Port responds to County criticism over proposed Malaga TIA, cites Alcoa site and Microsoft project

WENATCHEE — The Chelan-Douglas Regional Port Authority is pushing back on criticism from Chelan County Commissioners of a proposed Tax Increment Area (TIA) in Malaga, saying the district is aimed at redeveloping the former Alcoa site and supporting long-term job growth.

In a response published this week, the Port said it “respectfully disagree[s]” with the county’s recent characterization of the project and posed what it called the key question: “Why is the Regional Port considering forming the TIA in Malaga?” The release argues that “successful communities are always positioning themselves to attract future economic development investment and good paying jobs.”

Why Malaga — and the Alcoa site

One motivation, the Port said, is the former Alcoa property, about 2,800 acres. At its peak, Alcoa employed roughly 1,000 workers and was among the county’s largest taxpayers, according to the statement. The Port notes Alcoa paid $600,000 in property taxes in 2016 and is projected to pay only $130,000 this year — “a 78% reduction.” The Port says the TIA would help fund “strategic infrastructure investments” to turn the site “back into an economic asset for Chelan County.”

Collaboration claims

The Port said it has met three times with county officials about the Malaga TIA — on May 9, June 3, and July 15 — and that “each of the meetings allowed ample opportunities for elected officials and staff to provide commentary and ask questions.” It also says Chelan County has submitted projects it wants added to the draft TIA project list. On Aug. 19, 2025, the Port says it sent commissioners a proposed Memorandum of Understanding (MOA) inviting the county “to have a seat at the table” to jointly prioritize future infrastructure spending.

That MOA designates the Port as the final arbiter of any financial decisions, and indicates that although it is a non-binding document, any final InterLocal Agreement (ILA) would need to incorporate that designation of the Port as “Lead Agency” and acknowledge their final authority in “Revenue Allocation.”

How a TIA works, per the Port

“The TIA is not a new tax, and existing property taxes are not impacted by a TIA,” the statement says. Instead, it “redirects future property taxes from the growth in assessed value within a defined area” and reinvests that increment in public infrastructure. Based on current projections, the Port says Chelan County would receive $0.70 of every new property-tax dollar generated within the TIA, while the Port would receive $0.30.

Changing estimates — and offset projections

The Port acknowledges its early estimate of the county’s 25-year contribution was $50.3 million, but says state law requires a speculative development analysis with multiple scenarios. In one model, the Port says, county contributions could total $103.6 million over 25 years — a figure it calls “highly theoretical” and contingent on private investment “that only come[s] to fruition with substantial infrastructure improvements” partly funded by TIA revenues.

The Port argues those foregone county dollars would be more than offset by other revenue growth tied to development in Malaga, citing projections of $150.8 million in sales tax and $71.1 million in property tax from new machinery and equipment value that would be outside the TIA. After the TIA ends, the statement adds, the county would see an annual property-tax “windfall of more than $4 million.”

Microsoft project and water upgrades

The Port highlights the Microsoft data center project in Malaga as “the largest private investment in Chelan County’s history,” saying that if three buildings are completed the assessed value is projected at $1.2 billion, with about $4 million in new annual sales tax for the county. It credits its role in securing property for the project and acknowledges the county’s help with land-use planning.

Separately, the Port says it is managing a $53 million overhaul of the Malaga Water District paid for by Microsoft — two new reservoirs totaling 1.5 million gallons of storage, systemwide upgrades, and capacity that the Port says will also support future housing. By the Port’s estimate, Microsoft would use about 20% of the new storage, leaving the rest for neighborhood growth and reliability.

Bottom line from the Port

“Strategic investments in public infrastructure are a proven driver of economic growth,” the statement concludes, adding that the Port “remains committed to ongoing collaboration with all local partners” and directing readers to its website for more information.

Ward Media attempted to contact the County Commissioners’ Office before press time, but their office closes early on Fridays, which is when this statement became available.

Andrew Simpson: 509-433-7626 or andrew@ward.media