Bellingham approves seven-year tax reprieve for downtown startups

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The Bellingham City Council approved a seven-year tax reprieve for qualifying startups in the city center on July 13, advancing Mayor Kim Lund’s plan to support downtown business activity and entrepreneurship.

The council also expanded tax credits available to businesses in Bellingham’s urban villages. The measures are intended to lower barriers for new businesses, encourage investment and help address vacancies in the downtown core.

The action applies to businesses in Bellingham’s city center and urban villages. It does not establish a benefit for every downtown business: eligibility is limited to qualifying startups and other businesses covered by the expanded credit rules.

First step in mayor’s economic plan i

The council’s vote was described as the first step toward implementing an executive order Mayor Kim Lund issued June 15, 2026. That order calls for expanding economic opportunity and strengthening the City Center.

The broader strategy includes reducing downtown vacancies, activating public spaces, supporting local business and entrepreneurship, protecting industrial land, supporting marine-trades jobs and improving infrastructure connected to downtown activity.

Those priorities place the tax measures within a wider economic-development effort rather than treating the reprieve as a stand-alone change. The city’s stated goal is to make it easier for new businesses to open and for existing commercial areas to attract investment.

What the measure means locally i

For eligible startups, a seven-year reprieve could reduce the cost of establishing a business in the city center. The expanded urban-village credits similarly aim to encourage activity in designated neighborhood centers.

The measures are designed to address two local concerns identified in the city’s economic plan: vacant downtown spaces and the need to support entrepreneurship. The policy’s intended effects are not the same as guaranteed results, however. The action is meant to encourage investment and reduce barriers; it does not guarantee that businesses will open, create jobs or fill vacant storefronts.

The city’s announcement does not specify the dollar value of the tax benefit or provide every eligibility detail for qualifying businesses. Those terms will determine how much assistance individual businesses can receive and which startups can use the reprieve.

Related downtown priorities i

Mayor Lund’s order also identifies public infrastructure and downtown activity as priorities alongside business incentives. It calls for attention to industrial-land protection and marine-trades employment, sectors connected to Bellingham’s broader economic base.

The city has separately identified the Whatcom Museum and Mount Baker Theatre as potential recipients of Public Facilities District investment. That potential investment is part of the city’s stated effort to support downtown facilities and activity, while the council’s tax action focuses directly on businesses and urban-village development.

The July 13 vote moves the tax incentives from the mayor’s broader economic agenda toward implementation. The practical impact will depend on the final eligibility rules, the value of the benefits and how many businesses ultimately qualify.

Sources

• Bellingham approves seven-year tax reprieve for startups, The Bellingham Herald
• Bellingham is open for business, City of Bellingham

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