When the former Boise Cascade plywood mill closed two years ago, hundreds of workers lost their family-wage jobs and were left only with memories of happier times.

Now the mill's property owners, along with city and county officials, believe they can create an economic driver on the vacant site that will shape the future for generations of Yakima Valley residents.

New activity at the former Boise Cascade mill site could generate more than $1 billion in direct economic benefits for the Yakima Valley, according to an economic analysis released Monday.

The analysis, by J-U-B Engineers of Kennewick, said new residential and commercial uses at the 208-acre site would also increase the city property tax base by $500 million, generate $68 million in local sales tax revenues and create 3,900 permanent jobs.

Specific uses of the property have not been defined, but would include a mix of retail, office and residential uses based on market demand. The proposed development would also make use of existing community amenities, such as the Yakima Greenway, said Brad Hill, a representative for the mill property owners.

And it may be home to even more community activities. The site has emerged as a prime location for a proposed aquatic center. Recently, the city of Yakima proposed a sales tax increase to fund the center and would team up with the YMCA to run it.

Hill said that an aquatic center could help make the site a regional draw. In the end, the overall project could help redefine what Yakima means to the region, the state and the nation.

"Clearly this is going to be part of the next 100 years of Yakima's economic future," Hill said.

When Yakima Valley business and government officials envision a better future, the city of Bend, Ore., is often mentioned.

The Central Oregon city has become a regional tourism and industrial powerhouse in just the last 15 to 20 years.

Suncadia, a four-season resort in Kittitas County, is modeled after the Sunriver Resort outside of Bend. Californians, attracted to the cheaper real estate, have moved to the area, driving up the area's property values.

More importantly, Bend is also home to a former abandoned mill that has emerged as a retail, entertainment and business center.

In the 1980s, Bill Smith, a Bend-based developer, was inspired by the redevelopment of property along the river that runs through San Antonio, Texas. He knew that an abandoned mill site in Bend, which was located on both sides of the Deschutes River, was a prime candidate for a similar project.

"The mill's right in the middle of town and it has a river running through it. How much better can it get?" Smith said.

He purchased the 270-acre property in 1993 and started on a long development process that has tackled land-use laws and environmental issues. The site finally emerged as The Old Mill District, a mix of retail, entertainment venues, restaurants and office space. The first office space was ready in 2000, and the site's first retail spaces were available a year later.

The site is now home to national retailers such as REI and Ann Taylor Loft, along with companies such as Sony America.

Roger Lee, executive director of Economic Development for Central Oregon, said the new development has kept retail dollars from going elsewhere and has been a key asset in recruiting companies to the area.

It has also given the city of Bend a higher profile. Prior to this development, people would drive through Bend to get to the upscale Sunriver Resort.

Now thanks to The Old Mill District, Bend is a destination in itself.

"To Bill Smith's credit, he had that vision for this property when it was pretty ugly," he said.

Now other developers and municipalities are trying to achieve the same thing. While the Bend project was mainly driven by a private developer, others are trying a more public-private approach.

In 2006, the state Legislature established the Local Infrastructure Financing Tool, or LIFT program, to help public municipalities attract more private-development activity. Sites are selected on a number of factors, including the ability to generate family-wage jobs, the impact on the community at large and new uses generated by the redevelopment.

Under this program, the state will defer an amount equal to the property and sales taxes generated in the district to pay for infrastructure improvements, such as roads.

The maximum award is $1 million a year for 25 years. The awarded amount must be matched by the city or county through other local public sources.

Six sites have so far received designations since the program's formation, including redevelopment sites at former mills in Bellingham and Everett.

The city of Yakima and the mill property owners hope to join them.

"We have a unique opportunity to leverage state dollars to accelerate redevelopment," said Michael Morales, deputy director of the city's Community and Economic Development Department.

There will be plenty of competition, however. The state Department of Community, Trade and Economic Development, which administers the program, has already received 21 applications so far, said LIFT program manager Matt Ojennus. Applications are due by June 30, and those selected to receive LIFT designations will be announced by December.

Property owners and government officials believe the finished economic analysis for the site will boost their chances. And though receiving a LIFT designation would certainly quicken the process, Hill, the owner's representative, emphasizes that everyone is prepared for a long development process that comes with such a large site.

They also note they're starting at the right time. While several retail developments across the nation, including some in the Valley, have been on hold with the recent economic slowdown, those involved with the old Boise site can look five to 10 years ahead.

"By the time the markets come back, we'll be in a perfect position with our project," Hill said.

* Mai Hoang can be reached at 577-7685 or mhoang@yakimaherald.com.