Good morning.
Thank you for being here for our Monday morning briefing on December 17th.
This will actually be our last briefing for this year until we bring in the new year.
So I'll give a quick president's report and simply say that we have, after we go through our short today's full council actions, we'll have a briefing.
and discussion on the Mercer Mega Block property issue.
Very quickly, Council Member Baggio, we have, let me just say this, we have no items up for vote for the Governance, Equity, and Technology Committee.
We do have our meeting tomorrow morning at 9 30 and we have three agenda items.
And the first one will be looking at the, um, some legislation that was previously passed, which basically regulates the for hire and taxi industry.
And we're sure going to look at where that is now.
There's been, it's been caught up in litigation for years, potentially, and there will be a discussion briefing and possible vote looking at modifying that legislation, particularly taking out the compensation piece that was embedded in that legislation.
And by doing that, it may both positively affect the legislation and positively affect our abilities just to look at the compensation issues that pertain to the drivers and to the benefit of the drivers and the owners of the company.
Okay, so that'll be the first agenda item.
Second one will be a sort of a status report on the surveillance work, the surveillance technology I want to give a quick synopsis of where we are.
We are picking people to serve on the advisory board and moving forward with that.
A piggyback third agenda item on that is, I want to thank Councilmember Herbold for flagging the issue on great key technologies, surveillance technology.
We are going to have a discussion about that with a possible vote to at least file it.
law enforcement agencies can use it to unlock locked phones.
And it's, number one, it's been useful in certain criminal situations, but also flags an issue about when phones are locked, whether privacy issues are raised.
So we'll have a discussion about how The city uses that technology and our department uses that technology and most likely file it.
And so again, Council Member Herbold, thanks for sort of flagging that issue.
We will, Council Member Baxhaw, what I started to say was you do have an issue that will require seven votes.
And so just such that many of you are aware, we have three council members who have been excused, but we do have Council Member Juarez who will be on call through the use of technology.
So we'll be able to meet our Three-quarters vote requirement for supplemental budget issues and so be there No, it's it's we can we can do that I don't need a motion to to allow a council member to at least that's my understanding that changes before now I'll talk to the clerk, but I think we're just capable of doing it.
We probably will have to rescind her Excused absence, but other than that will be okay.
I Okay, Council Member Bechdel.
Thank you.
So today, this afternoon, we have 17 items from the Finance and Neighborhoods Committee to vote on.
10 of those are appointments for the Youth Commission.
They were all in front of the commission on Wednesday.
Extraordinary young people.
So that takes care of 10 of them.
that will go fairly quickly.
But we do have the fourth quarter grant acceptance, the fourth quarter employment ordinance, the fourth quarter supplemental budget package voted out of the committee.
We also have an animal fee legislation, technical cleanup, and three landmark designations.
So I will keep it as concise as possible if you have any questions or concerns about any of this.
If you'd let me know prior to 2 o'clock so I can address them.
I don't think it'll take all afternoon, but 17 items does take a bit of time.
Thank you.
Thank you.
Thank you.
Before I launch into my stuff, I just wanted to make a note as it relates to the fourth quarter supplemental.
I do have a very small amendment as it relates to a grant acceptance for a project in West Seattle on Alki Beach.
There is a Loman Park seawall removal project.
Funding came through the Flood Control District, which I sit on, and was endorsed by King County.
And this is an important project for salmon restoration.
And I had a visit from a number of constituents at my office hours on Friday, and they have some concerns around mitigation to potential impacts to their homes that might occur with the removal of the seawall.
And so if this is just our first crack at an amendment, there may be some tweaking between now and noon, but if there is, we will certainly get folks an update.
Thanks.
And you can just see on the back of the page I just distributed on page two, there's just a six word, seven word sentence saying that the city will also consider potential mitigation measures.
Absolutely.
Thank you for that.
And if you needed stronger language, we can talk about that.
I appreciate the fact that your constituents came and talked to you about it.
Thank you for letting me know.
Absolutely.
As far as items on the full council agenda from the Civil Rights, Utilities, Economic Development, and Arts Committee, we have two pieces of legislation.
One is a council bill authorizing SPU to accept seven water utility easements at no cost to the city.
The second is authorizing Seattle Public Utilities to relinquish five drainage utility easements and accept five easements.
Again, at no cost to the city.
Due to the relinquishments, we had a public hearing last week and there was no substantive comment.
Further, there are also five Human Rights Commission appointments.
One council, three mayoral appointments, and one commission appointment.
And then in addition, there's a mayoral reappointment.
And finally, we have a Women's Commission appointment brought forward to us from the Women's Commission.
No more meetings in 2018. And as I mentioned, I had office hours last Friday at South Park and other items that are coming up.
I'm looking forward to this Wednesday.
The Seattle Parks Department is going to allow me to do a ride-along on their work inspecting parks in district one and then also I think I'll be following you and your visit to pier 86 councilmember Bagshaw and the grain terminal art project I think you attended the opening I'm going to be attending the closing and that's all I've got today.
Thank you very much.
You reminded me that over the weekend we had a lot of not on the city light side customer investigators not here and while your SPU report I haven't looked at the reports yet, but it's my understanding and my impression that the crews were really out there and we got power restored.
My power was actually out one evening.
It came on at 1.18 a.m.
It was out for several hours because I was still up and all the lights went on.
But I think the crews were out there.
It was just a terrible windstorm, and so they're pretty astute it at getting the crews out there and getting it restored but I did see some folks in the morning who power was still out in the Beacon Hill area and but those windstorms I Know this.
I'm sorry.
That would have been Saturday morning.
I thought everyone's restored You know, there's no presumptuous you're talking and everyone in the neighborhood at a coffee shop and mine still out But I think they did I think they met the recovery times, but I'm not sure I'll look at the reports and I know councilmember skater would have talked to that if she were here, but
I just want to thank our new CEO at City Light.
She did a great job addressing the issue as well as reaching out to me to hear about the adventures of constituents in District 1 dealing with the shutoffs.
Council Member O'Brien.
Thank you.
There is nothing on this afternoon's agenda from the Sustainability and Transportation Committee, but we have our last meeting of the year tomorrow afternoon.
A number of items on tomorrow's agenda.
We have seven appointments and reappointments to the Transit Advisory Board, two reappointments to the Levy to Move Seattle Oversight Board, and one new appointment to the Bike Advisory Board.
We also will hopefully vote on approval for the city to enter an agreement with WSDOT on the 520 project.
There's obviously been a series of agreements there, but this one's focused on a lot of negotiation back and forth about who will be responsible for maintenance of certain aspects, who owns which part of the project up to what line.
This is as we're looking at building the lid in the Montlake neighborhood and other parts of the next phase of that project.
We have an ordinance around transferring some property ownership for the South Lander Street overpass project, a piece of property that I believe belongs to the school district and other little parcels there to facilitate that project.
There's an ordinance to rename a couple streets in an alley, a couple streets northwest, 113th and 112th Street, and then also, I believe these alleys are in Pioneer Square.
to name the alleys.
And then finally, we have an ordinance that was in committee months ago, and it's coming back for a vote.
This would be to grant a permit for two underground pedestrian tunnels associated with the, it's a Hadreen Hotel project across from the Convention Center expansion.
So we should be pretty busy tomorrow afternoon.
The other thing I'll just mention, I'm going to be up in Lake City this afternoon with a literacy source.
They're going to have classes for folks that are learning English, and they've requested council members come up and speak to one of their classes.
They've been sending us letters about things they're interested in working on.
I'm excited to go up there and I know that the folks up there are really excited for their students, these are adults, to have opportunities to engage with civic leaders.
And so I believe there are folks from all over the city and I know they'd love to see as many folks up there over the next year as they could.
Excellent.
Thank you.
I think that is a good point.
Thank you.
Councilmember Bryan, would you talk a little bit more about the tunnel request and the site?
I have not been up to speed and I have not been attending your committees.
Can you tell us a little bit more about what compromises have been reached and what public benefits have been negotiated?
And so the public benefits associated with the actual tunnels themselves, I believe, are storage of some additional art in the alleyway, or additional art will be in the alleyway.
And let's see, originally it was gonna be like a bar or something in the building, but I think they've switched to something else.
So, you know, retail space, I guess, in the main unit.
No, not in the tunnel, so.
Bars of public benefit now?
I believe it was a speakeasy, was what they called it.
But I think that was the original proposal, and I think it's shifted a bit, so.
It's, you know, what we have is they're, you know, poised to open the, a big project, which is the hotel on, I guess, the outside of the L of the alley.
And they also own the other block, a piece of the block that's on the other side of the alley.
Originally, they had transferred a bunch of development rights from the smaller site to the larger site using a combined lot development rules.
And as they transferred the benefits, transferred, sorry, some of the developments, There's a public benefit that goes along with that, and the department, it's more of an administrative process, but they agreed that some of the public benefit would be the size and scale of that additional building that they would ultimately develop would be smaller.
Now, in the meantime, we've added development capacity, we've upzoned as part of MHA and other things.
So now, they have additional development capacity on the site that's almost done, and they want to transfer that back to the new site and make that original building bigger, even though that was part of the public benefit originally was not to do that.
They're asking to put in these two alleys, or sorry, two tunnels so that workers can You know, back of office workers can go back and forth between them, so I don't know exactly.
We'll hear more about it.
But I imagine there could be a single laundry facility for the two hotels, and they don't have people carrying laundry across in the weather.
They would connect it that way, and that means they don't need to build two separate laundry facilities.
So they're asking for those two vacations.
But we're still also waiting to hear on the director's ruling on transferring some of those development right back.
what are those public benefits gonna be associated with that, and that decision has not been made, and we're trying to determine the timing of it.
I've been holding off on this legislation on the alleys, waiting for that to happen, but I know the developer is very excited to get those done, so we're gonna hear him, and hopefully have a chance to learn a little bit more about some of the complexities around that.
I'm really interested in the associated public benefits, so if they're transferring back and forth, what the benefits will be.
Yeah, yeah.
The things I hear on all of the benefits is we're going to maintain the alley, and then we're going to keep maintaining the alley, and maybe it's a little wider.
I don't know.
I don't know if they've added much width, or maybe there's more lighting at this time, and more things to draw people in, like retail establishments.
not 100 units of affordable housing or anything.
Come see that.
I'd love to see more.
Especially after all the work we did around the convention center with getting public benefit money that was going into things that were really truly public benefits.
Let's move on.
Are you finished?
I'm finished, Council President.
Council Member Johnson.
Thanks.
Just briefly, nothing on the agenda for this afternoon for council.
We do have community discussion on Wednesday morning.
On Wednesday morning we're going to talk about three issues, a discussion and vote on some transportation level of service standards adopted in our comprehensive plan, a briefing and discussion on the proposed neighborhood design guidelines in the University District as well as a briefing and discussion on proposed neighborhood design guidelines in uptown.
As a reminder for our colleagues, since this is the last time we'll likely all be together in a briefing setting until after the first of the year, our next select committee on mandatory housing affordability is that first Monday that we're back, January the 7th.
So we'll have our council briefing and then immediately following it, we'll have the first select committee on mandatory housing affordability of 2019. Just briefly, late last week I wanted to call everybody's attention to a study that was published in the paper about the positive effect that later bell times had for high school students.
We as a council adopted some additional revenue in 2017 to help the school district buy some additional buses and additional bus hours to facilitate a later start time for high school students and an earlier start time for elementary school students.
It was based on a lot of data and a lot of facts and figures.
And now we've got the first year's report.
Students are getting an extra almost 40 minutes of sleep a night, and grades are improved by almost 5%.
So we're seeing really good benefits to those late start times.
And again, one of those great examples of a small amount of money and a little bit of collaboration between the city and the school district is really having a good downstream benefit for all of our kids.
Oh, good report.
Thank you.
Councilman Gonzalez, welcome back.
Thank you.
Good segue to my agenda items is I have 12 items on this afternoon's agenda.
One of them is a council bill related to the Seattle Fire Department.
That's item 26. It will allow the Seattle Fire Department to enter into an interlocal agreement with 29 different agencies across King County to provide So this is a billed up or a billed off of our mutual aid agreements with many of the regional agencies.
And so this is a statutorily required interlocal agreement that Our fire department would be automatically required to or automatically agrees to provide emergency response services to supplement responses of other agencies, so We had a good committee hearing where we asked several questions about that including potential costs and I'm looking forward to Shepherding it through this afternoon's council meeting the last items, which is item 27 through 37 are all Appointments to the family's education preschool and promise levy oversight committee.
So this is also required as part of the ordinance that we passed that we then put in front of voters that was successful in November to create and establish an oversight committee made up of residents of the city of Seattle who would provide oversight of how levy dollars would be prioritized and invested.
And the first thing that folks will be working on will be to give some input into and structure to the implementation plan that will be considered in my committee sometime in March of 2019 so these are the appointments to facilitate that process to occur.
The second thing that I'll mention just really quickly actually I have two more things the second thing that I'll say is that we don't have any more committee hearings for the rest of the year our last committee hearing was last week looking forward to digging into more work in January our first committee hearing for January of I think is January 23rd, 2019. Looking forward to that.
The third thing that I'll mention is that there is a lot happening in the world of the consent decree and just wanted to acknowledge that I'm aware of all of the different things that are occurring in the consent decree context.
You may have heard that the city attorney's office has filed an appeal with the King County Superior Court related to the Shepard arbitration decision that came out last week that overturned then Chief O'Toole's disciplinary decision to terminate an officer who handcuffed, excuse me, who punched a woman in the face who was handcuffed at the time of the incident.
I support the city attorney's decision to file that appeal.
I think it's an important part of the overall due process and While arbitration decisions are recognized as final under the collective bargaining agreement, it doesn't mean that the city doesn't have a legal right.
And in fact, in some cases, a legal duty to appeal some of those arbitrator decisions to make sure that our ultimate commitment to police accountability and trust in our police accountability system is being maintained with integrity.
The other thing that I will mention really quickly on the consent decree is that there will be a filing that we anticipate Occurring today as a result of some of Judge Robar's court orders from last week and the prior week requesting that the city provide the court with a clear understanding of a crosswalk between how the collective bargaining agreement with Spog and by In France SPMA impacts our accountability ordinance legislation and in turn how that squares up with or does not square up with the consent decree.
I have been in communications with the city attorney Pete Holmes around My ongoing concerns related to where the final deal ended up.
I have done my best to advocate what I think the City Council's position is as reflected in the resolution that we passed when we voted on the collective bargaining agreement with SPOG.
I still, to be transparent, have a lot of anxiety about what the tone and the content of that brief will ultimately be.
And I'm hoping that I am able to obtain a copy of that brief sooner rather than later to be able to either allay my anxiety and concerns about whether or not counsel's positions are accurately reflected in that briefing.
or whether or not my anxiety will be confirmed, that our positions are not accurately reflected in the briefing.
So my hope is that we will be able to come to a place where the city is all rowing in the same direction in terms of some legitimate, reasonable concerns related to the collective bargaining agreement.
And I think we will have tough decisions before us if that is not the case.
Thank you.
Thank you for that.
Okay.
Thank you, Councillor.
And again, welcome back.
Thank you.
Okay, so let's move forward to our next agenda item.
That'll be the Mercer Mega Block property sale discussion.
So the presenters, please come forward.
And perhaps Council Member O'Brien, before we do introduction, could you just sort of tee it up and lead us through the discussion?
Thank you, Council President.
So we're gonna have a briefing this morning to get an update on the process.
This has gone through my committee a few times, in part because the parcel we're selling is owned by SDOT.
Actually, there's two parcels and required a series of street and alley vacations to make that happen.
This is something that has been known that would be surplus for at least a decade before my time on the council.
And so today's conversation is going to be at a fairly high level for us to get kind of up to speed and share with the public where we are in the process.
There are some confidential aspects of real estate.
Negotiation that's happening and at some point in the conversation.
We'll probably need to Imagine colleagues will have some questions that they we can't ask answer in public Session, so we'll probably shift to an executive session Technical issues over there do we need to help with anything or?
Yeah, well I'll work on that okay, Lish Witson council central staff a noble city budget director I Good morning, Stephen Shane with CBO.
And just very briefly, Council a year ago passed a resolution asking the executive to put out an RFP for the sale of these properties.
that was put out in June.
We've received a number of responses, and Stephen's going to talk about what we've heard and what the proposals are generally.
Any financial terms will be discussed in the executive session.
And Stephen, as you jump into this, if you could just remind us all of the overview of kind of how a city approaches a project like this when you have a big parcel that's significant value.
what the different phases are and where we are in that process, too.
Let me start with that, Councilmember, if I could.
So this piece of property, as you mentioned, we've been looking at for a long period of time.
One of the things that we did is that we had a major street that needed to be vacated between there, and as I think we came to you about 16 months ago, we talked about the moving forward with an RFP, but there were going to be conditions proceeding to moving forward.
Vacating the property, getting all to surveys, getting other, making sure that a lot of the other agreements that needed to be in place, in place before we went ahead and did that.
Where we are, we issued a RFP.
We came here, as Lish mentioned, about a year ago when we finally did the street vacation, and said now we'll be going ahead and preparing the RFP and issuing it as into a broader form as possible.
So we issued the RFP on July 11th with responses due back on October 5th.
We had seven proposals and six of those were deemed responsive.
What we did is we had an evaluation committee that made up a lot of city members and also a Kate Jonkis also served as one of our committee members and we, excuse me, we reviewed all the proposals before and then we interviewed all the teams, all the six teams that we deemed were responsive.
After we did that, we were trying to figure out, you know, do we move a couple forward for the best and final offer or as referred to as a BAFO, best and final offer?
What we decided in consultation with the executive is to issue it to all six teams to give them a best chance to move forward and identify how they wanted to go ahead and respond.
So the phase that we moved from was from the RFP, selecting those developer teams to the best and final offer, which is where we are today.
When we did the best and final offer, there were additional items that we wanted to get clarification and while they were just responding as a proposal to an RFP, we wanted to go back and some, if you will, negotiate with them.
on better terms and conditions that we wanted.
Primarily is increasing the financial offer, reducing the delta for affordable housing, which was one of the items that we asked for in the RFP is that could you provide affordable housing, and if you could, at what price, and would there be a reduction off the sale price?
Also, one of the things that we wanted to get better answers on, what were, is there a way that we could shorten the due diligence period of time.
A lot of them asked for a very long period of time.
And also one of the things we wanted to do was lower the entitlement risk to the city so that we would possible the city would close before a mop was prepared.
A lot of them wanted to have the mop fully entitled and ready to pull before.
I'm sorry, can you explain?
You're losing me a little bit.
So the entitlement risk, what do you mean by the entitlement risk?
What is the entitlement risk?
I'm not familiar with what that is.
So the entitlement risk for the developers is they don't want to take the property down before they have a full entitled building permit, if you will.
And what we wanted to do was say that that could be two, three, four years down the road.
We wanted to find a way of shortening that so we would get the money sooner and put that risk upon them.
We possibly thought that that might bring reductions in prices.
You'll see soon that that didn't.
And also one of the things we want to do is provide certainty of closing so that when we moved forward and we negotiated a deal that that deal would close and they would move forward on the development.
I won't point to any other sites around here.
Just I don't want to remind you that the through the RFP and now through the best and final process We've been soliciting proposals that include options that would include on-site housing But potentially not so sort of either or and also options that would involve the sale of the property or potentially its long-term lease And decisions on how to proceed have not been made.
I just want to give you a sense that we've continued to analyze all of those options customer herbal
Can you talk a little bit, you mentioned there is an advisory committee?
Yes.
And you mentioned that Kate Jonkis is one of the people who's on it.
Can you talk a little bit more about the composition of that committee?
And I'm assuming that Ms. Jonkis served on it as after she was a city employee and sort of what was her capacity and were there other external to the city stakeholders that participated?
We did not have any other external.
We did reach out a lot and the time commitment was somewhere in the neighborhood of about 60 to 80 hours in a very short period of time.
So it was great that Kate was willing to serve on that.
We had a lot of other city, qualified city employees.
Lish was one of them.
Sam Spencer was there.
Miriam Roskin who just walked in.
Well done.
And then actually I also want to point out Lori Hill who's from Jones Lang LaSalle.
who has served us as, if you will, as an external advisor.
We were working through Jones Lang LaSalle and they helped provide a lot of information and kept us moving forward.
And what was the role of the advisory committee?
The advisory committee was to, so we had a list of criteria and I think in the documents that you have in front of you, you can see the kind of the criteria that we, that we went ahead and reviewed the RFP based on and seeing whether they were responsive or not.
And what we wanted to do was get the committee to weigh in and then also see if we had questions after they reviewed the...
Stephen, I'm sorry.
I didn't have this document.
Does everyone have this document?
It's online, but I didn't have it.
I've got an extra copy.
I took Alicia's.
Okay.
I have an extra copy.
You have an extra copy?
Well, maybe you took mine.
I don't happen to have it in front of me, but you'll note that there's a...
It's on Legistar.
So can I ask a question?
I appreciate the criteria and the community benefits is laid out on page 12 and 13 of the handout for us.
But how did you measure affordable housing in this?
So affordable housing, one of the items that we, I still, let me answer the question about what other role the evaluation committee had and then I'll also talk about affordable housing.
So the committee looked at the if you look at the criteria and identify when we first reviewed it, everybody was supposed to read the RFPs and then come back with questions.
And we had two meetings of the committee looking at each proposal.
Jones-Lang with Sal also kind of took a stab and identified the key points on that.
And what we did is came up with questions if we wanted to move forward with interviews.
And what we did is we had a list of separate interview questions for each team as well as, if you will, generic questions for each team as well so that they could, so we could better get an understanding of what they're really offering and ask some questions.
So that was the role of the evaluation committee.
And so they actually reviewed not only the RFP, but the RFP responses.
And then provided questions for the RFP responders to address so you could get a better sense of what their proposals were.
I thought I remember seeing a description from Lish about helping them sort of make that there was another round of responses and that their role also helped basically improve.
So that's the best and final offer.
That's where we are now.
And so that was after we had those teams, we identified were there other issues that we wanted to do.
And the items that I addressed were in the best and final offer.
Increase financial offering, reduce affordables, shorter due diligence, shorter closing time frame, lower the entitlement risk, and provide certainty of closing.
To answer the question about affordable housing, it was not a requirement, but what we suggested to every developer would make sense for them to move forward.
And there was a suggestion, if you will, to provide 175 affordable housing units below 60% AMI and keep it, you know, meeting kind of the same OH requirements, affordable for at least 50 years.
And we found that most of the developers responded to that.
We also, you'll see here in a moment, when they respond, they may provide price X without it, price X without the affordability and then price Y with affordability.
quite a large delta on some of them, and then there's actually a smaller delta on one that we'll talk about a little more.
And I assume the folks who we consulted with who were part of this, there's confidentiality around this regardless of whether they're a city employee or outside.
Absolutely.
Absolutely.
And we've been maintaining that.
As we get into the executive session, we have not identified who the respondents are.
We have not identified what the pricing is.
That's only known to a few people.
It helps us, if you will, not to negotiate against ourselves.
I was going to say, I mean, I think some members of the public might see the confidential nature of this transaction as being nefarious or motivated by something that is that is not a good motivation.
So I think, you know, in addition to just talking about the fact that it's confidential and why there is a confidentiality agreement, I think it's important for us to talk publicly about why there is a confidentiality provision that is imposed on those members of the advisory committee regardless of whether they're internal or external stakeholders and why we're not talking about those issues at the table.
There's certainly no nefarious purpose on the confidentiality.
And as I said, I think if you can crystallize it, it's really not to negotiate against yourself.
There's a variety of pricing between the respondents.
And what we're trying to do is get the best price for the property, get as much as we possibly can, get as many community benefits as we possibly can.
And that's where we are with where we'll see where we are in the BAFO.
So if I could say just a little more if if all the folks that are putting in prices knew exactly what their competition we're doing You could encourage more of a race to the bottom as opposed to the top and I think I'm Councilmember Gonzalez the point you raise is really good when I even setting aside a maybe the cynicism around a nefarious process, just the idea that this should be a public process is a fair question.
And I think we as policymakers have this decision to make about how much transparency we show and at what expense.
And ultimately, we will have to take a public vote to approve this transaction.
And at that point, the aspects of the transactions will be public and available.
And, you know, we will collectively be judged on whether We did a good job or not.
It's going to be hard between now and then.
I mean, I think that that's, you know, I don't know, maybe nine to 12 months away, something in there.
Could be even sooner.
Yes.
And so, you know, how we work through this process of Maintaining the confidentiality as much as we can to continue to leverage our position best for the public in these negotiations.
And at any step where appropriate to share more information with the public so they understand what we're evaluating and how we're moving forward.
And one of the things we hear from public is, hey, we also have some expertise.
then we're not on this committee.
We would love to weigh in on that.
In addition, just the public pressure that folks can provide on the outside to push us to make sure we're getting as much as possible.
The only thing I'd add there, too, is the council has described the introduction here has provided a pretty clear policy direction to a resolution.
So as we have worked through this on the executive side, trying to achieve the goals that you've just described, we have been taking that policy direction.
That is a key element in the evaluation process that Stephen has just described.
And ultimately, you will be the judge of that if we bring forward a proposed transaction.
One more thing about the process.
Sorry, not the process, the advisory committee process or composition.
I was unaware until very recently that it is even possible to have somebody not of the city family to participate in a process like this.
with the security of a confidentiality agreement to protect those negotiations.
And I heard you mention that you reached out to other folks to find out whether or not there was other interest.
I think it's, I'm really excited that this effort has had the expertise of Kate Jonkos to participate, but I think it would have been really helpful to also look at, knowing now that we could have external stakeholders participate, I think it would have been really helpful to talk a little bit about whether or not We should have had some representation from really one of our highest goals for this transaction as it relates to affordable housing.
The RFP itself says that we have a strong interest in maximizing benefits for affordable housing.
And we come out and say that we seek proposals that meet the goal of producing at least 175 apartment units of affordable housing.
So having somebody participate with expertise in non-profit affordable housing production, I think, would have been really, really useful.
And we did reach out to Capitol Hill Housing, who is not a partner to any of the developers.
And it was the same issue as if the time commitment was too great for uncompensated time.
So we did reach out to them, and we reached out to others.
Thank you.
There was a obvious complication that some of those folks were potentially teeming with bitters So yeah, that was but your point is well taken and as thinking going forward, you know We all continue in the kind of opportunities like this to reach out.
Councilmember Johnson in queue Director Noble, can you remind us what the financial encumbrances are on the projects already?
So there are a number of internal city loans, essentially, that are secured by the proceeds of the property.
Roughly $25 million that is actually an interfund loan to help complete the construction of the Mercer Project itself.
So the mega block, we now have a picture up.
It was in part the vacation of Broad Street that assembled the street.
And that was anticipated as a result of the Mercer rechannelization, if you will, and the remaking of Mercer altogether.
So it was always known that there would be, at the end of the project, this piece of surplus property, and that had been one of the funding sources for the property.
So there's about $25 million there.
In the most recent approved budget, SDOT has also identified potential proceeds of the property to pay for some of the debts outstanding for the South Lake Union streetcar, so order of magnitude $5 million.
And then in addition, as part of the budget process, not this past fall, but the previous fall, there was another interfund loan taken against the property of approximately $4.5 million to help fund some of the near-term homelessness response.
So in total, about $35 million of charges against the potential net proceeds.
And maybe this isn't a question that you guys are prepared to answer today, but assuming that we were to hold on to the property and keep it in the public domain, how much would it cost for us to develop it all as a residential unit?
Two pieces there.
One is that portions of the property were purchased with transportation-restricted dollars.
And you'll hear more later today about some of the legal complications therein.
So there's potential to have to repay some of those dollars in order to secure general fund use of the property, if you will.
So we'll talk more about that.
But then in terms of developing housing itself, I think, Stephen, we've done some back of the envelope on that.
So if you're typically Say you build 500 units on the site, which would be underdeveloped, that's roughly about $50 million.
If you do 1,000, that would be $100 million.
The property also has substantial requirements in terms of public improvements that need to be put in based on the Broad Street vacation.
There's also a large environmental exposure.
And by the time you're done on this free piece of property, you're into it quite deeply and get it underdeveloped.
So just the, and you would, if you will, tap out the OH levy pretty quickly.
The $100,000 per unit amount is what's typically the city's share of a non-profit housing project.
So total billed out for those units would be about $300,000 or more per unit.
So we're looking at $150 million for 500 units.
million of which hopefully two-thirds would be coming from other sources, likely four percent federal tax credits, but get the scale of that.
As we're starting to shift into price, I imagine folks, there are some details that can be shared.
Maybe if we have other broad questions, we can ask those.
But I suggest in a moment, we go into executive sessions so folks can actually see.
But we can talk about the housing components because that's a non, we can ask.
the amount of housing.
Can we not?
In open session?
We can tell you that all of the proposals included some affordable housing component.
Not all of them.
On the BAPFOS, some included, lots of them.
Aren't you running dangerously close of revealing some versus others which you want to stay away from?
Council Member Gonzalez is in queue.
I did want a daylight Thanks for the clerk's office for getting us some schematics of what we're talking about.
I was a little worried about that.
Councilwoman Gonzalez, you have the floor.
Thank you.
I wanted to just bring up three different issues on the, just to wrap up the conversation that we were having around confidentiality.
And, you know, I just, I continue to be concerned about how the confidentiality provisions and how we find the balance between confidentiality to negotiate the best deal on behalf of the taxpayers while also prioritizing the need for trust and transparency in those very same processes.
And I don't have a clear answer to that, but I do want to express that there is, I think, a very obvious tension that is at play in that context.
And I guess my frustration from the city side is that we just assume that everything is confidential and sort of we don't afford ourselves the opportunity to take perhaps a scalpel approach to the issues related to confidentiality.
So yes, while the details of the transaction and the proposals might be subject to confidentiality.
There are several details about these types of transactions, including the process, the advisory committee, who's on it, who's not on it, why they're not on it, what those processes are, that could have been daylighted in a more transparent, intentional way that perhaps could, at a minimum, contribute to a higher level of public confidence in whatever deal we're gonna be judged for ultimately for approving or not approving.
And so I just, again, I don't purport to have the magical answer to how we deal with that friction between the need for transparency to engender public trust in these confidences while also creating a process that is confidential enough for us to negotiate a deal that is good for our taxpayers.
But I think we need to struggle with that particular question in the near term.
And it may be too late for this particular project, but there are plenty of other projects that I think that type of rigorous analysis could be applied to.
And I assume that our agencies are more than amenable to having that type of structured conversation and sort of a resolution to that particular answer, because I know we're all getting nailed with the same type of questions and inquiries, right?
And it's frustrating to not be able to answer questions of the people we are here to serve.
And I find that incredibly frustrating, and I assume that you all do as well.
I would add, we have been in the struggle for a big day and agree.
Again, you know, we take very seriously the charge to potentially maximize the value here for taxpayers, but at the same time understand the need to be transparent about, at a minimum, about process.
So we have, take opportunity to meet several groups of stakeholders to explain process and the like.
But I agree with you that this is a real struggle.
It can be a challenge to determine the best way to protect value and at the same time be clear about the work that's being done and the processes that are being followed.
And I think it just would be helpful for us to have a follow-up conversation collectively around how do we begin a process by which we could grapple with some level of resolution to that tension.
So the second thing that I would say is that it struck me a comment about Capitol Hill Housing being asked to participate, but their position that they determined to not participate because of the intensity of the participation that would be required.
And and that they would need some level of compensation to participate I mean I do think that we're starting to see this a lot more in terms of the work that we're doing at the city is that we do have a lot of Natural and subject matter expertise that exists within our city and we are going as the issues facing the city become more critical and and more complex.
We are, as elected leaders, both in the mayor's office and here and amongst agencies, pursuing the expertise of subject matter experts within the community more and more often, and we haven't been able to provide a clearer a sense of what the strategy is going to be for compensating folks with subject matter expertise, which we would do for consultants who have a for-profit license, who are in the business of being paid to provide their opinions.
And I just find that that's an inherent inequity in how we engage.
subject matter experts in a variety of different areas.
And this isn't specific to this project.
It's, I think, across the spectrum of how the city is starting to evolve its business model in terms of tapping into expertise.
We tend to not monetarily value nonprofits, but we will monetarily value people who are literally in the business of providing And I think we need to sort of think about missed opportunities in really engendering public trust in these types of transactions and others by creating some sort of fiscal response to the realities of how we're using consultant dollars for these types of projects.
So, I don't expect you to have an answer for me there, but...
Oh, it's a very fair point, and one that's, I mean, situational.
It varies some situation to situation.
Sure.
But no, but it was a struggle for Steve and I as we went out trying to bring some expertise to the table in part so that we could demonstrate that the, and really, and have at our hands the folks who really, you know, know this space well.
and weren't necessarily comfortable with paying folks.
But at the same time, that leaves us potentially without some expertise that could be valuable.
So I think, again, as part of that same dialogue about transparency and the ways to bring in appropriate expertise could be helpful as well.
A few things, Ben.
Number one is Our attempt I hope is obvious that it should be obvious by now We're going to an executive session on this matter that was mentioned a few times and so that's not a big secret but our attempt was to daylight as much as possible even at the risk of criticizing ourselves or the city's process as I think was well placed and then go into executive session and talk about those issues that could maybe Disadvantaged advantage competitors in this process.
So a little tough discussion.
We had to sort of muddle through it But my question is this in process as the Advisory Committee Deficiencies and all sort of muddles through this and comes up with one or two Well, let me ask the question Are they gonna try to come up with one and present it to the council or a short list?
That's my first question.
I have a couple more.
I
Ultimately, our plan is to bring forward a, if the decision is made to bring forward any transaction, it would be a single transaction.
Okay.
And when the advisory committee sort of makes that proposal, it comes to the council and council kid.
Reject modify and say go back to the drawing board and bring back three more, correct?
It's not a done deal or you bringing us a Pretty much a contract that's been ratified We what we will bring forward is a is a if we bring forward will be a proposed transaction that will require councils Approval, right?
There's no there's no property sale that can happen without your approval so that there would be Significant opportunity for council to do its own due diligence on whatever is proposed.
So at that point the council can daylight it's it's It's daylighted at that point, and we can say thumbs up, thumbs down, more input.
And that's where the process is much more transparent than it is up to that point.
Councilman Brown.
What I'll just add, though, is the thing that we brought forward will be a fairly detailed, negotiated product.
And the purpose of this discussion and the subsequent executive session, and frankly, what will likely be a number of more series like this, is to gather the types of input so that there's a greater likelihood that what you negotiate and bring forward is something that will meet with our expectations.
Our goal has been to fulfill your policy direction and as we move forward, I mean, just as honest, I mean, and as we go forward to consult with you to determine if we're still, you know, in general terms or even very specific terms on that right page.
Between now and the process where we've whittled it down to some extent, you have the resolution, you have this discussion, what's the plan on getting more and more input to them, or do we believe they have enough input on the affordable housing component, or other ideas?
No, I think maybe, Stephen, you can talk to a little bit of some of the time frame.
I mean, it's a little bit dependent on things.
So the advisory committee, if you will, our evaluation committee, did make a recommendation of a team to move forward.
We will talk about that in more detail.
The next step would be that after we brief you, we've briefed the executive.
We have, if you will, her concurrence to move forward in a certain direction.
We want to share that with you.
What we'd like to do is then start in the negotiations on due diligence with the a team and then start working in through the other, the term sheets, the development agreements, and the purchase and sale agreement and work through the time frames on those issues.
So that would be in the first quarter.
I would, we'll be more comfortable once we have their signature on a document and we have our signature on a document to share names.
And you'll see the papers that I'm going to be sharing with you have Team A, B, C, D, and E.
So as this process progresses from where we are today to ultimate legislation, the level of confidence that the parties are working together will increase.
And as that increases, there'll be opportunities to share more information publicly in different ways.
And I don't know that we know the specific time frame, but consistent with what some of my colleagues have said, the sooner we feel comfortable where we can start sharing some of the details without jeopardizing what we may think is a good deal, we may not, we haven't had the conversation, the better off we're going to be.
Absolutely, Council President Harrell, when the actual legislation is there, that's when like everyone gets to see all the aspects and details.
But the goal is that along the way, there will be kind of different looks at what that is, not just from us, but also from the public.
And they're obviously hearing some of that today.
But at a pretty high level, it's probably going to be frustrating to some of the folks listening.
So one of the things, if you didn't ask, I'll go ahead and add some more information.
So when we have come to council, I think three or four times on this piece of property.
We've raised various things that we thought should be added as required elements.
and council has pushed back and added other required elements.
So the required elements that are in there have been discussed with this body and they have become things that the development teams need to respond to.
Those are givens.
The others are that you'll see are some of the other community benefits that the developers have added, been additive to that requirement and are making their offers better besides financial, better offers.
Very good.
Council Member Herbold, take us home.
I don't know if I'm going to take us home, but I do want to, since it's very helpful to know in advance that we are going to hear what the recommendation of the advisory committee is, and it sounds like they're recommending a particular But we'll also hear about some of the details of the others.
So in light of that, I just wanted to provide some ancient history, if you will, on the council's efforts as it relates specifically to Southlake Union and the interest in having housing development there.
Way back in 2012, while the city was preparing legislation for rezones in South Lake Union, there was a proposal that was developed in conjunction with Vulcan, a bunch of social service and community groups, and the objective was an integrated campus.
was referred to as a block 59 concept and it included 337 units of low and moderate income housing, a child care facility, community meeting space, job training, career placement, a social enterprise cafe, commercial kitchen, nonprofit office space, community classrooms, and a community garden.
That proposal was contingent upon a specific rezone.
Although the council did not accept the proposal.
They still pursued the campus-style development at the location and took a number of actions in subsequent years to continue to put forward that vision.
And I think the thinking behind the vision is that between rezoning South Lake Union and the hundreds of millions of dollars of investment, the city was creating a high-opportunity neighborhood, and there was a strong feeling that low-income people should be able to benefit from that investment, both in the way of housing opportunities in that neighborhood, as well as, in particular, job training and career wage path opportunities.
The council took, like I said, a number of actions afterwards.
There was a resolution passed in May 2013 committing to action to specifically increase affordable housing, promoting a community center, facilitating a school, and requesting that OED develop a work plan on job training.
Subsequent to that, the council funded a consultant study by Doris Koo, which examined three adjacent properties for low-income and workforce housing, workforce education and training, child care facility, community spaces, and housing and human services co-location.
In 2015, the council adopted a green sheet during the budget process for a feasibility study.
again focused on those particular uses.
The response in July 2015 listed concepts from relevant city departments, Office of Housing in their concept included 250 units of mixed income housing.
And then finally, in 2016, the council adopted another green sheet to fund an analysis for selling the Mega Block property, including public outreach on the types of benefits or uses the community would like to see.
Again, the community benefits identified at the time were consistent with those identified back in 2012. So, and then we've already talked about the 2017 resolution that the council passed.
So, as we move into the discussion hearing about the recommendations from the advisory community, I really wanted to uplift the history and the many years prioritization of the development of resources in housing and investments that people from all over the city could benefit from, particularly low-income communities.
This is a very helpful document.
Thank you.
We have been aware of this information and you'll see this neighborhood of opportunity based on one of the proposals that we'd like to bring forward
addresses a lot of those items that were in this paper and that the community has discussed over the years.
Thank you.
Okay, so we're winding down a little bit are there any other Assertions you all would like to make her many questions before we go an executive session and again customer Gonzales.
I want to thank you for Daylighting the issue about we're not trying to be secretive or clandestine in any way But we're trying to have an appreciation process and dealing with real estate So I hope we don't get dinged too badly, but we're trying to do our best with this with this opportunity so so having said that I'm gonna move into executive session and And let me read a script before we do that.
I'm kicking everyone out.
No, I'm just kidding.
Okay.
As presiding officer, I'm announcing that the Seattle City Council will now convene an executive session.
The purpose of the executive session is to discuss pending potential or actual litigation and a potential real estate transaction.
And these sessions are an opportunity for the council to discuss confidential legal matters with our city attorneys as authorized by law.
And a legal monitor from the city attorney's office is always present to ensure that the council reserves questions of policy for open sessions.
And so we expect this executive session to end in 30 minutes, which will be Is that 1108?
Is that 1108?
And if the executive session is to be extended beyond that time, I'll announce the extension and its expected duration.
So with that, let's secure the room and move forward.