The city is closer to raising all the funds needed to pay for the Performing Arts and Event Center currently under construction.

At Tuesday’s City Council meeting, Economic Development Director Tim Johnson said the city has already raised $7 million in allocations from Clearinghouse Community Development Financial Institution in New Market Tax Credits allocations with more possibly to come.

“And I believe within the next 45 [days], we’ll have somewhere between $15 to $20 million,” Johnson said at the meeting. “That should account for the rest of the money necessary to make the Performing Arts and Event Center work. It’s been a real accomplishment.”

For two years, Johnson has worked to secure the tax credits, which will provide between $.84 and $.89 on the dollar.

While the city will initially have to pay a 2 to 2.5 percent interest on the funds, that goes away after seven years and the money is treated like a grant – which is exactly why the program is so desirable, Johnson said.

The New Market Tax Credits is a federal enterprise program started in the year 2000 that, among other things, helps communities advance economic development.

The funds will go toward paying down the $33 million Performing Arts and Event Center. The 716-seat facility is on track to open this summer.

Mayor Jim Ferrell said about $21 million has been raised for the center, so far.

And with the approximate $7 million to $8 million that will come from the total allocations, the city only has to secure $3.5 million in naming rights to completely pay for the Performing Arts and Event Center.

If the city does not secure the money anticipated, officials will need to dip into their already-approved $13 million inter-fund loan. The city would have three years from the time those funds are spent to begin paying back the money.

To qualify for the tax credits, the project was deemed a qualified low-income community investment area, which means the area had 80 percent or less of the county median income or a poverty rate 1.25 times the national average and either a poverty rate greater than 30 percent, a median income less than 60 percent or an unemployment rate of 1.5 times the national average.

Johnson told the council that he hopes the tax credit allocations will be finalized in March or April.

“Because we’ve been so well prepared over the last two years, what gives us a comparative advantage over other entities in this activity is that we can close within the first quarter and more organizations will take third or fourth quarter before they can close,” Johnson said, adding that there is a rule that community development entities and financial institutions have to give 85 percent of their allocations before they can apply again in September.

“So, everybody wants to have their allocations deployed and so most people will be looking at the city of Federal Way as comparative advantage because we can deploy their money for them sooner than later and they like that about us.”

• In other news, Acting City Attorney Mark Orthmann gave the council an update on the Industrial Realty Group property (formerly known as the Weyerhaeuser campus), as many in the community are invested in the property’s future.

Although the date has yet to be set, the city’s Hearing Examiner will hear an appeal by Industrial Realty Group on the city’s determination that the company cannot use a short subdivision application to separate their property.

City officials say that type of application is not appropriate and that it should be used to separate residential areas, not commercial areas. Instead, it should be done using a binding site plan, Orthmann said.

Despite news that Industrial Realty Group and Chill Build Seattle, LLC terminated their contract to build a fish processing center, the developer is still going forward with the SEPA review and their Use Process III application for the 19-acres.

The city is still waiting for Industrial Realty Group’s responses to their technical review comments, but Orthmann said some of the items could change because of the contract termination and its affect on the project.

• Ferrell told the council the city is working very closely with University of Washington-Tacoma, Highline College and Federal Way Public Schools on a memorandum of understanding to bring a “higher education presence” to Federal Way.

Ferrell said he plans to keep everyone posted on the details of this as they become available.

• Community Development Director Brian Davis delivered a timeline for actions related to a multi-family moratorium the council extended in December.

A SEPA determination will be issued in February with a 14-day public comment period and 21-day appeal period to follow. A Planning Commission hearing is planned for March 15, a Land Use and Transportation Committee on April 3, first reading by the council on May 18 and second reading on May 23. The moratorium will end June 6.

Near the end of the council meeting, council members did a first reading of council bill #718, the adoption of state-mandated building and construction codes, and council bill #719, imposing an admissions tax.

They also unanimously passed council bill #716, a Washington State Parks and Recreation sewer line and park utilities franchise.