Think of it as a little flag that says “see Auburn” to major retail outlets thinking about locating somewhere in South King County.

That’s how City officials characterized a proposed construction sales tax exemption during a meeting of the Planning and Community Development Committee on Monday evening.

Planning Director Kevin Snyder said the ordinance would provide an opportunity for classes of businesses within the C3 – heavy commercial district – or C4 – mixed use commercial – zoning designations to get the exemption.

Snyder said the “refund opportunity” would apply to sales tax paid for construction-related activities and construction materials, fixed equipment or machinery installation directly related to the construction of new commercial buildings, expansion of existing commercial buildings, or tenant improvements to existing commercial buildings.

According to the ordinance, a purchaser would be eligible for an exemption from the local sales-and-use tax up to a maximum of 20 percent of taxes imposed and paid to Auburn up to $100,000.

Effective for a limited time of four years, the economic development incentive was originally to apply only to general merchandise, warehouse clubs and super-centers, building materials, home and garden centers and electronics and appliances stores. But on Monday, the committee added to the list full-service restaurants, new and used automobile and light utility truck dealerships, bowling centers and motion picture theaters, excluding drive-in theaters.

Snyder said that all of the businesses would generate a certain amount of sales tax beneficial to the City.

“As part of the city’s economic development toolbox, this is one of the tools we can offer to make ourselves stand out in the marketplace, such that businesses that are making expansion or relocation decisions might look at us,” Snyder said of the exemption.

He added that planning staff felt that four years was a reasonable time for evaluation and to collect data on the effectiveness of the ordinance.

Committee members had questions.

“Why are we excluding drive-in theaters?” asked Committee Chair Lynn Norman.

Snyder answered that that is how the sales tax classification is set up under state law.

Outdoor theaters such as the Valley 6 Drive-In generate low sales tax revenue for the land area they occupy, Snyder said, while fixed buildings, such as movie theaters, would bring in substantially more revenue in a much smaller area.

Drive-in Theaters could still come, noted Mayor Pete Lewis, but they would not receive the incentive.

Committee member John Partridge asked if the exemption was designed with any particular business in mind. Lewis said it was not.

The four-block Auburn Junction conceptual plan, however, does show a movie theater.

“Major retail outlets, electronic stores and restaurants, and big equipment suppliers are going to be looking at this south county area,” Lewis said. “If they have a choice of Kent, Renton or Federal Way, we have this in our toolbox. It’s one more reason to put us at the top of the list.”