Grandview Economic Opportunity Study

Final Studies

The City of Ferndale, in partnership with the Port of Bellingham, is conducting a study to assess the economic benefits to utility ratepayers for funding utility improvements in the Grandview Area. The goal of the City of Ferndale and the Port of Bellingham is to encourage development that will bring the greatest economic benefits to Ferndale and Whatcom County.

The study will inform the City and County’s long-range vision for the area and decisions about when and where to expand utilities. Utility infrastructure is generally supported by new development in Washington state. In this case, the city, as the utility owner, could fund an expansion if it is in the best interest of utility ratepayers, which would be reimbursed through connection fees and other means. If this study demonstrates economic benefits, such as business development and job growth, grants and other funding may be available.

State law dictates how cities manage growth. Ferndale is expected to grow by approximately 11,000 people and add nearly 3,500 jobs between 2025 and 2045. The Grandview Study Area is in Ferndale’s urban growth area (UGA). Over the last ten years, the City has managed growth through infill development. Eventually, future growth will lead the City to annex more of its urban growth areas, including the parts of the Grandview Study Area that are currently outside of the city limits.

View or download the Grandview Economic Opportunity Study (PDF) to find more information about the following:

The study’s objective and purpose
Grandview history
An overview of the study area
The study’s approach and timeline

FAQs

Why is the City doing this project now?

The Grandview area has long been part of the City of Ferndale’s future growth plan: The City’s Comprehensive Plan notes that the extension of utilities, including sewer, to the Grandview area is necessary for major development in the area to occur. (Land Use Element, 2016 Comprehensive Plan, Page 43).   

The City’s Comprehensive Sewer Plan (PDF) anticipates the extension of sewer to the Grandview Areas (East and West) and includes a 2011 Feasibility Study. A subsequent feasibility study was completed in 2017, and both studies will be re-examined as part of the current Economic Opportunity Study, this analysis, and the later engineering design work for the extension. The City’s Utility Rate Analysis (PDF) (2019, revised 2023) includes consideration of the Grandview Sewer Extension into utility user connection fees and monthly bills.  

Areas in unincorporated Whatcom County do not benefit from comprehensive long-range planning in the same way as property in city limits. As a result, property owners within the Grandview area have been permitted by Whatcom County to develop their properties without appropriate urban infrastructure, which will limit the area’s future economic potential. Growth in Whatcom County over the last two decades has resulted in very limited commercial and industrial lands available to support future business and job growth. The City of Ferndale and the Port of Bellingham are conducting the Economic Opportunity Study now to identify opportunities to optimize the economic and job benefits of future development in Grandview for the benefit of current county residents and businesses. 

Much, if not a majority, of the project will utilize public funds. While the City cannot make a profit from a sewer extension project, it is important for the City Council and any other public funding agency to consider the economic impact of their investment. The City and other agencies may determine that it is appropriate to fund the project even if there is little direct monetary return on investment, but this does not mean that these agencies should not seek to quantify what that return could reasonably look like, and what the overall costs to prepare the area for future development are. Failure to make these assessments in advance risks an incomplete understanding of the project.

How will the sewer extension be funded?

The Grandview Economic Opportunity Study is assessing the feasibility of sewer expansion based on the estimated economic impacts from future development. If the City decides to pursue the sewer expansion, it will commission an updated sewer design and cost estimate study.

However, based on a 2017 study, the total cost of the project is estimated to be between $15 million and $20 million, with annual construction cost inflation averaging 5 to 7% each year. The City anticipates funding the expansion through City sewer reserved funds and will be seeking grants and public benefit loans to help finance the cost of the expansion. Property owners and developers benefiting from the extension will also be required to pay their portion of the utility service, as required by law. Costs to property owners may be structured through connection fees and other cost-sharing mechanisms such as a Latecomer’s Agreement, Utility Local Improvement District (ULID) structure, or other approach that is typical of infrastructure expansions of this type. 

Is the City committed to a specific alignment or route for a future sewer extension?

No. The sewer expansion has not yet been designed. However, previous engineering assessments recommend that an alignment within the existing public right of way (Malloy Drive, Portal Way) will eliminate the need for property acquisition and related costs, while retaining the public’s ability to utilize and maintain the alignment in perpetuity. Further, an extension along the west side of Interstate Five (along Malloy Drive) will enable future residential growth within the City’s Urban Growth Area (UGA) to the west of Malloy to connect to the sewer utility via a gravity feed (i.e., without the need for additional pump stations).

The City recognizes that some may have preferences for alternative alignments. The final sewer design decisions will be based on not only the cost to build the project, but the maintenance costs, the alignment with the City’s long-range planning goals and policies, maximizing the public benefit, and environmental and other legal considerations, among others.

What businesses does the City wish to attract to the Grandview Area? (Response can be both a discussion of highest and best use, and a reminder that the City does not target specific businesses)

The City does not participate in the recruitment of specific businesses. In this case, the City and the Port of Bellingham seek to understand and define the highest and best commercial or industrial uses that could be expected to develop on this site and to further understand the infrastructure (utilities, power demands, transportation needs, etc.) that these types of use might require. The City may consider modifications to its land use and development requirements if it is in the best interest of the City of Ferndale.

Will residents / businesses in the area be required to connect (what conditions are required for connection)?

No. Connection to city services is typically a condition of development initiated by the property owner or the result of a failing septic system. Properties, especially residential properties that are not proposing development and do not have a failing septic, will be given the opportunity to connect but will not be compelled to connect.  

Independent of the sewer extension, future annexations of lands in the City’s urban growth areas into the city limits may impact a property’s requirements to connect to city services. Properties within the city limits are required to connect to city services to provide basic predictability to the utilities and better service to ratepayers. It is important to note that the annexation process is separate from the land use development and permitting process. It is focused on changes to the City’s boundaries, rather than changes to the land use within those boundaries.

If the City decides to expand the sewer will my taxes go up?

It is unlikely that taxes will go up as a direct result of a sewer extension. Sewer extensions are generally funded by the City’s sewer fund, which receives revenue directly from ratepayers (bi-monthly billing fees, utility connection charges), rather than through taxation (property taxes, sales tax, etc.).

Other infrastructure improvements, such as road improvements, may impact property taxes where they use special assessments to properties benefiting from those investments.

If the City decides to expand the sewer, when will construction begin?

If the City decides to pursue the sewer expansion, it will commission an engineering design and cost estimate in 2026. The earliest construction could begin is 2027, assuming all permits and funding are in place at that time.

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