Seattle City Council Sustainability & Transportation Committee Special Meeting 8/16/19

Good morning, everybody.

It is Friday, August 16, 2019. It's about 10.03 a.m.

My name is Mike O'Brien.

Welcome to the Sustainability and Transportation Committee.

I'm the chair of the committee.

This is a special committee meeting.

This is our last day at City Council before we go into a two-week recess at the end of August.

We have seven items listed on the agenda.

One of those we are not going to get to today, and I'll speak to that in a second.

The first two items are related to potential sale of city property, sometimes referred to as the Mercer Mega Block.

It's two blocks the city owns on the northeast and northwest corners of Dexter Avenue and Mercer.

The next item is a resolution requesting that SDOT develop a budget proposal for creating on-street bike and scooter parking.

That will be discussed by my colleague Councilmember Pacheco when he gets here.

Then we're taking up an ordinance related to, I'm sorry, so the first two items we're just gonna be discussing today will potentially vote on the resolution I just mentioned.

We also will potentially vote on an ordinance related to construction of protected bike lanes requiring the major paving projects include protected bike lanes if they are identified in the bike master plan.

We will discuss and possibly vote on a resolution relating to funding priorities for the bike master plan implementation plan.

Then we will have a discussion, but no vote, on an ordinance related to heating oil, imposing a tax on heating oil service providers, and directing the expenditures of heating oil tax revenues towards conversion and eliminating heating oil, phasing them out over the next ten years.

Finally on the agenda is listed a briefing and discussion on transportation impact fees.

We had put that on there in anticipation of having received a ruling from the hearing examiner over a challenge to that piece of legislation.

But as of this morning, we have not heard that response to that ruling.

So I am going to amend the agenda and remove item number seven.

And then go ahead and I'll approve the agenda now as amended with the first six items as we just discussed.

With that, we'll go ahead and move into public comment.

So folks will have up to two minutes to provide public comment.

I'll read a few names at a time.

You can come to either the microphone in the center of the room or the far side of the room.

Looks like we have about 15 folks signed up.

Stephen Clark is first, followed by Kevin Clark, and then Megan Murphy.

Good morning.

My name is Steve Clark.

I'm the owner, third generation owner, along with my sisters of Genesee Energy, which was started by my grandfather in 1929. We applaud the goal of carbon neutrality.

And in fact, for the last 10 years, we've been selling biofuel with a goal of getting all of our Seattle customers on 100% biofuel by 2029. We also applaud The assistance to low income, but outreach, what about the 17,000 other families that will be affected?

Did you reach out to them and let them know that they will be expected to spend $264 million in eight years, a quarter of a billion dollars, these are your numbers, to comply with the city?

If the goal is really carbon neutrality, why is natural gas ignored?

There's 188,000 homes in Seattle right now that are burning natural gas that they think is no carbon.

This plan does nothing.

Equity.

This is not equitable.

17,000 families, that's 5%, will be compelled by their city government to spend a quarter of a billion dollars.

These are not high earners.

They're not upper middle earners.

The tax, which is a great plan, takes care of the low income.

The quarter of a billion dollars will land squarely on those that are earning $36,000 to $75,000 per household.

These are working class, elderly, fixed income, while over 188,000 residents will continue to burn natural gas and pay nothing.

This is not equitable and the proposal is not ready.

I urge the council to wait.

Thank you.

Thank you, Steve.

Good morning.

My name is Kevin Clark.

I've lived in my oil-heated home on North Beacon Hill for 40 years.

For three decades, I was a city employee, proud of my career protecting both the environment and Seattle utility ratepayers.

Since learning of this proposal 10 years ago, I've had many discussions with the four heating oil companies that serve Seattle.

To my surprise, the city had kept them in the dark too, just like us affected homeowners.

During my career, I brought over 100 proposed actions before this council.

I would have been embarrassed to bring you one like this without extensive public input, especially from the few affected businesses and residents.

Does this council have lower standards than your predecessors?

Or are you just rushing to get this done before your terms expire this year?

The mayor and council are not just the governing body for Seattle.

You're also the board of directors of one of the largest public electric utility monopolies in America.

As lawyers often warned us, cities are not exempt from antitrust laws.

This ordinance will not hurt big oil companies like Exxon or BP.

These are classic small businesses run by the sons, daughters, and grandsons of their founders 75 to 100 years ago.

They're not climate change deniers.

They sell biofuel, furnace maintenance, and other services that reduce carbon emissions today.

They have existing relations with their oil heat customers that could help market and install new heating systems.

They would rather be partners than plaintiffs.

So I know you want to create a model that other cities could copy.

Why not pioneer working with your local heating oil businesses instead of fighting them?

Wouldn't that be a better example of how Seattle does things?

Thank you, Kevin.

Megan, you're next.

Megan, you'll be followed by Ryan Packer, Nancy Hirsch, and then Kirsten Smith.

Thanks for letting me speak.

I really like number five about the bicycle master plan implementation because everybody's hopes were kind of smashed when we realized that there was, I think it was like 35 million or something that was going to go to the north northeast or some for the bike lanes or even in Rainier Avenue 35th Avenue South where everyone said that there was like a traffic light like it was really dangerous for bikes so from what I understand you're overriding that plan I think and I'm implementing it anyways or something like that so that's good news because it's really vital to have alternative transportation.

And then the other one that I really like is the e-scooter and bike parking, because that's really going to reshape the city in a good way, in a green way.

So the thing about the affordable housing is good, you know, it's just I don't really think it's enough.

I think once rent control is in place, which is meeting here on September 17th, then if that gets passed, then I think that is a more substantial win for people who like to stay in the same place for a long amount of time and build a life, like a job, healthcare provider, grocery store.

However, number two about the Eden addition, oh no, no, no, not that one, sorry.

Which one was, it was the one, they're gonna sell a city property and then.

That's number one and number two.

Oh good, okay, thank you.

Yeah, that's a good one.

they're going to $138,500,000 for recreation department and the housing.

So all of this is good.

I'm just I'm really excited to be here.

Thanks, Megan.

Ryan.

Hi, good morning.

I wasn't planning on being here today, but I changed my schedule after two people in two days were hit on Aurora Avenue near 85th Street.

I hope this underscores for everyone the current pedestrian safety crisis that our city is in the grips of, with numbers that I've recounted at recent meetings that are through the roof.

It's clear that the city is not going to do enough on its own, the executive branch, and the legislation that the committee is bringing through right now is an indication that they are doing as much as they can right now to push safety, but we need to be more comprehensive in terms of Vision Zero.

The bike lane infrastructure is really phenomenal.

And I think where we're building protected bike lanes is the place where we're protecting pedestrians at the same time right now in the city the best way.

Elsewhere we don't really have a comprehensive plan.

And so in terms of collision hotspots, I think the council needs to get a report very regularly about where these collisions are happening.

And what they can do systematically, they can name dozens of intersections where one or two or three major pedestrian collisions have happened and no changes have happened.

And the Council needs to get Vision Zero numbers sooner.

Waiting until December is not acceptable for the previous year's information.

And my final comment on the bike legislation.

is I think that there needs to be more vetting in terms of what the bike master plan means in terms of minor in-street separation.

There's technically a bike lane on Martin Luther King Way over in the Central District that SPD actually doesn't recognize as a bike lane.

And so technically that might meet the bike PMP standard, but not really.

So that should be addressed.

Thanks.

Thanks, Ryan.

Nancy.

Good morning, Mr. Chair.

My name is Nancy Hirsch with the Northwest Energy Coalition.

I'm also a founding member of Shift Zero, an alliance of green building, energy efficiency, and climate action organizations and businesses that advance zero net carbon buildings in Washington.

We strongly support Ordinance 119607 to jumpstart the conversion of oil heated homes to electric heating.

Using oil in our homes is inefficient, polluting, and unhealthy for occupants.

This policy creates a path for homeowners to convert to clean technologies such as electric heat pumps.

In fact, Seattle has a perfect climate for heat pumps.

It is cost-effective and ultra-efficient heating system for our temperate winter climate and also provides air conditioning as the summers in our region are getting hotter due to climate change.

In addition to reducing carbon pollution, converting to electric heat pumps will most certainly improve health and safety in the home.

We're pleased to see that the revenue from the proposed tax on oil heat providers will be used to bring down the cost of conversions, to pay the full cost of low-income household conversions, and to offset the cost of the tax for low-income while they wait for conversion or if they are a renter.

And very importantly, the revenue will support workforce retraining for oil delivery employees.

It would also be useful if the training funds were for existing HVAC contractors, as this conversion may be something that they have not done before.

While not in the proposed ordinance, we would like to highlight a critical complement to this policy, the connection to weatherization and energy efficiency services.

When major work is done in a home, particularly older homes like those that still have oil heat, it is critical that the home is weatherized and other energy efficiency upgrades are done at the same time.

The city must be proactive to ensure that all of the oil heat conversion customers are connected to existing city programs that encourage increased energy efficiency and weatherization.

We urge the committee to adopt this ordinance.

Thank you.

Thanks, Nancy.

Kirsten, we're followed by Dale Bright, then Marilyn Jensen, and then Steve Gelb.

Good morning, Chairman O'Brien.

My name is Kirsten Smith.

I represent AIA Seattle, the American Institute of Architects.

We're also membership zero, which Nancy did a very nice job of describing, speaking in support of number six on the agenda.

Architects in serving homeowners are well aware of the cost of remediation and environmental hazards of fuel oil tanks, given the very real threats posed by climate change.

We also know that we simply cannot continue to use this fuel.

We actually feel the same way about gas, but we're on fuel right now, or on oil right now.

The transition this ordinance initiates through incentives and attacks on oil is a crucial one, since buildings represent around 40% of greenhouse gases in Seattle, and fuel oil represents around 6% of our building sector greenhouse gas use.

It's also a smart way to expand the use of highly efficient heat pump technology.

Like Nancy, it's a technology that architects are very excited about because of its impact on those GHG numbers.

This is a model policy and a great way to help both homeowners and the environment.

We urge you to support it and hope that other jurisdictions will follow your lead.

Thank you.

Thanks, Kirsten.

Dale.

Councilmember O'Brien, committee.

I'm Dale Bright with Labor's Local Union 242. I'd really like to applaud the city on the Mercer's Mega Block Sale.

That's really a great thing for the city of Seattle.

It was nice to see you include a PLA.

PLAs allow the building trades to bring community members in and access the middle class through apprenticeships.

So I really want to applaud the city for including a PLA in that and continue the good work.

See you, Mike.

Thank you, Dale.

Really appreciate your ongoing work with the city to get PLAs and priority higher right, and the partnership's been a great one, so thanks for being here today.

Marilyn.

Good morning.

Thank you for letting me talk.

My name's Marilyn Jensen.

I am with Sound Oil Company.

Sound Oil is a second-generation family-owned business, two-thirds of which are women.

We're based in Seattle, and we provide necessary service to Seattle homes.

We employ approximately 30 workers in the city with good-paying jobs and good benefits, including health care and retirement.

The majority of our employees belong to the unions, either the Teamsters or IBEW.

And over the past year, Soundo has paid over $420,000 to the city in sales and excise taxes and over $36,000 in B&O taxes to the city, amongst other fees, taxes, and licenses.

Sound Oil opposes implementing a heating oil business tax as it would harm the segment of people in the city that the city is purporting to try and help.

This is counterintuitive and makes no sense.

The city should recognize such a tax would be regressive in nature.

In summary, Sound Oil provides many good, high-paying local jobs to the city with good health care and retirement benefits.

The services we provide are necessary for keeping thousands of Seattle households warm and comfortable in inclement weather conditions.

Seattle provides good, stable revenue to the city via the form of sales and excise tax and B&O taxes.

We believe the city's idea of imposing a regressive heating oil tax is a bad idea.

Thank you.

Thank you, Marilyn.

Steve?

Steve, you're going to be followed by Seth Estason.

Probably didn't get that right.

Then Leah Misik and Eleanor Bastian.

Good evening Councilmember O'Brien.

I'm Steve Gelb, Director of Emerald City Seattle.

We're a collaborative of organizations working on clean energy and equity.

I'm here to speak about the oil tax and regulation ordinance.

We are strong supporters of the Climate Action Plan and the Green New Deal calling for Seattle to be climate pollution free by 2030. Getting there will require bold action including eliminating virtually all fossil fuels from our buildings and transportation infrastructure.

We strongly support this oil tax and regulations on oil tanks as a significant step to reducing greenhouse gas emissions and groundwater pollution.

Most importantly, we applaud the Office of Sustainability for utilizing a significant share of the revenue to support transitioning low income residents from heating oil to clean electricity in conjunction with improving the efficiency of their homes.

In our transition from dirty fossil fuels to clean electricity, we need to always insist on a just transition.

We applaud plans to use funding from this tax for training oil industry workers and to prepare new workers for careers in the HVAC field, installing energy efficient electric equipment.

Emerald Cities urges the city to focus this training on communities of color and women who are underrepresented in the field.

We also urge the city to create a program to provide opportunities for minority owned businesses to perform conversions from oil heating to electricity.

This ordinance is a great model for transitioning our built environment from fossil fuels to clean electricity.

And I do agree with the first speaker who indicated we should be focusing on natural gas also, not just oil.

And we do strongly support its passage.

Thank you.

Thank you, Steve.

Seth.

Hi, my name is Seth Esmason with Cascade Bicycle Club.

Good to see you again, Seth.

Yeah, thank you so much.

I just want to echo some of the messages we heard from our advocates last week at the committee hearing.

in support of these resolutions about the mass coalition package and in particular the bicycle master plan pieces of legislation.

First, we heard community members voicing concern for their children's environmental burden.

A lot of folks were saying that it's critical to act now so that our youth inherit a manageable system of effective measures.

We also heard from workers throughout the city asking for a safe and cost-effective connection to their jobs.

People who bike by choice or out of necessity deserve safe and reliable networks was a common theme.

And then we also heard from caring neighbors stressing that routes between communities citywide, especially through the South and Southeast Seattle, are important for everyday activities like health checkups, safe rides to school, and trips to our treasured local parks and things like that.

So Cascade is proud to stand in support of the legislation from the mass transportation package.

And our community members need accountability measures and economically sensible paving strategies for establishing and maintaining safe routes that enable them to live a fully connected life throughout the city.

So thank you, council members Pacheco and O'Brien.

It's really an honor to work with you.

Thank you so much.

Thanks, Seth.

And we've been joined by Council Member Pacheco.

Thanks for being here this morning.

Leah.

Leah, you'll be followed by Eleanor, and then Clara Cantor is the last one to sign up.

Good morning.

I'm Leah Missick, and I'm a policy manager at Climate Solutions.

Our mission is to accelerate our transition to a clean energy future.

I'm here to testify in support of the Heating Oil Ordinance.

In Washington State, greenhouse gas pollution stemming from buildings has been growing when we drastically need to reduce these emissions.

Here in Seattle, emissions from oil heating represent almost a fifth of carbon pollution from homes.

This ordinance simultaneously addresses both our need to substantially cut carbon pollution, improve public health, and is crafted in a way that prioritizes lower income communities and helps them switch to clean heating.

Heating oil is a public health issue.

In Seattle, about a quarter of oil tanks are leaking, and that number is only increasing.

Long-term exposure to oil fumes, especially through undetected leaks, can cause liver and kidney damage.

In addition, burning oil creates sulfur dioxide and foreign particles, which are unhealthy for us to breathe and can exacerbate respiratory conditions.

It can be difficult to switch to heating homes with clean electricity, but the city can help play a role in that transition.

Under this ordinance, people who meet income qualifications, including renters, will have their homes fully upgraded and others will receive rebates to make the switch to highly efficient heat pumps.

Moreover, if a renter meets the income qualification, not only will the city fund the conversion, but will work with the landlord on a covenant to ensure rent isn't increased for three years.

Heating oil is expensive.

Once the cost of the switch is covered, people will have efficient, clean heating at a much lower and stable utility cost.

They will also be eligible for energy payment assistance and pre-weatherization services.

Helping folks make the switch is so beneficial, not just for the climate, but for our health.

This ordinance is well-crafted and will reduce greenhouse gas pollution, improve public health, and give folks the opportunity to have cleaner, cheaper heating.

I also want to add, given that there are several ordinances and resolutions relating to biking infrastructure, that a comprehensive and connected bike network for all ages and abilities is part of a clean and safe transportation system, which is also something we support.

Thank you very much.

Thanks, Leah.

Eleanor.

Good morning.

My name is Eleanor Bastian, and I am the Climate and Clean Energy Policy Manager at the Washington Environmental Council.

The Washington Environmental Council is an environmental advocacy organization that has worked for more than 50 years for progressive change.

We are pleased to comment today in support of this oil heating legislation.

This policy represents a targeted, proactive approach to reducing fossil fuel use in the residential sector.

It anticipates and lessens the burden for low-income folks in the clean energy transition.

We hope this can be a model effort for other places and sectors.

Big picture, we are all paying a high price for using fossil fuels in our daily life.

Getting off fossil fuels saves money and lives.

But in an economy where folks think about their budget week to week, we need policies that help manage upfront costs even when there's a likely payoff later, years down the line.

This policy takes a thoughtful approach and will make homes cleaner, safer, and more comfortable.

We look forward to engaging with the Council on this legislation as well as other innovative plans to manage the clean energy transition.

Thank you.

Thank you, Eleanor.

Clara, you're the last one who signed up.

If there's anyone else who didn't sign up but would like to provide public comment, you can get in line behind Clara.

You may proceed, Clara.

Good morning.

My name is Clara Cantor from Seattle Neighborhood Greenways, and I'm here to speak briefly in support of the entire mass transportation package, including the three pieces that are being discussed today about the resolution on on-street bike and scooter parking, the Bicycle Safety Ordinance, and the resolution requesting funding for the unfunded Southeast Seattle bike routes.

All three of these are responses to what the Council's been hearing from the community over the last year and longer, from people who are concerned about Vision Zero, about our climate, about equity and safety and getting around our city.

I just want to remind the Council that transportation is a vast majority of our city's climate emissions right now, and we have about 10 years to drastically change the way that we get around.

And that includes a safe connected bike route, but it also includes pieces from the rest of the mass transportation package, making it safer and easier and more convenient for people to get around on sidewalks, crossing the street, on transit, and all of those.

So thank you very much for having these discussions today, and I look forward to more action coming for the rest of the year.

Great.

Thank you.

Thank you, Clara.

Seeing no one else, we'll go ahead and close public comment and move into the first agenda item.

I will invite presenters forward and then ask Kelly to read agenda item one.

Do we want to read agenda items one and two into the record?

Do you want me to read the whole thing?

The short version would be excellent.

Oh, I would love to read the short version.

Thank you.

All right.

Council Bill 119609, an ordinance relating to certain city-owned properties located in South Lake Union neighborhood and declaring them as surplus to the city's needs.

Do you want to read number two in also?

I just have to change the page.

Council Bill 119608, an ordinance relating to the city-owned property located at 702 Roy Street in a portion of Lot 4, Block 2, Eden Addition to the City of Seattle, laying off, opening, widening, extending, and establishing a portion of Roy Street and placing the property under the jurisdiction of the Seattle Department of Transportation.

Thank you.

Let's start with introductions.

Liz, do you mind going first?

Lish Woodson, Council Central Staff.

Stephen Shane, CBO.

Leslie Brinson, Mayor's Office.

Ben Noble, City Budget Director.

Thank you all for being here today.

Lish, do you have any opening comments you want to make before we jump into this?

No, let's just go ahead with the briefing.

All right.

Stephen, are you in charge?

Leslie, go ahead.

We have a different...

This isn't the right presentation.

Okay.

We can speak to it.

Oh, yeah.

It should be the next tab over the PowerPoint.

This one?

Yep.

Perfect.

Ben has done this before.

View full screen.

I got it.

I can do it if you want.

There you go.

Full screen.

Yep.

There you go.

Teamwork.

Well done.

Look at that.

That is a budget director for you, folks.

Other duties as assigned.

Thanks, Ben.

All right.

Take it away.

Okay, thank you.

We're going to have three people presenting.

I'm going to start and just kick it off a little bit and then turn it over to Leslie and come back and Ben will speak a little bit more.

We're very excited to be here.

Last time we were here at this committee was in December.

Let me just take a quick look.

We were here June 2018 when you, voted in favor of the street vacation.

And so there's a lot of news that we're trying to bring you today and very exciting news.

With that, I'm going to turn it over to Leslie, who's going to talk about how this fits into the mayor's vision for housing.

Good morning.

A few weeks ago, maybe a month ago now, Mayor Durkin rolled out her vision for housing called Housing Seattle Now.

And it is really made up of four components, and Mercer fits into each one of those.

We are looking to increase opportunity and access to family wage jobs.

We know we must build more housing, not only for people experiencing homelessness, but also for our low and middle income families in the city.

Looking to address displacement and prevent eviction, and also to secure new tools and resources.

And thanks to both of you and to the other council members, we are moving forward on a number of the components already.

So we've been working closely with Council Member Herbold on new protections from tenants.

I would like to thank all of council for moving really quickly on the local option housing bill, providing upwards of $50 million that will go towards building housing for people experiencing homelessness.

And we look forward to returning to the conversation about renewing the multifamily tax exemption program once council returns from recess.

I think when we think about the Mercer transaction, it really is a generational opportunity to take a piece of property and turn it into something that is much bigger than a piece of property in and of itself.

As Dale mentioned during public comments, the application of the project labor agreement not only creates more jobs with the construction project, but the real estate transaction itself will provide more jobs for the city as we broaden our employment base.

We will create more affordable housing and mixed in home housing both on site and with the proceeds in locations throughout the city.

And also, it provides an opportunity to build more safe transportation connections.

I'm not done yet.

Thank you, though.

As we look forward a little bit, the mayor's proposal for how the proceeds will be invested will be coming down to council as part of her budget proposal.

But they are being made with absolute intention to move forward strategies that are rooted in advancing racial equity and in displacing and in addressing displacement in a way that we haven't yet, the city hasn't had the resources to do before.

So we look forward to working with you all on that in several weeks.

But now we'll talk about the real estate transaction.

Leslie, thank you.

I want to echo what Leslie said about this being a generational opportunity.

basically taking the information that we've had from this various green sheets about how to transition this piece of property, vacant, empty property, underutilized, that had a road that ran through the middle of the site.

How do we take this piece of property and transition it so that it could be used for people throughout the city of Seattle?

Again, as I said, we were here in June of 2018 when we vacated the street.

We worked hand-in-hand with SDOT as they were vacating Broad Street.

making sure that we can impose those restrictions on the RFP.

We didn't issue the RFP until we knew we had the streets vacated.

Let me just go back a little bit of the history of the Mercer properties.

Council's had an interest in this property since about 2014 or a little bit earlier and then we've had three green sheets relative to the site.

We came, I think, in 2017 and addressed, how do we move forward on these green sheets?

And we came up with the recommendation of coming up with an RFP where we would be able to reach out into the marketplace and sell these properties.

At that point, we didn't have a, we were working with Citywide, but we went ahead and decided, let's just focus on the S-stop properties and move forward.

So as you can see on the bottom, we've been to this committee since 2016, 17, 2018, and now 2019. The properties also, I just want to touch base just quickly, is that portions of them were purchased with revenues from the commercial parking tax and gas tax, which is important as we move forward and what you're going to potentially do with the proceeds.

So in 2017, we had adopted Resolution 31786, which authorized the RFPs.

And it had the goal to increase affordable housing resources.

And it also required us to come back to council in an executive session to brief you on the top three proposals.

And actually, we came back and we briefed you on all of the proposals at the end of last year.

So let me, we'll go into the, thank you, the RFP.

The cover sheet of the RFP, we went ahead and engaged Jones Lang LaSalle, and Lori Hill is here from, was formerly with Jones Lang LaSalle, was the broker who worked with us.

So we issued the RFP in 2018. We looked at how do we go out and market this property to the national and international marketplace and find a way of increasing as much resources as we possibly could.

We had specific requirements in the RFP.

We tried to figure out what was that balance between public benefits and proceeds.

We also encouraged respondents to propose on both a fee simple and a non-subordinated ground lease.

We also encouraged all the respondents to include on-site affordable housing of 175 units.

and the responses were due in 2018. Just going to go over the next couple slides.

They're a little harder to read, but these were sheets in the RFP that directed the proposers of items that they should be proposing on public benefits, requirements.

A little bit more so as we already heard today that we talked about a project labor agreement that was going to be an item that was included and is included.

There was also a labor harmony agreement in case there was going to be a hotel ever on this site.

Also, sustainability standards.

We said gold would be a minimum and remediate environmental contamination, broad street vacation requirements, mandatory housing.

In the end of October, we received seven responses.

Six we deemed were responsive.

We had an evaluation committee.

They met in October.

We reviewed, analyzed, and requested specific answers of each respondent.

And then we had interviews with each one of the teams.

After, okay.

Sorry, just trying to stick there.

Just really quick on the review committee, were those all city employees or what was the?

Primarily had city employees.

We did have one who was a former city employee who was no longer, who was outside, that was Kate Jonkas.

Okay.

We had people from central staff to Office of Housing, OED.

Estat.

Estat.

I think there were more.

FAS.

FAS.

And the law department.

Right.

So we moved, after we interviewed all of them, we said, well, you know, we liked all these proposals.

We liked one in particular, but the price point was not where we wanted it to be.

And so after the interviews, we issued a best and final offer or a BAFO to these teams and said with certain specific requirements on each team to have them address and make a point of where they could come back to the city and be a little more responsive price-wise and public benefit-wise.

This next page is kind of like the punchline.

We ended up with These six teams, the one on the top, Alexandria Real Estate Equities, Inc., made a substantial jump in their pricing.

And some of the other teams made a jump, but not as significant.

As you can see on the top line, the Fee Simple with Purchase and Fee Simple with Affordable Housing, they moved from 122 to 171, or 99 to 138. approximately a 40% increase.

This is only the financial consideration.

It doesn't address any of the non-cash, and it doesn't really address the $5 million that they're also proposing to offer on the property.

Thank you.

The transaction on this page here identifies, from just a cash perspective, at closing we'll have $143,500,000.

That's of the 138. million and the $5 million for homelessness.

Just for your information, Alexandria is in the city of Seattle currently.

They entered the market in 1996. They've worked a lot with Fred Hutch and they've expanded to Eastlake.

I think one of the things that we liked about Alexandria besides the price point was the programmatic interest.

They are bringing their businesses, primarily building buildings for bioscience work to find places where that will improve the health of the community as well as have a lot of tenants around the country that are working to solve and cure cancer, and which we find will broaden the types of tech workers that are down in South Lake Union.

One of the other points that we liked is that there was not a permit or financing contingency.

We had some of the other teams that we're looking at, they would close once they had their MUP and which would push it way out before we would potentially close and also had some financial contingencies.

Thank you.

So here's just roughly their development program.

If you remember what the site looked like before, Now we have on Mercer West and Mercer East, there will be two towers.

On the 615 Dexter, which has various addresses, they call it 615, we have it as 620. But that is where the housing will be.

That's been referred to often as the copier's northwest side.

So they will have Laboratory, so when you have bioscience work, you have a much higher floor to ceiling ratio.

But it's not just going to be what labs.

It'll be a lot more than laboratory space.

I'm going to show on the ground floor here.

This is the ground floor.

Do we have a pointer or not?

No, but you can use the mouse.

So we'll talk about this here.

This is the, wow, that's the 8th Avenue.

a pedestrian way, which is one of the requirements of the vacation at Broad Street.

I'll talk about that next, but right now I want to talk about one of the public benefits that Alexandria brought forward was a community center that would be located on the ground floor of Mercer West.

It's up to 30,000 square feet.

The term would be for up to 40 years, and there would be zero rent.

They're providing $3 million of tenant improvements.

That's in addition to and above the $143 million that they're going to be providing at close.

As I pointed out, the 8th Avenue Pedestrian Way, this is something that was very important to the Design Commission, and that was a requirement as we move forward into the RFP.

One of the things we wanted to do was make sure that that 8th Avenue would be an activated space that would be an important It would be a nice community benefit in a public space that not just the tenants of this building, but citizens throughout the city could use this piece of property.

Stephen, are the photos here?

I mean, how far along has Alexander gone on design work?

Are these just kind of concepts or is this actually part of a design element?

Council Member, thank you for raising that question.

These right now are just representative photos that we took out of the RFP.

but they are giving a sense of direction of how they will move forward.

Like the previous photo of the ground floor, that is not exactly how the floor is going to lay out, but that is, we'll figure out how that 30,000 square feet will work in there.

Also in that 30,000 square feet, and if I could maybe just go back.

I'm going to go back to that slide and just address a couple of other items on the community center.

been an interest expressed by some other council members about a daycare facility in this.

And one of the things that we've had conversations with parks, we've had conversations with council members and council staff about that it, that sound Seattle parks would be the tenant and they would work with either deal or somebody else to come up and develop a child care in there as part of their program.

It's, it's not an either or we're looking at as an

And we do child care and other parks facilities throughout the city.

So it's something they have some expertise on So assuming this deal is to go forward Once Parks has their 30-year lease, would that be then up to the city to just figure out how we want to program that, including childcare?

Are there certain agreements we need to get in place to make that work in advance?

So right now, we have one of the things that we've been addressing with council staff, that daycare is not an excluded use.

So it would be allowed.

And I think as Parks moves forward on their design of this facility, they would need to figure out how that would work.

It's not an excluded use, but it's also not a explicitly permitted use.

And so under the terms of the MOU, the city would need to get Alexandria's permission to include a child care facility in the space.

And there is generally a requirement for outdoor space that would need to be worked out probably with Alexandria in terms of whether that's feasible, probably in the 8th Avenue area.

conversations we've had with Alexandria they would they'll work with the city to figure out how this all works together.

As we come back in September to consider voting on this and committee a full council it'd be great if it's possible in the next few weeks to get some more clarity on what those agreements look like and you know obviously something in writing would be helpful too.

I know I think everyone on the council is very supportive of opportunities for child care and there's certainly a few of my colleagues who that'll be an important piece.

So going back to your question about these are representative photos, but part of it gave a sense of how they would address the properties at this location.

Again, these are representative photos, what we think are very dynamic type buildings.

Of course, that will be part of the, as they move forward into deeper design and as they move into permitting, these buildings might change.

Sure.

And one of the things that we're, excited about is that we talked about a housing development program on this property.

So what's in their proposal in the RFP is they propose an 18-story multi-income, multi-family building that could potentially have 365 total housing units with 175 that would be affordable and that would be guaranteed that they're As we move through the MOU, there is a lot of dynamic discussions as we move forward on the MOU.

And there was looking at some MHA performance, but what ended up happening is that we've made a decision and we worked with them on that they will do payments in lieu of both the residential and the commercial, which potentially could be about $12.5 million combined with all of them.

So that $12.5 million, that's a square footage based on the ultimate design of the building, so that's why it's an about at the moment.

But that's on top of the $143 million in cash payments that you discussed earlier in the presentation?

It's on top of the $143 million, on top of the $3 million for TI for parks.

Yes, this is part of that payment there.

I think one of the things that's interesting is that if they move forward on the full build-out and design of this building, This would be one building, and it's a pre-manufactured building system, so it could be quicker to the market.

Is it something we've seen in Seattle before?

There's a much smaller scale.

I think there's one up by the university, and I know there's another one being looked at downtown as well.

But a much smaller building.

Okay.

Councilman Pacheco.

Just for additional context, Ben, I'm so glad you're here.

Last year we collected MHA payments about $13.3 million, correct?

I don't have the number of figures in front of me, but it sounds familiar, yes.

The proceeds, the MHA payment from this sale will be almost the equivalent of what we collected last year.

Just trying to provide additional context.

This is a large scale development and there will be a significant contribution generated both from the residential and the commercial side.

So one of the things that we are excited about on this is that there is an affordable housing commitment.

This again would be at the 620. Aurora site, the copiers northwest.

There's 175 affordable housing units with a 50-year covenant.

This is controlled by contract, not by a city program.

There's no city dollars.

There's no federal dollars into this affordable housing.

So the way it would break out is 140 units at 60 AMI, 35 units at MFT, and then after the MFT burns off, affordability would deepen to 60%.

Can I clarify for a second?

One piece of clarification here, when we talk about no public subsidy being used, there was a question asked earlier by staff.

That just means there will be no public subsidy used in the operations or development of the property.

SHA Section 8 tenants with tenant vouchers would be eligible to participate, just like they would be anywhere since they are indeed a protected class.

One of the other items, too, as this building gets fully built out, another 20% of those units would also be MFTE.

So when we take a look at the aggregate of cash and non-cash public benefits, it's approximately somewhere in the neighborhood of about $300 million public benefits.

That's from the proceeds for the sale, the homelessness, the housing, the public spaces, the project labor agreement, transportation, mobility, environmental remediation.

As we talk about environmental remediation, I do want to address the issue that is the major outlier that contingency that we need to close.

Alexandria will pursue a prospective purchaser agreement with the Department of Ecology.

30 days after council hopefully votes on the 16th of September, they will submit their application to ecology to move forward on that.

The city would also help them wherever possible to get this prospective purchaser agreement.

Ben?

I was going to talk a little bit more about the potential use of the proceeds.

And again, as Leslie has described, actual proposed appropriations and allocations will be in the mayor's budget delivered late in September.

But wanted to give you a sense of the resources that are available.

As Steven has described, total cash payments are $143.5 million.

I think I'm going to work this table up from the bottom to give you a sense of how there are some constraints that we face on the resources and then what is, if you will, available after those constraints have been met.

So first of all, there are some transactions costs associated with the purchase, so we're setting aside $5.3 million for those.

In addition, There have been a number of financial commitments made in the past in anticipation of these revenues.

In particular, there's an inter-fund loan outstanding of just over $12 million.

Those monies were used to actually build the Mercer Project itself, and we had anticipated selling this surplus property.

So that's one piece of that.

Council just recently approved a piece of legislation that puts another inter-fund loan against this property, $9 million.

for the South Lake Union Streetcar.

In addition, there is some, that's for a capital, excuse me, not the South Lake Union Streetcar, the Center City Streetcar.

There is in addition an outstanding loan, just over three and a half million dollars related to the past operations of the South Lake Union Streetcar.

So it had operated at a deficit previously.

We had built up a sum of debt and then committed these resources to repay it.

And then lastly, there, was a loan of general fund resources taken against the property of about $4 million.

So in total, just over $29 million of pre-committed allocations of the resources.

There's then this $5 million that's restricted for homelessness use.

It's a contribution rather than an actual specific payment for the property.

And again, we have a number of ideas, and we'll bring those forward in the budget.

Overall, and some of the transportation dollars are in the repayment category and some are now sitting here unrestricted, overall of the $143.5 million, Approximately 52 million dollars is restricted for transportation purposes And that's specifically because some of the underlying property was purchased with transportation restricted funding in particular gas tax dollars and Commercial parking tax so there is approximately just under 26 million dollars that again in the budget will be allocated to transportation uses because that will be a legal restriction on those funds and And then lastly, that leaves north of $78 million that will be dedicated to housing in various forms, but particularly affordable housing.

It was an emphasis also on the city acquiring and owning the land under which that housing would be built.

which is not a coincidence.

We recognize that this proposal would sell off a significant public asset piece of property.

And the goal is in part to acquire additional public property so that we will hold that asset for the long run.

And in the context of affordable housing, owning the dirt under the housing will help ensure that that is a long-term public asset.

So I have ideas about identifying neighborhoods at risk of displacement where we can make a difference in developing affordable housing and minimizing impacts on the neighborhood as our local economy continues to grow and drive up the cost of housing generally.

Then the two transportation restricted funds, those add up to $55 million, and you had mentioned a gas tax of 52, so is the 3 million gap some non-gas tax restrictions?

It's actually, the repayment category, the yellow category, includes the general fund loan repayment as well.

So that's why you end up with just over 50 between the two of them.

Some of the repayment is not gas tax eligible.

And the rest of it is gas tax type-ish expenses?

Exactly.

Somewhere in the transportation world?

Yeah, I'd say transportation-related expenses.

Great.

Ben, as I'm gearing up for my first budget, can you go a little bit further and a little bit of background and insight into the $4 million general fund loan?

So I believe this was a 2017 budget action.

The council was making some difficult choices about particularly some investments around homelessness services, had some anticipation of revenues that would emerge the following year.

So took out a loan, secured against the property, knowing that either those revenues would emerge or alternatively that this property would be sold in the future and that loan could be repaid.

So that's the nature of that one.

So these are all essentially examples of where we spent the anticipated money a few years in advance of the coming, or in the case of Mercer, 10 years in advance of the coming?

Exactly.

Yeah, I would say, I mean, again, I know there's been healthy debate and there was a lot of internal work here understanding whether or not selling the property was ultimately the right thing to do.

I would know that in building a Mercer project, it was actually anticipated that we would sell the property.

I mean, there potentially would have been other ways to pay that loan.

But overall, I mean, you can see that the If we didn't move forward with the transaction, there are almost $30 million in prior commitments that we'd have to have addressed with some other resources.

That wasn't the deciding factor in moving forward.

It's really the whole package that makes this, in our view, a wise policy move, but that was an element.

So council members, one of the things that Ben and Leslie have talked about, you'll have an opportunity to look at the proceeds at budget, but that is not part of the ordinance discussion.

So the summary, as you saw, that there was a really long title.

And let me explain what we're asking in the ordinance.

One is authorizing the sale of the property for $138 million with the covenant to develop affordable housing, to negotiate a lease, with Parks and Alexandria for the recreational facility.

That lease would be not for the full design build out, but we would have a lease that when they close on the property, we would have the general outline of how that would move forward.

That could include affordable child care and other uses as well.

We're also, as you will see in the overall ordinance, that we have an executed MOU by Alexandria.

We're asking for the authorization of the mayor to execute that MOU for the sale of the property and then authorizing the superintendent of parks to negotiate, execute, and deliver a lease.

And then Department of Transportation director or their designee to prepare and deliver all the necessary transaction documents.

Yeah, one thing that is different with this legislation and some other property sales that Council has seen recently is that this will be the last time legislation will come to Council.

This authorizes the executive to negotiate and sign the final transaction document so it won't come back to Council after approval of this ordinance.

So our next steps, our next steps one is today, here we are.

The next one is that we come back to you on September 6th for hopefully there will be a vote on the legislation.

September 16th, full council.

And then as the mayor signs the legislation, you'll move forward into the budget discussion with the proceeds.

And then we'll go ahead and finalize and prepare the disposition and development agreement, not throughout the rest of the year, but partial of this year.

Then in that period of time, once we move forward, Alexandria will pursue the prospective purchaser agreement.

with DOE and then hopefully they will get that in 2020 and we'll be able to close the property.

And then that will be their property.

We will have our cash to spend.

And then in 2020 to 2021 onward, construction will follow based on remediation, permitting and site prep.

Questions?

Mr. Pacheco, do you have any questions on this?

No, but I do appreciate the briefing before and just, I mean, I'm supportive and I just appreciate the detailed conversations we had both privately and here today.

Steven, I want to start by just thanking you for your work.

I don't know if it's just you.

I imagine there's a team of people that's around you.

Really, a lot of work's gone into it.

I appreciate the thoughtfulness.

You know, the numbers are outstanding from kind of that perspective.

I know that a decade ago, I believe, Ben, I don't know if you remember this, but I kind of thought we were thinking about $40 million for this parcel and, you know, cash and other benefits as you added up.

You know, I'm not sure this is totally apples to apples, but $300 million.

Obviously, the market in South Lake Union has shifted quite a bit, probably more than our expectations from the work that was done over a decade ago down there.

And I think, you know, there's a few pieces kind of left to dial in.

I think getting the child care piece to feel a little more certainty around that.

Obviously, we'll have to do some work on the back end, but it really seems to address a lot of the issues that we had hoped you know, we might be able to address with a single, you know, a single sale, a couple parcels.

And I'm just grateful to have your expertise at the city.

I think a lot of times we, you know, we're not real estate experts at the city.

I mean, we do have some real estate experts in the city, but sometimes in complex transactions like this, we end up in deals that tend to fall apart or turn out later not to be a great benefit and you know we'll see how this moves forward but at the moment it feels like you've secured a really amazing deal for the people of Seattle so thank you for that work for the city.

Thank you.

I'm grateful.

I know also for a lot of community members it's complicated and I think I mean Ben you touched on or Leslie maybe it was you that talked about trading you know we're selling a really valuable asset and we want to make sure that We use that to acquire other assets that are important to the city.

And I think, you know, we've had private and some public conversations with community members that are just concerned about using the framework about how we think about land and real estate in our city and who gets to control it.

This is a major, you know, well-capitalized private entity that's, you know, hopefully doing some good work around you know, public health things and curing cancer and at the same time it's, you know, it's a for profit and they're going to spend a billion dollars on this and they're going to make more than that, I'm sure.

So, that's part of our system and I think a lot of folks are struggling with how our system, you know, works to the benefit of those with immense wealth.

You know, most of us couldn't even compete to bid on something like this just because of the reality of what it's worth today.

And I know there's a lot of thoughtful people internal to city and just kind of continually to think through about What do we do especially when it comes to housing in our city?

You know so many folks are struggling we're gonna be able to address a lot of amazing things on the housing front We'll figure out the specific mix of those as we get into this budget and future budgets and yet we know that after all that there's still going to be a you know, tens of thousands of people in our community who still are going to be struggling with finding a place that they can survive in our city.

And so there needs to be an ongoing conversation.

I really think that we did some great groundwork on this, and there's a lot more to do going forward, too.

I appreciate the timeline.

Vish, I appreciate you highlighting that I guess there's a possibility if colleagues felt like this needed to come back one more time or something, we can obviously create space for that.

I feel that with the childcare thing being the one piece that I think getting some more clarity on would be great on September 6th.

I feel comfortable with taking this to my colleagues at the full council saying I think we have a good package and clarity about where this is to go and not delay the remaining parts of those negotiations.

Obviously, the sooner we can get to a signed agreement and accept that cash, no longer be in a position like we are at that.

It's a gorgeous view across the street because there's not a building there, but there was intended to be a building there over a decade ago, and that parcel keeps getting held up.

And so we'd love to close this deal as quickly as possible, because I do think we have a deal that's more than fair to the people of Seattle.

So hopefully we can get through that.

So great.

Thanks for your work on that.

We have a second agenda item related to this.

And are there other presenters that are going to come up forward?

All right.

Why don't we invite those folks forward?

We already read that in the record.

But come on forward and introduce yourselves, and we'll talk about the final pieces on the street vacation, I believe.

Thanks, Stephen.

Mike, just so you're not surprised, someone come sit at the table.

So I'm Sam Spencer, I'm the legal affairs advisor for the Seattle Department of Transportation.

Today I will be presenting a change in property designation ordinance, specifically changing the designation of a portion of real property.

That's a portion to the mega block under the jurisdiction of SDOT to its proper designation of street right away.

Above is an overview of the presentation.

This presentation will include a quick history of the SDOT property.

We'll go through the purpose and goal of the legislation.

I'll show you some maps that illustrate where this 462 square foot portion of the mega block is located relative to the larger parcel it's being apportioned from.

This portion of the mega block was acquired in 1969 in connection with the Bay Freeway Project.

As you know, the Bay Freeway project was never built.

The 1969 legislation designated the property for street purposes, but did not lay it off as street right-of-way.

As part of the Mercer Corridor project, Roy Street was widened, and the portion of the Roy Street sidewalk was constructed on the mega block.

This ordinance is similar to the dedication ordinances this committee hears from time to time.

where the city is accepting widened portions of right-of-way.

Another way to conceptualize this ordinance is the city is reserving for itself an easement for street purposes in anticipation of the future sale of the Mega Block.

An additional benefit of this legislation is it will provide clear title to the prospective purchaser of the Mega Block.

This is kind of redundant to the presentation, but this is the MegaBlock.

And this is two side-by-side images of the same area.

On the right, you can see the highlighted area.

That's the portion that's being dedicated.

On the left, you can see it without the highlight.

Hopefully see is that you know, there's a sidewalk existing there.

It's kind of an oddly shaped parcel and that's what this legislation is trying to correct and So I'm here asking the City Council to pass this bill to redesignate this portion of the mega block a street right away in order to correctly align this property's designation with its current use and That was kind of a mouthful so if you have any questions, I'm here to answer them great and

Is this something that we've known about for a while, or did it come up in the due diligence of the previous transaction?

Yeah, it came up as part of the due diligence when we were doing the street vacation.

It kind of manifested itself as this is kind of a title oddity, and we're just here to correct that.

Great.

Seems fairly straightforward.

Unless you have a question, I'll go ahead and move Council Bill 119608. Second.

All those in favor signify by saying aye.

Aye.

Thank you.

Great.

Thanks for your work on this and we'll get that to full council in September.

Appreciate it.

Great.

We'll move on to agenda item number three.

All right, resolution 31898, a resolution requesting that the Seattle Department of Transportation develop a budget proposal for creating on-street bike and e-scooter parking.

Great.

Councilor Pacheco, you've been doing a lot of work on this.

Do you want to talk about it and we'll talk about amendments?

Sure, so this legislation, this resolution just calls on SDOT to develop a budget proposal to fund the expansion of the on-street bike and scooter parking corrals for 2020. We are on track, or SDOT has notified us that we are expected to build 1,500 bike corrals by the end of this year and so the goal is and the objective is to double them by the end of next year.

There are two amendments after talking to your office and Council Member Mosqueda's office that I think would be very helpful to the resolution itself.

One is so that we're but creating the vision so that, or asking SDOT to create the vision for the entire city and with the priority of the connectivity to the frequent transit network.

And then the second amendment is to have SDOT submit this proposed policy in writing to all members of the council by September 20th.

This should give them a couple extra weeks as we prepare before the budget and we can prepare in advance for it, so.

Great.

Well, thanks for your work on this.

I appreciate the kind of phased approach here, and I want to applaud SDOT for doing some good work on bike corrals, and everything we can do to accelerate that is also a great thing, too.

What's that?

We also have our amendment.

And so, yes, how do we want to, Councilor Pacheco, do you want to, what order would you like to do these amendments in?

Sure, so I'm sorry, can you repeat the question?

What order shall we do the amendments in?

Do you want to, I have an amendment, I guess it's named Amendment 1, and you have this amendment, Amendment 2. We can move them both together, that's okay.

Why don't we do one at a time, and I'll just do Amendment 1 and speak to it, and then I'll let you discuss Amendment 2. The amendment I'm proposing was what we discussed at committee last week.

I would simply add a sentence at the end of the resolution that says the budget proposal should include provisions for enforcing properly parked devices through financial penalties.

specifically folks using the bikes the existing bike share program we've heard ongoing challenges where folks that are using that system are not leaving their bikes in an appropriate place.

To date I believe SDOT has you know as they've ramped up enforcement which I think has been a little slow the penalty they've used has been to reduce the number of bikes on the street and I would like to see a proposal where they actually have direct financial penalties so a fine for for someone, and hopefully that companies will be passing on to the users to really change user behavior.

It's pretty easy to be able to figure out where to park those bikes properly.

We're just asking people to take a few seconds more to put it in the appropriate place.

So I'll go ahead and move amendment number one.

Second.

Great.

Thank you for that.

All those in favor, signify by saying aye.

Aye.

Super, so amendment one passes.

Amendment number two, why don't you speak to that.

Sure, amendment number two would amend section one, which is, did you want me to read the full amendment?

Yeah, why don't you just read the language that would be struck.

Okay, so the language that would be struck would be, within one mile served by frequent transit service in Seattle, and it would amend it to say, comma, prioritizing connectivity within the frequent transit network.

And it would add say to sufficiently add up to 3,000 multi-modal parking spaces by the end of 2020 Great and then There's a section 2 amendment also if it's part of the amendment and so we would be striking September 9th 2019 and making the new date September 20th, 2019. Great.

So, that would just give us an extra week or so to respond to this?

Correct.

Great.

Super.

If you want to move that, I'll second it.

So, I move to amend Section 1 as previously stated and Section 2 as previously stated.

Great.

I will second that.

All those in favor signify by saying aye.

Aye.

Great.

So, we now have a resolution as amended before us.

Anything else you want to say to that?

No, I really like, I appreciate the advocates who have been in touch base, who have been touching base with our office.

And thank you Council Member O'Brien for your amendment.

You know, it's really, as I said previously in committee, you know, anything that we can do to ensure that people are in compliance and people are supportive and really trying to ensure that user behavior is such that people are ensuring that they're utilizing the services, but utilizing the services in a way that doesn't prevent folks from, Not being able to access our sidewalks is also important, too.

So thank you for your amendment, and I would be really happy to just pass this resolution so that we can have SDOT come back to us with a plan.

Great.

I'll go ahead and move resolution 31898. Second.

All those in favor, signify by saying aye.

Aye.

Great.

So that amended resolution will be at the full council in September.

Cool.

Hearty applause from the audience.

Half the audience members were clapping.

Great, we'll go ahead and move on to agenda number four.

Council Bill 119601, an ordinance relating to the construction of protected bicycle lanes requiring major paving projects to include protected bicycle lanes as identified in the City of Seattle Bicycle Master Plan and adding a new chapter 15.80 to the Seattle Municipal Code.

Thank you, Kelly.

We had a good discussion about this legislation last week.

Wanted to take a week to just see if we heard any more from community members or had any thoughts wanted to change.

Kelly, do you want to give us in the public just a quick overview of what this legislation would do?

Yes, so this legislation is really aimed at providing transparency and accountability moving forward in the building of our protected bicycle network in the city.

Paving projects provide a really financially sound opportunity to provide protected bike lanes.

If you're already going in and doing construction and tearing up the street, that's a really good time to add safe bike infrastructure.

This is utilizing the bicycle master plan that we have passed in 2014 to ensure that we're using the guidance of community to create this network.

And it's really focused on ensuring that we're working to meet our goals on Vision Zero as well as our climate change goals by encouraging more people to bike.

We heard last week that there's about 60% of Seattleites who are interested in biking but are concerned about their safety.

And we really see that protected bike lanes provide opportunities for more people to choose to ride.

This is really evidenced by the implementation of the Second Avenue bike lane.

We've seen numbers skyrocket, especially as we have the expanded section, and we want to continue that progress moving forward.

I'll just note that earlier this week, was it even yesterday, the day before yesterday, the mayor was at a ribbon cutting for the city's opening of a protected bike facility on 8th Avenue in downtown Seattle.

Yeah, I guess it was a couple days ago.

I had a chance to ride it yesterday.

It was great.

It was an interesting kind of diagonal crossing.

It worked for me when I was there.

But I appreciate that the cities, especially in the downtown area, are making those commitments.

And I think this will certainly clarify.

It's possible that this won't have a significant change because all these bike facilities would have been built anyways, but it's nice to have this protection in place and create some structure around a process in the hopefully rare or non-event that there's a decision to no longer proceed with the protected bike lane going forward.

And I do want to note that we have one proposed amendment.

In section 2, number 3, we've added just a little bit of language saying if you're going to propose a parallel route instead of doing a protected bike lane on the paving project, that you also need to include a cost estimate for providing such connectivity.

And so that does two things.

It helps provide a little bit more incentive to understand the financial repercussions of choosing to not build a protected bike lane during the paving project.

And then if it really does make sense to do a parallel route, you have a strong budget ask for the following year, so you know how much to factor in for those parallel routes to make sure that it's a safe all ages and abilities facility.

That's great.

think I appreciate your language here one of the fears I had was that it's easy to just say well we're not going to do a protected bike lane on this facility we'll do it somewhere else But as you've mentioned in your previous comments, often the most cost-effective way to get safe bike facilities in is just do it as a part of an arterial repaving project.

And if we're not going to do what may be the least expensive option, and instead do something much more expensive, we want to first daylight that there's cost to this decision.

And if the city decides to still continue going that way, as you said, then we'll know what those cost implications will be, and we'll have to go figure out how to get money for that.

So I'll go ahead and, do we have a substitute bill or do we have an amendment?

I believe, I think substitute bill.

Substitute bill.

I don't know if we have a number for it.

Council Member Chico, I would like to move that we substitute version D6 to replace version D5, which adds that language that Kelly just mentioned.

Second.

Thank you.

All in favor of the amendment signify by saying aye.

Aye.

Great.

So we now have a substitute version six before us.

I'm just curious, is it D6 for D6?

Now I had to get it out of Council Member Juarez's district and into mine.

But one more amendment would be bad, we'd put it in the Council Member Bagshot's, so hopefully we're good where we are.

Do you have any questions or any other things you want to say about this?

No, I just think, you know, one of the, as we so often have stated before in this committee, just, you know, as I've stated, if you build it, they will come in the sense of ensuring that the, as we look at the scooters, bikes, future mobility options and ensuring the safety of everyone.

And secondly, you know, just This is good governance on our progressive values.

And so for that very reason, I think collectively we should be pushing further and further and further to do more.

So that to say is I'm excited to vote in support of this and get this out of committee.

Great.

Excellent.

Well, I will go ahead and move.

Let's see, what agenda are we on now for?

I will move Council Bill 119601 as amended.

Second.

All in favor signify by saying aye.

Aye.

Aye.

Great.

We will move that to full council again in our first council meeting in September which will be on September 3rd Kelly would you read agenda item number five into the record?

We have a resolution 31894, a resolution relating to the funding of priority projects in the 2019 to 2024 bicycle master plan implementation plan, requesting that the mayor commit to building out the bicycle master plan and identify funding for priority bicycle master plan projects in the mayor's 2020 proposed budget.

Thank you for that, Kelly.

I'm going to excuse Councilor Pacheco.

I am very grateful because we've had a lot of extra committee meetings, and he's been very loyal in coming to these committee meetings.

And I know that puts a burden on my colleagues for all that work we've been doing.

But we have two more items to get through today.

So do you want to speak to this resolution just to give the public an overview of what's in it?

We discussed this at our committee meeting last week, too.

Sure, this resolution really focuses on looking at the 2019 to 2024 bicycle master plan implementation plan.

There was a reset earlier this year looking at that implementation plan and some key facilities in South Seattle were left in unfunded and this resolution is really focusing on finding funding for these projects in South Seattle.

At 2024, we'll see the end of the Move Seattle levy, and we really want to ensure that there's a safe, connected route through South Seattle.

It also speaks to the need for ensuring that we're committing to a two-way protected bike lane on 4th Avenue and finishing the waterfront connection.

Bless you.

So this is really just committing to building on those projects.

And I think if we see these projects funded, our implementation plan is going to be great.

And we're going to really see some serious progress on getting a connected network for people biking in the city.

Great.

Thank you for that, Kelly.

As we discussed last week, I will reiterate that I really appreciate the work of the good folks at Seattle Department of Transportation.

The first kind of draft, I'll say, of this round of the implementation plan that came out in March I think was a bit underwhelming for a lot of folks in the community.

SDOT heard that feedback and immediately worked with Department of Neighborhoods to do pretty broad outreach in a pretty short period of time.

I think they may have had five different community meetings over roughly the month of April.

And great community turnout at those.

Hundreds of people provided comment, both in person and otherwise.

And SDOT came back to us, I believe it was in late June, with an update to their implementation plan to present that to us.

And I really appreciate their work to kind of incorporate a lot of the feedback they heard.

I think there was, to the extent that folks were still disappointed, I think it was more about the fiscal reality that there's a lot of good projects to be built and there are some really important projects that are not included in that implementation plan.

And so the intent with this resolution is to both build on the work that SDOT has done, but also say that it's not okay for us to simply accept that fiscal reality.

If we really are committed to an equitable bike network, all neighborhoods throughout the city need to have.

safe facilities to ride in, and the great news is I think there are some really good opportunities before us this budget cycle to actually fund those.

Specifically, the program we listened to on the potential sale of the Mercer Mega Block includes some significant transportation dollars beyond just the repayment of previous debts.

There's, you know, about $26 million in transportation investments that can be made.

The mayor has made some public statements that she would like to see about $15 million of that go to Vision Zero projects.

So we'll see what comes over in the budget, but I think that's a really strong sign.

And, you know, certainly safe bicycle routes in southeast Seattle are the types of projects that would easily be in a Vision Zero vision.

And so we have a little bit of work to do to figure that out, but I think this resolution sets clear prioritization, it makes a strong commitment for that.

Anything I'm missing?

No, that was great.

All right.

Thank you.

I think you work for me and you're going to tell me I'm great.

I appreciate that.

So it's just me left.

So I'm going to go ahead and move and second resolution 31894. There's no amendments to that resolution.

No, not this one.

So go ahead and vote on that.

I vote in favor.

So on a 1-0 vote, that will pass out a committee with a recommendation to pass this to the full council.

And we'll hear that on September 3rd.

Now we can invite some other folks to join us at the table if you want to read agenda item number six into the record.

Council Bill 119607, an ordinance relating to the heating oil, imposing a tax on heating oil service providers, directing the expenditure of heating oil tax revenues, directing relevant city departments to create a plan for regulating the use of heating oil tanks, and adding new chapter 5.47 to the Seattle Municipal Code and amending sections 5.30.010, 5.30.060, 5.55.010, 5.55.040, 5.55.60, 5.55.150, 5.55165, 5.55220, 5.55230, and 6.20808020 of the Seattle Municipal Code.

Nice work.

That was a lot of fives.

Everyone in the public got all that, and they know which codes we're doing.

So why don't we start with a quick round of introductions.

Yolanda Ho, Council Central staff.

Christine Bunch, Office of Sustainability and Environment.

and Bentonville City Budget Director.

Thank you all for being here.

Christine, I believe this is the first time you're at the table, so thank you so much for joining us.

I know you've done a lot of work on this proposal, and I'm really excited about it.

I'll just make a couple opening remarks, and then I'll turn it over to you all to walk us through this.

Again, today we're not planning to vote on this.

This is just a kind of public airing of what's in this proposal.

I know the mayor did an announcement earlier, was that last week?

last week.

And this is exactly the type of legislation that I view as part of the commitment to the Green New Deal for Seattle.

And so I think the timing of this is just perfect.

We heard from folks questioning why we're focusing just on heating oil and not natural gas.

But I can tell the public that we will be working on natural gas very shortly, too, because that is indeed a key part of our proposal.

are a key part of our climate pollution that we need to address also.

So I will stop talking.

Yolanda, did you want to make any opening comments or should we just hand it off?

Great.

So, Christine, Ben, I'm going to let you two just walk through this, and if it's okay, I'll just ask questions as they come up, but I'll try to let the presentation go through.

Sounds good.

Well, thanks so much for the opportunity to present.

I'll just kind of do a brief overview or introduction.

As you know, Council Member O'Brien, Seattle's Climate Action Plan has a target to reduce our greenhouse gas emissions in the city, specifically in the residential sector, 32% by 2030. We don't actually have a lot of policies in place for the residential sector.

Most of our policies for emissions are in the commercial space, so this legislation before you is a unique opportunity.

And then, of course, Mayor Durkin's climate strategy that was released last April, she had identified or directed our office to develop a plan to accelerate oil conversions with an emphasis on low-income households.

And we know that approximately 15,000 to 18,000 households in the city of Seattle are heating with oil.

So phasing out oil by 2030 represents an 8% to 9% reduction in emissions in the entire building sector and 16% to 18% in just the residential alone.

So I think one of the takeaways here is that this policy makes substantial reductions in the residential sector alone.

So just to kind of give you an overview of why we're doing this or why do we care about oil, you know, we're really, this policy is not intended to punish those small businesses that we heard from today.

We recognize that they have value in this, you know, with workforce and the city, but we also know that carbon pollution and climate change is a real issue.

And we know that communities are impacted by climate change as well as a high energy burden from oil.

We know oil contributes to a host of environmental impacts, not just at the point of use, but also throughout the supply chain from extraction, refining, and transport.

It is very expensive and volatile in price and carbon intensive.

But the good news is that Seattle is very fortunate to have locally sourced, reliable, and carbon-free electricity as an alternative to oil heat.

And what we know about oil tanks, not just the carbon emissions that come from oil, but we know that oil is stored in underground oil tanks for the most part.

Those homes with oil were primarily built in the 1920s, 1950s.

They're well beyond their useful life at this point.

So this just kind of shows a graph of what the vintage of the homes in Seattle look like that have oil.

This graph, I won't go too much into detail, but this pretty much just paints a picture from the data that we have received from the state of Washington's Pollution Liability Insurance Agency.

They cover insurance for tanks, tank leakage, and we know that over time, as these tanks are in the ground, that the likelihood of a leak occurring increases over time.

So we know this is essentially a little bit of a ticking time bomb at this point.

One in four tanks are leaking in the city.

And so it is our duty as the city as well as the state to take care of this issue.

And this just sort of provides you an overview of, again, I mentioned 15 to 18,000 oil heated homes in Seattle.

Of that, we know 1,100 homes are on the utility discount program who are heating with oil, and those zip codes or those neighborhoods that are identified on the map are those who are predominantly people of color heating with oil and who are burdened with the high cost of oil heat.

And I'll just say that unlike utilities, there are no programs for folks to get off of oil or to weatherize their home.

It's not technically a utility under state statute, and so there are no rate payer funded programs, if you will, like Seattle City Light and Puget Sound Energy have rebate programs and weatherization programs and that type of thing.

The oil industry does not provide those benefits to their customers.

Christine, the city's been doing, or people in the city have been converting from oil for, let's say a number of years.

And I believe the sustainability environment has been working with other city departments to kind of accelerate that in the past few years.

What's the pace of those programs in the past, and what have we used to make those happen in the past, and how is this different or similar to that?

So we know that about 1,300 on average households get off of oil every year.

So that's just general attrition, what we call attrition.

It's organic.

People get off of oil for a variety of reasons, whether it's cost or leaks or they just wanted a different heating source.

So that's sort of like when we look at rebate programs in the utility world, that's just called organic attrition, right?

So we haven't influenced those folks with a rebate of any sort.

They're doing it on their own.

We know that at that rate, by 2030, there will be no oil in the city, right?

So that's just happening irrespective of what we're proposing today.

In the last two years, since August of 2017, we provided, with council authority, a limited amount of funding for a rebate for people to get off of oil heat to heat pumps.

That's been very successful.

We've worked with heat pump distributors, contractors to convert essentially 200 homes per year.

So since then, we've converted over 400. So it's been a very successful program.

And so we see that as scaling with the tax revenue and really being able to scale to more homes.

And you talk about converting to ductless heat pumps as one of the electric options that would be clean and quite energy efficient.

Have you had conversations with some of the oil heating companies in town and do any of them participate in other programs?

Are they usually exclusively oil heat program companies or do they also do other work?

Our conversations have been limited with oil dealers.

We have had a conversation with Genesee Oil, who you heard from earlier today.

Our understanding is that they're primarily in the oil dealing business, but some of them are doing heat pump and HVAC installations.

I believe our conversation with Genesee was that one-fifth of their business is installing heat pumps, and so I think There is, you know, some of these companies already have that capability and they have technicians who are able to do that work.

We want to support the continuation of that work and you'll hear a little bit later about how we'll be earmarking some of those funds.

Thank you.

So to go into the policy goals, In line with our carbon emissions reductions goals, the goal is to convert all homes from oil by 2028, which, as I mentioned, is organically happening as it is now.

But through increasing the equitable adoption of electric heat pumps, we are reducing carbon pollution and overall energy use and heating bills.

Through this legislation, we will help to prevent future oil leaks because people are getting off of oil earlier.

They're decommissioning their tanks and minimizing future environmental damage and cleanup costs.

And then we're providing a pathway for households with lower incomes.

As I mentioned earlier, there really aren't a lot of pathways for folks on oil.

When you're heating with oil, and I used to be one of them.

I had oil about four years ago, and I converted to a heat pump.

You don't have access to rebates from the utilities.

If you're lower income, you can't get weatherization because you're not electrically heated or heated with fossil gas.

So you're just kind of stuck in the middle.

And of course, oil is like the most costly heating source.

Kind of a double whammy if you will.

So what we like to do is by electrifying those homes for lower income folks, we create a pathway so that they can access city light weatherization services.

So we reduce their heating costs and then we also help them weatherize their home.

And then, of course, the policy goal is to support oil dealer workforce transition to heat pump technology.

Not all, we recognize not all oil dealers are installing heat pumps, but we want to be able to provide the funding to help them do that and work with labor as well.

So the policy components of this legislation is to impose a heating oil tax of $0.236 per gallon on oil dealers.

That would generate estimated $8.3 million from taxes over approximately nine years.

And then prioritize oil conversions for those lower income households I mentioned, which would pay 100% of those costs.

We recognize that heat pumps can be expensive.

We can't expect low income households to be burdened with those costs.

And so this is really, this legislation is really putting or centering equity and prioritizing those households first and foremost.

And then because we've had great success with our existing program, we'd like to expand that program and offer additional rebates for more non-low income households, so approximately 1,700 rebates.

And then this legislation, one component of it would direct relevant city departments including the Office of Sustainability and Environment, the Seattle Fire Department, and SDCI to develop a plan and recommendation by July 1st of next year on how we will essentially approach underground heating oil tanks.

And that might be some specific requirements for upgrading the tank and decommissioning those tanks.

So go a little bit deeper into serving households with lower incomes.

The fully funded conversions would be for 1,000 income eligible households, and that would include renters.

We would work with the, so the tenants essentially have to be income qualified, but then we would work with the landlords.

to have those heat pumps installed.

We would work with the Office of Housing for the delivery of the program.

We're currently working with them on a pilot in the Duwamish Valley neighborhood to convert 25 homes, and that's going well so far.

So we recognize Office of Housing has this expertise, and so they also do weatherization services.

We are already working with them on this pilot.

And then, as I mentioned earlier, the electrification creates pathways for Seattle City Light and Office of Housing and Weatherization Services.

So essentially, it's a double win for those low-income households.

And we also recognize that attacks on oil dealers is likely to get passed on to individuals.

And so in order to mitigate the anticipated tax burden on low-income households, what we anticipate doing is reimbursing those households for their average use.

And we would put that on their City Light account.

So here's just an example of how a low-income household could benefit from oil conversion.

So an average one might be $1,700 a year to have a 500-gallon tank filled.

This is based on $3.40 per gallon.

We recognize that, you know.

prices change and can be volatile.

But with a heat pump, that is more than twice as efficient.

This person could expect to save at least 50% on their heating costs.

And then because they're also participating in the utility discount program, they receive the 60% discount.

on that new electric heating, which basically saves this person about $1,300 per year on their heating.

That is substantial.

That is like people can, you know, use that money in very substantial ways.

So just wanted to make sure I had outlined what the benefit was.

Christine, that's great, I really appreciate.

I've been talking about the savings just from efficiency, but reminding folks that for those low income folks that qualify for the utility discount program, that is something that they currently don't get and could get a significant savings.

You mentioned the reimbursement on city light counts to mitigate anticipated tax burden, so is that targeted for folks that are on the utility discount program today?

That's right, yep.

We would identify them or they apply for the, how do we know that they're on oil heat?

So the Human Services Department has already collected that information.

So we actually looked at all the data for the UDP program and that's how we came up with the 1100. So we've identified, they've self-identified as heating with oil.

And so we would basically, we wouldn't require them to go through another application process.

They've already done that with the UDP program.

We would likely have a process where we would just verify to ensure they still are heating with oil and we would work with the Office of Housing and HSD to do that work.

And then literally it's just a transfer of funds, interagency funds, to Seattle City Light and working with their billing department to ensure that the credit is accurately placed on their account.

And so the goal obviously would be to get to those households, to get them to convert off of oil.

But to the extent that that may take a few years or multiple years, as long as they're still on oil, we'll be giving them roughly the equivalent of the tax back through utility credit.

And we did hear from community organizations who were on the front line working with low-income households.

So organizations like Bird Bar Place, They basically, you know, really recommended that make it really easy for households.

Don't have them apply for a rebate.

Just make it easy and put it on their account so that there isn't an additional hoop that we're asking them to take.

That's great.

Yeah.

I love that.

So in summary, the projected value and benefits from a carbon environmental standpoint, we're projecting at least 433,000 metric tons of carbon equivalent over 10 years.

So what does this mean?

It's about 90,000 cars off the road for one year.

It's significant, and I think that the other piece of it is reducing the future incidence of leaking tanks from underground oil.

It's really sort of an out-of-sight, out-of-mind issue, and so, you know, the earlier we can support people converting off of oil, the better.

In terms of energy benefits, switching off of oil to a heat pump represents a 50 to 60 percent average savings on costs and, of course, reducing that burden for lower income households.

And from a non-energy benefit standpoint, There will be increased comfort, especially during extreme heating events and smoke events.

I think someone earlier had testified about the benefits of heat pumps.

You know, we're seeing more extreme heating events every summer, especially with the wildfire smoke.

Thankfully, we haven't had that this year.

But there are people who definitely have, you know, upper respiratory health issues.

Elders who also have issues, upper respiratory issues.

And so these two, extreme heat events and wildfire events, this is really about resilience in our new sort of, hopefully not new normal, but probably new normal.

So increased comfort and health and supporting health is very important here.

Your next slide has a lot of numbers.

I'm not going to dig into this.

Yeah, I know.

This is just for if you have questions about the budget.

In public comment, someone mentioned something like $250 million.

Did you hear that?

I did hear it, but I wasn't sure where that number had come from.

Yeah, it seems orders of magnitude off, so.

Yeah, I just would like to say that this legislation is not intended to force everybody off of oil, right?

We don't, it's a personal decision.

Some people really like oil and if they would choose to continue to heat with oil, you know, we're simply saying then there will be a tax and that tax will support Converting folks who are more energy burdened off into something cleaner, locally sourced.

So we have the benefit of a locally sourced hydro green electric resource.

And so how do we maximize those hydro resources the best that we can?

I used to work for Seattle City Light, and I know Deborah Smith, you may have heard her talk about, we're long on power.

We're long on our clean resource.

So how do we ensure that through electrification that we can keep those resources here locally versus selling them off at a lower rate and just really kind of keeping, maximizing that hydro resource?

Yeah.

Well, and from a climate perspective, We know that because our electrical grid in Seattle is already 100% carbon neutral and has been for over a decade, that any time we electrify, whether it's how we heat our home, how we heat our water, how we energize our transportation system, we're eliminating, replacing a fossil fuel with 100% clean energy.

And frankly, that's what we need to be doing everywhere in the city of Seattle and everywhere else, too.

Great.

Well, I don't have any further questions.

We will be back at committee, I think is this?

Okay, either September 6th or September 17th.

We'll have to see what's teed up on those schedules, but we'll get through this sometime in the first half of September.

And it would be great just to clarify to make sure that we're not off on our math by an order of.

ten or a hundred between the 250 million dollars and the eight million dollars so if someone doesn't mind checking with the folks that provide the comment and just making sure that we're not missing something that'd be great.

Great.

Just for folks that are just tuning in expecting to see a conversation about transportation impact fees we amended the agenda to remove that item because at least as of the start of this committee we hadn't received a ruling from the hearing examiner on whether we were clear to move forward with transportation impact fees or not.

So we are going to come back in September.

I imagine by then we'll hear about transportation impact fees.

But this is the last item on our agenda.

Ben, you didn't get a chance to say anything at this moment, but as long as you're OK with that.

Christine, thanks so much for your work on this.

Thanks for the presentation.

It was great.

And we'll see you again sometime in September.

Thanks, Yolanda.

We're adjourned.