Seattle City Council Public Assets and Homelessness Committee 7/19/23

Thank you so much.

The July 19th, 2023 meeting of the Public Assets and Homelessness Committee will come to order.

It is 2.02 p.m.

I am Andrew Lewis, chair of the committee.

Council Member Moresqued is excused from today's meeting.

Will the clerk please call the roll?

Council Member Herbold.

Here.

Council President Juarez.

Here.

Council Member Morales.

I see Council Member Morales is raising her hand virtually.

Can I take that to mean that she's present?

Yes, the Chair will recognize, and well, there we go, confirmed, yes.

Chair Lewis.

Present.

Chair, there are four members present.

Thank you, Mr. Clerk.

If there's no objection, the agenda will be adopted.

Hearing no objection, the agenda is adopted.

So today we have one public hearing that will occur during agenda item two.

So if you are calling in to publicly comment on agenda item two, note that the time to comment on that will be during the noted public hearing.

So I just want to get that out there before we enter public comment.

There is a fairly packed agenda today.

So I would ask that for all these presentations, council members note their questions and note the slides for reference.

Allow our presenters to finish the entire presentation and then leave ample time for questions given that, especially in the case of agenda item two, these are significant and important presentations that I want to make sure we have a productive session on and answer questions to the satisfaction of committee members.

So with that, I'm going to go ahead and move on to the public comment session for our regularly posted agenda.

And again, just as one final reminder, if you are calling in specifically for agenda item two, please hold your comments until we reach that agenda item and we will open a special public hearing on that topic.

So with that, the clerk will preside over the public comment period.

Commenters will have one minute to provide public comment.

We have two in-person public commenters who are here for regular public comment.

The rest have signed up to participate in the public hearing, and it looks like six or seven online.

So I will start with the in-person public commenters.

Our first public commenter is Alex Zimmerman.

Alex, if you approach the podium, you'll have one minute.

I'm confused.

One minute, 60 seconds?

That's correct.

because my ear not so good.

60 seconds?

You have 60 seconds starting.

Oh, I'm so sorry.

Exactly.

60 seconds is better than nothing.

It's okay.

No problemo.

Yeah.

Yeah.

Poor people.

What is we can do?

Say hi my lovely Fuhrer.

My name Alex Zimmerman and I live in the city and in Bellevue for more than 35 years.

I want to speak about agenda number four.

Because I think also you're very good.

You help people who have a boat.

Yes, it's a poor homeless people who cannot live in street, so they live in boat.

Sometimes boat couple hundred thousand dollars and you help them.

You know what this mean?

It's a thousand thousand boat around and you're very good.

You talk people live in this boat, you know what I mean?

It's better they live in street.

So because we have like 12,000 people in street right now, we need give to everybody a boat for couple hundred grand so they can live in this boat, you know what I mean?

If you're happy, why you don't doing this?

I talk about this for many year.

Move homeless people from street to boat for hundred grand.

Stand up America!

Fucking idiot.

Our next in-person public commenter is Bruce Drager.

Bruce, you will have one minute when you are ready to begin speaking.

Hi.

Good to see you, Andrew.

Yeah, my name is Bruce Drager, and I represent Green Lake Homeless Advocates, my organization, and where we go out and we meet with homeless folks that are going to get swept.

And I'm just here to remind everybody, in case you didn't know, sweeps don't work.

They're bad for everybody.

They destroy the lives of the over 600 people that I've worked with over the last couple years.

They have nowhere to go.

I've followed the course of every one of these folks, and I urge you to, I can send you my reports on what I've seen out there, and of those folks that were swept, about 60 of them, about 10% got into viable transitional housing, and of those, only about 15 of those got into permanent housing.

And so there's where we are two years later, after sweeping all these folks whose lives were destroyed.

I was working with the guy that, speaking of boats, that burned down this boat yard, and he was swept the seventh time, and he had no place to go, but this boat yard ended up in a disaster there.

Thank you, Bruce.

We will now switch to virtual public comment.

To participate virtually, you will need to press star six to unmute your microphone and begin speaking.

Our first virtual public commenter is Austin Miller.

Austin, you will have one minute.

Hello, council members.

Thank you for your opportunity to comment today.

My name is Austin Miller with the Washington Hospitality Association.

On behalf of our members, I'm calling to urge your support for CB120-619 to repeal the human device licensing fee that is being discussed today.

Repealing this requirement would reduce barriers and provide economic relief for businesses across the city, but especially downtown as we continue to work towards recovery and activation.

Additionally, removing this requirement will align Seattle with many of our neighboring jurisdictions and we'll follow the lead of other cities that have eliminated these fees in order to ease regulatory burdens for businesses still recovering from the pandemic.

Thank you for Council Member Lewis for putting this proposal forward and we look forward to working with you all.

Thank you.

Thank you, Austin.

Our next virtual public commenter is Darren DeRoche.

Darren, please press star six and then you'll have one minute.

Darren is no longer present.

Our next virtual public commenter is Andrew McDonald.

Andrew, if you're available, please press star six and you'll have one minute for public comment.

Andrew McDonald, this is your turn for public comment.

If you would still like to comment, please press star six.

Excuse me, I thought I was unmuted.

I believe I'm unmuted now.

Is that correct?

Yes, we can hear you.

Thank you.

Well, thank you, Committee Chair Lewis and others for providing this opportunity to speak.

I'm Andy McDonald.

I'm the treasurer of Sales Sandpoint.

And on the board, I'm formerly the board president, been involved for almost a decade.

I've been a neighbor for several decades.

raised my family in this area and live blocks from the park and sales standpoint.

And I'm here to urge you to vote in favor of this new concession agreement.

It's a critical agreement for, I believe, both the parks and sales standpoint.

It has been a pleasure over the decades here of watching Magnuson Park evolve to the tremendous community asset that it is today and everyone should be proud of it.

it's hard to imagine a better public use for the small corner of the park used by Sailsham Point.

Over the 25 years that Sailsham Point has been there, they've evolved into a wonderful community asset serving thousands of people.

you know, when it was started, it could have been a sailing club.

Andrew, I'm sorry to interrupt you, but your time has expired.

You can send in the rest of your public comments and the city council members will receive them if you would like to send written public comment.

Thank you.

Our next public commenter is Sarah Taubman.

Sarah, please press star six and you'll have one minute for public comment.

Sarah, we can't hear you.

If you press star six, we'll be able to listen to your public comment here in council chambers.

Hello, I apologize for that.

Thank you for the opportunity to speak.

I am also a sales standpoint board member and the chair of their fundraising committee.

And I am here today to strongly encourage you to vote in favor of the new concession agreement between Seattle Parks and Rec and sales standpoint.

This agreement is particularly important for fundraising for sales standpoint to do improvements on the facilities there, because this gives us the city's formal commitment to our long-term access, which will allow us to access over $700,000 in state and community funds we already have earmarked for the building.

And this ability to improve our campus will allow us to expand the community of sailors, to include people who previously did not have access to water sports, including engaging Mercy Magnuson Park residents, Lake City and Shoreline residents, students from Seattle Public Schools, and South Seattle residents.

Thank you.

Thank you, Sarah.

Our next public commenter is Greg Stephens.

Greg, whenever you're ready, press star six and we'll begin.

Can you hear me?

Great.

My name is Greg Stephens.

I am one of the owners of GameWorks, which is located in downtown.

For those of you, and I'm here, by the way, to ask for your support of 120619. For those of you who are not aware, GameWorks shut down at the end of 2021. It fell into receivership at that time.

So for all intents and purposes, it was game over for GameWorks.

Together with my partners, we stepped in in 2022. We bought the assets and made a sizable investment to reopen.

We felt this was an important legacy operation in downtown Seattle, and we wanted to make sure it continued to operate.

This amusement device license, though, is unfortunately burdensome to a business like ours.

While the fee really is non-consequential to the most small bars and restaurants, for us it amounts to over $40,000 a year.

And to our knowledge, your city only collects about $90,000 in total.

So we're like 50% of this fee.

Anyways, we're doing everything we can to make this business work.

There's a lot of traffic issues, vacancy issues, other problems downtown.

We would strongly urge your support for this legislation to remove this burden to our business.

Thank you.

Thank you, Greg.

Our final commenter as part of regular public comment is Connor Inslee.

Connor, please press star six and then you'll have one minute.

Good afternoon.

Thank you, Committee Chair Lewis and Council President Warren.

I'm here today to speak in support of a concession agreement between Seattle Parks and Sales Sandpoint.

My name is Connor Inza.

I'm the Associate Director of the Outdoors for All Foundation.

We provide adaptive recreation to individuals with disabilities.

And we've been Park Tenants here in Magnuson for about 18 years.

I've been coming to this park since 1997 when I first sailed at Sands Sandpoint, Sales Sandpoint.

And I've seen the profound impact it's had on the community, bringing recreation to the community, providing equity in the sailing industry, which is very unique that Sails Sandpoint has the ability to do that.

We have been partnering as Outdoors For All to provide adaptive sailing programs with Sails Sandpoint.

In fact, we had our campers out there yesterday have a successful time They are a key community member.

They are making Magnuson Park stronger.

And I strongly urge you to support this concession agreement.

Thank you.

Thank you to our public commenters.

That concludes our list of people who have signed up for in-person public comment.

The remainder of public commenters are here to address the public hearing on agenda item two.

And Mr. Clerk, we may have one last public comment, or I believe Monty Anderson would like to address the committee.

I would ask Mr. Anderson, is this on agenda item two, the waterfront?

Yeah, so that would be better for the special hearing.

So we'll get to that in a few minutes.

Yeah, thank you so much.

Yeah.

Okay, Mr. Clerk, will you please read item number one into the record?

Agenda item one, appointment 02626, appointment of Calandra Childers as member of Climate Pledge Arena Giving Council for a term to June 30th, 2026.

Thank you so much, Mr. Clerk.

We have, the committee is now joined by Morgan Littlefield.

Are you on there, Morgan?

I don't see it.

There you go.

Perfect.

Morgan Littlefield, along with the appointee, Kalondra Childers.

And so Morgan, would you like to speak first and introduce the nominee?

And then we can open it up to committee questions.

Yes, thank you very much.

A former longtime Deputy Director of the City's Office of Arts and Culture, Calandra is a well-known and well-respected voice advocating for arts access for all.

She is highly knowledgeable about the local arts landscape, experienced in equitable grant-making, and now VP at Arts Fund.

We look forward to having Calandra as a member of the Giving Council for Climate Pledge Arena's Giving Fund.

Thank you.

Thank you so much for that introduction.

Kalandra, I'll turn it over to you.

Thanks for coming to the committee today for our consideration and the floor is yours.

Thanks so much, Council Member Lewis.

I appreciate being here and I appreciate the recommendation.

I'm really excited about this opportunity to serve on this advisory body.

I was actually part of the city family when this was negotiated.

And so being able to be part of the body that helps distribute these funds back into the community is really meaningful.

and the arts and cultural sector just adds so much to our culture in this city and we really hope that these funds can help boost these organizations in this time.

Any questions for me?

Do committee members have any questions for the nominee?

Council Member Morales.

I don't have any questions I just want to say I couldn't think of a better person for this role and really appreciate the work that colander has done in the past for the city and the arts community and the work that I know she's going to continue to do so looking forward to supporting this.

Thank you.

Thank you so much.

I don't see any additional questions from colleagues.

It's really great to have a second nominee for a position on this body that is so eminently qualified to represent us in this new partnership.

I believe it was about a month ago that we appointed our first member, so it's good to be in a place to have our delegation fully staffed and really look forward to what comes out of this partnership with Climate Pledge.

So seeing as how there's no additional questions and we have every confidence in the nominee's ability to serve, I will move the nomination of Um, Kalonda Childers, is there a second?

Second.

Moved and seconded.

Will the clerk please call the roll on the recommendation for the nomination?

Council Member Herbold?

Yes.

Council President Juarez?

Council President Juarez, I didn't hear a response.

I'm sorry, I was, I was on mute.

Yeah, I

Thank you.

Council Member Morales?

Yes.

Chair Lewis?

Yes.

Chair, there are four in favor, none opposed.

Thank you.

The recommendation carries and we'll go to the next full council meeting.

Thank you so much and really appreciate the opportunity to advance the nomination.

Condra, you do not need to be at that full council meeting.

You are more than welcome to attend if you want to.

We really look forward to continuing this partnership and our shared service with you.

Thank you.

Thank you.

I really appreciate it.

Okay, we will move to the next agenda item.

Will the clerk please read agenda item two into the record?

Agenda item two, second amendment to the O&M agreement by and between the City of Seattle and Seattle Aquarium Society regarding the Ocean Pavilion.

Thank you, Mr. Clerk.

As we indicated before, this is a public hearing, so we will now have another public comment session associated once I read into the record the language starting the public hearing.

So before we consider the presentation, as presiding officer, I am now opening this public hearing on the amendment to the operation and management agreement.

relating to aquarium financing.

Are there any speakers?

And the clerk will go through our previously collected list of speakers, but if there are any additional speakers, please be prepared to signify once we have gone through the previously collected list.

We will be setting the time at one minute again for this public hearing, and the clerk will preside over the public hearing comment session.

So with that, I will hand it over to the clerk.

We will begin with the in-person public commenters.

Our first person to comment is Karen Powers.

Karen, please approach the podium and you'll have one minute to speak.

On deck will be Bob Donegan.

Dear council members, for the record, my name is Karen Powers.

Karen, just one moment.

I apologize.

We'll restart your time, but can committee members hear the speaker?

Not very good, Mr. Chair.

I'll speak more closely into the microphone.

That is way better.

Thank you so much.

Excellent.

Will the clerk please restart the speaker's time?

Yes.

For the record, my name is Karen Powers.

As a current volunteer at the Seattle Aquarium, I strongly encourage you to support the new Ocean Pavilion.

I have volunteered for 11 years.

At the aquarium, I engage with people who don't know what is in our ocean.

don't know what is in jeopardy, and don't know why.

We can't care for things we aren't even aware of.

In our small Pacific coral reef section, I talk about the effects of warming oceans on corals and their importance to global health and ocean health.

But this small exhibit barely touches on the numerous life systems in tropical waters.

One of the many things missing is sharks.

The Ocean Pavilion will have sharks, and we'll be able to talk about how important they are in creating and maintaining a diverse and healthy ecosystem.

Please support the expansion today, and then come and see the sharks.

Thank you.

Our next public commenter is Bob Donegan, who will be followed by Lana Towers.

I've been a volunteer at the Aquarium for almost 20 years.

In addition to that, I'm active in the Seattle Waterfront Association.

You'll remember from the many meetings we've had in this room that in 2019, 6.3 million people visited the waterfront.

Candace Damon, the municipal finance expert from Brooklyn who helped us plan the financing for the park, tells us that the number of visitors to the waterfront will grow to 14 to 15 million when the park opens.

In 2019, Almost 40 days the aquarium was at capacity and could not handle those visitors.

We can't fulfill our mission of inspiring conservation of our marine environment unless we have additional space.

Please support the proposal so that we can complete the project on time and on budget and we look forward to welcoming you to the ribbon cutting.

Thanks.

Our next public commenter is Lana Towers, who will be followed by Via Storms.

Good afternoon, council members.

My name is Lana Towers, and I'm here to strongly encourage you to support the Seattle Aquarium's amended operating and management agreement so the aquarium can expand its important work with the Ocean Pavilion.

I'm a youth ocean advocate at the aquarium.

I teach guests about our ecosystem as it is represented in the aquarium.

Ocean Pavilion gives us an opportunity to further represent another important ecosystem in our one world ocean, the Coral Triangle.

This representation improves the way we can care for our oceans and in turn our world.

Ocean Pavilion brings more resources to care for and rescue animals in need and increases our ability to inspire.

I've interacted with many visitors, particularly young visitors who had never seen an ocean in person before, and many whose interests in marine science were sparked by a visit to an aquarium.

Supporting the aquarium means supporting our future biologists.

In Seattle, marine life is an integral part of the fabric of our community.

I urge you to support Ocean Pavilion.

Thank you.

Our next public commenter is via storms who will be followed by the Samantha Lynn Martinez.

Is this okay?

Okay, hello council members.

My name is Via Storms and I'm a youth ocean advocate at the Seattle Aquarium.

I'm here because I believe the new ocean pavilion expansion is important and we will have a huge impact on our community.

My time with the Seattle Aquarium as a high school volunteer has taught me how to be an advocate for our oceans, specifically our own Salish Sea.

My job is to inspire empathy for the oceans and all of us who depend on them.

Without this, younger generations may see an ocean with more plastic than fish in it.

We must take action to ensure that this does not become a reality.

The aquarium has programs that teach people of all ages to care for our oceans and marine animals.

It motivates people to take action.

My first exposure to the ocean beyond the surface was aquariums.

I grew up in Texas, so I had never really seen a beach or the ocean until I visited the Dallas Aquarium for the first time.

I was immediately encapsulated by the wide variety of life swimming below the surface that I had never known was there.

Today, my dream job is to be a marine biologist, and I love teaching people why they should care about and protect our oceans.

This is all thanks to aquariums.

We need your support to ensure that the aquarium can continue its vital conservation work and inspire a whole new generation marine biologists.

Thank you.

Our next public commenter is Samantha Lynn Martinez, who will be followed by Leah Thorpe.

Hi there, council members.

My name is Samantha, and I'm actually a former Youth Ocean Advocate.

So fast forward a couple of years past these lovely volunteers we have here today, and now I'm working as a marine biologist.

And truly, I have to say that the aquarium and their improved O&M agreement is something that you all really have to support.

I've come back after a couple of years because this amazing team of people have so much to offer a brand new generation of visitors, guests, and tourists that live around this area as well.

And for me personally, the Coral Triangle, basically the giant feature of the Ocean Pavilion, it really brings back a story from home.

I grew up in the Philippines and moved over here in Seattle when I was about three or four.

And this is truly going to be a link between my home away from here and a home here in Seattle.

And I'm so excited to see everything that this new ocean pavilion has to offer.

It's going to be a cultural hub for here in Seattle and for people who visit as well.

And it will make accessibility to all of this ocean science a lot easier for so many people here and around the globe.

So thank you so much and hope you have a great day.

Thank you.

Our next public commenter is Aaliyah Thorpe who will be followed by Jesse Wasson.

Hello, council members.

My name is Aaliyah Thorpe, and I am a downtown Seattle resident, and I've been volunteering with the Seattle Aquarium for three years, where I've witnessed firsthand the invaluable work that it carries out as the largest platform for ocean conservation in the Pacific Northwest.

It's of the utmost importance that we address the mounting challenges our oceans face and raise awareness among individuals of all ages regarding the significance of ocean life.

That is why I am personally excited about the educational opportunities the Ocean Pavilion will offer, fostering understanding of our one world ocean and its global impact.

Moreover, its free admission programs and community-focused initiatives are essential to the aquarium's conservation mission.

As a resident of downtown Seattle, I can attest to the aquarium's role as a cornerstone of our waterfront.

I believe the expanded pavilion will not only benefit the businesses within my community, but also bolster waterfront tourism.

The proposed expansion holds the potential to not only strengthen community cohesion, but also contribute to downtown's economic recovery.

I urge you to support the aquarium's request, ensuring our community reaps the rewards of this project.

Thank you for your consideration.

Our next public commenter is Jesse Wasson, followed by Monty Anderson.

Hello, Seattle City Council.

My name is Jessie Wasson, and I am the Programs and Operations Manager for Inspire Washington, our state's cultural advocacy organization.

We champion public funding and policy that support nonprofit science, heritage, and arts organizations, as well as the broad creative economy in every one of Washington's 281 cities and towns.

But today, I am here to talk about one specific organization in our great city of Seattle, the Seattle Aquarium and the incredible Ocean Pavilion.

A few months ago, I was fortunate to get an in-person tour of the future home of this project from aquarium and construction staff.

I was initially blown away by the care and intention that was put into this project, from animal welfare to public engagement to environmental impact and more.

And then my thoughts initially went to my nieces and nephews, who will learn, play, and be inspired by this incredible place.

Providing opportunities like the Ocean Pavilion is how we excite the next generation of scientists, explorers, volunteers, and activists who will protect our oceans for years to come.

The Ocean Pavilion is a celebration of the future.

It will transform and revitalize community life at the pier and further connection we have to the Salish Sea.

I strongly encourage you to support the legislation you are considering that will allow the aquarium to complete the Ocean Pavilion project and deliver a world-class aquarium for our community.

Thank you.

Monty Anderson will be our final in-person participant in this public hearing, then we will move to virtual participants.

Monty, you'll have one minute when ready.

All right, thank you very much.

Good afternoon, council members.

My name is Monty Anderson.

I'm with the Seattle Building Trades, representing over 20,000 construction workers here in King County.

I want to express our strong support for the Aquarium's Ocean Pacific Project and the proposed legislation before you.

As everybody knows, this is a crucial part of the waterfront.

It has provided over 1,500 people with local union jobs, apprenticeship, there's community hire on there.

This job has been a perfect example of how to build since the beginning involving the community.

I'd like to see that momentum keep going here with the adoption of this legislation and get this project done so we can have a fully functioning waterfront.

Thank you very much.

We will now move to our virtual public commenters.

Our first speaker who is here virtually is Joy Shigaki.

Joy, please press star six, and then you will have one minute to speak.

Thank you.

Good afternoon, Council Chair Lewis and council members.

I'm Joy Shigaki.

I am president and CEO of Friends of Waterfront Seattle.

On behalf of Friends, I would like to express our strong support for the Seattle Aquarium's Ocean Pavilion Project and its importance to the waterfront redevelopment and future waterfront park.

As a nonprofit partner to the city of Seattle, it's our job to help fund, steward, and program waterfront park now and in perpetuity.

We are deeply invested in the success and redevelopment of the waterfront and waterfront park to activate a renewed sense of connection to Seattle's central shoreline.

The Ocean Pavilion will do just that.

It will help revitalize tourism in our region, attract residents to the park, and beyond.

We have a bold vision for Waterfront Park and the Ocean Pavilion is crucial to making those plans a reality.

I urge your support of the legislation and support of the Seattle Aquarium that this project to be delivered on time and for a larger community.

Thank you.

Our next public commenter is Cynthia Gossett.

Cynthia please press star six and you'll have one minute to provide comment.

Hello.

Thank you.

My name is Cynthia Gossett.

I'm a 40-year resident of Seattle and a homeowner.

I've been a volunteer at the Seattle Aquarium now for 12 years with over 6,000 hours of service.

I'm also a contributor to the annual fund and to the construction of the Seattle Aquarium Ocean Pavilion expansion.

As a current volunteer and supporter of Seattle Aquarium, I strongly encourage you to approve the legislation you're considering to support the completion of the Aquarium's new Ocean Pavilion and the expansion of our Ocean conservation efforts.

Over the past 12 years as a volunteer at the aquarium, I've seen so many visitors pass through the aquarium.

I've seen the faces of children and adults light up as they experience the awe and wonder of the Salish Sea.

The Seattle Aquarium is a gem and the largest platform for ocean conservation and engagement in the Pacific Northwest.

Ocean connects all of us on this planet, every one of us, no matter where we live.

The new ocean pavilion will be a place where we can share the story about global ocean health with millions of visitors to connect millions of people to the ocean.

I'm personally committed to the mission of the Seattle Aquarium and will continue to support the aquarium with my time and with my dollars.

I ask you to support the aquarium with your actions and your votes.

Please approve the proposed amendments so our important marine conservation work can continue.

and visitors can understand the relationship between each of us and the ocean.

Thank you.

Our final public commenter is Martha Kongsguard.

Martha, please press star six and we'll start your timer when ready.

Thank you, Chair Lewis, members of the committee for the chance to comment.

I'm Martha Kongsguard.

I'm a West Seattle resident and a passionate advocate for the Salish Sea.

And I'm here to express my strong support for the Seattle Aquarium's Ocean Pavilion project.

I chair that campaign, and I'm a founding board member, also the Friends of the Waterfront.

I believe that together, they represent a once-in-a-several-generation opportunity to reinvent our waterfront and reconnect Seattle with its ocean roots.

These two projects have prioritized making a welcoming and accessible waterfront experience that both honors our place on indigenous homelands and invites all community members to the city's new front porch.

The new pedestrian connection, public plaza, and ocean pavilion striking architecture, which embodies the aquarium's conservation ethos, will help ensure that the waterfront promise can be delivered to our community.

I urge you to support the legislation under your consideration that will enable the aquarium to secure the bridge funding.

And thanks so much for all you've done for us in the city of Seattle.

Thank you, Mr. Chair, that concludes our list of community members who have signed up to participate in this public hearing.

Thank you so much, Mr. Clerk.

And thank you for everyone who called in to participate in the public hearing for agenda item two.

We will now move on to the presentation for the agenda item.

And I believe that most everyone for the presentation is here in person and chambers.

So if folks want to go ahead and approach the committee table.

And this is going to be separated into two separate presentations.

So can I ask the panel who wants to go first in the order here?

Should it be the aquarium or does the executive team want to present first?

I'll open up, introduce the aquarium.

Excellent.

And then we'll finish up with Christopher.

Thank you so much.

Take it away, please.

Great.

Good afternoon, Councilmembers.

Thank you for your time today.

My name is Adiem Emery.

I'm one of the Deputy Mayors.

We're here to discuss legislation that amends the city's operating agreement with the Seattle Aquarium Society.

This proposed amendment is needed to accommodate C's interest in securing private bank loan through a state non-profit program.

The bank loan is needed to address both cash flow and funding shortfall issues associated with construction of the Ocean Pavilion facility.

The mayor's support ceased in securing additional funding as it would be needed to keep construction going, which is in its final and fourth phase and expected to be completed by the end of this year.

Stopping construction in this final stage has consequences, significant negative consequences.

We'll have increased construction costs, sending workers home, and delaying the opening of the waterfront.

The mayor believes the waterfront park, in which the Ocean Pavilion is a pivotal and integrated component, would be transformational, not just for our downtown, but for our city of Seattle.

It's expected to be a major draw for tourists and Seattle residents.

It already is, even under construction, and inject new life into the waterfront.

We'll continue to do that, which will also be on full display to the world as we host our World Cup in 2026. The ocean pavilion will help connect pedestrian activity from the Pike Place Market to the waterfront through the integrated overlook walkway.

While we're hoping the funding needed to complete the ocean pavilion would be in hand at this point, this is a large, complex project undertaken during challenging times.

When the aquarium experienced a total shutdown during the early days of COVID, construction costs continue to escalate and seas needing to do fundraising during great deal of economic uncertainty.

We believe SEAS has done an amazing job in securing private philanthropic dollars to date.

And when it's all said and done, the city will take ownership of a beautiful facility, Ocean Pavilion, that will be expected to have been paid at least 50% in philanthropic dollars.

That's a big news.

Today, CEAS is here to talk about the private bank loan that will not only enable them to complete the construction, but to keep both the Ocean Pavilion and the Overlook project on track and allow them to prepay the city's enhanced facility fees.

With that, I'll turn it to CEAS to talk about the status of their fundraising.

key bank terms and how they plan to use the bank loan and repay it.

With that, I'll pass it on to you all.

Fantastic.

Thank you, Deputy Mayor Emery.

Thank you, Chair Lewis, members of the committee for the opportunity to present today.

My name is Brad Rutherford.

I'm the COO of the Seattle Aquarium.

And I'm joined today by our Connections Program Manager, Jasmine Williams, Susan Bullardick, our Senior Director of Capital Projects, and Rick Johnson, our Vice President of Finance.

I've got a, we've got a brief agenda.

If you could advance the slide, please.

So I'm going to do just a brief conversation about the strong partnership between the city and SEES.

And then I'm going to turn it over to Jasmine Williams to talk about our community access, which I know is critical to all of us.

And then I'll turn it over to Susan for an update on the building, which is very exciting news.

And then I'll finish this up with getting into some details about our fundraising and the proposed financing.

And then the city, Krista Vallis and Christopher Williams will talk about the OMA amendment.

And I do want to take just a minute and say we are here for an OMA amendment request.

We were so grateful back in September when the city advanced the increased funding commitment of $20 million.

And we heard loud and clear that that was the final commitment of funds from the city.

And we are here to say thank you.

and to talk about this financing package and to talk about paying back that $20 million advance.

So we're thrilled to be at that point in the conversation, and I just wanted to touch on that important point.

So the next slide, please.

We have a long-standing relationship between Seattle Parks and Rec and the Seattle Aquarium Society, or SEAS.

We have been successfully operating the Seattle Aquarium since 2010 through this operations and management agreement that was worked out between parks and Seattle Aquarium, and that 13-year track record has been outstanding.

And the relationship goes deeper.

We partnered with the city and parks to develop our master plan.

that was approved by the city council in 2015 that actually laid the groundwork for Ocean Pavilion, which we're here to talk about today.

So we're, and if you could go to the next slide, you can see there have been a number of ordinances and resolutions over the years moving us forward in this.

And again, the most recent in 2022 for the increased funding commitment of which we are very grateful for the city.

They stepped up, helped us get through phase three of construction.

We also were able to advance our fundraising by $10 million during that period.

And now we're at a point where we've raised over 75% of the funding total and are in a position to secure a bank loan for the remainder of the project.

So thank you so much again.

And with that, I'll turn it over to Jasmine to talk about community access.

Yes, thank you, Brad.

Next slide, please.

My name is Jasmine Williams.

I use she, her pronouns, and I am the Connections Program Manager in the Community Engagement Team with Conservation Engagement and Learning.

I have been involved in the aquarium since I was in high school as a volunteer.

So you heard from Youth Ocean Advocates before, and I was one of them.

And fast forward, you know, 10 plus years, here we are.

I have, growing up in marine science, not always seen myself represented within marine science as a black woman, and this motivated me to want to address the systemic barriers that prevent so many people of color from engaging and finding careers within marine conservation.

And I am very proud to say that the Seattle Aquarium understands this and is striving to make the aquarium and our field, largely, more accessible to everyone in the greater Seattle area.

And we know that we cannot achieve our mission of inspiring conservation of our marine environment without becoming an anti-racist, equitable, and inclusive organization.

So with that said, we have a variety of access programs and discounts available to help remove barriers to engagement.

And one of them is the Connections Program.

We partner with nonprofit and social service governmental agencies that serve historically oppressed and marginalized communities that typically face the most barriers to engagement.

So through this program, we hope to create authentic, mutually beneficial relationships that build trust between the aquarium and the communities.

And all our partners have access to free admission, and we hope that that is just the start of our partnership, knowing that free admission is not the only barrier to engaging with the aquarium.

So in the past year, we have expanded this program and we've added more resources.

And this has really resulted in us deepening more ties with our community and increasing our partnerships broadly throughout the community.

Next slide, please.

So we are now up to over 450 Connections partners.

We have 200 plus conservation partners in 13 different countries.

We have over 2,200 Youth Ocean Advocates.

And the partnerships just go on and on.

40,000 students across 200 school districts in the state.

And next slide.

And then we're also wanting to highlight the growth of our species recovery programs.

So here you can see there are two images of the Indo-Pacific leopard shark and a Pinto abalone.

And we are helping to recover species locally here in our Salish Sea at home and also in the Coral Triangle.

And we look forward to continuing to grow this conservation work as we expand our organization.

And I will pass it to Susan.

Thank you, Jasmine.

As Brad mentioned, my name is Susan Bullardick.

I use she, her pronouns.

And I serve as the Senior Director of Capital Projects at the Seattle Aquarium and leading the Ocean Pavilion project in partnership with the Office of the Waterfront, City's Office of the Waterfront, and other key stakeholders.

And we're really excited, as you can hear in the testimonies, to deliver this project that will serve as a centerpiece of the new Waterfront Park.

It's been no easy task and we often repeat that directive that Council President Juarez reminded us early on about let's not dig dirt twice.

So we have been working very closely with the city in the waterfront construction so that we are all working collaboratively on that and very appreciative of that.

Hold on, before we go to the next slide, Councilmember Herbold was under the impression I would take questions after each section.

I think that's actually a better way to go about this, so I do want to give Councilmember Herbold a moment to ask a question on the previous section.

Thank you so much.

I really appreciate it, and I love the accessibility work that you're doing at the Aquarium.

so fantastic and inspirational.

And I have great hopes for its expansion.

I did want to talk a little bit about the free ticketing, fully understanding that free tickets is not the only way to expand access.

to the aquarium.

We know that the redemption rate for those tickets is about 40% to 45%.

And I'm just wondering, my first question is just, can you talk a little bit about what you might be doing to expand that redemption rate?

And then my second question relates to, the upcoming increase in admissions fee.

I believe the plan is to increase fees by an additional $10 a person.

And just wondering, again, given this increase, if there are other efforts that you are engaged in to make sure that the aquarium is truly accessible to all.

Thank you.

Yeah, so I'll take that first question.

So yes, redemption rates are not as high as we would like them to be.

We do all that we can to put as many tickets out into the community and recognizing, right, that the families that we're giving them to have other barriers, right?

The one thing that we're noting and working on is working with our partner organizations so that they understand their own redemption rates and helping them understand of the folks that they're giving them to helping us understand why their folks are not coming.

So right now, the biggest issue is that they don't know of the tickets that they pass out, who has come and who hasn't.

And so we're working with our communications and we're working with our systems and our data so that we have a better sense so that we can share that with the organizations.

And they are also asking that same question, so we're all.

trying to work on that together.

And then I will say that we have a number of programs, not just with tickets, but with outreach programming, where we're really trying to go into the community so that we can provide engagement in that way, as opposed to having everyone to come to us, knowing that sometimes it's difficult for folks to get down to the waterfront.

By increasing our team, we have more folks that are able to go into the community so that we can do some more listening.

We're going to do some community conversation soon.

And I think that's also going to help give us a better sense of what are the barriers.

And we're giving tickets, right?

But obviously, there's other things that are happening.

And so really trying to understand what those barriers are so that we can help to remove them and hearing that from the community themselves.

Yeah.

And I'll let Brad take the next question.

Yeah, thank you very much.

It's a topic we've given a great deal of thought about.

So the first thing that we're really wrestling with and trying to make sure is to ensure the value proposition of what someone is paying a ticket for.

So today, an adult Washington state resident would pay $29.95 to come into the Seattle Aquarium.

The new addition is estimated to add 50% more stay time, more value for the price of that ticket.

But we're only increasing the price 33%.

So we're trying to make sure that the value proposition stays strong.

And we've compared that to Monterey Bay Aquarium, Shedd Aquarium, Georgia Aquarium, National Aquarium, New England Aquarium, and our prices are still below and are competitive in that rate.

We're also comparing it to other activities that people can do on the Seattle waterfront, Seattle Center, and we feel that price is still very competitive and so very good for the overall health of the Seattle Aquarium.

But I think the question that we're all interested in is what does that mean for access?

And our argument is that at $29.95 or $39.95, you're still talking about a challenge of access.

So we are doubling down on our investments through our Connections Partners program.

by putting more staff, more money into that program, because our mission, inspiring conservation of our marine environment, can't be achieved without all communities participating, and we truly believe that, and we have to find ways that all communities can access the Seattle Aquarium.

Thank you.

No more questions, Councilmember?

Okay, thank you so much.

We can proceed with the presentation.

Oh, I apologize.

Council Member Morales.

Yes, go ahead.

Thank you.

I have one more question on this slide and it sort of is getting to your point.

You know, part of the purpose of this being to educate and to help folks understand conservation.

I'm also looking at a very interested in this question of the estimated public benefit value.

And as a mom of two kids who are three kids who are none of whom are old enough for summer camp anymore, much to my chagrin.

I am recalling that summer camp is not cheap.

And so I'm wondering if you could share either what the average cost is for your camp or how many people you think you would be serving with this and whether given the low redemption rate of the community tickets, it might make more sense to shift some of that into more scholarships or more school visits so that more people can take advantage of the opportunity to learn about the work that you do.

Yeah, I can take that question.

Thank you for that question.

So our summer camps and I'm trying to remember exactly how much they cost right now, but they are around $350 a week.

And we provide scholarships of up to 80%, I believe, to folks who would like to apply.

This scholarship is separate from the Connections Program.

advertise to our partners and share out this opportunity, but anyone is available to apply for these scholarships as well as scholarships connected to schools.

So there are two teams that are working to create access and that money is not pulled together.

So the money that's going towards the connections program and the use of the tickets is separate than the money that is going to schools and camp scholarships and allowing classroom visits and field trips from Title I schools to come and visit the aquarium.

And so we work together and share information and resources with our two prospective audiences, but we're not required to shift that money around because it's separate.

So we have the ability to expand tickets And we have the ability to expand scholarships to our summer camps.

And I will say that our summer camp scholarship rate has increased in the last few years.

I don't think many people knew that we had scholarships to our camps.

And in the past few years, that has increased.

double and we've been filling all of our scholarship spots, so we we set aside at least two spots every summer camp for scholarship recipients and we hold those until a few weeks before our camps before we release them.

Thank you for that.

Chair, if I might just one follow up.

Yes, I guess.

So I appreciate that information and certainly understand the different colors of money that you have to play with here.

I guess my my real question is about, you know, given, again, the low redemption rate for the community tickets, if it might make more sense to reconfigure what you think the estimated value is of this public benefit and figure out how to, if there's a target that you are trying to achieve here and you know that some percentage of this is probably unlikely, it feels like maybe there's room for another version of this slide that we might look at as we're having this conversation.

Yeah, thank you very much I really appreciate the question.

And I think what we can do is look at this information get more details on it and and provide that to the committee members if that would be okay.

I think it's an excellent thing that we need to look at is. you know, should we be, for example, investing more in summer camp scholarships because of our current redemption rate?

And we are happy to try and reallocate those resources to make them more useful.

I will point out, we do have another program under Jasmine's leadership called the connection partner membership, which is a $25 family membership for the aquarium.

And we'll also include those numbers in our summary that we will get to the committee.

So if you'll give us a bit of time, we'll make sure we get all of that information to you, but appreciate the question.

There will also be an opportunity for the city to engage with the Inquirium on its public benefits programs when it takes over the Ocean Pavilion after their certificate of occupancy is issued.

Any other questions Council Member Morales?

I think we have a lot to get through in this afternoon so I think at this point I would revert back to the old rule.

Let's just get through the presentations and open it up to questions.

But if council colleagues would make notations of the slide numbers and their questions as we go, I will make as much time for questions as possible at the end of the

So this project will truly be a civic gem for Seattle.

The Ocean Pavilion will be an accessible and inclusive urban park on the top, as you see in this image.

Opportunity, there's a public stairs and elevator that will get you up to the top of the Ocean Pavilion, then carry you up to the market, or if you're coming from the Pike Place Market, coming down to the waterfront.

For the first time in history of the city we will see that direct connection.

We've also been very involved with the coast Salish and urban Indian community on this project from the point of design to where we are now in our construction.

And this has been relevant into our.

public art that's been, we have had an indigenous-led artist selected for our public art piece.

The plantings that you see on top of the roof, we have Valerie Seacrest, a Muckleshoot tribal member, and specializes in that, has been helping us.

Other members of the Suquamish tribe, the Quinault tribe, and urban Indians have been working with us on that.

Conservation, you've heard a lot about our conservation work and the testimonies on those who are volunteering and our youth advocates that will increase supporting downtown recovery work, jobs for the construction certainly but also jobs for additional staff at the Ocean Pavilion.

spaces for species recovery.

You heard Jasmine speaking to that.

And also we're targeting to be the first city-owned PEDL certified living building.

Actually, it will be the first PEDL certified building in the world.

So we're very excited about that goal.

Next, please.

So next I'm going to just share some images of where we are in the construction you can see to the larger images where we are right now at the ocean pavilion popping up and you see that view from the south looking north of that entry area, and the big windows that will look into the ocean pavilion.

There's also a feature right below that opening where you see the kind of people pointing to.

I'll talk about that in a moment, but that is a public free public access to into look peeking into our exhibits.

Next please.

Here you see looking out actually from the new Pier 62, looking across to the new Ocean Pavilion and the Salish Steps.

And that integration, you can see how connected it is with the waterfront and the Ocean Pavilion and those steps leading you up to the market.

Next, please.

And that connection with the overlook walk in the Seattle Aquarium taking you on to the rooftop.

Again, the plan is for the project to be finishing up construction by the beginning of next year and then opening next summer.

And looking forward to having you there next.

And this is a view looking from the east to west on the street side, the new Ziceladzic Road that has been completed by the city to connect you again to another connection to the waterfront and accessible pathways that are critical connections.

And next.

And this is the oculus that I want to point you to that is a view into the large main reef exhibit.

And surrounding this is the art design from Dan Friday alumni artists that again was selected to be our public art dance piece will surround this as well as being below on the sandblasted design below and then into the lobby area.

look forward to that happening and having you come and visit that as well.

Next.

And I'm going to hand it back to Bren.

Great.

So I will try and be as brief as I can.

I know time is tight, but this is a complicated project.

We divided it into four phases so that we could begin on time and in sync with the Office of the Waterfront and all of the other construction projects.

So I've talked quite a bit about phase three and the critical increased financial commitment from the city and our great fundraising efforts that moved us into phase four.

We are now exceeded our 75% fundraising target and are bringing forward a commercial loan, a bank loan.

to finish the project and repay the city.

If you go to the next slide, please.

So the fundraising is just on tremendous pace right now.

It is a true public partnership 50-50 split with $80 million targeted to be raised by private funding and $80 million targeted to be raised by government funding.

We are ahead of schedule on our private funding.

We are just under $67 million.

We have $13 million to go by the end of 2024, and we have very strong confidence in our ability to raise that final $13 million.

On the government fundraising side, we have had great success in many areas, including the city, the county, the state, the port.

On the federal side, we have had a little less success, and I'm going to go into our efforts and where we are on that and what we're going to do about it, most importantly.

So if you'll flip to the next slide, this just outlines our plan for that next 13 million.

It's really getting into the weeds, but we, again, are very confident we're in our ability to do this.

And then the next slide, This shows you our efforts on the federal side.

So it began with a very strong proposal for an EDA grant of $10 million, which we requested into the second round and ultimately were declined.

We also had excellent inroads into the Build Back Better infrastructure bill, which ultimately ended up not being supported through Congress.

On the community-directed spending, we are very grateful to Congressperson Jayapal's efforts and ultimately received $750,000 in community-directed spending.

So not the $3 million that we had originally tried for, through no fault of Congressperson Jayapal, did an excellent job representing us.

And then down at the bottom, $5 million in community-directed spending through Senator Murray's office that ultimately was not funded.

So we have taken it on the chin a bit on the federal side.

And if you'll go to the next slide, I'll show you what we're gonna do about that.

So this is the outline of the commercial loan from PNC Bank.

It is designed to be a draw up to loan.

They are guaranteeing an ability to drop to 67 million.

Our projections are we will use 53 million out of that 67 million.

20 million of that 53 will be used to repay the city enhanced fees ahead of schedule with interest.

We will do that next month.

If we close the loan next month.

That leaves us 26 million to complete the construction that's our current budget on that.

And then we are setting up a capital reserve account.

That is basically a for any capital emergencies with Ocean Pavilion, but primarily as if if we were to default on the loan, it is a reserve fund that would be used to cover more than a year's worth of payments.

So very conservative, very helpful thing to the bank.

Our target close date is the middle of August.

And the vehicle that we are going to use on this is the Washington State Housing Finance Commission's nonprofit facilities program.

It's fantastic.

They issued tax exempt bonds that the bank will purchase.

That gives us a very competitive rate.

The rate on this loan is actually going to be 1% below prime.

And I'll get into a little bit of the details on that in a moment as well.

So next slide.

So some of the key loan considerations are this assures completion of the project in summer of 2024. We secure this loan.

We will deliver ocean pavilion open to the public.

Next summer, which will be absolutely critical for the revitalization of the waterfront and Seattle.

It is an atypical loan structure is a structure in that there is no physical collateral.

It's made clear and all the loan documents that there is there.

Pier 59, Pier 60, the existing aquarium, are owned by the city.

Ocean Pavilion, as soon as we finish it, will be delivered to the city.

There is no physical collateral for the bank to use, so it is an interesting structure.

They are looking for ways to minimize their risk.

The only commitment we are making is that surplus revenue generated by the operation of the Seattle Aquarium will go towards the loan repayment.

50% of that is pledged.

We plan on actually delivering more than 80%.

of our surplus revenues to pay down that loan as quickly as we possibly can.

It has a variable interest rate, which we actually are very supportive of, because that comes with no prepayment penalties.

If we were to have to pay this loan out over its amortization period of 15 years, you'd be looking at 20 more million in expenses, no matter what the interest rate you get, because all of the interest on that over 15 years versus our target of repaying the loan by the end of 2028. So prepayment or a variable rate is good.

Plus we're at the top of the market on rates right now, not a great time to lock in rates anyway.

So it really does seem to work for us.

And most importantly, it avoids a work stoppage that would have to occur if we don't secure this financing.

We would pause construction that would cause millions of dollars in escalation.

It would send hundreds of workers home.

And none of us wanna see that.

And it would delay the project probably measured in months, if not years.

So those are the key loan considerations.

And if you go to the next slide.

So there's been a lot of discussion about how did we get to this loan size?

How did we solve the, how did we size this loan?

So the first column shows the total goal, $160 million.

We have physically collected, been paid just under a hundred million dollars.

We have $13.7 million in pledges that are coming due in 2023 that we will be able to use to pay invoices on the construction.

And it's those yellow highlighted items that are the foundation of what the loan is going to serve.

$11 million in secured pledges.

These are monies that are pledged both by public agencies and private donors.

They're going to be paid out in 2024, 25, 26. We have to finance against them.

That's part of the loan.

There is the completion of the campaign, that 13 million in private that I talked about that we will finish by the end of 2024, 3 million more in state and a little bit in county money.

And then finally that big federal piece.

And so let me show you how that breaks down on the next slide.

So the, Remainder of the campaign totals about 16 million.

That's the 13 private and 3 million government.

Those pledges that will come in, but require financing because of the timing of when they come in, that's another 11 million.

And then that federal gap of 19 million, you add those three together and that's the $46 million for bridging the campaign, the pledges and the gap.

And then that 7 million capital reserve fund that I talked about, that's why we are penciling out 53 million is our draw on the loan.

Next slide, please.

So I'm going to move through this one.

This is just the detailed breakout of the pledges.

So this is the level of detail we are working this on.

We know exactly when the pledges are scheduled to be paid.

We know when they'll be coming in.

We know when we'll have our contractor invoices.

And that's how we're balancing out that 13.7 million that we'll have in time.

And the total of those next three columns is the 11 million that we need funding for.

Next slide.

And this is probably the most important slide I have for you.

It shows the principal and interest payments and when we will be making those payments.

Council Member Herbold, we were doing a briefing and would like to see this slide broken out between principal and interest and when the pledges and campaign monies are coming in.

We will do that and we will provide that to the committee.

We didn't have time to fix this slide in advance.

But what you're looking at is, say 2024, we will be paying about $17 million on that loan, the bulk of which is on the principal side is pledges coming in campaign returns coming in.

as well as the interest payments we have.

And then that goes through 25, 6, 7, and 8. And the final year in 2028, that $7 million reserve fund, which we don't ever intend to tap, will then be used to zero out the loan and will be fully paid out debt-free in the end of 2028. And that, if the next slide, is our time for questions.

Thank you so much to the panel.

So I will open it up to committee members now for questions.

I certainly have a couple of my own but I do want to make that space for committee colleagues before I ask mine.

Are there any Council Member Herbold?

Yes.

Thanks so much.

I'm going to restate in my own words, some of the things that I've learned both from this presentation or earlier earlier discussion, I do have a couple questions but first I just want to, again, share what I've learned for the viewing public.

On slide 15, I think that underscores something that I did not understand before, which is once your private fundraising campaign reached its 75% goal, a commercial loan became possible.

That it wasn't possible before that.

I think that's a really important piece for folks to understand for why you came to the council last year for a $20 million loan.

But this year, you're eligible to go out for a commercial loan.

I think as you clarify, but I want to underscore, the city will not be a guarantor on this commercial loan.

Ownership of the new pavilion will transfer to the city after the certificate of occupancy is issued in 2024, but the ocean pavilion itself will not be collateral for the loan.

And the loan last year of $20 million is covering the shortfall that is shown on slide 21. So there's a row that shows a $19 million shortfall.

the loan last year covers the shortfall, and then we will be paid back ahead of schedule with the proposed commercial financing, and then CEAS will replace that funding over time by increased revenue from admissions.

The financing will give you time to increase the admissions and ticket prices and generate that extra revenue.

And then, finally, before I want to mention my ask my question on slide 22. I think this is a slide that I think is very, very helpful.

Point one on this slide is that is illustrates the funding that is yet to be raised.

0.2 shows the cash flow issues where pledges have been received but will not be paid until future years.

And then 0.3 is the federal gap, which will ultimately be covered by increased admissions in future years.

And so then just going back to my question, On slide 16, the right side of the slide says that funds have been secured.

Just want to confirm that the statement that funds have been secured means not just funds in hand, but also funds for which you've received firm pledges that will be paid in future years.

Yeah, thank you for that clarification.

That interpretation is exactly correct.

So for example, the Port of Seattle has committed $5 million to this project, which is phenomenal.

We have received 1.1 million.

We know the port is good for the 3.9 million remaining, and they have a schedule laid out in our MOU with them of the timing of those payments.

So that's a perfect example of how that number is included in that total, but we do not yet have it in hand.

And thank you for remembering my request for slide 24. I appreciate it.

Thank you so much.

Are there questions from other members of the committee?

Okay, seeing none at this time, I'll go into a couple of my questions.

First, the presentation touches on a couple of slides on the Overlook Walk.

The Overlook Walk is intimately connected to the Ocean Pavilion.

So just to confirm for the record, if there were a work stoppage on this, it would also delay the opening of the Overlook Walk connection between the Pike Place Market and the waterfront.

Is that correct?

So they are separate projects.

So the Ocean Pavilion, if it was to stop, the Overlook Walk would continue, but it wouldn't be able to connect onto the rooftop of the Ocean Pavilion.

Meaning there would not be a connection between the waterfront and the Pike Place Market?

Yeah, because the stair and elevator would not be accessible, so it would no longer meet the ADA requirements and goal that we have, which is that anybody with a stroller or a wheelchair can come from Pike Place Market, cross the roof of our building and down that.

So those would be unavailable.

Right.

It wouldn't meet the accessibility.

I mean, the Overlook Walk does have stairs, but it doesn't have an elevator.

Right.

OK, I think that is an important point because there has been some communication about the waterfront as a whole maybe not being able to open, which You know, I mean, the park will open regardless of the status of this project, but the overlook walk is something that would be inhibited.

And I think that's an important distinction to make and a compelling policy reason to pursue strategies to make sure that the Ocean Pavilion comes in on time and on budget.

I do want to ask as well about the, you know, the unusual terms that are in the agreement where there isn't physical collateral, but there is an understanding on surplus revenue as a condition for the loan.

Can we get a definition of surplus revenue?

I think that'd be useful for the committee to know.

At what point are your revenues considered surplus?

I can answer that.

My name is Rick Johnson.

I'm vice president of finance for the aquarium.

It's really a simple bottom line answer, revenues in excess of expenses, which we projected out.

And we've done some extensive modeling and had consultants review that as well.

And we are projecting significant annual surpluses similar to other large aquariums around the country.

And those estimates are based on the recent attendance trends that the aquarium is experiencing?

It's based on projections of future attendance, and we've had two consultant groups do an analysis of that for us, and they both came in remarkably consistently to each other.

And the second consultant did a pricing study that indicated $5 million more in annual revenue than what we projected internally.

So we think there's room and there's some margin to these numbers that will allow those surpluses to repay the loan as quickly as Brad has explained.

Right, so even budgeting by the conservative baselines, you feel confident on the ability to repay this loan?

Correct, as does the bank.

Yeah, I will just state as a brief editorial comment, in my capacity as chair of the committee, I serve ex officio on the board of the Seattle Aquarium, so I do receive presentations on the finances of the aquarium, as well as reviewing reports of attendance, and can state that from that experience, the aquarium has been experiencing a very robust recovery coming out of the COVID shutdowns.

But I do also want to make sure that me stating that is maybe supported by the panel.

So I could hand it back over to you to give a moment to confirm if that is the case.

That is the case.

We're about 16,000 ahead of budget in attendance through June 30th.

And our revenue is just like point something percent below projection.

So we're running extremely close to budget.

And the attendance trend has been consistent, even with all the construction on the waterfront over the last how many years.

Yeah, yeah.

So we can only imagine with with the completion of the project, the the long term vibrancy and success in the institution.

So appreciate that.

Do colleagues have any additional questions on the presentation?

Okay, I don't see any.

And do we now have, was that the combined presentation or do we have a separate presentation from the city?

Yes, yes.

Okay, I will hand it over.

Christopher, am I handing it over to you?

Okay, yes, I will hand it over to Deputy Superintendent Williams.

Thank you.

Thank you so much to our colleagues at the Seattle Aquarium.

And thank you to council members for taking the opportunity to brief you today.

I know you have a packed agenda, so I'll try to go quick.

I'd like to start out by acknowledging our colleague Krista Valles for all of the background work that she did to kind of bring us here today.

Thank you, Krista.

I'd also like to acknowledge what an exceptional partner the Seattle Aquarium has been operating the aquarium since 2010. When we transferred the aquarium back in 2010, they had an annual budget of roughly $13 million.

Today the aquarium has an annual operating budget of nearly $30 million.

This track record of growth over the years is significant.

Together with an expanded aquarium, and more exhibit gives us a good measure of confidence in the aquarium's ability to pay the loan debt.

Additionally, there's also been many markers along the way that exemplify kind of the strength of this partnership.

One example was the aquarium's performance during the pandemic when literally everything was shut down.

and how they definitely manage their financial resources during that time.

Another example was in 2010 when we transferred the aquarium.

A lot of those employees were city employees and had concerns about going to work for SEAS, a nonprofit entity, and they were able to resolve those issues.

Congratulations to Bob Davidson, his team, Brad, Susan, Jasmine, Rick.

They've truly done an incredible job managing one of the finest, well-run public aquariums in the country.

So thank you, partners.

I also want to kind of highlight before we get into the presentation.

Why we're here you know our message today is the again the aquarium is a stellar partner.

The bank loan is good for the aquarium.

The city and the waterfront redevelopment.

We believe that the debt service on the loan.

as well within the aquarium's ability to service that debt.

The ocean pavilions and the redevelopment of the waterfront, I think is an important soundbite here, is maybe one of the most significant civic projects since the creation of the Seattle Center for the 1962 World's Fair, so it's a big deal.

Next slide.

The original agreement we had when we transferred the aquarium to seize back in 2010 required that the aquarium come back to us with a proposal for an expanded Seattle aquarium we first began having these discussions about an expanded aquarium back in 2003. and the aquarium staff has really come a long way since then.

This loan is important because it advances the project.

There's already several millions of dollars in sunk costs that you saw in Brad's presentation, and the loan is required to complete the project.

As you've heard previously, the city will not act as a loan guarantee for this loan, or other guarantor, although the city will take ownership of the new Ocean Pavilions building once it's completed.

Future aquarium revenues will be used to service the debt on the loan, which you've heard.

We support this loan.

We believe it supports our shared interests, which is the successful completion of the aquarium project.

Next slide.

This loan requires us to revise the operations and management agreement, which is why we're here today.

The legislation authorizes the executive to make changes to the OMA in a manner compatible with the requirements of the bank loan.

The city finance director is required to approve the bonds before signing off on the bank loan.

The OMA proposes a 10-year extension to the current OMA.

The additional term will expire in 2040. The current OMA was set to expire in 2030. However, as a condition of the loan, the bank wanted a longer relationship on paper between the aquarium and the city.

A new section is being added to establish a minimum reserve fund as insurance against an exigent financial circumstance to cover future loan payments if needed.

And again, this is a requirement of the loan.

Next slide.

This legislation grants an extension of the OMA again for an additional 10 years.

I just mentioned this is important because the bank wanted a longer relationship between the aquarium and the city.

It prohibits the city from walking away from outstanding bonds in the unlikely scenario the aquarium were to go into default.

The terms under the provisions provide that the aquarium and the city will work together to update other parts of the OMA within an 18 month, rather within 18 months after acceptance of the changes to the OMA.

Next slide.

This legislation grants authority for the city finance director to be the decider in determining if the bonds backing the loan meet specific city requirements.

Chiefly, the finance director will want to be sure that the loan conditions are reasonable, and two, that there are no unintended financial consequences or unforeseen risk as a part of this loan.

The finance director will approve specific bank loan documents, Next slide.

I mentioned earlier that a reserve fund will be required to be established.

ASEAS will be required to maintain a capital reserve fund at the $7 million level and will be required to replenish this fund and maintain this fund balance over the life of the loan.

Financial reporting and monitoring will be required where ASEAS will need to submit ongoing reports to the city over the course of the loan.

CEAS can request an increase in funding from the City to maintain the Capital Reserve Fund.

However, any requests for additional funding will be approved at the Council's discretion.

I will pause right there and see if there are any questions.

Thank you so much, Deputy Superintendent.

I don't see any questions from the panel.

Oh, Council Member Herbold, please.

Sorry.

Thank you.

I appreciate that in our conversations, you've recognized the position I took last year, which was my hope that with the $20 million the Council approved, that those should be the last dollars that we are asked to commit to the project.

I appreciate that we are not committing any more dollars to this project because we are not a guarantor on the loan.

But I'm not thrilled that the agreement allows C's to request additional funding in the future, but recognize that the decision-making of whether or not to do so will be in the hands of a future council, so appreciate that.

I do have a couple of questions about the loan term and the conditions on the city's ability to terminate the OMA.

Just how would the termination fee, how would it be calculated?

What would be the triggering event?

Then who basically would authorize a corrective action plan?

And is this termination fee new to the second agreement or did it already exist in the original?

Thank you.

So the original agreement allows the city to terminate its relationship with SEAS for any reason.

But given the bank loan, clearly the bank would not want us to terminate and then have SEAS have no way to generate revenue to pay off the bank loan.

So the sort of compromise with the bank was we wanted to maintain our ability to terminate, but it's predicated on a default situation and that SEAS might find itself in, which could be unable to make a payment due to the bank, in which case we would work with SEAS to create a corrective action plan.

And then C's could, under the minimum reserve requirement, also use that funding.

But should that funding fall and C's be unable to replenish that minimum reserve, that's also cause for corrective action.

Ultimately, after we go through some corrective action with C's, if we wanted to terminate at that point.

The agreement requires us to pay C's a termination fee that would be equivalent to what the outstanding cost of the bonds are that C's has with the bank.

Can you say that last part again?

So the termination fee that the city would be paying to terminate its relationship with SEAS would be equivalent to whatever it is due and owing to the bank that's outstanding at that time.

Okay, thank you.

Okay, no additional questions Council Member Buerkle?

I do not, thank you.

Okay, good.

So we can move to the next panelist.

Let me see.

Are there any other council members who have questions for the city panel?

Okay.

Well, I think that we've exhausted this agenda item.

So I appreciate everybody coming in here and answering our questions on this legislation.

Like I indicated in briefing this week, my intention was to have a full hearing and not bring this for a vote.

So we will be coming back in two weeks with an expectation of taking action on this legislation at that time.

It doesn't sound like there's any outstanding I don't know if there's anything else that you would like to add.

I don't know if there's any additional business or questions from the committee members, but if something comes up in the interim, I'm sure the panel will make themselves available.

It does sound like there's going to be a breakdown coming from one of the slides that wasn't ready for the presentation, but that would be useful for our consideration over the next two weeks.

I would maybe ask that that be But it is my expectation, I'll put it on the record, that we bring this for a vote at the next committee meeting.

So committee members should come to committee prepared to do that.

It sounds like there's a seagull on the roof.

It's probably here looking for Bob Donegan.

He's gone now, guys.

But in any event, we will take this up in two weeks.

I appreciate everybody coming by and see you at the next committee meeting.

Thank you so much.

Thank you.

Will the clerk please read item three into the record?

Agenda Item 3, Council Bill 120619, an ordinance relating to amusement device licenses, repealing the requirement for an amusement device license, repealing Chapter 5.32 of the Seattle Municipal Code, and amending sections 5.30, 010, 5.30020, 5.30060, 5.55010, 5.55030, 5.55040, 5.55060, 5.55150, 5.55165, 5.55220, 5.55230, 6.208020, and 6.208050 of the Seattle Municipal Code.

Thank you, Mr. Clerk.

I think in the future you can say amending various sections of the SMC for reading the short title, but I appreciate reading every single section in there.

It's a lot of sections we're amending with this ordinance.

≫ Thank you.

We have this amusement license fee in the Seattle Municipal Code.

I guess colloquially, I'm just gonna mint a term right here in open session.

This is the fun tax.

This is a tax on fun.

This is a tax on amusement devices in the city of Seattle.

There's been a very helpful presentation and accompanying memo that Jasmine has prepared that talks a little bit about the history and the description of this regulation.

There's a growing national trend that's alluded to in the last paragraph around repeal.

And recently, the city of New York, New York City in New York State, Aurora, Colorado and Spokane, Washington have repealed similar fees on amusement devices.

There was an interesting article in the In the May edition, one of the May editions of The Economist, commenting on the pinball industry and the resurgence that pinball is seeing, in particular, which is one of the amusement devices that is regulated.

from the May 20th issue of The Economist titled Wizardry and about this pinball boom talks about the fact that for several decades there has been a significant amount of regulation on amusement devices Because they historically had been associated with gambling and an older era where more that was a common concern in the state of South Carolina, you still have to be over 18 to play a pinball machine, just as an example of some of the regulations that are still on the books.

Indeed, the origin of our current amusement license fee is from the mid 1970s and undoubtedly for folks who have read books like Seattle Vice or Seattle Justice and know about at that time the police payoff.

system that operated in the city Seattle know that part of it was related to pinball gambling almost certainly.

If I had to speculate part of the origin of having this fee on the books, it raises a de minimis amount of Revenue for the city I think there's a compelling argument that the burden of administrating and tracking the amusement fee outweighs any possible revenue benefit to the city.

And it's.

been argued by people in the industry that this fee is having a chilling effect on the decision of businesses based in amusement to settle and set up in Seattle at a time when we are trying to attract more of these businesses to revitalize downtown and the general economy of the city post-COVID.

So given those introductory remarks, I will hand it over to Jasmine to give an overview of the legislation, talk about her memo and the presentation she's prepared for us.

So thank you so much.

Thank you.

Once again, for the record, my name is Jasmine Marwaha on Council Central staff.

And thank you to Jacob, who'll be running the slides for me.

So I just wanted to clarify, Central staff has not prepared a memo, but we, because there weren't necessarily different policy options related to this, it was whether you support the repeal or not, but we did provide a detailed summary and fiscal note.

I was referring to the summary and fiscal note for the record.

My apologies.

In case there were council members who were frantically looking for a memo.

Sorry about that.

But yes, next slide, please.

This legislation would repeal the requirement for businesses to obtain a license and pay a license fee before providing an amusement device for public use.

And the goals, go on to the next slide, as mentioned by Chair Lewis, is to reduce the barrier to entry for amusement-oriented businesses in Seattle and to provide economic relief to current businesses that rely on amusement devices as the city transitions to a post-pandemic environment.

Next slide.

So what is an amusement device?

According to SMC, it's any machine or device that provides recreation or entertainment for which a charge is made for use or play.

It includes those listed there, pool, shuffleboard, like jukeboxes, video games, pinballs, et cetera.

It does not include machines used exclusively for vending merchandise, so not vending machines.

Next slide.

So the annual license fee, well, I should say that from looking at other local jurisdictions, and it does seem like Seattle has a somewhat more complex license fee scheme.

The annual license fee for an amusement device that's activated upon insertion of a payment, so coin operator, like a swipe of a card, is 100 times the price of one play for use of the device, rounded to the next $50, not to exceed $1,500 per year.

For other types of amusement devices that aren't operated specifically upon insertion of payment, it's a flat $500 per year.

There's other caps.

So you see a countertop device or dartboard is capped at 25 per year.

Pool table, shuffle boards, music devices are capped at 50. And then special events also need to apply for amusement device licenses.

And they would pay a maximum fee of $100 per event.

but it could be less depending on how many amusement devices they're applying for.

Next slide.

So I only recently learned about the Seattle Pinball Wars and its fascinating history.

Encourage folks to go to HistoryLink to get the Reader's Digest version, I should say.

But my understanding from talking to FAS is that one of the main reasons for it currently A potential objective of it currently being on the books is that many of these amusement devices generate business income that is not subject to sales tax.

And so the license fees allow for some additional revenue capture of this business activity.

But there are some amusement devices that are subject to sales tax according to state law.

These include air hockey, billiards, pool, foosball, darts, blah, blah, blah.

You can see that on that list.

There are some other amusement devices like pinball and arcade games that are classified as non-retail amusement devices.

They would be subject, they're still subject to B&O tax under the services and other activities classification.

Next slide.

And again, as I mentioned, other jurisdictions have different requirements.

Typically the license fees are less or none at all.

So we did a little, I called around, did a little digging.

So Federal Way has $100 per novelty amusement device.

Kent has $50 per amusement device and Bellevue and Redton don't charge any license fee or have a requirement.

And as mentioned by Chair Lewis, there are other jurisdictions around the country that have repealed similar license fees in recent years, also citing economic recovery reasons.

Next slide.

So there is an impact on the budget.

It would result in reduced revenue at an estimated to be about $64,000 per year.

There's not a proposed replacement for that amount of general fund revenue.

And so while minor, the revenue reduction does impact the long-term projected gap between the annual general fund revenues and our expenditures.

And that concludes my presentation.

Jasmine, thank you so much.

Are there questions from council colleagues?

And can we go to the previous slide, actually, Jasmine, because I will have one that I'll queue up.

Council Member Herbold first.

All right, is our intent to vote on this today or are we just hearing it first?

I'm open to be flexible on the timing since this is the first hearing.

So I make it available for questions and kind of get a sense of what the committee is thinking.

Okay, thank you.

Do we have information, I suppose it would be from FAS about the purpose served by the license?

The information that I have is just for allowing for that revenue capture from the business activity.

And because I believe you explained that some businesses also pay sales tax and others do not.

I am wondering whether or not there is a policy option which would be to exempt the ones that do not pay sales tax.

I'm sorry, exempt the ones who do pay sales taxes who are already getting some revenue capture from those businesses and continue the tax on those that are exempt from sales tax.

Sure, that would that would not necessarily be a repeal of the, it would, it would be an amendment to the code as opposed to repeal of the license fee so it would be, and we could we could work on drafting a different bill but I do.

I think one thing to note is that in speaking to our tax experts in the city attorney's office, that regulation in terms of what amusement devices are subject to sales tax and what aren't does fluctuate and is subject to change by the state legislature.

Interesting.

That's good to know.

We heard a testifier, I think it was the GameWorks owner who testified that the license results in costing that business $40,000 specifically in a year that the city took in a total of $95,000.

I think that was in 2019. Yes.

In that year, that was 40 percent of the entire revenue from one business.

That would mean 68 businesses applying for licenses.

I'm sorry, the remaining 67 businesses collectively paid 55,000 for that year.

I understand, you know, accepting GameWorks and the impact on them, it's hard to imagine that the fee itself is much of a deterrent for getting into or staying in for those other businesses.

You know, again, it's $55,000 over 67 different businesses.

So I'm just wondering, what information do we have about the barrier this, fee has to these businesses?

I don't have any specific information on that, but I do believe there's been some stakeholdering to get at that impact, but I'm not specifically aware.

Yeah, I mean, my response to that phrasing would be, I think it's fairly evident of the impact that having this fee has that one taxpayer represents a colossally disproportionate percentage of the very, very small stream of revenue that this thing generates.

You know, yes, I mean, to Councilmember Herbold's point, there's probably lots of bars and cafes that have one or two devices, and in the aggregate, it's not a significant impact.

Obviously, I think in these times, any small thing that the city can do to assess a given policy here or there that can reduce the burden is something that is a warranted policy from the city as far as that particular business is concerned.

But, you know, one of the points as I've done stakeholdering on downtown recovery and talked to a lot of landlords, talked to, you know, talked to GameWorks in this case, an argument that has been made to me is that the uniqueness in the region of the amusement license fee makes Seattle a less attractive place to have these kinds of businesses, hence the fact that this raises well under $100,000 each year of our $1.6 billion general fund.

And we have to keep in mind that The overall economic activity generated by something like GameWorks is leaps and bounds higher as far as our general fund is concerned in terms of B&O tax and other revenue that it generates and brings into the city.

And to be able to be competitive to attract additional businesses like that, especially as we try to recover and rebuild downtown on a foundation, partly of entertainment amusement and tourism would be to attract more potential tenants like that.

And I just mean that this doesn't even pay for the full time person to enforce the license fee in a given year I mean that the amount of money is so anemic.

That, you know, again, I think that a, an argument can be made that the need to not process and force and do anything with this probably outweighs what we raised from it.

But, and I would also note, FAS doesn't have any objection to the repeal of this statute.

There's another effort that I know FAS was engaged in for a few years.

I haven't checked in on it recently, but it was actually to ensure that these regulatory licenses were collecting enough to cover the costs to do the regulation, because of just the point that you're making, that it costs more to, you know, to regulate from the city's perspective than is being collected.

And so there was an effort to make sure that we were aligning the collection of the fees with the cost to administer the fee itself.

It just feels like this is going a little bit in an opposite direction than that.

I'd welcome the opportunity to see any information that you have that this fee is dampening economic vitality or interest from this sector of the industry.

Yeah, and that is good feedback, and we're happy to engage with your office on that.

I mean, to one of your earlier points as well, Council Member Herbold, I do think that when we're talking, you know, if we're talking about raising revenue for a city, I do think it is warranted to examine policy around what our taxes are.

There's been a number of taxes that I've affixed my name to as a co-sponsor or proposed during my time on the council.

I think that when we are instituting regulatory fees to the premise of a line of questioning that you raised earlier, it also begs the point of what the health, safety, or welfare purpose of the fee or the regulation is.

There is absolutely no health, welfare, or safety basis for this.

If it's purely a revenue collection, then it should be reconfigured as a tax.

It isn't, strictly speaking, a tax.

Again, to speculate, as we've kind of alluded to a couple of times, as it was created in the 70s, I would imagine it's related to an antiquated history of vice that used to be associated with pinball machines that is no longer the case.

And I do think that that was the health, safety, and welfare rationale when it was originally conceived.

If it is at this point supposed to be a revenue generator, what I would just posit is, one, it's failing at that.

Two, that isn't why we should be assessing fees.

And if that's the case, we should reconfigure this to be some kind of tax, not that I'm advocating that, but it does just seem like it occasionally behooves us as a city council to re-examine relics that we find in our SMC and determine if they are suited to our times the same way that we create new regulations like we're doing right now with deactivations or whatever else that are responding to exigent problems in our economy that warrant some level of regulation intervention.

And I think that we should be capable of that kind of self-renewal and critical assessment, and that's the spirit that I've brought this proposal in.

But the questions raised for this initial hearing are very good questions, and we can work in our stakeholdering to work with your office to answer them.

Yours is very compelling argument.

Well, thank you so much.

Are there other questions from council colleagues on this agenda item?

Seeing none, let's close this out.

I will not bring this for a vote today, but we can revisit this at the next committee meeting, and we'll work to respond to some of the questions raised by Council Member Herbold in particular, and appreciate the indulgence of the committee in hearing this this afternoon.

Will the clerk please read item four into the record?

Item four, Council Bill 120609, an ordinance authorizing the superintendent of Seattle Parks and Recreation to enter into a concession agreement with the sales standpoint to occupy and use a portion of the Magnuson North Shore Recreation Area at Warren G. Magnuson Park to provide sailing and boating programs and education, short-term boat rentals, and dry boat storage.

Thank you so much, Mr. Clerk.

So here we are back on this council bill that we discussed earlier this month.

There were really, really good questions raised by committee members, in particular Council President Juarez and Council Member Herbold, who raised a number of concerns and requests for clarification on this concession agreement.

There's been a significant amount of additional information that's been provided, and we are joined by Tracy Rassler from our Council Central staff.

I believe we also have some additional presenters, Superintendent Diaz and a team from Parks.

So, why don't we go ahead and start with Superintendent Diaz, and we can bring Tracy in as required.

So, Superintendent, I will hand it over to you.

Thank you so much, Mr. Chair.

Good afternoon, Councilmembers, AP Diaz, Superintendent, Seattle Parks and Recreation.

Thank you for this opportunity to provide more information and details about the public benefits in the department's proposed concession agreement with Sales Sandpoint at Magnuson Park.

We greatly appreciate your comments and times.

and took away the questions from the last committee on July 11th.

And since that meeting, we've sent responses to a number of your follow-up questions to your staff and our city colleagues.

Today, my colleague, Brian Judd, and I, as well as Sales Sandpoint Executive Director, Seth Muir, will focus on the public benefits portion of the proposed agreement, including a more detailed breakdown of the city benefits.

These benefits were developed to align with the city's direction and specifically Council President Juarez's 2016 guidance to Seattle Parks and Recreation.

This contract includes a bevy of mandated public requirements with no rent offsets.

They are simply requirements as agreements to enact a new concession term.

What's more SPR indicates or anticipates that the city will receive several million dollars in historic district capital improvements as part of the proposed agreement with sales standpoint.

recognizing that there is much work to be done and maintenance requirements for the unique facilities regarding the boat docks and areas surrounding the concession.

I want to stress that even though this is a long-term contract, the department is committed to closely monitoring the terms of the agreement throughout its terms including the annual requirement for the concessionaire to submit a plan for our department's approval and approval of the public benefits and at any time we will not hesitate to ensure or ask the concessionaire to add more benefit if we feel that they are not meeting up to the obligations.

We have a staff team at Magnuson Park that works closely with our tenants and we will ensure that contract compliance going forward.

At this time, I would like to turn it over to Brian Judd to walk you through a more comprehensive and succinct list of the public benefits and we're available to answer any questions for the committee as needed.

So at this time, Brian, thank you so much.

Thank you, AP, for passing the baton.

And Seth Muir is also here with me.

We will, he's the Executive Director of Sales Sandpoint, and we will pivot back and forth on a few slides.

I believe that, yep, thank you very much.

I'll make sure we get this going.

Jacob, you can move it to slide two whenever you're ready.

Great.

So, to set the tone for today, we're just going to refresh and prime folks's memory a little bit about the current state of the relationship between Seattle Parks and Recreation and Sales Sandpoint.

Sales Sandpoint has operated in the park for about 25 years.

And we are operating and guiding our relationship according to an agreement established between the Building 11 LLC and Sales Sandpoint several years ago.

In that agreement, Sales Sandpoint has exclusive extension options that go through the year 2056. There is no public benefit requirement, and there's no tenant improvement offsets available to Sales Sandpoint.

And there's also an outdoor dry boat storage that is included in the proposed agreement.

We currently have that under a separate permit and we'll do some comparison analysis here on an upcoming slide.

Next slide please.

So this slide really provides some overarching key considerations in the development of the proposed agreement that we have in front of you today.

The maximum term, meaning the full contract length, if all of the options are exercised, is close to the current agreement.

It goes out to 2053. It establishes a new public benefit requirement.

As AP said, there is no rent offset.

It is simply a requirement.

And there is an accountability plan for annual reports and establishing those plans.

And it clarifies the premises that Sales Sandpoint uses within the North Shore of the park.

Sales Sandpoint does not have exclusive use of the entire North Shore, but simply several facilities in that area.

And it also incorporates a percentage revenue coming to the City of Seattle for a dry boat storage area, of which currently we only collect $1 annually.

It incentivizes Sales Sandpoint to complete historic district capital improvements in several facilities, including a boathouse and the North Shore.

And the new agreement, there's no loss of revenue compared to what we are taking in now.

And so these were a lot of the balancing priorities that we considered as we were developing the agreement.

Next slide, please.

This table gives you a side-by-side comparison between the existing agreement and our proposed agreement today.

It does compare a 15-year term because that is the length of the initial term of the proposed agreement.

You will see here that the current agreement we bring in about $860,000, and the proposed agreement we are expecting to bring in 1.35 million in gross revenue.

before any tenant improvement offsets.

While a market study that we have indicates that we could generate 4.2 million in rent revenue, this study does not take into account unique restrictions on the premises in this contract, including a shoreline restriction zone, which requires only aquatics uses, and the recreation use conveyance requirement from the National Park Service.

In terms of public benefits, the existing agreement encourages public benefits, but does not require them.

Offsets are allowed if sales standpoint were to ask us for one, but since at least 2016, sales standpoint has provided us public benefits and an annual report and has never asked for a rent offset.

The new agreement has an annual value baseline value of $100,000, which equals out to 1.5 million in that baseline value.

Or if you take into account some projected inflation, 1.85 million in public benefits.

These are required and there's no offsets.

The current agreement has tenant improvements that are allowed, but there's no offset provided.

This proposed agreement does provide up to 50% tenant improvement offset from their rent for any approved project.

And there is an annual plan that is required from Sales Sandpoint around their fundraising efforts and their facility development plans.

And Sales Sandpoint does not currently have an approved plan, so that offset will not start on the first month of this agreement.

It will start once we have an approved agreement.

And then the dry boat storage, I've alluded to that before.

Currently, we're collecting $1 a year.

And in the proposed agreement, we are anticipating that we're going to bring in around $260,000 over that 15-year period.

Next slide, please.

And then on the important topic of public benefits, we wanted to give you a side-by-side comparison of what is in the existing agreement and what we're proposing.

The existing agreement, as I said, public benefits were encouraged but not required.

There was language that Sales Sandpoint could seek a public benefit offset from the park superintendent, and they have never tried to do this with us.

And there were some specific programs that were kind of frozen in time during that time, not a very flexible exhibit.

And under the proposed agreement, there is that annual value that is going to be a baseline requirement for public benefit.

And there's going to be, as you can see, there's an annual plan that is required that will be approved and reviewed by the superintendent, a report that is required, reviewed by the superintendent.

And this annual approach allows us to be incredibly flexible so that public benefits can meet new and emerging needs.

And we'll talk about that a little bit, but one of those is the Swim Seattle initiative.

Sales Sandpoint has verbally committed to being a partner with us in that initiative.

So we expect that a partnership around Swim Seattle will be in a future public benefit report and plan, and we look forward to that.

And then capital improvements, we have it in a separate part of the contract, and those also require superintendent review and approval and we'll go through that in a little bit here.

Next slide.

All right, so I'm going to give some high level on the public benefit and then hand it over to Seth to really walk through the core details of what his organization will provide.

In Exhibit B1, we have the public benefits outlined and the value.

And we, like AP said, we used the guidelines provided to us in 2016 by Council President Juarez.

And it does allow us to have an annual.

Kind of opportunity to adjust it what's in the exhibit is a menu and a guide so that we can continue this conversation on an annual basis and make sure it is reaching initiatives and populations that are a priority to us.

I mentioned a future swim Seattle and.

some Swim Seattle opportunity.

I also want to note that Council President Juarez mentioned in our previous meeting on July 7th that Outdoors for All was a good example for public benefit.

I do want to confirm that this approach, this menu is consistent with what is in the Outdoors for All license agreement here at Magnuson Park.

And with those details, Seth, I'm going to hand it off to you for the next slide.

Seth will take on most of the categories, and then we'll come back to me to talk a little bit more about capital improvements.

Terrific.

Thank you very much, Brian.

Hello and good afternoon.

I wanted to start by saying thank you for the opportunity for Sales Sandpoint to continue this wonderful partnership.

All of us at Sales Sandpoint understand that it's a privilege to steward this special public asset, and we take this responsibility very seriously.

We also recognize our important role in providing public access and want to be as supportive a partner as possible as we work to deliver public benefit, to keep open access to the North End Recreation Area, and to meet our shared service goals with the City.

So as Brian noted, these benefits that we'll go over may flex in response to community need, but this summary illustrates what we intend to deliver in 2024. So the first slide here is all about public access, coming in at a total of $20,000.

We have a range of opportunities listed, which increase public access.

The value is based on their fair market value.

So for example, every day we're open, we sat out a cart of free life jackets, which are used by approximately 750 people annually.

If they were to rent those life jackets, it would cost $10 a day.

So that's where we come up with that $7,500 value.

We do the same with wetsuits and foul weather gear.

The expense of lake safety support, we've extrapolated from other services that provide that sort of support.

A new big one for us is that we will take over the management of the public restroom, which is directly adjacent to our facility.

That's a significant responsibility, as you can imagine, a public restroom in a public park will be and we will take that on, keeping it open to the public, but taking on the janitorial services supplies and management of that space.

Additionally, the last one there is for first aid support.

Next slide, please.

The next slide is close to my heart as a former educator, and it is all about scholarships, starting with $25,000 worth of scholarships, which will go to individuals and families.

These individuals, many of whom themselves are Magnuson Park residents, will learn about our scholarships through myriad outreach mechanisms.

And once they apply, we'll use the same process that SPR uses to calculate the need for what we allocate.

Many of these are 100% scholarships.

And in fact, for a $250 average program, we anticipate several hundred of those hundred percent scholarships every year.

we're seeing more applications than ever before.

$20,000 of this is for scholarships to community groups, and we separate that because that's an important distinction for us and enables us to be more successful.

These groups include groups like Outdoors for All, and I appreciate Connor Inslee for his public testimony earlier.

nonprofits like solid ground and kids and paper that serve Magnuson mercy Magnuson residents Children's Home Society of Washington, and just yesterday we have the soldier recovery unit who are formerly wounded warriors with us as a group receiving some scholarship.

We spend a lot of time and energy working with our community partners as they're crucial to our work engaging new audiences.

We have learned over the years that we have a greater success involving new communities, especially those who don't have prior experience with water sports or privileged to have had exposure to water sports.

If we invite these folks to participate in groups, we also find that we excel if we build strong alliances with the leaders within these groups who already have the trust of the community that they can bring.

Then in an ideal world, a group will receive a full scholarship to come all together for a day program.

Several of the students or youth will come and join a longer term camp, perhaps joining a full season of a racing team.

And then eventually, like Diego did last year, work with us and rent our boats forever.

Next slide, please.

The next slide is about community outreach events.

These in particular will flex in response to community need.

And we can anticipate that this would be a place where perhaps a lake swimming or an introduction to water safety in a lake environment partnership with Swim Seattle might exist where it hasn't yet been conceived.

But these free events will total $15,000 each year.

And examples include our full moon sails, weekly races, refresher lessons, and free barbecues that we offer every season.

And like I said, we anticipate working with Swim Seattle to present some of these events in the future.

Next slide please.

The final slide in the public benefits summary covers other activities, the largest of which is the volunteer events, where over 100 estimated volunteers work each year to help us clean the public beaches, the public boat ramps, public pathways, and the public pier directly adjacent to us, and conduct repairs and improvements therein with SPR's oversight and approval.

This value is $12,500 using SPR's wage calculator for volunteers.

And then finally, in 2024, we anticipate giving away $7,500 in boating passes for paddling and sailing to community groups.

Typically, these are used for fundraisers for those organizations, and we prioritize groups with measurable need Many of these are existing community partner groups like Outdoors for All and Solid Ground, some of whom we've been working with for decades.

So that concludes my detail.

Thank you again for the opportunity.

All right, and actually just 1 more slide here on public benefits around the capital improvements.

And so, as mentioned, this agreement has a separate section for this because of all of the requirements related to it.

Sales standpoint, we'll have up to a 50%.

Monthly concession fee offset for improving.

Uh, currently inaccessible public, public assets, public buildings that will become accessible to the public.

And, as I mentioned before, Exhibit C actually outlines a very specific set of categories for what is eligible for that offset.

And every project needs to go through a review process with SDCI, Seattle Parks and Recreation, the Landmarks Preservation Board, if needed, to become approved and eligible for those offsets.

And as well, all of our tenant improvement opportunity or tentative proven projects out here at Magnuson Park, we do have tracking accountability baked into the contract and into our processes.

And, you know, most importantly, when we.

When the contract ends, we actually inherit and all of those improvements and they become city property.

And as I mentioned, we expect that these improvements will be in the millions of dollars, particularly with the boathouse, which is building 31 right there.

The boathouse is currently inaccessible to the public because of the condition of the building.

It's over water.

The pilings need repair.

It's going to be a very, very complicated project.

The sales standpoint team has a lot of motivation and desire to renovate that, not just for their program, but for public access and to maintain the structure within the historic district.

So with that, hand it back for questions.

Thank you so much for that thorough report back after our previous committee session.

I appreciate a lot of these clarifications and putting a lot of this clearly on the slide.

Are there questions from committee members?

Council President.

Thank you.

I just want to thank you guys for coming back with the public benefits piece and showing the offsets.

And thanks, Tracy, for sending out the memo to kind of line up what the questions were.

I apologize if you felt like I was too hard on you last time.

Just I think it's always better to come back and answer those questions so we can respond to constituents.

So thank you.

Thank you, Council President, and vigilantly guarding our public assets is a big part of our committee work.

So appreciate the probing questions last time that led to these great clarifications.

Are there any additional, Council Member Herbold.

Thank you, I likewise just wanted to thank you for providing the information on the actual rent, the market rent, and allowing me to compare the value of the public benefits, including the improvements, that was very helpful information for me.

Excellent.

Well, given those statements from committee members, just to take a quick poll, are committee members then ready to vote or do we have questions for Tracy based on the presentation?

Okay, I guess we can just go ahead.

Given the late hour, I would like to call the question and vote if committee members are satisfied.

So I will make the motion to recommend passage of ordinance 120609. Is there a second?

Second.

Moved and seconded.

Will the clerk please call the roll on recommending passage of 120609?

Council Member Herbold.

Yes.

Council President Juarez.

Aye.

Council Member Morales.

Yes.

Chair Lewis.

Yes.

Chair, there are four in favor, none opposed.

Thank you so much, Mr. Clerk.

The measure passes and we'll go to the next full council meeting.

Again, really appreciate this follow-up from everybody involved and look forward to seeing the final passage of this agreement.

With that, committee members, we don't have any other agenda items.

Thanks for your indulgence on the long agenda this afternoon.

It is 4.15 p.m.

Is there anything for the good of the order?

Seeing none, it is now 4.16 p.m.

and this committee is adjourned.

Thank you.

Recording stopped.