LYNNWOOD—At a three-hour work session Monday, September 15, Lynnwood’s City Council walked a cautious tightrope between innovating its City Center, through the Lynnwood Public Facilities District (LPFC) Master Plan, while balancing short-term financing strategies to tackle the city’s looming $10.7 million budget deficit.
Reimagining “The District”
One third of Monday’s meeting revolved around the LPFD Master Plan and its associated Development Agreement.
Council was briefed on this through a presentation led by Ben Wolters, Director of Development and Business Services, Sarah Cho, City Center Program Manager, and David Mach, City Engineer.
The LPFD Master Plan seeks to transform a heavily underutilized 13-acre site in Lynnwood’s downtown core – currently occupied by the Lynnwood Event Center along with retail and parking – into a mixed-use hub featuring expanded event spaces, commercial uses, housing, green spaces, and pedestrian-friendly streets.
With momentum in regional transit, growing demand for walkable, vibrant downtowns, and rising costs of land and infrastructure, “The District” could become a signature project for the city — one that defines Lynnwood’s identity for decades, staff said Monday.
“[It’s] a unique opportunity to reshape the City Center,” said Cho. “We want this to be more than buildings — we want places where people linger, where the public realm is front and center.”
On the other hand, council expressed caution that the city moves forward in a way that’s both conscientious of its budget restraints, and in a way that’s properly managed to properly maximize the project’s potential.
To support the District Master Plan, the City and the LPFD recently drafted a Development Agreement (DA) that establishes a framework for infrastructure improvements, land use, design requirements, and shared responsibilities over time.
This includes the construction of a “Ring Road” (via an extension of 194th Street plus a new 38th Avenue) to better connect The District to the rest of Lynnwood’s street grid. This would be paid for, in part, by Lynnwood’s TIF (tax increment finance) funds as well as its multifamily property tax.
Wolters also noted that city staff could potentially utilize bond capacity, but those discussions would come later.
“Flexibility is key,” said Ben Wolters. “We want to ensure that the public-private partnership can adapt should market or policy conditions shift.”
Council was presented a draft ordinance which, if approved, would authorize the city to enter into a development agreement with the PFD. However, no action was taken at Monday’s meeting.
Financing the Vision: Bridging the Gap
Continuing the conversation about funding the LFPD, Finance Director Michelle Meyer then introduced a proposed short-term financing resolution to support the project for the time being, until a broader funding plan could be established for future development.
This resolution would permit the LPFD to issue subordinate taxable notes, enter into short-term loans (including from Snohomish County), refinance existing bonds (including the 2015 Revenue Refunding Bonds), and cover associated issuance costs.
The City provided credit backing for $36 million in bonds that funded development of the PFD event center, all payments of which have been paid on schedule. Currently $9.6 million remains outstanding.
The PFD has funded their redevelopment master planning efforts without any additional debt. However, to reach the critical point of schematic design, additional funding is needed.
“We must now on financing options so that momentum isn’t lost while long-term funding is secured,” said Meyers Monday, emphasizing that while the financing is short-term, the structure must protect the city’s financial health.
The PFD board has currently taken action to authorize borrowing $15 million through a loan offered by the County Treasurer. $9 million would be used to repay most of the outstanding bonded debt bringing the City’s total backing to $15.6 million while the loan is outstanding. The conditions of this are to require City credit backing and, by extension, require the passing of the resolution brought to council Monday.
Meyers continued that there is no out of pocket funding being requested so the current General Fund budget shortfall would not affect the City’s ability to consider or approve the resolution.
The City Council is scheduled to vote on this resolution on October 13, following the adoption of the previously mentioned Development Agreement.
Budget Reality Check: 2025-2026
The final major item Monday, also handled by Meyer, was a follow-up on Lynnwood’s 2025-26 biennial budget, including adjustments and projections in light of economic uncertainties and the city’s $10.7 million shortfall.
“As most of us are aware, our city is facing some tough challenges ahead as we strategize how to reset city finances on a sustainable funding model for the future,” Lynnwood Mayor Christine Frizzell opened. “A budget is not something set in stone, it is a plan and plans often change and need to be reassessed, reimagined, and recalculated.”
Part of this budget change, the Mayor continued, is reductions to city services. Mayor Frizzell has asked the Police Department to reduce their expenditure by 6%, and all other departments to reduce their general fund operating budget to a target of 10% as well.
In addition, the Mayor has reduced seasonal staffing, travel, training, overtime (unless approved by Directors), reductions to programs, reduced professional services and contracts, eliminated non-critical purchases, implemented furloughs for Directors and Mayor, and initiated employee workforce reductions.
“The decisions made by the Mayor and Directors were thoughtful and intentional. Our decisions are not made in a bubble or in a hurry. We’ve taken the time needed to implement these changes to meet our revised budget targets,” said Mayor Frizzell.
The City also laid off nine employees last week.
The city is facing several fiscal pressures, Finance Director Meyers said, including rising operational costs (utilities, maintenance, public safety), delays or uncertainties in revenue (including grants or taxes), and possible cost overruns in planned capital projects — especially those associated with “The District.”
Meyer presented updated revenue estimates, showing possible shortfalls under more pessimistic scenarios, and urged council to consider sensitivity analyses.
“We need to understand both our base case and our downside case, so we’re prepared — not caught off guard,” said Meyers.
City Council members were in agreeance that whatever cuts or reallocations might be necessary, essential services must be protected.
The Lynnwood City Council is scheduled to have a more in-depth conversation on how it will tackle its budget shortfall this Wednesday, September 17.
Author: Kienan Briscoe
