Land Use Committee 6/5/2024

Good afternoon, everyone.

The June 5th, 2024 regularly scheduled meeting of the Land Use Committee will come to order.

It is 2 p.m.

I'm Tammy Morales, chair of the committee.

Will the clerk please call the roll?

Council Member Moore.

Council Member Rivera.

Present.

Council Member Wu.

Present.

Council Member, Vice Chair Strauss.

Present.

And...

Chair Morales.

Here.

Four present.

And will you please call Council Member Moore again, please?

Council Member Moore.

Present.

Five present.

Great.

Thank you very much.

We've got three items on our agenda today and two public hearings.

Here's how this is going to work.

We're going to hear Council Bill 120761, a briefing and discussion first on our office to residential conversion legislation, and then we'll have the public hearing for that component.

We're gonna have a briefing and discussion on Council Bill 120771 and have a public hearing on downtown street activation legislation.

And then we will have an informational item 2484, which is gonna be a briefing and discussion on the implementation of the permitting audit that was done by the Department of Construction and...

construction and inspection in 2021, 2022. And I do want to confirm, Naomi, you may or may not know this, that we need to have the two hearings separately, or can we allow people to speak on either of those two items?

We can have it in one, but they have to clearly indicate which item they are speaking to.

Okay, and how many people do we have signed up?

We have three in person signed up for General Public Comment.

Six online signed up for CB120761.

Three in person sign up for Council Bill 120771 and seven in person sign up for 120761.

Okay, so here's what we'll do then.

We'll open for public comment, general public comment first, and then if you're here to speak to either the Office to Residential Conversion or to the Downtown Street Activation legislation specifically, please hold your comment until we open up the public hearing, and we'll just do one since we don't have a whole lot of folks signed up.

We'll just do the one hearing, and you can indicate which of those two things you're speaking to.

Everybody clear?

Okay.

Okay, in that case, if there's no objection, today's agenda will be adopted.

Hearing no objection, today's agenda is adopted.

So we'll now open the hybrid public comment period.

And we'll give two minutes to folks who are here for public comment.

And Naomi, I will let you proceed with the instructions.

Each speaker will have two minutes.

We will start with in-person speakers first.

The public comment period will be moderated in the following manner.

The public comment period is up to 20 minutes.

Speakers will be called in the order in which they registered.

Speakers will alternate between sets of in-person and remote speakers.

Speakers will hear the chime when there's 10 seconds left to speak.

Okay.

So in person for general public comment, we have Robert Riker, Steve Rubustello, and Alex Zimmerman.

I'm here for something somewhat tangential to your main thing.

Sir, check your mic, please.

There's a taller one there if that one works better for you.

Can you hear me now?

That's better.

Okay.

I'm here to speak about permitting for ADUs.

Okay.

You'll have to get really close to the mic.

I know it's sometimes uncomfortable.

I have previously met, I talked with my previous council member, Alex Peterson, about this.

They said they would get back to me and they hadn't.

I talked to Mr. Strauss's office when he was head of this committee.

They said they would get back to me.

They didn't.

And more recently, I met with Council Member Rivera about this.

And they all said they would have members of their staff look into this and never got a response, despite multiple calls.

I live in Laurelhurst.

The city is promoting ADUs dramatically.

I live on the lake in Laurelhurst.

And for some reason, the particular area where I live does not permit ADUs.

I have not been able to get information from anybody about why that is or what we do to remedy that.

And I assume they're not getting back to me because they can't figure it out either.

And there are three ADUs in our immediate neighborhood in smaller lots with no off-street parking.

I have off-street parking on a larger lot, but for some reason, Because of where I am on the lake, they do not permit ADUs.

And I'd like to find out how I remedy that.

Who do I go to?

Do I have to bring suit to the city to deal with this?

I don't know what to do.

Thank you.

Thank you.

You can email our office and we've got STCI staff here.

We'd be happy to follow up with you.

We'd be happy to follow up with you if you contact our office.

I thought we had reached out.

Well, let's continue.

Yeah, go ahead.

Well, we're still not talking about raising MHA fees.

I hear a lot about concern about housing, but our very, very low MHA fees, if you compare them to other cities, remain low.

And I think it's time we take a look at that because it is an affordable way for the city to take care of people who cannot afford housing.

And what's happened over the years is even people at your relatively high level of income should be noticing a difference in the market.

Just think what it's like for people far below your level of income.

We have many essential jobs, but it's not essential that we pay a living wage.

And in Seattle, a living wage is higher than it is in a lot of other places.

The other thing I'd like to mention under general comments here is trees.

What's left of them and how fast they're going away.

If you're building lot line to lot line, you're going to equalize the city.

North End, we've been very lucky.

more trees, more shade than a lot of other places.

But when you build lot line to lot line, we'll all come out with the big zero.

It'll be equal though.

Nobody will have trees of any consequence.

And in spite of what the talk of canopy is, there is a difference between a tree with a little age on it in handling pollution and providing shade than there is a bunch of shrubs or a sapling.

Let's talk about having a tree ordinance that brings development under control.

Everything cannot be or should not be exactly the same.

There are not sprockets.

Development industry would like it that way.

Up next, we have Alex Zimmerman.

Zeke.

Zeke Heil, my dirty damn Nazi fascist honda.

A pure bandit.

My name Alec Zimmerman.

I want speak about something.

I want help you consul make your job better because many consul here right now has come first time.

So you probably not understand why I come to this place for 20 years and before two.

Situation what we have right now is very strange.

I presented on meeting last week, 250 people come.

You don't know what is doing.

You sit in this chamber for four hours.

It's a nightmare.

Yesterday, almost same situation, you know what is mean.

Too many people come, I don't know, 50 or 60. You spend, talk about one minute for speaking.

I want help you guys because situation for you terrible.

I'll be honest with you.

So, and I talk about this for many years, hundred times.

When you open better room, In city hall, first floor, you know what this mean?

One time per week, you give people chance speak for three minute, all this energy, what this people bring here, you know what this mean?

Hundred, hundred people will be going, people can speak because when you speak three minute and everybody listen to you, you can speak about everything because what is we speak here, you controlling this.

By definition, you acting like a Nazi Gestapo.

That's exactly who you are.

I'm so sorry, only one help you.

So open Berta Roman City Hall so people can come one day per week from 9 to 9, for example, and speak about everything.

There's thousands and thousands of people who will be angry more and more because the economy has fallen down before we make changes.

And right now the situation is exactly critical because right now we look not like a normal republic.

We have no more speakers.

Sign up for general public comment in person or online.

Okay, thank you very much.

So I will go ahead and close public comment and ask you Naomi to read item one into the record and ask our OPCD staff and central staff to join us at the table.

Agenda item one, council bill 120761, office to residential legislation for briefing discussion and public hearing.

Great, thank you.

So we have OPCD and central staff and we have asked Mark McIntyre from the Office of Economic Development to join us because a lot of what we'll be talking about today is the Downtown Activation Plan.

And I have a lot of questions about OED's role in that.

So please go ahead and introduce yourselves and begin your presentation.

Good afternoon, council members.

I'm Jeff Wendland.

I'm the land use policy manager in the city's Office of Planning and Community Development.

And I'm Mark McIntyre, director of the Office of Economic Development.

Asha Venkatraman, council central staff.

Terrific, thank you.

So while they're getting their presentation set up, this is about the office to residential conversion element of the Downtown Activation Plan that the mayor has proposed.

I will say that I've met with two developers.

My office toured a potential office building that would take advantage of this legislation.

It was important to me to actually see on the ground what we're talking about here.

And I think it's important that we bring more housing downtown.

I do think that it's the best way to reinvigorate our downtown core.

But I do have concerns about ensuring that we are providing services for people.

If we're going to increase residents down here, then I'm interested in how we get grocery stores and childcare facilities, maybe even a school and other services that are needed to create the kind of access to amenities that people need in a neighborhood.

Those are the kind of questions that I asked.

I took a tour of the buildings.

I took a tour of the street activation element, which we'll talk about next.

But just for the viewing public and for my colleagues here on the committee, it's important to me to understand what kind of support the city is giving to these conversions and what kind of support we are getting for the people who will be living, potentially living in these buildings.

So with that, I will go ahead and hand it off to you for your presentation.

Thank you, Jeff.

Great.

Thank you, Chair.

So we're going to be talking about conversion to residential and the legislation you have before you.

This presentation starts with a general discussion of conversion to residential and why that's important and why we would like to move this forward.

And then at the end of the presentation, I'll get into the specifics of the bill you have before you today.

So the big picture here is that as many of us are well aware, as a result of the pandemic, office vacancy rates went from roughly 5% in 2019 to close to 25% in downtown early this year.

At the same time, Seattle continues to face a real shortage of housing and rents have continued to increase.

So Mayor Harrell asked us to look at both of these and as a part of downtown activation, think about more residential downtown while also taking small steps to increase housing supply.

Other important points on why we think this is important are that a more balanced mix of housing with commercial and offices downtown has actually been a goal for the city for quite some time, but the pandemic really laid bare why that's so important.

We think it's also important to avoid long periods of vacancy and structures because those really can create some negative perceptions.

Also, residents are just a great way to activate a place.

They have an 18- or 24-hour-a-day presence, and they bring life to a downtown.

And we've really found strong support for this concept of converting offices to housing among the public.

When we go out to meetings, people just think it's a common-sense good idea.

I'm going to note that Mayor Harrell included this as one of his downtown activation plan items.

And our OED director is here today.

So, Markham, do you want to say a couple words about the activation plan?

Sure.

As you're all familiar, the mayor has a downtown activation plan.

The whole purpose of that plan is to get more people downtown.

It's an ambitious plan that has seven different goals, one of which is how do we make downtown more of a neighborhood.

So to Council Member Morales' point, not just more housing options, but also the amenities that really make it feel like a neighborhood.

As Jeff mentioned, we've talked to a lot of people in the development of this plan, as well as when we're implementing it.

And we've heard loud and clear that they want to see more housing options.

So policy is one of the best levers we have as a city to try and encourage that.

Last year, after the plan was launched, there were some up zones announced along Third Avenue, so that's one way we can do it, and we did include some incentives for educational facilities, possibly for school or childcare.

This is another great tool that we've kind of workshopped and come up with, and that's why it's being proposed to you today.

Thank you.

Thank you.

There are several things that the city and not just the city, but also the state are doing to support conversions to housing.

They're listed here on the screen.

So I'm gonna talk a bit about each of these.

Last summer, OPCD did the Call for Ideas competition to bring forward great ideas for conversions.

The highlighted item is what's on your plate today, our regulatory and cost relief legislation.

The city is also providing direct consultation to support building owners who might want to do a conversion.

And the state legislature in this last session passed enabling legislation for a sales tax exemption on the construction of conversion developments.

So first on that list, the Call for Ideas competition from last summer was a lot of fun.

The design and development community came together.

They brought forward 13 quality proposals.

These proposals had everything from floor plans, development feasibility information, suggestions for policy changes like the one we're bringing forward today.

And this process helped OPCD learn a lot of the details and the information about the dynamics of conversions.

Just a few images from that call for ideas.

This is the Paulson and Western buildings in Pioneer Square on Western.

Really cool idea to create a courtyard in the upper level of a historic age structure.

Here's another example everybody is familiar with.

The Smith Tower was brought forward as an idea and the floor plan there shows how that great iconic building in Seattle could be, you know, what if it were converted to residential and how interesting that would be.

Direct consultation to support owners.

So we're doing more than just legislation.

We're talking with some owners about applying for funds from federal funds that could be available.

And SDCI has done a fantastic job of being available to talk to building owners early in the development process to give them some guidance about the seismic and structural codes or the energy codes and some flexibilities that could be there before they have to get too far into the permanent process and spend too much money.

I want to just note this.

It's not on your agenda today, but that state sales tax exemption is something that we'd like to pursue and bring back to you.

The council would have to make a local action to enact that sales tax exemption.

So we're working on it, and we'd love to come back later with that item as well.

Just real quick, this slide, you can read it when you have time, but we think it's interesting to think of a scenario where an office building does not convert versus converting.

And basically, if there's no conversion, we're facing a reality where there could be a long period of vacancy or zombie buildings in and around downtown.

And we think there's a public policy reason why the city would want to intervene to provide some support to shift that over from scenario A, no conversion, to a conversion scenario that brings hundreds of residents into a new structure where it might otherwise have been vacant for quite some time.

This is just an image of a structure in Pioneer Square that's currently vacant.

We know the negative effects of that.

There's an increased likelihood of sort of foregone maintenance.

Also, vacancy just provides negative perceptions around safety and comfort.

So if we can get a conversion, and even if there's a small number in key locations, it can really have a big positive impact.

Well, and I'll just say to that point, Jeff, just yesterday we voted on a bill to address the fact that we have so many vacancies across the city and the potential safety hazards that they pose.

So I think, you know, that concern applies downtown as well and just trying to make sure that we're doing, in this case, you know, looking for some other policy lever to pull to make sure that we're not leaving those buildings vacant.

Absolutely.

This is possible.

There are examples out there.

This is an example of a historic building in Tacoma that was converted before, started before the pandemic.

And they're nice historic structures in many cases that can have appealing features for residents.

This is a very important slide because it's showing you that the cost of conversions, which is in the orange bar here, at $475,000 and up per unit, how that relates to the cost of construction for ground-up construction on just a site without a building on it.

And what it's showing you is that the cost of conversions is as high or higher in many cases than a ground up construction.

So this is the case why we really feel like the city and the public sector should take some action to support bringing some of those costs down, because without that, the cost of conversion is so high that you will just not see conversions take place.

We don't think there will be any meaningful number of conversions, but for supports like the one where we're bringing forward today.

And on that, why is it so expensive?

It's not obvious really why reusing a building would cost so much, but these are some of the factors.

Often you have to do a seismic or structural upgrade, an energy code upgrade.

The plumbing and ventilation systems are completely different for a residential building than they would be for an office.

And there's also a lot of uncertainty or unknowns when you get into, everyone's done a kitchen remodel and you don't know what you're getting into at the outset always.

Okay, so that was the overview on conversions generally, and this is moving into the legislation that's before you today.

This legislation would exempt conversion proposals from dimensional and design development standards in downtown commercial and mixed use zones.

It would apply to conversions that are just being proposed.

So existing structures, but new proposals to convert them, as well as projects that are in construction or projects that have been permitted but not started.

You could convert any one of those from office to housing.

This proposal would also waive the MHA requirement in this very limited case of converting an existing structure.

I'm going to talk about why we think that's important and appropriate in this case.

I also want to note that the initial bill provided all the exemptions in that first bullet point, including for overlay districts, but OPCD did work with Council Central staff on the amendment that Council Member Morales has brought forward, and we think that's a good correction.

It was inadvertently exempting from overlay districts like the SHORELINE MASTER PROGRAM DISTRICT AND THE HISTORIC DISTRICTS, SO WE SUPPORT COUNCILMEMBER MORALES'S AMENDMENT ON THAT ISSUE.

I JUST WANT TO FLAG THAT AT THE OUTSET.

EXEMPTING CONVERSIONS FROM MHA, WHY THIS IS IMPORTANT.

It brings, first of all, it brings the cost down.

It's one tangible way you can bring the cost down to be competitive, so we do have some conversions.

And we do not think there's any conflict here with MHA's foundation or principles, and it's a very narrow case.

In fact, we probably think it was not perhaps the best approach at the outset to apply MHA to conversions of existing structure.

And I just want to touch on these two points.

Number one, MHA's basis and purpose is a development incentive program.

So as you know, there's always an up zone or a bonus given when we put an MHA requirement in place.

And the mandatory housing affordability it goes in tandem with that bonus.

So developers are getting a bonus, and then they have to contribute towards affordable housing.

In this case, if you're a builder and you're just converting an existing structure within that existing envelope, you're not accessing that bonus.

So we think it's fair and reasonable not to impose the requirement.

Also, MHA is intended to mitigate impacts.

And in this case, again, if you're just converting an existing structure that had one use, that's just being replaced with a new use, there's not a new increment of impact on things like traffic that would cause the need to mitigate that impact, or in this case, on housing.

So we're proposing the MHA exemption.

We think this is very important to include in the bill and is a tangible way you can really move the needle and encourage a few conversions to take place.

So lastly, just wrapping up here, overall, we estimate that if you pass this legislation and we do other supports, there could be something like a dozen conversions that could create 1,000 to 2,000 new homes within a seven-year-ish timeframe.

Without this legislation and other supports, we really don't think we're gonna see any meaningful conversions or any in downtown.

A SEPA determination was published and there was no appeal.

And Mayor Harrell really does place a high priority on adding housing downtown, including in conversions as a part of the downtown activation plan.

And we strongly recommend that you pass this legislation.

Thank you.

Colleagues, if you have questions, please feel free.

I will start in the meantime.

Asha, did you wanna add anything to this?

I didn't wanna, they did a great job of describing what the legislation actually does.

There are a couple of issues that I raised in the memo that I can bring up now or after you all are done asking questions.

Okay, well, let me start with a couple of questions and then we can see where we go.

So if we go to slide, I think it's slide 13, the development cost comparisons, Um, I just want to make sure I understand this chart.

Um, so there it starts with the, the, um, lowest, uh, floor.

So 75 feet, um, up to 400 feet downtown.

These are the different costs for, uh, construction and is this, um, We're talking about converting to residential.

So is this construction costs for residential construction downtown at these different heights, or is this office construction at these different heights?

This is residential construction.

Okay.

So even at only 75 feet, if we're building downtown residential, it's about 400,000 per unit.

Yeah, this wouldn't be limited just to downtown.

Anywhere in the Seattle market where you build a 75 to 85-foot building, that's going to be the cost.

Okay, that's helpful.

Thank you.

And then I wonder if you can talk a little bit about...

and maybe this is a question for Markham as well.

As I said, I'm interested to know what it takes, what other levers we could be pulling to make sure that we are increasing access to services downtown.

So can you talk about sort of the economic situation that might be keeping some of these properties vacant and what OED might be doing to help curate services or businesses or other ground floor activation

keeping some of the current office buildings vacant?

Is that what you're asking?

That's a big question.

And pretty much every major metro area around the country is wrestling with it in some way, shape, or form.

And that's core to why we have a downtown activation plan is previously the downtown core was largely activated by office workers, 9 to 5, Monday through Friday.

And that's changed.

And it's likely never going to go back to kind of the same rhythm as it was before.

And so that's impacting...

as you're describing kind of office use space, frequency to small businesses, transit use, all sorts of things.

And that's really kind of the crux question that we're trying to wrestle with.

So some of it has to do with local conditions, whether that be public safety or just behavior patterns that change during the pandemic, people being used to working from home and seeing value in that.

Some of that is just the nature of work has changed.

So what we're trying to do to activate it is make downtown a great place to be, not just to work.

whether that's more of a neighborhood, more of an arts and culture district, making sure that people feel like their families can come down here.

Those are all ways that we're trying to bring new people downtown that weren't necessarily the office workers prior to the pandemic, but to make it attractive, interesting, safe, and welcoming for all those different types of people.

Thank you.

Colleagues, any questions before we turn it to?

Yes, Councilmember Moore.

Thank you, Chair.

I had a couple of questions.

The one question I have is, so let's say we convert these buildings, what is the cost going to be for the unit?

Who's going to be able to afford to live in these buildings?

It seems to me it's going to be high-end earners, and that's not really the population that we so desperately need to be focusing our city subsidies and resources on.

Thank you for the question, Councilmember Moore.

In the call for ideas, there was rent information along with those proposals, and it really was a range of different rents.

So I wouldn't assume that...

Or I would push back on the assumption that these are all going to be very high-rent sort of luxury units.

There was quite a range, including one bedrooms in the...

the $2,000 rent range, which isn't cheap, but it's not that far out of step with middle income market rents.

There were even some proposals that had co-living formats, which are, the building has some shared features and those provided even lower rents in the $950 range for like a small, very small efficiency type unit.

So in sum, we think this would produce a range of different types of rent.

Okay, but how do we guarantee that?

I mean, just because they put it in a nice proposal doesn't mean that that's how it's going to pan out.

As the city, we need to actually get that in writing or make sure it happens through ordinance.

If we're going to waive MHA for a real benefit to developers, we need to get something in return besides just more high-end housing.

So I'm interested in how we might do that.

I mean, if you're saying that it's basically the same cost as it is to build new housing, well, new housing requires MHA, or it requires onsite performance.

Perhaps there's some way that we can require onsite performance if we're looking to really have mixed income in downtown and commercial areas and mixed use, you know, we want the diversity of income, then we need to be doing that in these places by on-site performance.

I mean, thank you for those comments.

One thing I'll note that's a tangible response for you is that If you elected to enact the state sales tax exemption, that would include a 10% requirement for 10% of the units to be affordable at the 80% AMI level.

That's not on your agenda today, but if we bring that back, that would be one specific way that you could make sure there's some at least moderate income housing.

And I thank you for that suggestion and other suggestions I'm certainly open to.

And my other concern about this is that it's a permanent situation and it would capture some multifamily housing.

So it seems to me that every time there's legislation that comes down to this floor, there's an exemption from MHA and we are slowly chipping away at MHA.

We don't even have provision for MHA in the current comp plan, which is really troublesome.

So I am very concerned about what the message this sends about the commitment to MHA is a real tool to getting truly affordable housing.

Thank you, Chair.

Sure.

Council Member Strauss and then Council Member Wu.

Oh, Council Member Wu can go first.

Oh, okay.

Please go ahead.

Thank you, so drawing from experience, my family has a building that's in downtown, Chinatown International District is part of downtown.

We developed from a hotel into apartments, and we did the whole analysis where we looked at who would most likely be living in this building.

people who work in downtown, office workers, people who are retail.

We design the building around that, make sure there are closets towards that market target audience that would be most likely to round.

And we also, you know, I think we also, there's the MFTE program.

I hear you, MHA is really important.

And I think we need to figure out some way where we are able to incentivize affordable and workforce housing in downtown's core to allow for people to work and live there.

But also, I think a lot of these, looking at the pro forma for a lot of these projects, MFTE seems like most, most also as an incentive maybe many of them are doing that as well but the costs are really high when it comes to um you know redeveloping a building it's three times more than built new and so i think this is a good incentive program i feel like it does there needs to be more work to be done on this but i'm generally supportive thank you councilmember strauss

Yes, I just wanted to say regarding downtown activation overall, it's the solution by a thousand implements.

Right.

There's not a silver single solution that will revitalize downtown.

And Director McIntyre, I have to say it's working and there's still more work to do.

And this bill represents a lot of that.

Just reflecting on the bills that we passed last year, and I think especially with land use bills, it takes a long time for the impact to be felt of what we've passed.

And so the benefit of this bill before us is it's not a zoning change.

to wait for a building to go through the permitting, MUP, et cetera, building construction.

We're actually just taking our existing shells, repurposing them.

And Jeff, your presentation was very straightforward.

And I think for folks that are not familiar with land use or building, hearing things like changing the plumbing and elevators sounds very easy when you say it.

And for the other folks in the room here, we all know that change, you know, a residential elevator is very different than a commercial elevator, just even the landing zones within those buildings.

looking at the building and the requirements that we have for windows in bedrooms, windows to square foot ratios.

Really, we're looking at a very limited number of buildings because they likely had to be built before World War II when we did not have central air conditioning, right?

Like there are a limited number of buildings that can actually benefit from this.

And we need more people downtown, whether they're rich or poor, we need more people downtown.

And we've got many low-income or income-verified buildings downtown, and we just need more people.

And so, Councilmember Moore, I hear you in what you're saying about...

Sir, this is...

Please don't disrupt the proceedings.

Chair, this is the third time that Mr. Zimmerman has become a distraction for me while performing my job as an elected council member for the city of Seattle.

The first time was as he was speaking to another member of the audience in a loud whisper while standing.

The second time was coughing in the same form and fashion multiple times while others were presenting, and this third time interrupting me while I'm on the dais.

I'd like the record to reflect Mr. Zimmerman is distracting and beginning to harass me.

Thank you, Council Member Strauss.

Mr. Zimmerman, I'm going to ask you to keep your comments to yourself or be removed from the chamber if you can't.

Thank you.

Please continue, Councilmember Strauss.

To be honest, I kind of lost, oh, I lost my spot.

But talking about mandatory housing affordability and exemptions, last year we passed the maritime and industrial zoning changes where we did provide an MHA exemption in exchange for unreinforced masonry pilot project, as well as cross-laminated timber pilot project as well.

And that was based on the density bonus that Jeff mentioned.

Your presentation was so streamlined.

You covered a lot there.

But I absolutely hear you, 100% agree with you in values and in spirit.

I think what is challenging is what Jeff presented, at least from my view, is MHA is based on a bonus.

And so unless these redevelopment projects had another floor that they accessed, they aren't accessing the bonus that is the exchange for MHA.

I'd love to keep working with you to figure out what elements we do have in there to ensure that there are affordable units downtown because a vibrant and healthy community is a community of all economic spectrums.

I guess I don't have a question, gentlemen.

Asha, maybe this is a good time for you to address the issues that you raised in your memo.

Sure, happy to.

As you all have been discussing, the first issue that I did raise in the memo is about the exemption from MHA.

And I think you all have probably discussed that pretty thoroughly at the moment.

But I think on balance, it is for you all to consider whether you want to incentivize conversion without MHA, which would result in an increase in housing units, though, as you've indicated, it's not fully clear what the income level would be in terms of being able to afford those units.

On the other hand, if MHA were to apply and that was a key financial incentive that prevented developers from converting buildings, then we would end up with no more additional units regardless of the income level.

It's just one of the issues for you all to consider as you think about whether you all want to incentivize conversions versus new development that would be otherwise subject to MHA.

The second piece, the second issue that I did raise in the memo was about exemptions from street level use regulations.

Part of the executive's rationale and as OPCD explained is for the downtown activation plan to be increasing the number of people downtown, economic activity that's occurring.

But as this council bill indicates, exemption from those street level use regulations has some impact on how those areas would be activated if conversion did occur.

And so you all may want to consider the balance between incentivizing conversion given fewer regulatory barriers that would be in place if there were an exemption from street level use regulations.

But also if there is an increase in the residents that do live in these buildings after conversion, there are not street level use requirements, that that could result in a different sort of activation.

A lot of the time for residents that live on ground floor units, there are privacy concerns.

And so the shades might be drawn the whole time.

So you'd have an increase in people that are living there, but not necessarily an increase in people that are using the amenities that might otherwise be available on the ground floor.

So instead of requiring a cafe or some sort of retail store, you have units on the ground floor and that just has a different impact on activation and the availability of services to people that then live in those buildings.

As a point of, given the scale of how many buildings might be converted, it's possible that the buildings in those locations might already have a lot of active, robust street level use that is happening around them.

And so it's possible that the impact of having more residents in that area without the requisite street level uses may not be a huge impact, but without knowing by building to building what the level of street use is and what the current situation is, It just may not be easy to tell from a legislative level whether those street use regulations should be in play or not.

Okay.

Okay.

And the last piece relates to many of the other exemptions that conversions would be subject to.

So for example, as OPCD indicated, there are exemptions from things like parking regulations.

And so if there are more residents coming in, that might increase for parking, however, because there are no requirements to develop things like offsite parking that could have an impact on how traffic moves through that area.

As Jeff indicated, the major exemption here that I want to talk about is from Title III, Subtitle III, Division III, of the land use code, which is this piece of overlay districts, which includes the shoreline master plan regulations.

As Jeff indicated, they're including the shoreline master plan regulations from this legislation was more of an oversight.

And so the amendment that is on the agenda would address putting those regulations back into the legislation.

and then there would not be any sort of commensurate impacts that would trigger any other processes that are required if we are doing amendments to the Shoreline Master Program.

That exemption of Division III also does exempt special review districts from this piece of the legislation.

We have two special review districts, the Pioneer Square Special Preservation District, excuse me, and the International Special Review District.

And so the exemption would mean that any conversions that are taking place in those areas wouldn't go through those regulations that are usually required when it comes to special review districts.

If the amendment were to restore the special review district regulations, then it would go through those procedures.

Although the level of impact differs depending on what the actual change is.

And so for some, in some circumstances, there's an entire process in which the project has to go through board approval.

However, there were, an ordinance I think you all passed, the council passed last year, created some more administrative streamline so that all projects don't have to go through the full board review process.

There is some administrative way to get those approvals.

And so there is some flexibility about how much additional process that would require at the end of the day.

And so the last piece that I'll just mention is one of the exemptions is also for major institution plan overlays.

And this, I didn't flag this very strongly in the memo, but it did come up as we were thinking further about this, just in the sense of if there are exemptions from the major institution plan overlay regulations, In essence, that would mean that conversions would be able to happen sort of outside the normal process in which a major institution considers changes to anything that's happening within the overlay district.

Whether those would be particularly onerous or not, we can certainly do more follow-up and more research on what the implications of that would be, but it's just an issue of whether you all would want that additional layer of process and how much of a disincentive it might be for developers that want to convert if they did have to go through additional process.

So those are the main issues that I raised.

Happy to answer questions or do any follow-up.

Thank you, Asha.

And I do want to say the amendment that is posted right now was intended to be a technical change.

So I do want to follow up because it wasn't the intention to exclude Pioneer Square.

That is one of the areas where...

there was significant opportunity to use this tool for the office to residential conversion that could really benefit from this.

So we'll be following up on that as well.

Council Member Rivera.

Thank you, Chair.

I will thank you to the department who gave me a briefing earlier about this proposal.

I do want to clarify Well, this is actually something across the city.

It's not just for downtown.

But also, there have been very limited buildings that have been identified as potentially viable in terms of conversion.

So this would apply to a very limited set of buildings, at least as identified now, correct?

If I... Correct.

And then in terms of even, I noticed here because you had a competition, you indicated there are about three buildings out of that competition that came out as potentially viable for this.

And then identified another few buildings that might be viable.

You also talked and presented about the new projects that could apply and projects in construction that could apply.

Do you have a sense of how many new projects would be I don't have a sense of how many new projects that have already applied that could be viable.

I understand that they've applied to be and have plans to be commercial, and those are the ones that if they decide to pivot and become residential, that they could avail themselves of this opportunity.

regulation.

Do you have a sense of how many that is?

I can just tell you what I know.

And I think you're speaking of like new construction or recently construction that kind of got caught up in the shift in the market where the office component is not viable.

I know of two interested buildings we've heard from.

I mean, when I say I, I mean the office is aware of two recently constructed buildings that might want to explore this.

And mainly because I imagine it's very difficult to convert from commercial to residential.

So that's why it's really applicable to a very small percentage of existing buildings or even new, newly contemplated buildings that were supposed to be commercial.

Yes, absolutely.

And ongoing, do you think that the you know, when you think about 10 years from now, do you think there'll be more buildings that would lend themselves to this?

Um, or do, are we thinking that long-term this is still always going to be limited to a very few subset of buildings that really lend themselves to being converted for various reasons?

Yeah, it's our estimate in the report was, uh, a dozen or less within the seven year timeframe.

Um, I think we would be confident saying that even over a longer timeframe, we still believe it would be a relatively small number.

And Jeff, part of the reason for that is because of the floor plate of older buildings, right?

Because older buildings were constructed with, you know, hallways and it allows, I'm clearly not a builder, I'm sure somebody else here will be able to explain this better, but the older buildings are just laid out in a way that allows for more units to be put around a perimeter and newer buildings are built with wide open space that makes it really hard to cut up and and turn into apartments, especially when you have to put a window in each unit and a bathroom and a kitchen and all of that.

So it's harder to do these larger, newer buildings.

Yes, exactly.

I had one last question, Chair.

And then in terms of the sales tax exemption, I know you said we're not talking about this and you'll come back to talk about that, but is it contemplated then that we would move forward with the legislation since we actively have to codify that state law and then these buildings could avail themselves of that and then it would be they'd have to be or it is required that 10% of those units would be 80% AMI.

That's correct.

That's what the state legislature made available to cities.

Do you have a timeline of when that legislation would be transmitted?

I'm sorry, I don't think I could provide a timeline right now.

Okay, we could follow up on that.

Any other questions, Council Member?

No, thank you, Chair.

Council Member Wu, is that an old hand, or do you have another question?

Oh, I actually have a comment.

Okay.

Well, I know a lot of these buildings are older, and so I think they would be able to utilize other incentives like historic tax credits, which means they would have to go through a very similar process as they would have to go through ISRD or the Pioneer Square Alliance.

historic district review process.

And so that kind of works hand in hand with that group.

Regarding Asha's concern regarding street level uses, I think it'd be fair to include or explore retaining original uses of street level of buildings.

If something was not there to begin with, we don't need to put it in there, but it was originally a storefront.

It'd be great to explore things to allow it to continue to be a storefront or maybe look at a live work scenario where they could have a store and be able to live upstairs, connecting to that unit.

Something I'm interested in.

But I think every little bit helps.

And so I'd be really interested to pursue this as well as the sales tax exemption, because I know there are a lot of buildings in historic District Pioneer Square, CID, where the entire building is not habitable.

Maybe the ground floor is only utilized because of seismic and fire code that has changed, and the upper floor is not compatible.

So I know that there's a lot of interest in redeveloping these buildings, but it's very hard.

So I think this might help with jumpstarting some of that development.

Great.

OK, well, let's go ahead and open up the public hearing.

It looks like we've got eight folks online.

And thank you for your patience, everybody, as we get through the discussion here.

And we've got some people here in public too, in chambers as well.

I am now going to open the public hearing on Council Bill 120761 and 120771. Again, as a reminder, please make sure that when you begin your remarks, you indicate which issue you're speaking to, and I'm going to hand it to Naomi to get us started.

Each speaker will have two minutes, and then once the public hearing portion is over, we'll move to the second.

Okay, Naomi, please read the comments.

Starting with in-person speakers, we have Ed Hewson, Patrick Foley, Mark Angelo, Ed Pulisic, Alex Zimmerman, Steve Stello, Ryan Doramo, and Ian Morrison.

We'll begin with Ed Hewson.

Chair Morales and council members, my name is Ed Hewson and I'm a lifetime resident of West Seattle and a multifamily real estate developer who's very active in the city.

With my partners, I've developed residential buildings in Roosevelt and Belltown and have several projects in entitlement stages in those neighborhoods and in West Seattle, in fact, over 1,000 units.

And I'm here today to comment on Council Bill 120761 and related to conversion of non-residential structures to residential use.

I and my partners fully support this legislation and we hope to use it on our Seattle House project that's currently under construction.

I'd like to give a shout out to the people who came up with these ideas.

I know how difficult it is to start a brand new project.

I feel lucky to have one under construction, but it's really, really difficult to make these pencil.

And I think right now in the city, every single new apartment is gonna count.

So I appreciate the innovation.

I know how difficult it is to try and convert a building that is currently in place.

And so taking some of the fear factor out of it and taking advantage of developers such as me who might be having trouble with their existing projects, finding a way to get them to actually lean in and help us make use of some existing structures.

So more power to you and good job.

Our Seattle House project is in partnership with Concord Pacific and we're located at Sixth Avenue between Bell and Battery Streets.

It's a two tower residential project that will provide nearly 1,100 units of residential along with ground level retail and below grade parking.

It's also designed to include a hotel, a non-residential use, but we strongly feel that it would be better and more suitable to add apartment units instead of a hotel in that podium.

This conversion, unfortunately, is not possible under the current land code restrictions.

Sir, your time's expired, but thank you.

But anyway, yes, please vote for it.

Okay, thanks very much.

Very helpful.

Up next, we have Patrick Foley.

And just as a reminder, folks, when you hear the chime, that means you have 10 seconds left.

Thank you.

Again, I'm Patrick Foley.

Lake Union Partners is my company.

We're a Seattle-based developer, mostly known for multifamily residential.

And the buildings I'd say we're mostly known for are a mixed-income community over at 23rd and Union, known as Midtown Square.

And we've also done a lot of historic preservation in the city, specifically the State Hotel at 2nd and Pike Street that we opened in 2019. I'm here to speak in support of this legislation for office to residential conversion.

I will say that I think all components of this legislation are necessary.

I don't think it can be a menu of items.

One of the initiatives we are specifically focused on is working on converting Pioneer Square to a mostly residential neighborhood to the best of our ability.

We don't own the buildings.

We are working on acquisitions for some, but we think that that is the most exciting, best place to do office to residential conversions because As Council Member Morales stated, the floor plates are actually laid out just right for that.

And so we have a lot of preservation experience.

We're interested in that and being a mixed income community as well.

We think that in a seven year, seven to 10 year period, we can bring 2000 units to Pioneer Square, which means roughly 3000 people, we think.

And so all of the services are going to have to be recruited to the neighborhood, the grocers, who's going to be the shoe repair, all those types of things.

So we really think that this legislation is important, specifically for Pioneer Square.

These projects are razor thin, so every little bit helps.

All of these laws that you're talking about are really, really necessary.

I also want to speak in support of this potential amendment for the overlay removal of the Pioneer Square Preservation Board.

I'm in favor.

If you're using National Park Service tax credits, then you would go through that process.

If you're not, you would go through the Pioneer Square Preservation Boards.

Up next, we have Mark Angelo.

CHAIR MORALES, VICE CHAIR STRAUSS, AND COUNCIL MEMBERS, THANK YOU FOR THE OPPORTUNITY TO ADDRESS YOU TODAY.

MY NAME IS MARK ANGELILLO AND I'VE BEEN A RESIDENT OF SEATTLE FOR 32 YEARS.

I'M THE MANAGING MEMBER OF STREAM REAL ESTATE.

WE'RE A SMALL LOCAL REAL ESTATE DEVELOPMENT INVESTMENT COMPANY BASED IN SEATTLE AND I'M COMMITTING IN SUPPORT OF THE PROPOSED OFFICE TO RESIDENTIAL LEGISLATION, COUNCIL BILL 120761. We acquired a 1980s vintage office building located in the uptown Lower Queen Anne neighborhood in December 2023. The building has been vacant for two years.

We have been evaluating this building for its potential for conversion from office to residential as well as other potential uses.

As you all know, the conversion from office to residential is a complex and expensive endeavor, but one we believe that more housing is essential as part of revitalizing our urban core and supporting active, vibrant neighborhoods.

The bill before you incentivizes the conversion of commercial buildings to residential buildings.

With the shift from remote work and online shopping, there is an increasingly large number of vacant commercial buildings in our city.

At a time when we have a housing crisis, it seems logical to transition these buildings into housing units.

Transitioning these buildings into residential is not easy from a construction standpoint and is largely the reason the private sector hasn't been doing this proactively.

Plumbing and electrical aren't located where they need to be.

Structural and seismic upgrades are typically needed and nearly all internal walls need to be reconfigured.

The incentives in this bill will be a good step towards making more of these projects possible and helps ensure that not only are we adding units to the housing market, but in our case, also adding affordable units to the marketplace because we plan to participate in the MFTE program, and if the council adopts it later this year, the new state law incentives, State Bill 6175 for the adaptive reuse housing that will require 10% of adaptive reuse units to be affordable for 10 years at 80% of AMI.

Thank you for the opportunity to testify.

We encourage the council to pass this legislation and Senate Bill 6175 legislation to support more conversion projects throughout the city.

And I'm happy to answer any questions.

Up next, we have Ed Paluchok.

Good afternoon.

My name is Ed Paluchok.

I'm a former member of the Seattle Downtown Design Review Board, and I am an architect with Mithun, a national practice based here in Seattle with architecture, interior design, landscape architecture, and urban planning.

I'm here in support of the proposed legislation to addressing the regulatory and cost relief for residential conversions.

Since last August, our firm has been working with a client to evaluate the conversion of eight floors of existing office space within a relatively new mixed-use high-rise.

Despite the creation of 216 new residential units for families in the upper portion of the tower, just under 200,000 square feet of office space has remained vacant since 2019. Conversion of the vacant office space requires flexibility with the land use code as we cannot alter our building footprint and we feel we have a viable solution.

The proposed legislation will support this project's conversion and result in upwards about 150 new units of housing in Belltown.

We will note that the project has already paid MHA fees for the existing office component.

So the MHA waiver is as proposed in the legislation is critical for us.

Otherwise the project will have to pay MHA fees twice and our client would probably render this project unworkable.

Converting this office space to residential will bring more residents to Belltown who can help activate the streetscape and support local businesses.

Adaptive reuse is also the more sustainable solution and supports the city's goals for reducing greenhouse gas emissions as repurposing existing buildings reduces embodied carbon that results from the construction process.

Thank you.

Up next, we have Alex Zimmerman.

He's no longer here.

Up next, we have Steve Rubustello.

If you're not going to use MHA, raise it.

And the goal that originally was for MHA was 50-50.

It is not 50-50.

Now, you don't have hardly anybody actually putting the units in their building.

If you have the higher MHA, you will have more low cost units spread around the city and more diverse, which would be good.

The main thing I was concerned about is the first floor.

Uh, now that residential is comparable or in many cases more profitable than commercial, which is a reverse of what things used to be.

We want to maintain the business districts, especially the small business districts.

There's been wars fought on this before and if you want to bring the residential and the business community together against the developers, give them free reign there.

Because I do remember Jim Street telling me that in the urban villages and commercial areas, they were going to allow the lower floor to be residential.

And that brought several communities together to change that and I can clean it up.

Jim Street told me they wouldn't blanky blank, couldn't stop it basically.

Well, we did.

And we also got a good chance to change a good deal of other things because we brought together a coalition that was concerned about a number of things.

So that bottom floor has got to remain in the commercial or the office mode.

The rest of the would be helpful to have housing.

Quick reminder that this is combined public comments.

So if you want to speak to both bills, please indicate that.

Up next, we have Ryan DeRamo.

DEAR COUNCIL, MY NAME IS RYAN DORAMO AND I'M WITH THE ARCHITECTURE FIRM GRAPHITE DESIGN GROUP.

I'M GOING TO SPEAK IN SUPPORT OF THE OFFICE TO HOUSING LEGISLATION.

AT GRAPHITE OUR EXPERTISE RANGES FROM LARGE COMPLEX MIXED USE PROJECT TO SMALL SCALE STREET LEVEL RETAIL.

THIS HAS GIVEN US A FUNDAMENTAL UNDERSTANDING OF WHAT MAKES OUR DOWNTOWNS THRIVE AT THE MICRO MACRO LEVEL.

RIGHT NOW AS YOU GUYS KNOW DOWNTOWN IS NOT FULLY RECOVERED.

But with these conversions, neighborhoods downtown can diversify their uses, leading to a diversity of users, and in doing so, restore the economic vitality of our core.

I'm also our director of sustainability, and I can say with confidence that mixed-use neighborhoods are the foundation for sustainability to even begin.

The exemptions proposed are a positive first step, but we encourage you guys to go further.

What we're talking about is saving buildings, and that is preservation.

These older buildings are the most likely candidates for conversion.

And so what we need to do is re-examine the current landmarks in this context.

The landmarks process is long and uncertain, which brings an element of risk.

That could see projects abandon the pursuit altogether.

So we encourage you to consider that and to bring along all the city departments from SDCI, OPCD, and the Department of Neighborhoods in reforming the full process to encourage these conversions so they could take place.

Thank you.

Up next, we have Ian Morrison.

Thank you, Chair and members of the committee.

Ian Morrison on behalf of McCulloch Hill here to speak in support of both the Office to Residential and the Street Littleville Bill.

I want to speak first to Councilmember Rivera's question about the Office to Residential conversion.

You've heard from many of the owners that are looking at doing existing buildings.

Your question about what about new buildings, I think it is, as a land use attorney, we talk to folks who are trying to finance those projects that have a MUP that are trying to convince lenders to lend to them.

This would be a tool that at least we're aware of at least five projects that have a MUP, but not yet the ability to secure construction financing would look at to convert portions that maybe were entitled as office or lodging.

And so this is a real economic development tool.

Notably, as Jeff mentioned, those projects would pay MHA fees.

and create construction sales tax.

So I think it's an economic development tool, not just for the old existing buildings, but also for that small subset of buildings.

And notably, those are throughout the city, including one or two in the University District, Councilmember Rivera.

So I think it's a great tool for all types of buildings to incentivize that activity and investment and make some of those projects pencil.

I know you're going to hear more about the street level use bill, but I also would like to speak in support of that for It is a tool, and we want to applaud the mayor and OED, OPCD, and SDCI at looking at this.

It is something that will help bring more people into areas of downtown and uptown.

It is not, as Councilmember Strauss said, a silver bullet solution, but it's one of those tools to bring more flexibility.

And I'll speak specifically to life sciences.

Life sciences around downtown and uptown on Fifth Avenue are a cluster.

They want to be there, but we are competing with those life science users with Bothell, San Francisco, Boston.

And so when you could allow for life science uses to be on the first floor, it is going to be something that those users want to see, those R&D and life science users.

It's something that we could then say, yes, you could move those to the first floor as opposed to looking at maybe they go to Bothell or maybe they look at San Francisco.

So that would provide some flexibility.

And I will note life science users are in person.

So it brings activation because those employees are going to be out there spending and going to lunch and using the park.

So we would encourage both bills to be passed.

Thank you.

Up next, we have Nick Santini.

Good afternoon, everybody.

My name is Nick Santini.

I'm a senior development manager at Lincoln Property Company.

I'm here to support the mayor's proposal for interim street use level flexibility.

As everybody knows, uptown neighborhood in Seattle is becoming a life sciences hub.

However, it is struggling to recover from the pandemic.

Lincoln is on the verge of completing both 222 Fifth Avenue, a 200,000 square foot state-of-the-art research facility on Fifth Avenue and Thomas, which is also along the City Green Street, as well as the pre-construction and early development efforts to get Fifth and John off the ground.

Fifth Avenue is a required retail street, but is constrained by the large monorail columns and high-speed traffic.

It does not make for an inviting retail street.

The city's code and design review board required us to put retail in these challenging locations while our Thomas Street facade has mostly lobby.

We believe in active uses along the street where feasible, but it's important to recognize that not every street is conducive to retail.

With the mayor's proposal, we would rearrange ground floor so the retail could be located along Thomas, which is a green street, alongside the plaza, and we would then shift our building lobby over to Fifth.

Current code will not allow for this.

This flexibility would create more vibrant, successful retail along Fifth and John, excuse me, along Fifth Avenue in the Uptown neighborhood.

Lincoln recently received its MUP for another 100,000 square foot lab just south of Fifth Avenue along John.

We have yet to start construction, but that site has even more challenges for viable retail.

We have serious concerns of that area becoming a dead zone.

We encourage the city to support the street level use flexibility ordinance set forth by the mayor.

We would also encourage the committee to amend the ordinance to allow for projects with existing MUPs along Fifth Avenue to also be eligible for street level...

In closing, we would encourage the city to support these opportunities for more high-quality jobs in the region.

And the last in-person speaker is Gary Lee.

I'm Gary Lee and I'm a city planner from the city of Redmond.

Been there for 33 years and I just retired two months ago.

I'm also a member of the Chinatown Block Watch.

I want to thank you, thank staff for excluding the CID, excluding the the active streets program item number 71 in the Pioneer Square and CID neighborhoods.

I say this because it's likely that unintended consequences could happen there because homeless shelters and similar homeless services are allowed under the category of institutions.

That's page two, line 21 of the ordinance.

I say this because it will likely cause overconcentration of homeless shelters and human services in Belltown, like it has in CID and Pioneer Square.

There's a lot of interim street activation allowed in Belltown, according to Map 1G.

With the existing comprehensive plan, the existing community well-being element in the 2035 comp plan begins to strategically address impacts, as it talks about where places of human service facilities can be.

as well as existing downtown policy DTHSP5, which says, seek to avoid over concentration of human services in any one area of downtown.

Those are great policies that acknowledge there could be unintended consequences that should be prevented by zoning regulations to implement those policies.

However, no such zoning regulations have ever been established.

Now, with the draft One Seattle plan, with the streamlining of the reduction and pages in the document, the entire community well-being element has been deleted, as well as downtown policies like DTHSP5, which specifically addresses the overconcentration of such uses.

In closing, number one, look closely at the institutional category that allows community uses in this ordinance.

Number two, view of the draft once you had a plan, look at including the human elements and services in that plan.

It's not included in the one.

That is all the in-person speakers we have signed up.

Online, we have seven speakers signed up, starting with Chris Woodward, followed by Natalie Quick, then Lars Erickson.

Chris Woodward, if you press star six to unmute yourself.

Chris, you're up next.

If you want to press star six.

There we go.

Thank you.

Good afternoon, council members.

My name is Chris Woodward.

I'm providing comments today regarding Council Bill 120761. I'm with the Alliance for Pioneer Square.

We're in District 1. The Alliance is an economic development nonprofit working for the betterment of the Pioneer Square Historic District.

Just to start off, thank you to this committee for your work on exploring how current office buildings in Pioneer Square could be converted to residential housing.

We recognize this opportunity within the district given that current office occupancy rates continue to be much lower than pre-pandemic levels.

We are interested in today's hearings considerations around the council bill and its potential amendments.

In general, we are supportive of streamlining the process to foster residential uses in our neighborhood.

However, we would like to understand how projects would be determined eligible or ineligible in meeting outlined criteria to ensure that historic character of the district remains intact.

So the big question here is, would this be done by administrative review or within another stage of the process?

We look forward to engaging in this important discussion moving forward.

Thank you for your time.

Up next, we have Natalie Quick, followed by Lars Erickson.

Please press star six to unmute yourself.

Good afternoon, can you hear me?

Yes.

Wonderful.

My name is Natalie Quick, and thank you for the opportunity to comment on Council Bill 120761. This morning we submitted a group letter from the Seattle Chamber, DSA, NAEP, Washington State, FutureWise, and architecture firms Perkins & Will, Graphite, Ford & Bellum, and Clark Barnes.

Seattle's downtown office vacancy rate is around 28% vacant, which is still well below the national post-COVID average of 20%.

The proposed office-to-residentialization is a great tool to help to reuse that will result in more housing production throughout the city.

In a recent Seattle Times article, it stated that about 10 to 15% of downtown buildings may be viable for conversion to residential, which equates to about 6 million square feet not currently fully contributing to downtown's economic vibrancy.

Conversion of these buildings would result in thousands of new housing units.

In addition, a recent Gensler study found that the most sustainable building is the one we do not tear down.

and that embodied carbon benefits of repurposing office buildings will be significant.

Lastly, conversions of existing buildings are economically challenging, as you've heard today.

Adaptively reusing these structures require major improvements to ensure seismic stability and energy upgrades, along with more complex design, construction of new building systems, et cetera.

These are expensive and costly, and these projects do not pencil without incentives.

Finally, we support the city's proposed exemption of these projects from MHA requirements.

These are existing buildings, so there is not more development capacity being provided to owners through an up zone as required by state and law to implement MHA.

For these reasons, we support this legislation, encourage you to do so as well.

Thank you so much for your time.

Up next, we have Lars Erickson, followed by Marty Goodman.

Lars, please press star six to unmute yourself.

Good afternoon.

My name is Lars Derrickson, and on behalf of the more than 2,500 members of the Seattle Metropolitan Chamber of Commerce, I ask that you please support the proposed Office to Residential Conversion and Legislation, Council Bill 120761. As previously mentioned, commercial vacancy rates have reached a staggering 28% in Seattle's Central Business District, and the April economic forecast from the city shows that the rate will continue to rise before they decline.

At the same time, the region is in the midst of a housing crisis.

The city's data shows that applications for apartments and urban centers were down in Q1 2024 compared to Q1 in 2023. Given the diversity of commercial spaces across the city, we understand that residential conversions will not be the right option in every single situation.

We also understand that for developers, the process will be costly and not without risk.

In order to make these projects pencil out, we support the proposal to exempt mandatory housing affordability requirements.

We believe that the exemption from MHA along with the removal of other regulatory barriers included in this legislation is an important step towards seeing these projects to fruition.

Seattle voters and the business community see housing as one of the most important things in our region to get right, to be prepared for future growth and address ongoing affordability concerns in our region.

We also continue to stress the importance of revitalizing our downtown.

Please support Council Bill 120761, which helps address both.

Thank you.

Up next, we have Marty Goodman, followed by Whitney Cooper.

Marty, please press star six to unmute yourself.

Good afternoon, Chair Morales and council members.

My name is Marty Kidman.

I'm a senior development director for Holland Partner Group, a multifamily residential developer here in Seattle.

I'm here today to comment on Council Bill 120761 related to conversion of non-residential structures to residential use.

We fully support this legislation as written and hope to use it on one of our existing projects in the Denny Triangle called the Ivy on Boren.

The Ivy was created in partnership with Cornish College of the Arts.

We created a performance space and gallery for Cornish on the ground level of the building and built three floors of commercial office space in the podium of the tower to give and gave Cornish the option to purchase or lease.

In the aftermath of COVID, Cornish opted not to take the space.

It's been sitting there empty since 2022. and we would like to convert the office space to residential but we need this legislation in order to make it feasible with the high cost of conversion with this legislation we're prepared to move ahead as soon as possible and respectfully request that you pass the bill this is a great tool to create more much needed housing and reactivate our downtown thank you for your consideration

Up next we have Whitney Cooper followed by Jessica Walls.

Whitney please.

Whitney Cooper Good afternoon Chair Morales and committee members.

I'm Whitney Cooper from Unico Properties speaking in support of the Office to Residential Conversion Bill 120761. Unico owns and manages dozens of properties throughout Seattle.

including a number of historic buildings like Grand Central and Pioneer Square.

We've been a leader in creative adaptive reuse of office buildings, including the successful conversion of a historic building in downtown Tacoma into 156 apartments.

We learned through that conversion that modernizing historic office buildings to meet current seismic and energy code upgrades is incredibly costly and complex.

When it can be achieved, the community benefits through new housing, activated neighborhoods, and vibrant streetscapes.

There are substantial sustainability benefits as well.

The carbon savings from adaptive reuse compared to new construction can be upwards of 70% over the life of the building.

For all of these reasons, UNICO supports the proposed bill.

In order to make adaptive reuse conversions work, we need help from the public sector to streamline permitting and reduce barriers to viability.

This legislation is a step towards encouraging more housing conversions throughout the city.

Lastly, I'd note that many of our potential conversions are in Pioneer Square.

This bill would streamline the permitting process for projects within that historic district.

We understand there may be an amendment that effectively removes that streamlining exemption for Pioneer Square, and we would encourage the council to keep the legislation as proposed.

In conclusion, we appreciate the city's leadership on supporting adaptive reuse conversions.

Encourage the council to adopt this ordinance and keep the original permit streamlining provisions for Pioneer Square.

Thank you.

Up next, we have Jessica Walls, followed by Abigail DeWise.

Please go ahead, Jessica.

You're muted.

Thank you.

My name is Jessie Walls.

I'm a designer and a senior research lead focused on carbon and circular design at Perkins and Rill.

We're an architecture firm, and we have offices in downtown Seattle as well as in 30 other locations around the world.

And we've signed on as signatories in support of Council Bill 120761 in the letter that was shared by Natalie.

And I want to confirm and reiterate that there's a huge carbon benefit posed by reusing existing buildings.

Across thousands of studies on projects that we have performed, we're seeing that embodied carbon or the carbon associated with the new materials, specifically just the upfront embodied carbon, is responsible for 70% of the new building's carbon impact over the course of its six years life.

And that is average nationwide data.

The impact of embodied carbon is much higher here in Seattle where we have a clean grid because operational impact is lower.

And across these studies we are seeing a savings of 79% and embodied carbon impacts for buildings that retain 100% of their primary structure.

So that's a huge environmental benefit, and I think it needs to be considered along some of these other factors.

I also want to speak to the purpose for the purposes of increasing access to services.

If office to resi conversions are exempt from MHA mitigation, perhaps there are other things that could be considered, such as mixed use program the ground plane, public use at the ground plane.

Other organizations are looking at hybrid use types that would support community and support a sense of invitation in the area, making downtown feel more like a neighborhood.

And some of those use types are educational space, child care facilities, business incubation, arts or cultural spaces, government or other services, gathering spaces, public health vendors for distributed health care.

lots of things to think about.

And I agree that the bill needs to be thought of holistically across all the city departments.

Thank you.

Last speaker we have is Abigail DeWise.

Hi, good afternoon, council members.

My name is Abigail DeWise and I'm a local land use attorney and principal at the Hillis Park firm.

I'm also a governmental affairs chair for NAEP Washington, the commercial real estate development organization for Washington state that represents over 1,000 developers, owners, consultants, and others in allied industries.

I'm also a downtown business owner, and I send my two toddlers to daycare downtown.

I care deeply about our downtown recovery.

You already heard that we support the residential conversion proposal and submitted a letter earlier today.

But I'm also speaking to voice Mayap Washington's support for the proposed interim street level use regulations.

And we ask that you move Council Bill 120771 onto approval.

The approach to allow additional uses and thereby additional eyes on the street in our current climate makes sense.

Even uses not traditionally viewed as activating like office, life science, and institutional uses are better than vacant storefronts.

Any bit of use creates more activity, and feelings of safety on our streets.

We view this legislation as vital to downtown Seattle's recovery.

The legislation is also a short-term fix appropriate for our current moment in time.

The three-year time horizon is appropriately brief, but at the same time, it provides the certainty necessary for leasing activity to occur.

If our downtown fully recovers, we agree that it won't be necessary to continue into the future, but it's an important step to take right now and signal to the market that it's struggling.

We ask that you support these changes.

Thank you.

That's the last speaker we have.

Terrific.

Okay.

Thanks, everyone.

I'm going to go ahead and close the public hearing then and thank OPCD for your work on this legislation.

Colleagues, I anticipate bringing this back for a vote on July 3rd.

The late June council meeting, committee meeting is canceled.

Questions, please do reach out to Asha or to OPCD about the legislation.

Okay, will you please read item two into the record, Andra?

I'm sorry, Naomi.

Agenda item two, downtown street activation legislation for briefing discussion and public hearing.

Thank you, okay.

We are joined by Keetle and Mike, sorry, Gordon Clowers from SDCI.

So before you introduce yourselves, I'll just say again that last Friday I was able to tour the streets that are identified on the maps in this package to see buildings that are currently vacant on key streets in Downtown, Uptown and South Lake Union urban centers And the idea here is to contribute to economic revitalization of some of our urban centers.

This is a three-year pilot and would allow for expanded uses that could include community centers, a variety of other institutional uses, food processing, art.

It could also include non-household sales and services, as somebody referenced.

biomedical offices or research.

So we will hear about all of that.

And then colleagues, if you have questions, please feel free to ask them as we go.

We've got 30 minutes left and two more presentations.

So I'm gonna hope that we can get through our full agenda by four, but we may go a little bit over.

So with that, I will turn it over to Gordon, please go ahead.

Thank you.

Gordon Clowers with the Department of Construction and Inspections.

Thanks for the opportunity to present this today.

The bill is for interim street activation and I'll cover the areas that this legislation would address and some of our goals and details.

So the bill covers all of the downtown urban center, as well as portions of Uptown Urban Center and South Lake Union Urban Center.

And the intent includes to help fill vacant spaces.

As we've heard today in the commentary, there are a number of spaces intermittently around downtown that have been vacant and some of them for a long period of time.

This bill is very similar to a bill that was passed during COVID as an interim step.

And we took the time to examine the code in more detail for this bill and trying to find barriers or restrictions in the code that might inhibit a wider variety of tenants from being able to rent and fill those spaces.

Part of the goal here as well is just to attract more daily activity, more people, more eyes on the street, especially in certain areas that are lacking positive presence of people and activity on a daily basis.

And we're also looking to promote creativity and entrepreneurship by allowing new types of businesses.

We have, for example, allowed for more flexibility in size of spaces, allowing shallower spaces to occupy parts of existing vacant spaces, and allowing for the possibility of multi-floor spaces.

A LITTLE BIT OF DATA ON THE STATE OF OUR RECOVERY IN DOWNTOWN IN PARTICULAR.

AS WE KNOW, POST-COVID, WE DID HAVE A RECOVERY OF FOOT TRAFFIC AND BUSINESS OCCUPATION DOWNTOWN.

IN 2022 TO 2023, WE HAD UP TO A 15% GAIN IN FOOT TRAFFIC.

from the previous year, year over year.

In the past year, the gain, the foot traffic is still increasing, but only by about 5% year over year.

Similarly, for downtown business openings and closures, Our trend since last November has still not fully recovered from the effects of COVID and so on, where we have nine business openings but 21 closures, a kind of a similar ratio that we were experiencing during COVID.

SO THE PROPOSAL, AS NOTED, IT WOULD BE INTERIM LEGISLATION IN PLACE FOR THREE YEARS UPON PASSAGE.

AND IT WOULD APPLY TO CLASS I AND CLASS II PEDESTRIAN STREETS WITH STREET LEVEL USE REQUIREMENTS.

SO IT'S TARGETED TO THOSE PLACES THAT HAVE THESE ACTIVE STREET LEVEL USE REQUIREMENTS.

I'LL SHOW THAT A LITTLE BIT MORE IN A FEW MAPS COMING UP.

AND JUST PROVIDING MORE CODE FLEXIBILITY AND REDUCING BARRIERS.

SO THERE'S A NUMBER OF FINE POINT DETAILS IN THE LAYERING OF CITY RIGS THAT DISCOURAGE VARIETY IN THE USES.

AND NEW USES WE'RE CLARIFYING CAN REMAIN IF THEY COME IN DURING THE INTERIM PERIOD.

THERE'S NO PROBLEM WITH THE EXPIRATION OF THE INTERIM PERIOD.

OK, so the table here, the column on the left is the existing range of active street level uses that are possible today, largely limited to restaurants, general sales and services, a partial mix of human services and arts facilities, museums and libraries and so on.

On the right hand column are the categories of uses that we would allow, newly allow for this interim period as street level uses.

This range of uses is exactly the kinds of uses that are currently allowed in other neighborhoods around the city.

within their pedestrian districts.

So if you're talking about Greenwood or Fremont or what have you, that is this selection of uses was drawn from that capability on the theory that these are still uses that provide some activation and and can help the situation here.

Also, the possibility of office and R&D lab use at ground floor and a few more varieties of institutional uses.

Okay, for the Downtown Urban Center, this map explains where the proposal would apply, where it would not apply.

The outlined streets, ON THE MAP ARE PLACES WHERE TODAY THE ACTIVE STREET LEVEL USE REQUIREMENT APPLIES, AND THAT INCLUDES FIRST, SECOND, THIRD AVENUE IN BELLTOWN, FIRST AND THIRD IN THE OFFICE CORE, AND THEN ALSO MUCH OF THE RETAIL CORE AND GOING UP WEST LAKE AND STEWART STREET THERE.

For this proposal, we're proposing to retain the active street level use requirement along key streets and the retail core Pike and Pine, First Avenue and Second Avenue near the Pike Place Market and on the waterfront.

And the existing requirements still applies in Little Saigon as well.

Piner Square and Chinatown ID are not participating in this proposal.

They actually have full flexibility through their board process to consider and approve a variety of other mix of uses at their discretion.

In Southlake Union, the line designation with the circles in it NORTH OF MERCER AND INCLUDING VALLEY STREET IS THE PLACE WHERE THE PROPOSAL WOULD APPLY.

THE ONLY OTHER PLACE WHERE THE ZONING WOULD REQUIRE THESE USES IS THE EXTENSION OF WEST LAKE AVENUE BETWEEN MERCER AND DENNY.

THAT'S NOT INCLUDED IN THIS PROPOSAL AS OF RIGHT NOW.

And then in Uptown, the proposal would apply along Fifth Avenue North, north of Denny to Mercer, and a portion of Mercer Street heading over to, I believe it's Warren Avenue.

We have excluded the Uptown business district from participating in this flexibility in the proposal just to continue to support the active use character of that business district.

And so one of the examples that I mentioned earlier was ability to allow for small spaces with shallower minimum required spaces along the fronts of vacant spaces.

As we can see, the coffee and other STOREFRONT USES, WINDOWS AT THE MARKET, PIKE PLACE MARKET AND THE RETAIL CORE ARE GREAT ATTRACTORS OF PEOPLE AND VARIETY AND ACTIVITY, YOU KNOW, POSITIVE ATTRACTORS OF ACTIVITY IN THESE AREAS.

AND WE WOULD, YOU KNOW, OTHERWISE THE VACANT SPACES THAT THESE PLACES COULD OCCUPY MIGHT NOT NEED, YOU KNOW, 5,000, 7,000 square feet, and they would remain vacant.

We saw some of those examples near the retail core and in other places.

And then just the opportunity to accommodate multi-floor retail spaces or perhaps restaurants is something that is probably unintentionally affected by the downtown code.

IT HAS SOME, YOU KNOW, PENALTIES AS FAR AS ABILITY TO CONNECT THE FLOORS AND THEN COUNTING AGAINST DENSITY LIMITS ON UPPER FLOORS, EVEN IF THE USES WERE CONNECTED TO GROUND LEVEL USES.

SO WE WERE CAREFULLY PRUNING BACK SOME OF THOSE RESTRICTIONS IN CASE THERE ARE USES THAT WANT TO COME IN AS NEW CONCEPTS, NEW RESTAURANTS, NEW RETAIL, WHAT HAVE YOU, TO BE ABLE TO LOCATE IN THE CITY.

AND I THINK IN THE SPIRIT OF In the spirit of the downtown activation plan, places like all along Third Avenue throughout downtown, gaps, there's a number of gaps in First, Second, Third Avenue and Belltown neighborhood that kind of creates a scarcity of people walking around, scarcity of PEOPLE JUST TENDS TO NOT ACTIVATE THE NEIGHBORHOOD AND CREATE ISSUES, POTENTIALLY CREATE BEHAVIORAL ISSUES ON THE STREET OR JUST CONTRIBUTES TO POTENTIAL DECLINE OF THE FACADES, GRAFFITI, AND OTHER DETRACTORS TO THE QUALITY OF THE AREA.

SO THAT IS THE FAIRLY BRIEF VERSION OF THIS, AND I'M HAPPY TO ANSWER QUESTIONS.

Thank you.

In the interest of time, I think I'm going to go ahead and ask Ketel to address any issues that were raised in your memo.

Sure.

And then we can see if there are other questions.

So council members, in your materials, you have a memo from me dated May 31st, 2024. There are four kind of preliminary issues identified in that memo.

I'll just walk through each of them.

The first one is essentially a ripeness question.

Is this the right time to act on this legislation?

As you've heard, the downtown recovery has been uneven.

There are fewer office workers downtown than there used to be.

However, the number of visitors is pretty close to 2019 levels and the residential population is greater than 2019. The downtown residential population is about the size of Issaquah.

It's about between 35 and 40,000 folks.

There are a number of projects that will be completed here pretty soon, largely in Belltown, but in other parts of downtown too.

that will add another 4,000 to 5,000 units, so that's about the size of Chelan, for example, being added to Issaquah.

So there will be more people downtown relatively soon, and those people will need services, and those services are available through the street-level use requirement.

There's also some planning work that's going on.

There's a link in the memo to an OPCD webpage.

We're required, in part by PSRC, to update our urban center plans.

The first one to be updated will be the downtown urban center plan.

That'll be considered by the council in 2026. So as part of that work, the city will be looking at requirements for street level uses in those locations.

We'll have a little bit more information about how activity is changing downtown post-pandemic.

So that's a body of work that the council will be considering relatively soon.

Also with the transportation levy renewal, is there is some allocation for revisioning Third Avenue that could also inform some decisions about regulations for street level uses.

I think there's about $14 million allocated for that and the proposed transportation levy.

So issue number one is, is this right?

Moving on here, the location.

So Gordon flagged a couple of areas which are kind of conspicuous for their inclusion.

One is the Mercer blocks in South Lake Union.

The Mercer blocks are those blocks that were formerly owned by the city that run on South Lake Union Park.

One of those blocks has not been developed.

The others have.

The primary tenant there is Google, I believe.

It looks like there's a relatively recent application for, I think, an automotive showroom there.

It's a use that would not otherwise be allowed given the street level use requirements.

It's unclear if the landlord could actually get a different tenant in there, but sort of begs the question, would this dispensation really just allow a use that wouldn't otherwise be permitted when there could be a permitted use that would be a valid tenant there?

Similarly, we heard from the developers of the biotech cluster on Fifth and Broad They have a fair amount of street-level use space shown on their plans and are required by code.

Unclear whether or not they could find a tenant if they wanted to, but there's a boutique aspect of the proposal that seems to be about that particular location.

I called both of those locations out because they were the subject.

They were identified through neighborhood planning efforts that resulted from the South Lake Union Up Zone.

and the Uptown Up Zone where there was a desire by the community to have a node with retail uses at those locations.

So that's issue number two.

The same could be said for other parts of downtown as well.

As you all have probably observed walking around downtown, the vacancy issue is really highly localized.

It sort of depends on where you are downtown.

If you walk up Fourth Avenue, for example, where there are not required street-level uses, there are very few vacancies.

Other parts of Belltown, there are.

The issue of location is one that could be applied through other downtown neighborhoods as well.

Another question is, is this the right list of interim uses?

Some are more activating than others.

Office research and development, those otherwise would be chargeable FAR for which there would be a density limit associated with them, and that's in part because they're not preferred street-level uses under the city's code.

Other uses recommended by STCI could be more activating, like art space, custom craft work, things like that.

So in looking at this legislation, the types of uses is another dial that the council could turn in making amendments.

One final issue that I'll flag here, I guess maybe before I move on from that issue, there are other modifications that could be allowed for interim uses, including physical standards for the size of those uses.

That's another dial the council could turn.

Percentage of street level requirement for allowed interim uses could be something the council could consider in making modifications to this bill.

Finally, this really has to do with an institutional interest for the council.

There's a pretty broad delegation to the SDCI director to make as an administrative non-appealable decision, a call about what an allowable street level use is.

That's kind of a delegation of what might otherwise be a legislative authority to the SDCI director.

that the council has done before, but should be aware that that's proposed by the mayor for this bill as well.

Okay.

Thank you very much, Ketel.

Colleagues, I don't see any questions at this point.

Anyone?

Council Member Strauss?

Thank you, Chair, just so that you're not up here.

Talking at us, this is a very straightforward common sense bill.

I know that we passed something similar to this during the pandemic as a pilot, and this seems as if this expands on that a little bit.

No questions, Chair.

Okay, I will say, in the interest of time, I will raise my questions in public and we can continue the conversation.

I'm gonna say, as I've already let STCI know, I do have some questions about this.

And in general, I have questions about how many, really getting to the issues that Ketel has raised around, you know, how many folks are actually asking for this?

What is the demand for this kind of a change?

And Director McIntyre, since we do have you here, I might go ahead and ask you to help respond to this question I have about what efforts are underway to try to activate these vacant areas with existing resource.

And that seems like a question for OED.

So I'll hand that over to you.

Sure.

We're all in this together to try and fill vacant storefronts in a variety of ways possible.

Uh, the retail environment has changed dramatically.

Um, two of the leading factors were the pandemic and the lack of people coming downtown.

So this reduced foot traffic as well as the rise of e-commerce.

So I think we're, and I think you're seeing this with both the office to housing conversion legislation that we talked about earlier, as well as this.

Fundamentally, we're rethinking how do we use space downtown, whether it's public space or private space, how do we use space differently?

That's going to bring people downtown in new and different ways.

So OED's got some programmatic elements.

We have run the Seattle Restored Program that matches up artists and entrepreneurs with vacant storefronts.

Currently, we have our round of applications open.

It closes May 30th.

We've already received 248 applications, so it's very popular.

The demand for people wanting to be downtown and to try out some brick-and-mortar space downtown is really high.

However, we're also learning a lot from that program.

We don't just want to do pop-ups that are kind of flash in the pan.

We're also expanding that to evolve to think about long-term leases.

And one of the things we found in that long-term lease conversation is people want different types of space, different sizes of spaces.

So that's one of the things that the flexibility would allow is just different types of businesses to use space differently.

Relatedly, we're also undergoing a ground floor and retail analysis in cooperation with some of the BIAs and neighborhood groups to really understand like which block, what kind of retail, what kind of ground floor uses fits which types of blocks.

You can't just have retail everywhere.

If you diffuse it and have it everywhere, it doesn't really work.

So where do we concentrate it and how do we have other uses in other places that are still going to be activated and still attract folks?

Finally, we're trying to add capacity because, frankly, we just need more folks at the city and with our partners.

So OED is currently hiring for folks to help work with property owners to do some of the matchmaking with entrepreneurs, as well as additional folks to work with our BIAs and neighborhood groups to really make sure that they have the support that they need to be kind of those on the ground folks.

So we've got a lot going to try to fill vacant storefronts.

We want to move with urgency.

We also want to be creative.

And that's part of what excites me about this legislation is it provides some flexibility and some creativity for us to try different types of uses.

Somebody earlier mentioned a diversity of uses brings a diversity of users.

And I think that that's a really key phrase when thinking about this particular legislation.

Thank you.

Okay.

Colleagues, again, the late June committee meeting has been canceled, so we will not be bringing this again by the end of this month.

It's possible we will bring this back into committee next month at the July 3rd meeting, but I do have some questions and will want to follow up, and I would encourage colleagues, if you have questions either for Ketel or for the departments, please reach out.

They will be Happy to do briefings, additional briefings for you.

So thank you very much for being here, everyone.

Okay, I'm going to, we do have one more presentation, and I realize it is 3.52, but I do think it's important, so Nathan, please come on up, that we get an update from SDCI on the permitting audit that Councilmember Strauss requested a couple of years ago.

So Naomi, will you please read item three into the record?

Agenda Item 3, Informational Item 2484, Permitting Audit Implementation for Briefing and Discussion.

Thank you.

Okay.

Nathan, please go ahead and introduce yourselves and begin.

Good afternoon.

Nathan Torgelson, Director of the Seattle Department of Construction and Inspections.

And I'm Andy Higgins.

I'm the Customer Success Director for SDCI.

Thank you.

Hold on one moment.

I'd share just, I know Council Member Rivera has something to say, but before she started moving around, I just wanted to let you know, if we do need to reschedule this presentation, I had a great meeting with Andy this week.

I know that there are some updates that need to happen before the next time you come to committee, but I just noticed a fair amount of our colleagues suddenly- We do, we have lost Council Member Wu and Council Member Moore, I will say for the record.

Okay.

I have six minutes, but otherwise...

Shall we proceed?

Sure.

Let's go till 4, and if folks have another questions, we can ask you to come back.

Nathan, I apologize.

Okay.

I know.

Thank you to Naomi, who's gonna drive the PowerPoint.

Next slide.

So thank you for inviting us back.

And Council Member Strauss, I want to thank you for your partnership and the City Auditor last year.

We were last year, I believe, on October 20th to do the initial presentation.

And Council Member Morales, I want to thank you for your continued interest in the audit.

I feel like we've had a good partnership We greatly appreciate the recommendations that the auditor has put forward and are continuing to make progress on the recommendations.

And I just want to stress that we take the recommendations very seriously, and we at SDCAI are always looking for ways to improve and provide better customer service.

So that really gets to our values, and the values really reflect a lot of the things that were in the audit, equity, respect, quality, integrity, and service.

And I just want to stress, next slide, that we are extremely busy.

We are annually looking at over 53,000 permits, and we perform over 200,000 inspections a year.

Most of those are onsite, but we are able to do some of those inspections virtually.

We have very complicated work.

Our land use code is over 1,000 pages long, our building code.

and technical codes are very complex.

At some point, I'd love to come back to the council and talk about ways that we can sort of simplify and streamline those regulations, but that is another discussion.

But the point there is that our staff have an enormous amount of regulations that they have to administer on a day-to-day basis, and we take that very seriously.

Also, I just want to stress that the permit review process involves many different city departments, so it's not just SDCI, but that's a partnership with anyone who touches the permitting process.

Next slide.

So the city auditor's objectives were, are there opportunities to improve the clarity and consistency of the process?

Are we using the full potential of our technology?

And Andy's going to talk about that later in the presentation.

And is the city's permitting process contributing to the race and social justice initiative?

Next slide.

So another thing that I just wanted to stress was that the audit really looks at intake to permit issuance.

There's also a lot that happens after permit issuance as far as the construction inspection process.

And also the scope of this audit was in 2021 and 2022. At that time, we actually had a bit of a vesting rush as new regulations were about to go into effect.

And this is also when the peak of the pandemic was happening, and a lot of our staff were working virtually.

The good thing was that our whole permitting system is online, but it was a bit of an adjustment.

Next slide.

So the first recommendation was to look at metrics for SDCI's progress and that those should be displayed on SDCI's website.

And the second recommendation from the auditor was that that data should meet the needs and expectations of customers and also include review times of other city departments.

Next slide.

So we are publishing that data for permitting metrics on our public website.

We right now show the permitting time for that first round of corrections, which is usually the longest time period because it's the most intense review for our staff.

And we are...

ALSO WORKING ON SHOWING EVERY SINGLE PERMIT REVIEW TIME, EVERY SINGLE PERMIT REVIEW CYCLE.

OBVIOUSLY, WE WANT TO SHORTEN THE NUMBER OF CYCLES.

THIS IS SOMETHING THAT COUNCILMEMBER STRASSEN AND I TALKED A LOT ABOUT LAST YEAR WHEN HE WAS CHAIR OF THE LAND USE COMMITTEE.

AND IN THE THIRD QUARTER THIS YEAR, WE SHOULD BE ABLE TO SHOW THAT WHOLE TIMELINE AND HOW LONG EACH CYCLE TAKES.

SO THAT IS SOMETHING THAT'S SUPER IMPORTANT.

NEXT RECOMMENDATION.

This had to do with completing a racial equity kit for the entire permitting process and also evaluating the accessibility of our current processes and tools.

This is obviously something that's very important.

And going on to the next slide, we have formed an interdepartmental work group that's focusing on that whole permitting process and working with other city departments.

As you know, during COVID, we closed our applicant service center that was on the 20th floor of STCI.

That applicant service center remains closed due to security issues, but we are really excited at STCI and also at SDOT that we opened a customer service desk on the fourth floor of the Seattle Municipal Tower.

This has been a fantastic way to assist customers who don't have technology access.

And we also have a lot of customers who just want to talk to a person in person down at the Seattle Municipal Tower.

That being said, we do have a virtual applicant service center that Andy's also gonna talk about where people can access staff on a chat and also talk to someone virtually in person, and that's been a great way for our customers and members of the public to get answers to their questions without having to come downtown and pay for parking or ride a bus and to do that in the comfort of their own work environment or their home.

I just want to point out in that last slide, there's an SDCI staff person there, but the SDOT also staffs that desk, but they had to step away when this picture was taken.

You're right.

Director Torkelson, I apologize.

We're gonna lose quorum here.

So we will have to stop the presentation.

And I appreciate all the work that y'all have put into this.

I did not realize we were gonna lose quorum at four o'clock.

So we will see about rescheduling you.

And if people have particular questions before we can have you back in, I will ask them to reach out to you and your team.

Okay.

Perfect.

Thank you very much.

We look forward to coming back and we're always available to brief council members in their offices as well.

Thanks.

That would be great.

Thank you.

Thank you.

Okay.

It is 4.01 and we are going to adjourn this meeting now.

Thanks very much.

This meeting is adjourned.