals, top 10 goals, short-term goals,” Mielke said. “What David Guthrie is charged with doing, pursuing the implementation of the top 10.”

City Council President Ben Stuckart, who has butted heads with GSI in the past, called the arrangement unacceptable and in conflict with the purpose of establishing a public development authority in the first place.

“I’m not OK funding an organization, and then giving another organization firing power,” Stuckart said. “That’s not what I agreed to.”

Stuckart said he wouldn’t vote for city funds to go toward the public development authority given the power structure outlined in the agreement.

Mielke said he was confident the agreement could be explained in a way that would be acceptable to the city. Stuckart has not been involved directly in the contract talks, and City Councilman Mike Fagan, the council’s liaison to the development authority, was not in attendance at a June meeting when Guthrie’s contract was approved.

Guthrie, a former global real estate manager for Schweitzer Engineering Laboratories Inc., will be paid a salary capped at $100,000 annually. GSI will pay that salary, which will be reimbursed by the proceeds of the taxing district. The district captures taxes generated by increased commercial development and dedicates a portion toward infrastructure costs.

A similar arrangement, called tax-increment financing, has been credited with attracting multiple businesses to an industrial area near the Spokane International Airport on the West Plains, including Amazon and electric car manufacturer Mullan Technologies.

The West Plains authority does not have the same contractual agreement with GSI for employment of Todd Coleman, its executive director. But the contract in place in northeast Spokane will allow Guthrie to focus on building out the area and marketing it to businesses in the region, rather than administrative tasks, Mielke said.

“The NEPDA is about economic development, which is totally in line with what we do as well,” Mielke said. He said the arrangement was a “collaborative model” for attracting business in a targeted fashion, tailored to the benefits available in northeast Spokane.

That area is now primed for improvement with the looming completion of the North Spokane Corridor and plans to address cleanup concerns from decades of heavy industrial manufacturing, Guthrie said.

“You’ve got a great history there with the Great Northern Railroad, and the history of Hillyard,” said Guthrie, a Spokane native and graduate of Lewis and Clark High School. “You’ve got that legacy of a lot of the uses there, but also the stigma of environmental issues that has to be addressed.”

The district wouldn’t exclusively compete with the similar authority situated on the West Plains, Guthrie said, because the land and amenities offered in the northeast are different than the area around the airport.

“You’ve got some large sites, probably not as large as, say, the West Plains and the airport PDA, but you also have a lot of smaller sites there with good zoning, utilities in place,” he said. “Not everybody’s an Amazon.”

The area also has the potential for some mixed-use development along Market Street, which forms its western border. The city has zoned that stretch as a centers and corridors location, which brings with it the potential for small retailers, apartment buildings and other urban amenities. The authority is bordered on the east by the Beacon Hill development, 150 acres of bluff land that could accommodate up to 3,000 homes.

All of those developments mean potential for an area that hasn’t received the same attention in recent years as the West Plains, or even the University District, the city’s other public development authority in downtown that has seen millions of dollars of both private and public investment to support regional education centers, said Anthony Carrollo, chairman of the Northeast Public Development Authority Board.

“I would say this area has been the most ignored within the city in terms of infrastructure, and frankly has the most economic growth potential of any area of the city,” Carrollo said.

Guthrie’s job now, as a full-time employee, is to help the region realize that potential.

“I think people are starting to see the benefits of this concept,” he said.