It is the best of times or the worst of times in Lakewood, depending on who you talk to and the time of day. Yet everyone seems to agree that the 20 square miles of forest and lakefront at the southern end of Puget Sound is a city of possibilities.

Perhaps it’s because the city is so young. Wedged between Steilacoom, Fort Lewis and McChord Air Force Base at the southern end of Pierce County, Lakewood was incorporated Feb. 28, 1996.

Yet its roots extend back more than 150 years to 1833, the year Hudson Bay Company opened its first commercial enterprise on the Nisqually Prairie. At first, Native Americans put up with the visitors, but over the next 15 years they became alarmed and resentful over a swelling settler population. An attack on Fort Nisqually in 1849 left one settler and two Indians dead.

The U.S. military responded by constructing Ft. Steilacoom as a buffer between the opposing sides. Lakewood has been benefiting from its close proximity to military establishments ever since.

Camp Lewis created an economic boom of sorts when it was built in 1917 on land provided by Pierce County. In 1938, Tacoma Air Field changed its name to McChord Field, sparking another dramatic surge in the economy and population.

Yet even in that day and age, Lakewood was a community of contrasts. While sophisticated visitors oohed and aahed over the lakefront estate, a more blue-collar crowd was making the pilgrimage to witness hair-raising spectacles of motor racing. Eddie Rikenbacker and Barney Oldfield where among those who competed at Tacoma Speedway when it was the largest racetrack in the West. The track, which was located where Clover Park Technical College is located today, was on the same racing circuit as Indianapolis International Speedway until the largely wooden course was destroyed by fire in 1924.

The upper-crust, meanwhile, frequented the Tacoma Country and Golf Club, built in 1894.

Lakewood Colonial Shopping Center, one of the nation’s first shopping malls, was built in 1937. So was Lakewood Center, the site of Lakewood Pharmacy and the Terrace Restaurant.

“Lakewood just growed,” Lakewood Mayor Bill Harrison says of the intervening years.

Although Lakewood Colonial Shopping Center still exists it is the upstart Lakewood Mall that has suffered recently. General Manager Gary Martindale concedes that reports suggesting the mall has fallen on hard times haven’t been entirely off the mark. “Tenants have really shown a lot of faith staying with us,” he says. It is patience that will be rewarded, he adds.

An experienced, aggressive mall owner, combined with increased traffic that is expected to follow development of downtown government facilities, will be a boost for the mall, says Martindale.

Not even the specter of an enormous cut in City revenues seems capable of deflating the optimism inspired by visions of what Lakewood is and might become.

“The City is much easier to deal with than the county,” says Frank Jacobs, vice president of the Lakewood Industrial Park, which has a 95 percent occupancy rate. But there is one little thing he’d like to see someone work on.

“If they could just improve the permit process a bit,” he says. It takes a month to get a permit in Lakewood that you can get in Tacoma in 24 hours, he says.

“It’s a small thing overall,” he says. “Everyone complains everywhere.”

Carole Lail can’t even find something minor to complain about. The marketing coordinator for Jimmy G’s, a mini-casino and restaurant that opened in June, gushes over the support Lakewood’s City Council has provided.

“They made it easy to locate here,” she says.

She says the gaming establishment was particularly appreciative when half the City Council showed up for the opening ceremonies, at which Mayor Harrison cut the ribbon.

It’s hard not to be popular when your business pays taxes that are 20 percent higher than other businesses in town. But even that might not be enough to offset a financial disaster some doomsayers predict if Initiative 695 is approved by state voters.

“We don’t have to react by increasing taxes or decreasing services,” Harrison says of a recent Washington Research Council report that Lakewood’s financial situation would become fragile if I-695 passes this fall.

The reason for the Research Council’s sobering prediction is that Lakewood receives 15 percent of its total revenue from the Sales Tax Equalization Program (STEP). The program provides money to cities whose retail sales tax revenue is lower than 70 percent of the average for cities in the state. Lakewood’s STEP checks for 1998 totaled $4.67 million.

The problem is that STEP is funded with state revenue from the Motor Vehicle Excise Tax. That’s why Lakewood’s budgeting problems could get serious in a hurry if Initiative-695 passes.

“We’ll look at every way to balance the budget,” Harrison says of how the City would react to such a contingency. He says the City has no plans to implement either a utility tax or a Business & Occupation tax. But he stops short of saying such alternatives won’t be considered at some point in the future.

“We’ll never say never,” he says.

“Any councilman who supports a B&O tax will certainly not get my vote,” says Martindale, who is president-elect of the Lakewood Chamber of Commerce.

Frank Jacobs, vice president of the Lakewood Industrial Park, doesn’t think it will ever come to that.

“Even if it did pass,” he says of I-695, “the Legislature could pass a gas tax to take its place.”

Martindale isn’t convinced raising taxes at all would help.

“What we need is a more friendly environment, not a less friendly one,” he says.

City officials are convinced it’s pretty friendly already, but a strictly enforced sign ordinance sticks in the craw of many members of the business community. The ordinance was pressed into service when the City concluded that proliferation of signs was polluting the community.

Nearly 3,000 signs were declared illegal and ordered taken down.

“We had to limit signs,” says Harrison. “Most people would admit that we had a mess.”

City Manager Scott Rohlf recalls a business that had 38 signs randomly placed all over the outside of the store.

“When they finally relented and took them down,” Rohlf says, “customers began asking if they’d landscaped the area—they actually increased business traffic because of it. Let’s face it, nobody wants to be smack in the middle of a dump, unless they are a dump.”

Linda Smith, president of the Lakewood Chamber of Commerce, says she is sympathetic to the City’s concerns but is concerned that rights of businesses not be overlooked. She is confident the issue will be resolved amicably, she adds.

“The City asked us to give input,” she says. “Right now, we are studying the ordinance.”

The sign battle has tarnished the City’s image in some corners of the business community, but even critics seem to support Lakewood attempts to annex territory between its borders and neighboring military installations.

“We are not out to make money off the military,” Harrison says of the annexation effort. But he figures Lakewood could derive a greater profit from the territory than the Pierce County does. He says the county receives only $750,000 in federal funds to oversee the area. Because as a city, Lakewood is eligible for an entirely different set of federal allocations, it would somewhere in the neighborhood of $2.5 million.

All of it would be used to benefit the annexed areas, Harrison pledges.

The areas eventually would benefit even if annexation never occurs and the federal funds never become available, Rohlf says. Annexation and federal funds will simply make improvements to the McChord Gate and American Lake areas happen sooner, he says.

Annexation of such areas is in the City’s long-plan, which it has produced in compliance with the state’s Growth Management Act. The plan, which must be approved by the county, then the state, before it can be implemented, forecasts a population increase totaling 30,000 over the next two decades and anticipates a need for 13,000 new jobs.

The strategy for creating those new jobs is simple—recruit new businesses, retain the ones already there and make everyone in the business community feel welcome. Not only is that community the source of jobs, but it also is the source of one of the few revenue sources the city can harness.

To encourage future economic development in the city, Rohlf foresees a freeway interchange connecting Interstate-5 and Lakewood’s evolving downtown.

Although the project could hardly be said to be on the state Department of Transportation’s front burner, Rohlf is convinced the project eventually will be undertaken.

Therefore, he is determined that the City of Lakewood will be ready to take advantage of any such development, when—or if—it happens. The City is prepared to build on its history as iy looks towards the future.

By Brent Snyder, Business Examiner staff