Chelan County Pushes Back on $154M Malaga TIF Plan

Chelan County responds to the Chelan Douglas Regional Port Authority's proposed tax increment financing (TIF) district near Malaga.

What Is a TIF District?

TIF districts are economic tools used by governmental jurisdictions to fund projects, accommodate growth, and spur economic and community development. TIF districts are a reallocation of potential future taxes.

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The proposed TIF would cover 3,326 acres in Malaga, encompassing the Microsoft data center locations, the old Alcoa plant, and the future site of the potential Helion fusion power plant. Washington State has a statute where a TIF cannot be implemented if the area's assessed value exceeds $200 million.

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Why Chelan County Opposes the Current Plan

Commissioner Shon Smith said the proposed TIF could reduce the county's overall revenue by $50 million over 25 years.

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"Unfortunately, we have state-mandated duties that we have to use money like that for, and we would not have access to that added value on top of all that new activity, new construction, and new development," Smith said. "It's not a bad idea, we like the idea of development, but we have certain things we're required to do at the state level that, that money would be taking away from."

Major Projects Proposed in Malaga TIF District

The measure could be proposed in December, with the TIF materializing with the county assessor in June 2026. January 2027 would be the first year of tax allocation revenue.
Proposed projects the TIF district could fund include a child care facility, a bike and pedestrian pathway, a mercado, the Stemilt Creek Bridge rebuild, the Malaga Fire Station expansion, and other projects estimated to cost $154 million.

In 2025, Chelan County's total tax distribution is projected at over $166 million.
Smith said he wants the port to work with the county on a joint TIF.

"What we're wanting to do is, hopefully, have a seat at the table for those dollars, number one, and number two, where those dollars are going to be spent and for which projects, because we still have a county to run as well," Smith said.

KPQ reached out to the port for a comment Tuesday but did not hear back at the time of publication.