Seattle City Council Public Assets & Homelessness Committee 81623

The August 16th, 2023 meeting of the Seattle City Council's Public Assets and Homelessness Committee will come to order.

It is 2.02 p.m.

I am Andrew Lewis, chair of the committee.

Council President Juarez has been excused from today's meeting.

Will the clerk please call the roll of the remaining council members on the committee?

Council Member Herbold.

Council Member Morales.

Here.

Council Member Mosqueda.

Present.

Chair Lewis.

Present.

Chair, there are three members present.

And we will update the record as additional council members join today's committee meeting.

Approval of the agenda.

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

Hearing no objection, the agenda is adopted.

Public comment.

I will moderate, or the clerk will moderate the public comment period.

There will be one minute allotted for each speaker.

How many people have signed up for public comment, Mr. Clerk?

Mr. Chair, we have 12 in-person public commenters as well as five online public commenters.

If there are people in the gallery who have not yet signed up for public comment but would like to, they can sign up during the public comment period.

I saw some folks with their hands up who may not have had the opportunity yet, so feel free as we start going through the initial speakers to approach and sign up at the counter if you have not done so already.

The clerk will commence with the current sign-up sheet, and we will proceed with the public comment period with time set at one minute.

Our first public commenter is Kari Kaplan to be followed by Bruce Draeger.

I'll go very quickly, and I wrote it down.

So my name is Carrie Kaplan, a.k.a. Elbow, and I'm a respiratory, neurological, and visceral specialist.

I would like to start this public testimony time by leading a quick 30-second exercise in self-care as we all try to help our community in this beautiful planet.

Before I start, I would like us all to try to imagine our homeless population as one that can be a positive, beautiful movement back to the Earth community, creativity, innovation, and love, and away from profit-driven existence.

So I would like us all to put our hands directly over our hearts and the other hand out, if you wouldn't mind.

And think about breathing into your diaphragm, which is right between your lungs and heart and your liver and your stomach and the abdomen.

And just put a smile on your face so that the nose holes open up.

And get your mind to work and your diaphragm to move and your heart to move.

And just really think, imagine a good place for us all to cry together.

Just take some nice deep breaths into your diaphragm, into your nose, and just feel that we can all work together.

Thank you.

We should start every committee meeting that way.

Thank you.

Thank you, Carrie.

Our next public commenter is Bruce Drager to be followed by Charlie Anth.

Yeah, hi there.

My name is Bruce Drager and I represent Green Lake Homeless Advocates.

And as I said a couple weeks ago, my jam is to go out and meet people that are at camps that are going to get swept and help to get them ready to navigate sweep and I was really it was a pleasure yesterday to have King 5 come out and interview me and I had an opportunity to begin to tell the truth of what's going on with those folks that are on the streets and I was happy to see the report yesterday and it was and I was watching watching it on the news and all of a sudden they rebutted everything I said based upon data that the city has reported and I wanted to jump go down to the to the newsroom and say, you know what, don't you know the city's lying about this?

And the thing is, I'm not gonna argue the veracity of the city versus what I do, but suffice it to say that the story that I see, people want housing and they will accept housing if you make a viable offer to them.

Thank you.

Thank you.

Let the record note that Council Member Herbold has joined the meeting.

Our next public commenter is Charlie Anth, who will be followed by Scott Von Jukian.

Hello.

Thank you very much.

My name is Charlie Anthy, and along with my partner, Rumi Onui, we are the owners of Moshi Moshi Sushi Nisakaya in Ballard.

And I am here to speak about Council Bill 120463, which caps personal guarantee clauses and new commercial leases.

I just wanted to give a short personal anecdote of my own personal experience.

When my partner Rumi and I purchased Moshi Moshi in 2019, we had to accept a personal guarantee on an up to 10-year lease, and that is by far the biggest and scariest liability.

I basically put my own personal home on the line for that.

But not only in addition to that, our landlord, who otherwise is a very wonderful person to work with, actually demanded that the seller of the business maintain his own personal guarantee behind ours as well.

And that actually, I ended up having to personally indemnify him in the background in order to even proceed with the sale.

So my point in summary is that personal guarantees on commercial leases can be incredibly debilitating and painful, and are a huge barrier for entry for entrepreneurs and small business owners to enter commercial leases, and I thoroughly support this proposal.

Thank you.

Our next public commenter is Scott Bonjukian, who will be followed by Amy Gunner.

Thank you.

My name is Scott Bonjuki and I'm here on behalf of the Lit I-5 community organization speaking to Resolution 32100. The draft resolution before you follows an important feasibility study that found litting I-5 is not only possible but necessary to equitably reduce environmental harms and expand public land for dense and growing population.

This is especially important for the 600 families and social housing living within a block of the freeway.

As we're seeing this week, the urban heat island is worse in our central neighborhoods and could benefit from more green space on freeway lids.

While the community has adjusted a few edits to make the resolution stronger, such as extending the northern downtown reference to Thomas Streets and asking SDOT to include funds in the 2024 transportation levy, We're hopeful that an amendment can get into the resolution at full council, and we're excited to see this proposal move forward expeditiously as we support OPCD's federal grant application next month.

We greatly appreciate your leadership in keeping this moving forward.

Thank you.

Our next public commenter is Amy Gunner, who will be followed by Noah Ahn.

Hi, my name is Amy Gunner.

I'm a member of the Seattle Restaurant Alliance and I own Portage Bay Cafe.

I'm here to ask you to support Council Bill 120463, which caps personal guarantees on new commercial leases.

My company has seven leases, three signed in the last 10 years, so I'm a bit bummed that this is happening now and not last year, but I had to negotiate hard to limit the length and scope of my personal guarantees despite being in business for over 25 years.

My company operates as a single LLC, and so the backing of my company should have been sufficient, and yet I had to fight, fight, fight, and I still ended up with personal guarantees of some level on all of my leases.

So if I, as a longtime successful group of restaurants, have to fight that hard, how can any new restaurant or business is supposed to have a chance to get out from under an onerous virtual guarantee that can last 10 years or longer?

Going into, I'm going to run out of time, but yeah.

Thank you.

Thank you.

Thank you, Amy.

Our next public commenter is Noah Ahn, who will be followed by Nick Jackal.

Good afternoon.

I'm Noah Ahn, testifying in support of Resolution 32100 on behalf of Commute Seattle, the nonprofit that makes it easy to walk, bike, ride, and roll for the 600,000 people who go to work or school in Seattle every day.

At Commute Seattle, our work is guided by three core values.

A Seattle that's more connected, sustainable, and affordable.

And LID I-5 is the rare project that would advance all three of these values.

An I-5 LID would reconnect communities torn apart by construction of the interstate while providing new walking and biking connections that make it easier to get downtown.

It would advance Seattle's sustainability goals by creating new green open space and tree canopy in the heart of our city while limiting the highway's air quality effects on surrounding communities.

and Leading I-5 has the potential to open up new land right in the downtown core for the development of desperately needed affordable housing.

So on behalf of Commute Seattle, I'd like to thank Chair Lewis for his leadership on this issue and urge the committee to pass the resolution.

Thank you, Noah.

Our next public commenter is Nick Jackal, who will be followed by Gabriel Newman.

Good afternoon, Chair Lewis and members of this committee.

My name is Nick Jacklin.

I am representing the Downtown Seattle Association, and my comments today are in support of Resolution 32100. This resolution is a natural progression following the 2020 feasibility study, which demonstrated the viability of letting more sections of I-5 in Central Seattle.

The study highlighted substantial environmental, economic, and social advantages, which strongly aligned with the Downtown Seattle Association's mission to realize a healthy, vibrant downtown for all.

This resolution serves as a resounding declaration to the public and our partners at the county, state, and federal levels that lidding I-5 stands as a paramount opportunity and priority for the future of our city.

We commend this resolution's endorsement not only for the already studied Central Seattle segment, but for potential lid sites in the University District.

The resolution rightly acknowledges the pressing need for special considerations in finally addressing the environmental inequities stemming from I-5's passage through the Central District, I'm sorry, the CID, It is crucial for the full council to ratify this resolution by the second week of September, allowing ample time to back the federal grant application led by OPCD.

Thank you for your consideration and time.

Our next public commenter is Gabriel Newman, who will be followed by Jesse Friedman.

Hello, Seattle City Council.

I'm Gabriel Newman, Policy Counsel and Government Relations Manager at GSBA.

We're Washington's LGBTQ plus Chamber of Commerce.

On behalf of GSBA, I'm happy to testify in support of CB 12643. Seattle is home to contemporary artists and hospitality business owners.

artists, clothing designers, doulas, equity consultants, and more, who want the opportunity to expand in service to our community.

Many of these ventures are new, popping up in a post-pandemic world.

However, starting a business is an expensive process, and while folks can often come up with the funds to cover initial licensing costs, they are unable to take that final step towards opening a physical location.

This is especially true for many of our younger entrepreneurs and BIPOC community members who have not had the privilege to build up credit or capital.

and helping to ease the financial burden associated with business ownership.

This bill will bridge the path for many, but not all, for many entrepreneurs who would have otherwise been excluded from the realization of that dream.

We applaud City Council for taking these first steps and we hope to see the City engage in future legislation to support businesses that rent an office space as well as addressing reasonable security deposits.

However, we think this is a fantastic first step towards making business ownership equitable for all.

Thank you.

Our next public commenter is Jesse Friedman, who will be followed by Allison Isenger.

Sorry, whoever's next.

Good afternoon, Chair Lewis and committee members.

My name is Jessie Friedman, and I'm the Policy and External Affairs Director for YouthCARE, and a member of the Seattle-King County Coalition on Homelessness.

In today's presentation from the KCRHA, you'll hear about the one-time funding cliff facing homeless service providers throughout the city.

Included in that cliff is over $700,000 in funding for YouthCARE's three engagement centers in Rainier Beach, the University District, and South Lake Union.

And while we recognize that this was initially intended as one-time funding, there's nothing one-time about the urgent need to provide young people with a safe place to come indoors for a meal, a shower, connection to a safe place to sleep, and stable and long-term housing, access to behavioral health care services, and more.

During increasingly frequent extreme weather events, like the one we are all experiencing now, you can even more clearly see the urgency of ensuring that our young people have a safe place to go to throughout the day and night.

I'm hopeful that our governmental partners can together help fill this gap to ensure there's no service lost to the community members that youth care serves and those throughout the city.

Thank you for your time.

Thank you.

Our next public commenter will be Allison Isinger, followed by Javier.

Good afternoon, Chair Lewis and Councilmember Herbold and other councilmembers remotely.

My name is Allison Isinger.

I'm the director of the Seattle-King County Coalition on Homelessness.

I'm also here to comment about the KCRHA five-year plan and the necessary budget.

As I think you understand, and I've just handed to staff the latest list from the women in black of 34 people who died while outside or by violence, we have an urgent unmet need for shelter and housing, as I know the Council is profoundly aware.

But what is before you right now is the ability to maintain and sustain the quality services and not lose capacity.

And I wish that I were here talking to you about increasing, not simply maintaining.

But I want to flag for you not only the funding cliff that you just heard from care about, but also the need for adjusting for inflation for all homeless service contracts, including the COC contracts that are currently at KCRHA and to increase wages for the people who do this vital work.

We look forward to working with you during the budget process.

Thank you.

Our next public commenter is Javier, who will be followed by Jorge Chavez II.

Good afternoon.

My name is Javier and I'm based out of Nickelville.

One of our Nickelville goal is in 2023 is to open up our third self-management tiny house village.

This summer, we, to help meet our demands for our shelter.

On February 28, 2023, Nickelville met with HSD director, Deputy Director Michael Bailey, and two other staffers to ask assistance in identifying public properties that may be valuable locations for Niggleville's third village.

All requests as a tiny house overall is a shelter opportunities for many of homeless people.

On May 17th, almost three months ago, Nickelville, it wasn't HSSD staff that had a list of unused city-owned lands that may be potential for our third village.

But that had to come through the RHA, and they needed to be in the loop.

We are now in the middle of August and Nickelville has not yet received any of the list of the lands of the properties that they potentially said they would give us.

Thank you, Javier.

Our next public commenter is Jorge Chavez II.

My name is Jorge Chavez II.

Since Nickelodeon has met with HSD staff at the end of February, 112 homeless people have died outside in public or by violence, according to Women and Blacks List of Homeless Deaths.

On August 4th, Nickelsville wrote a letter to HSD Deputy Director Michael Bailey expressing our disappointment and lack of urgency shown by HSD in addressing our request for lend.

In his response, Deputy Director Michael Bailey emailed us that he would ask his team to find a path forward and to call him on Monday, August 7th.

We didn't hear from him during the day, but when our staff person tried to call, there was no response.

As of today, we've still not heard anything from HSD staff.

One, why has HSD's list of unused city-owned land identified for Nicholsville been kept from Nicholsville?

Two, why did KC...

RHA claimed there wasn't enough money in Nicholsville budget to operate a third village.

Tell HSD to release the list of public property identified as viable locations for Nicholsville's third towning village.

Thank you.

Thank you to all of our in-person public commenters.

We will now move on to public commenters who have called in online to provide virtual public comment.

I would ask our virtual public commenters to please press star six when their name is called so they'll be unmuted, and to remember they will have 10 seconds after they hear a chime to complete their public comment.

Our first virtual public commenter is Steve Hooper.

Steve, if you'll press star six, you'll have one minute.

Thank you very much, council members.

My name is Steve Hooper.

I'm the president of the Seattle Restaurant Alliance, and I'm here talking in support of Council Bill 120463. for caps on personal guarantees and new commercial leases.

Thank you very much to councilmember Lewis, or chair Lewis, I should say in this instance, and your staff.

They have been absolutely exceptional to work with over the last nine months as we've put this together.

A first in the nation opportunity to really give small businesses a chance to negotiate against large commercial landlords and other major well-funded stakeholders.

As Amy mentioned in her Portage Bay Cafe commentary, larger entities have no problem negotiating personal guarantees while still challenging, but new business owners struggle and at times have to put their entire life savings at risk just to start a new business and see themselves.

We at the Seattle Restaurant Alliance see this as an equity opportunity for the city to engage in and set a precedent for the rest of the country to give power back to small business owners.

Thank you very much for your time, and thank you very much, Council Member Lewis, for all your hard effort on this.

Have a great day.

Our next public commenter is Trey Lamont.

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

Hello?

Hi Trey, we can hear you.

Okay, sure.

Sorry.

Hi, my name is Trey Lamont and I am in, I'm here to ask for support of Council Bill 120463, which personal guarantee clauses in commercial leases.

So my personal experience, I own a restaurant in Jerkshack, in Jerkshack Kitchen in the Central District.

And when I got into my lease, my commercial lease, I had to put a personal guarantee and put my house up.

And when the pandemic hit, it really affected my situation at home.

because I tried to refinance and because of a personal guarantee and the liability due to COVID, it made it very hard for me to refinance and get a lower rate.

And it really put my whole family situation in a bad position.

So it's just very hard for small businesses but to deal with that for 10 years, especially missing out on opportunities that can help develop their home life.

I see that Todd Carden has signed up for virtual public comment.

Todd, your list is not present.

If you could please call into the number that was emailed, we'll try to get to you before public comment concludes.

Our next present in-person public commenter is Katie Riccio.

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

Hi, can you hear me?

Yes, we can.

Hi, good afternoon.

My name is Katie Rakuto, and I work for the U District Partnership in the University District.

I'm speaking today in support of Resolution 32100, supporting the development of highway lids in Seattle.

When IFI opened, it divided much of Seattle, and highway lids are critical infrastructure projects that will allow neighborhoods like downtown and the U District to reclaim public space.

The U-District is one of Seattle's most racially and economically diverse neighborhoods, yet it lacks open space and land for affordable housing.

So on top of the work to lid I-5 downtown, a lid effort between Northeast 45th and Cecil Street could result in up to 14 new acres of land that could be used for affordable housing, open space, retail, and safe crossings for pedestrians and cyclists.

This resolution will demonstrate the city's commitment to advancing lid conversations in neighborhoods like downtown and the U-District, and I urge you to support it.

Thank you.

Our next public commenter is John Fite.

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

John Fite, we can't hear you.

Please press star six to unmute yourself so that you can provide comment.

John?

I hit it twice, sorry.

Yes, here.

Hi, we can hear you whenever you're ready.

Okay, I'm here in support of Resolution 32100. Throughout our 12-year campaign at Lead I-5, when we have met with county, state, and federal officials and representatives, we've been told that City Council support is key to our success.

You can offer that support today.

Your support shows the City wants to substantially improve the environment around I-5, and you are willing to work with county, state, and federal officials to achieve that end, as well as the many housing, open space, and transportation advocates we have met with over the years.

Whether by earthquake, as with the viaduct and waterfront, or proactive legislative action, as with the 520 bridge, I-5-2 will most certainly need massive work.

Your vote today is a strong signal that a future I-5 with a lid is important to the city and that we will be a leader in the decision-making process for that future.

Thank you.

Thank you.

That concludes the list of present virtual public commenters.

If anyone did not get to provide comment who would like to, please email council at Seattle.gov.

Thank you so much, Mr. Clerk, and thank you to everybody who commented.

We will now move on to our items of business.

Will the clerk please read item one into the record?

Agenda item one, updates to the King County Regional Homelessness Authority.

Thank you.

We are now joined by Jeff Sims from the King County Regional Homelessness Authority, and Jen Labreck from our Council Central staff.

And I believe we have a presentation, and Jeff, is the plan for you to walk us through this presentation?

I'm not getting a green light.

Is it working?

You can't possibly be this out of practice, Jeff.

Yeah, that one gives me a green light.

Does that one work OK?

OK.

Is it in there?

Yeah, I think we've got a broken mic.

I can hear you.

Excellent.

Great.

You got me now.

Great.

Yes, I'll be walking us through the presentation.

I believe that was the question.

Yes.

Thank you so much.

Is it up OK?

Perfect.

Well, and we are being joined remotely by Jen.

Is that the case?

Excellent.

Okay.

Well, Jeff, why don't you go through the presentation, and then we will open it up.

Perfect.

And if colleagues could please hold their questions until the end of the presentation and note slides where they have relevant questions.

Although we probably won't stick to that.

We're probably going to stop you on a slide or two.

But go ahead.

We'll see.

Thank you, Mr. Chair and members of the committee.

As you'll see, you can go ahead and go to the next slide, Mr. Clerk.

There's a range of topics, because it's been a period since I was here to provide updates to the committee, and we wanted to make sure we were covering the full breadth of the areas that you're interested in.

I'm going to try to move through these rather quickly, about two minutes per slide, something like that, and allow most of your time for questions, because I want to make sure we're getting to all the items that you're most interested in.

So let's go to our next slide.

I'm happy to report, and since the last time I was here, we have now successfully had both of our boards adopt the five-year plan for KCRHA.

For those that are interested, it is available on our website.

You can go there and see it.

We anticipate there being two next steps related to that.

The first, as you can see on the left, is the development of sub-regional implementation plans.

The interlocal agreement that created RHA requires those.

We think the drafts for those will be done at the end of this year.

The second item I should note, probably in more letters that it's pending, as Chair Lewis is aware, this is a pending resolution to our governing committee that would require the creation of an operational work plan, is the title that's used.

Essentially, that would be the various components of RHA incorporating their anticipated work over the next two years into a report.

So even without this, we would still be reporting on a lot of these things, a lot of this information we would want to make sure our governing committee received.

We anticipate that this will be discussed at the fall meeting.

And then, as you can see, the plan would be adopted by resolution six months afterward with routine updates after that.

The next slide, please.

We haven't been without our share of obstacles and surprises over the last year, and this is one of those.

As I believe everyone on the committee is aware, the LAC Hotel Program had financial insolvency earlier this year.

KCRHA was asked to step in and help to wind down that program and especially prevent the return to homelessness for the people that had been sheltered there.

As you can see, I want to flag that the first number is 285 individuals, and then below is households.

The 285 is the broad number that we were given as we were entering the situation, but then the numbers at the end are ones that we tracked and had control over.

We were initially after some rounds where people had been told that they would not have their hotel stays extended, and then we were brought in.

We were provided additional funding from both King County and from the state legislature through the right-of-way initiative to be able to extend those hotel stays all the way through June 30th.

Over that time, we had numerous partners, and I actually wish I had brought the list of them because we did have numerous partners helping us to connect with individuals across four different hotels, identify placements for them, especially moving into permanent housing.

And I won't read through these four numbers, but I'm happy to answer questions on them later.

These are the outcomes that we've tracked for all of those households and individuals.

Jeff, just a clarifying question.

Can you confirm the locations of the four hotels?

It's in my memory bank.

I got to think about this.

Let me get back to you.

I don't want to get them wrong.

They were mostly outside of Seattle and in Southern King County.

Yeah, I don't recall that any of the four were in Seattle, but I'm not sure if that's correct.

I don't recall any that were in Seattle when we took over the program either.

There was a, yeah, I get like Comfort Inn and Clarion Inn, those terms, those hotel names confused.

I don't want to say the wrong ones, but there was four.

They were in Federal Way, I believe one in Kent, I believe one in Renton, and I believe, I don't remember the fourth location.

All right, thanks.

Thank you for clarifying that.

Sure.

Next slide, please.

Another major challenge for us is, as everyone here I assume is aware, our CEO stepped down in June.

So we have underway a process to identify a new CEO.

First, at the most recent governing committee meeting, a resolution was adopted to put together a CEO search advisory committee.

That committee's role, the picture you actually see is that resolution, has certain members identified, and its role is to help identify the search firm and help that search firm identify two to five high-quality candidates that would be recommended to the implementation board and the governing committee for interviews.

Both the interlocal agreement that founds us, I'm just going to start using the term ILA, The ILA requires first that the implementation board recommend, and then the governing committee approve.

But in the past, like with the hiring of CEO Doans, many of those interviews were done concurrently as joint sessions.

Search firms had to submit their notice of intent to bid actually by yesterday.

So I was hoping that timing would work out, that I could say, get it in today, but that didn't work out.

Next slide, please.

One of the major areas that obviously is under our responsibility is the expenditure of new funds.

So I'm going to go through these in a little bit more of a sequential order now.

First, Salmon Bay's RV safe lot was awarded to Lehigh last year, and it has been difficult to locate a site that would work.

However, Lehigh was able to successfully locate a site for operations in April.

The initially anticipated opening date was in July, early August, something like that.

The start date, right as we were approaching opening, there was some site issues that were identified, and the start date had to be delayed.

Actually, at the time that this presentation was put together, we didn't have a very good window.

I've subsequently learned it's likely very close to the three- to four-week end of the time frame that you see here, not the six-month end, but there is still more diligence that's underway to make sure that that will be the case.

Yeah, I was going to say, three weeks to six months is three to 24 weeks, which is not a very helpful span.

So it's good to hear more specific three to four weeks.

Yeah, there was a lot that had to be explored about specific issues.

It was related to wastewater, I believe.

I don't know all the details, and it's not my area of expertise.

But Lehigh has subsequently told us that they anticipate in the next few weeks is likely our timeline.

There's still further work that has to confirm that.

Does that put us into a mid-September sort of?

Yeah, I think that that would probably be early mid-September.

Okay, great.

Thank you.

Obviously, subject to, there's clearly code requirements that have to be met, things like that.

On the other new funds to expend, I wanted to flag that these are the various buckets of new funding that were appropriated in the 2023 budget provided by the City of Seattle.

I should note that this is only about half of the RFPs that we've done this year.

I understand that that's commensurate to that our two-person team has done about the same number of RFPs as the entire Department of Human Services this year.

But I wanted to flag that there are multiple that are already awarded and already effective.

The safe lot and micromodular shelters, those are two RFPs that closed in June.

The award letters have not yet gone out for those.

I know that there's a little bit of work to finalize some of those to make sure that all of the requirements and things like that match up.

I'm happy to go into more detail if you'd like.

But we do anticipate those coming online shortly.

The RFP actually requested that, or said it would rate more highly proposals that would be able to commence operations this fall.

So we do think that the likelihood that these locations will come online more rapidly than what we experienced with our first safe lot is good.

And then there is one more RFP that's awaiting some additional guidance from the city around specific requirements that we'll have to operate in for those funds.

So that one is on hold, but we hope to get that out soon.

Next slide, please.

I also wanted to run through our state right-of-way initiative.

This is for context again.

That's what this first slide is for.

The governor's office has organized this initiative.

KCRHA's allocation on behalf of King County in the first year was $49.2 million, $20 million almost of that 19, was to acquire a new building in order to be permanent housing.

You can see that there is also an emergency housing or you could leased hotel location as well, and then another $17-ish million for permanent housing.

Overall, the design of this program, because you can see that the ongoing funding is $16.6 million, the design was stand-up per legislative direction at the state legislature, permanent housing options with these funds, then engage with people at encampments on state-owned right-of-ways and move them into those permanent housing options.

In order to achieve that, that emergency housing component, especially in order to achieve it on a timely basis, that's why we, with the one-time funding we were provided, also procured what I know council members will remember as Just Care.

We paid for a portion of that to continue so that we had a hotel sheltering operation that could serve as a temporary destination for people as the permanent housing options that we wanted to create came online.

For example, the building that was acquired with the $19 million, the construction is not yet complete, and a certificate of occupancy received.

We're in August.

We're looking at something like a mid-October date now.

Initially, when this application was put together, we were told that would be February.

But we do have had a lot of success with other locations, especially through the use of mass-releasing of units that has moved a lot of people inside.

And that's going to take me to my next slide, please.

So you can see that we've engaged at approximately a dozen different, actually I can't remember the exact number, let's say 10 different encampments over the course of the initiative.

In total, when we have developed the list of people who are living on site, we've been looking at 327 individuals.

You'll see that there's a little bit of drop off there, 292 that actually move inside.

The difference between those two is there's often people that have moved, as we know this is a mobile population, and they are not on site, even if we have held a space for them to move into and we have lost contact with them.

There are circumstances, that difference also would be people that refused entrance into a location, which does happen as well, but that's actually a rather small number.

So of the 292 people that have moved inside, some of them moved directly into permanent housing, usually permanent supportive housing.

A large number also move into our hotel sheltering program.

And then you can see the outcomes of where we're at after that.

So take the 273 that went to a shelter and you can see where they went from that point onward.

Jack, can you just briefly remind the committee when the right-of-way initiative program started?

We actually received our funding from the state.

We received it in advance.

That allowed us to begin some operations in June.

The majority of our funding was...

June of...

2023. Sorry, 2022, last year.

Yes.

Okay.

Go ahead.

Sorry.

And then the majority of our funding was awarded to us in either September or October.

I have...

I don't remember the exact date of 2022.

So, would you count your effective start date as an agency as June or September?

I would say September.

The reason we received that advance was so that we could procure the access to that hotel and start responding to encampments.

There was two or three small ones right off the bat that we were engaged in.

All right, so this particular set of data, because you have July 1st as the most recent report date, but I think it's just helpful for me to track along.

That should be between September 2022 and July 1st, 2023. These are the outcomes.

Is that accurate?

I would use, let's use, let's call it July 1st of 2022, so a year ago, to July 1, 2023. if you can allow me a few days to fudge, because I don't remember exactly when the advance was received.

But it was at the end of June of 2022 that we received the initial advance.

And then that allowed the hotel program was already operating.

Just Care already existed.

So we immediately had units available.

And then it was within a few days, or maybe a couple of weeks after that, that our first resolutions began.

OK.

I appreciate those clarifications.

I think it's helpful for the committee in providing oversight of these investments and monitoring the initiatives from KCRHA to have that information of the period of time that we're monitoring the movement of encampment remediations and housing placements.

a level of comparison, and then obviously the overall annual investments relative to the placements.

But thank you.

This is good information.

So I just want I don't want it lost that we already have 86 people that are in permanent housing again That's the point of our initiative is we we are moving people from encampments into permanent housing.

That number is definitely outdated there was a building that we were able to mass release all of the units in the building and That building is now full and so all most of those move-ins are not reflected in this number.

So Okay Looking forward to getting that I guess in the next presentation later this fall.

Yeah, absolutely Next slide, please.

I do want to flag that as we do have some challenges that are still coming despite some successes like the resolution of the LAC hotel situation and the successful work of the right-of-way initiative.

And the most significant was actually alluded to by your public commenters earlier.

looking at agent that there's a few places where we have some funding uncertainty.

The one that I want to focus on is that first bullet, which actually was our boards, which both Councilmember Herbold and Chair Lewis sit on, authorized us to engage with the city and the county to discuss and explore more.

But there are other areas where we also have some funding uncertainty going forward and we're not that I want to make sure we're highlighted including continuum of care projects a public commenter mentioned those that do not have an identified funding inflationary increase yet and On the King County side, the lack of inflationary increases or other kinds of awards.

And then also, there is some uncertainty.

There were some state-supported programs.

The legislature did actually extend those programs, but we don't have the final agreements on them yet.

So, to be transparent, I put it on the slide.

If we could go to the next slide, though.

This is where I want to focus our attention.

These are the programs that KCRHA has highlighted actually since last year, but also in our engagement with our boards as areas where these programs initially received an amount of funding in September of 2020 and for successive funding rounds since then have been receiving one-time funding plugs to maintain the operations and the modifications that they were asked to undertake.

You can see that, for example, the Centralized Diversion Fund, it's the entirety of the funding for that program.

At least from KCRHA's perspective, they do have some other contributors.

And then you can see where others are impacted as well.

And I provided all the information numerically on how much funding we're looking at, things like that.

We have notified these providers already of the circumstance that we are facing with their funding and engaged with conversations about what would the impact of these funding changes would be for them in 2024. And that actually is all of the items that I was asked to cover.

I actually made it within 15 minutes, so that's good.

Great.

I'm sure that we're going to eat up all that saved time and questions.

I'll open it up to committee members first.

Trying to get in here to see if anyone has their hand up.

Oh, Council Member Herbold.

Thanks.

A couple questions.

First, If you could explain a little bit about how King County RHA is engaging with the city of Seattle itself in sub-regional planning, given that we are one of the sub-regions.

I'm wondering if you could talk a little bit about that.

So I'm just focusing on the slide with the five-year plan bullets.

And then secondly, on that slide, I'm reminded of the interest in topical considering the heat we are experiencing.

If you could speak to the geographic approach that King County RHA is taking in the sub-regional plans themselves for severe weather response.

Just those two?

Okay.

I figured I'd just do that one on that one slide before moving on to another slide.

That sounds good.

That's all right.

Yes, you are correct that Seattle is treated as a single subregion in the approach to subregional planning, and it is a very different approach to subregional planning because of that.

For example, a substantial impact on the system, given the nature of the funding that is received from Seattle, is that our rebid and re-procurement of our entire system is going to be one of the most substantive impacts around planning.

So our five-year plan already talks about things like leaning more into non-congregate shelter, leaning into person-centered care and approaches that are healing-based services that will help with transitions to housing, things like that.

And the rebid of the system that will effectuate contract requirements or also potentially result in the shuffling of funds between one program or another.

that those are the significant ways that we anticipate achieving that sub-regional plan.

There was a lot of engagement in the development of the five-year plan that the team has been relying on.

So at least in the Seattle region, there was an engagement that was convened with each district, geographic district, not citywide.

And then there was a subsequent meeting that was the two citywide council members and stakeholders that they identified as a sort of summative, was there anybody we somehow missed, which I don't think that there largely was, but there was still good, it was good to have some of that duplication.

Oversharing and over-engaging is usually good, not bad.

Then I will note that we did have some challenges with the first district one.

session there.

I believe it was a heat emergency that basically meant no one could show up because we all switched into an emergency posture.

But I believe that the re-engagement on that mostly had to be done virtually, I believe, because of just challenges with getting people there.

But I believe that did occur as well.

If I'm incorrect, please let me know.

All of that was part of the engagement that is what the sub-regional plan is building on.

And then the delivery of those drafts, I anticipate will also be an opportunity for further feedback and analysis.

What they're trying to do is take what has already been given by community and actually show that we've listened and heard it and put it into a plan before we start asking for more feedback.

And so I appreciate being reminded of the community engagement work that you've done.

I think my question is more focused on what is the work that we're doing now between King County RHA and the city of Seattle, specifically the Human Services Department, in sort of taking those next steps on the sub-regional planning?

what is going on internally with us right now.

It's mostly aggregating.

I don't have, I'm not directly- Between you and HSD.

I just, it's great to have this kind of contact with electeds and representatives of electeds and community members.

Just, I'm interested to know a little bit about how those conversations between King County RHA and our, and the department that works most closely on these issues, HSD, is going.

Yeah, I don't know where they're at in the stage of sharing what has been put together so far.

I don't believe that we've arrived yet at the point of having a developed enough plan to be able to take to HSD and share for input.

I could be mistaken about that, but I would have probably been aware of that if it had occurred.

And so at this stage, the latest things I saw were aggregating that feedback into specific actionable items, looking at how they tied to the five-year plan for organization, and examining what are the concrete steps by which those will occur.

And as I noted, a lot of that's rebid, but there are other things, too, just in our general contracting processes.

Even if we weren't rebidding contracts, for example, policies around serving LGBTQ individuals, having welcoming services, things like that.

Those are things that we can incorporate even in our contract separate from a rebid and that kind of work is also being noted and added to the plan.

And then extreme weather?

I forgot the question if you could remind me.

Just the approach that RHA is taking in the sub-regional plans for severe weather.

I actually will have to get back to you on that because I don't know the specifics about how they're discussing it.

Seattle is the geography where we actually hold the contracts and the funding for, actually I should amend that, Seattle and also for North King County, where they recently entered an ILA and have provided that funding to us.

We are actually the entity that holds the contracts for the standup of severe weather responses, including smoke responses.

In the rest of the county, we are a collaborator.

We can help to identify best practices, like the cooling canopies that we did last year, rather than expecting people to come to designated locations.

But we are increasingly trying to build that coordination.

There's actually a strong desire to move that forward so that we all are operating on the same National Weather Service thresholds for activation and the various tiering and have agreement.

And so instead of every time there's an event, having two KCRHA staff that are calling a large number of jurisdictions, confirming if they're going to open or not, that we have more of a systematic across the county approach to, okay, tier one, we are all doing this.

Yeah.

Okay.

Great.

And then moving on to the right-of-way initiative, if I may, Mr. Chair.

Please.

Just Very appreciative of how that initiative has done work in District 1 and is continuing to do work at another location on Myers Way near Arrowhead Gardens, a very large senior living community.

My appreciation for the work that you're doing at this location and at another location in District 1 earlier this year makes very critical to have a good understanding of what the outlook for continued state funding for this approach is moving forward and what we can do as a council to advocate for it.

appreciative of the approach that the right-of-way program uses to mitigating the impacts of people living outside, but doing it in a way that builds trust with the individuals living outside, communicates with community members who are either housed or have businesses nearby, but really focuses on that warm handoff to a safe indoor location.

And it's an approach that you know, to be honest, we aren't, haven't in the city of Seattle fully embraced.

And so I'm just, I'm so appreciative because it is this approach that results in people not returning to the location after it's been remediated or going to another nearby location is actually the only approach that is truly effective.

And the fact that this funding may not be available in the future suggests to me that we may not in the future have support for the only effective approach.

So just wondering if you could speak a little bit on that.

Yes, and thank you for your partnership.

We would be very eager to partner with the city council and working with our partners at the state legislature to make sure that they have the information they need for their deliberations and consider how this program should continue into the future.

You are correct.

As I noted, we have $16.6 million that is ongoing funding.

The way to think about that is that's the cost of all of the permanent places that we've either purchased or leased in order to maintain the services at all of those locations.

So it's an important distinction from the way, for example, the UCT and the HOPE team are working in that.

A point that we reach where we have spent every dollar we have to acquire a permanent housing unit, it adds up to something in the range of $16 million, $17 million a year that we're spending on housing then, and we would ramped down our hotel, we do not have the ongoing funding to maintain our field teams and our hotel sheltering programs.

So those would be ramped down.

And instead we would only maintain people in the housing that they're in, which, you know, these are mostly operating at the level of support, often commensurate to a permanent supportive housing facility, not universally, but in many cases, so that we believe we're really providing the robust level of services to maintain the housing for those folks going forward.

The additional funding that the state legislature did provide this year overall is still a reduction from where the initiative operated in its first year.

I just want to note that the state fiscal year is six months out of alignment with the city of Seattle, so I'll just talk about years generally.

In the first year that the state operated its initiative, there was home security funding, there was one-time housing acquisition funding, there was also operational dollars that were ongoing.

They merged all those pots into, I actually don't recall the number now, but it was more than $100 million, I want to say it was.

I actually don't remember.

But it was a substantial amount.

Those two one-time pots are gone now.

The state legislature did increase the amount of ongoing funding that is available, but not to the point that everything is getting maintained.

And so we understand we should expect an RFP from the Department of Commerce soon that will likely have another allocation of one-time funding for King County.

But it's one-time funding, not operational, so it's not going to change those permanent outcomes.

That could have an impact on our plans for when we need to ramp down our hotel sheltering and our field teams to a level that's sustainable, but we don't know those yet.

We don't know the number or the total amount of that funding or the kinds of requirements in it.

There's a lot of things we need to see once that funding announcement comes out.

Regardless of that, we definitely want to work with you all and our partners at the state legislature to share the successes that we've had here.

I do think that you're right, that successfully already having 86 people in permanent housing and ideally, well, it's not 292 because we've lost some already, but close to that many plus more as we resolve more locations in their permanent housing location is a story we should be telling and we hope that we can secure money to keep doing this going forward.

Um, I'm going to jump in and, and, uh, do a line of questioning on state right of way as long as we've been navigated to this topic.

Um, and Council Member Herbold, if you have additional questions, um, I'll hand the mic back over to you, uh, obviously.

Um, so, uh, Jeff appreciate, um, the progress that we've talked about with the King County Regional Homeless Authority and remediations of encampment locations on our interstate right of ways.

But we know that this current investment is not meeting the scale of the need.

What I'm curious about now that we are, I guess, since the fall of 2022, maybe the summer of 2022, depending on how we want to draw the timeline, into the right-of-way initiative I would be curious to hear what the King County Regional Homelessness Authority's feedback to the legislature on the scope and requested support for the program is based on the scale of the need.

Just to put it a little bit more in context, my district has a number of persistent encampment locations along state right-of-ways that have yet to be addressed by the initiative, but I understand nothing is resourced to meet the full scale of what we're facing in the city.

But, you know, for example, we don't necessarily, to my knowledge, have a timeline yet on remediation of the site.

On Mercer that recently had a significant fire, other sites that have been, where concern has been expressed.

It looks like there's two interventions in how you've structured this investment.

Ideally, you move people directly from the encampment into housing.

In a previous slide, I think that was about 19 people, and that's great.

The overwhelming balance of people move to something short of full housing, like a tiny house village, or the leased hotel that I believe is the Civic Hotel.

I guess what I'm asking

If there what what strategies KCRHA will be pursuing with the legislature to expand the utility of the service be able to remediate more locations From where I sit what that probably means in the short term is things like tiny homes and things like hotel leases rather than Full-on housing unfortunately given the the expense of that resource, but I just be curious to hear your thoughts on that and how KCRHA intends to interact in the upcoming session to work on increasing the effectiveness of this program and getting people inside and remediating these locations.

Yeah, thank you for that.

I think that certainly you're right, the scale of need.

There was a fair number of encampments, let's say, when we have excellent partners at WSDOT and in commerce and working with us on this initiative.

They allow us the opportunity to really engage with locations and really thoroughly assess things.

We've had great partnership with the city of Seattle more than once now around multi-jurisdictional, where there's lots of different property.

And you're right, like we aren't covering anywhere near the number of possible locations.

We're doing about one at a time and there's probably, there's a large number, let's say, I don't want to speculate, where we could be at.

I don't know that the realm of funding possibility is anywhere near what would cover, it could be, but I don't know the status with the legislature right now and what they're dealing with to know that we would have enough to be able to address every location, not only in King County, but also the other four counties in the state that are also part of this initiative, not to mention if the legislature is wanting to expand it to other locations in the state.

So that's, I couldn't tell you what the amount of funding would be there.

We definitely would like to work with our partners at the state level to find a way to keep doing this and keep doing it in more locations.

To your point about the long-term costs, you're certainly correct that the capital cost of leasing a hotel is substantial, and compared to the one-time cost to stand up a tiny home village, that's much less than a hotel.

Long-term housing is usually a cheaper option.

The services that you have to pay in order to operate a shelter location are actually usually more expensive, even with something like permanent supportive housing.

So it's a wiser investment for us to long-term put people in housing and homelessness than it is to over-focus on the shelter system.

And our design in this was very intentional to have about 80 beds of eventually going away one-time hotel sheltering and hundreds of beds of permanent housing so that our fan is not creating bottlenecks.

We are moving people through.

And we'd like to be able to retain that because it proves most cost effective long term and it's just the right thing to do to actually house people.

That's what we want to achieve.

But there are, to your point, there are places where things like a tiny home village approach might be possible.

Transparently, we needed to make sure we were responsive.

We didn't want to lose the opportunity for $50 million for our county.

And part of the really high-priority requirements with that were expediency.

And what was available to us that could be opened immediately, not two, three, five months potentially in the future, but we knew with certainty we had, was this hotel sheltering program.

It also has succeeded very well.

We've had tremendous success with that, as you can see from the numbers, tremendous retention.

and very good services.

And I mean, you named one location, but that people don't know where the hotels are at, I think is a good indication that we're doing well, so.

Yeah, I appreciate that.

And I do just wanna clearly state, I'm all for having a housing first approach, and I think that's critical and important.

I think that the balance that we need to strike is, you know, while I appreciate the data on the, you know, provisionally, I guess, 86, and presumably more, because a recent building was mass-released, and it sounds like that's probably a higher number.

You know, there is a dual policy interest of also being able to mitigate sites that are contributing to senses and real impact of public order in the city that require us to have a diversified portfolio of responses.

And I don't think that the KCRA necessarily disagrees with that position.

You know, I know that it's a struggle to find permanent housing placements, despite the city actually making considerable investments over the course of the last couple of years.

I think that we've had something like a 50% increase in our permanent supportive housing portfolio, taking advantage of federal housing investments, mandatory housing affordability, JumpStart, I mean, go down the list.

We've put that to great use, and that's made a big difference.

I think that the challenge is if we don't continue to diversify and look at building and adding to some of those enhanced shelter interim solutions, there's not gonna be a visible change or impact commensurate with what the public rightly expects to see.

And I think that you have a lot of folks who are living in encampments right now who would gladly transition to living in a tiny house village or hotel situation if we can imminently provide a housing option.

But this also puts front and center, and I'm just editorializing at this point.

I don't think we need another answer.

I don't know if I'm going to actually have a question at the end of this for you.

But it also puts front and center hard decisions that the city needs to make in terms of the types of housing we're allowed to build, the type of housing diversity that we're allowed to have in the city of Seattle, our commitment to increasing density in places where historically it hasn't been, that's all part of this conversation as well.

And unfortunately, we don't always make those connections when we're having these policy discussions.

But I think that fundamentally what it comes down to, Anything we can do to really come together and respond to this like the emergency that it is to scale up things that even if they might be shorter term are better than encampments is something that I'm going to continue to advocate for and push for and want to work with the KCRHA in advancing while we're building toward that future of scaled and available housing that all of us want to build.

And I would hope that as we are getting to the next session, that informs some of our state right-of-way conversations on how we might build on the success we've seen and the additional resources we might jointly ask for as a city and a county.

Are there other committee questions?

I did have questions about another slide.

Yes, Council Member Herbold.

So just to the slide 10, the funding uncertainty slide, it looks like there are 18 programs that were funded with one-time funding.

And I'm just wondering if you could speak to what kind of planning and communication King County RHA has been having with those 18 programs.

Yeah, and all those, they're all listed on the next slide.

They're all 18 of them.

So that was why, first, just responsibly communicating ahead of time so that agencies know that that is what we are dealing with.

KCRHA is also examining its own funding right now for places where there would be underspend or anything along those lines that we could do as a bridge or a solution temporarily for this circumstance.

And as I noted before, we continue the engagement with both of our primary funding partners, the county and the city.

to explore ways and discuss this as an option and ideally jointly identify a solution.

We're not at that point yet, and it's too early to be talking about how some of those conversations have gone, but our hope is that we can find a solution.

This slide also mentions inflationary increases.

I think You know, Jeff, as well as many people here with us, but for the viewing public, the City of Seattle is required by law to provide inflationary increases for the Human Services Department-administered contracts, including contracts with King County RHA.

This council's gone to great lengths in the past to ensure that these increases are included in the final approved city budget.

In particular, to King County RHA for 2023, there were $6 million in inflationary increases.

I have heard from central staff that starting in 2024, at least some HUD funding will be flowing directly to King County RHA rather than going through the city.

So I'm just concerned that that might mean that it will not include the city statutorily required inflationary increases.

And I'm wondering if you have a sense of which contracts that may be the case for and how much funding that might represent.

I can actually, I can follow up with that list.

I do have it.

I don't have it with me today.

And you described the situation exactly right there.

And those contracts, there's of course some that have been historically held by the county that we'll just set those aside.

but ones that were, it's 28 projects, that's why that number is there, that historically were given to the city of Seattle by HUD as part of our continuum of care.

When those contracts transitioned to being directly to KCRHA, you're correct that the city's legislation requiring the appropriation of an inflationary increase no longer applies to them.

They are not held by the city of Seattle.

So really through the shuffling of government of who holds something, but no input of the people that are actually affected, the agencies that receive these funds, the people they serve, and the people they employ, we are facing a situation where those contracts would not receive an inflationary increase, whereas, and I don't want to undersell this because I know it took a lot of work from all the members of this committee to make sure that that funding is there.

but the inflationary increase that goes to all human services providers, which is incredibly important.

We are incredibly grateful for that and really appreciate the tremendous work we know it takes to find, not only because it's legislatively required, but because of the commitment that the council and the city show for that.

And we hope that that might be something that can work for these COC contracts.

And is that something that RHA, together with the city and the county, for that matter, can do any advocacy with HUD on?

My understanding that the Biden administration understands or has spoken to understanding the impacts of wages on the ability to provide life-saving, mission-critical services.

And I would hope that the understanding of how compressed wages have led to staff turnover, vacancies, and inability to provide the services that we are all providing precious dollars to provide.

Hopefully we would have some assistance in addressing that issue for those contracts and just wondering what the likelihood of being able to do that is.

Yeah, an important nuance there, and you're actually right.

CEO Doans was regularly able to engage with federal partners and highlight the issue of wages and the need to maintain the funding, not just like in the true sense of providing inflationary increases for all of these contracts.

I'm not sure if it's statutory or regulatory.

I'd have to look into that issue more.

But the way the continuum of care grants work, if you have the housing costs, so if you have a PSH building that has a certain operational and lease, or like a rapid rehousing unit that has a lease cost, those costs do receive an inflationary increase.

They are the hard building, like rent cost that goes up every year.

HUD does provide that.

It's on the services side that that is not the case.

And we certainly are sharing information every opportunity we have.

on why that is not helpful and would like to see that changed.

In the meantime, we also tried to make sure we maximize the amount of our continuum of care grant to have as much of it receive some kind of an inflationary increase as possible.

Thank you.

Appreciate that.

That's all I got, Mr. Chair.

Thank you, Councilmember Herbold.

I do not see any other questions from Councilmembers.

Jeff, would it be premature for us to talk a little bit about the operational plan resolution in this hearing while you're here?

Do you think that's better left to another date?

I'm not totally sure how to answer that.

It's not yet required.

It's really, I mean, I don't feel like I can dictate what this committee wants to talk about.

So.

Well, that's true.

I can.

Yeah.

No, I'm just kidding.

I don't want to put you on the spot if that wouldn't be maybe a good use of time at this point.

But I guess I will just say for the public record, it was alluded to in an earlier slide.

that I have proposed as a member of the governing board of the King County Regional Homeless Authority, a resolution requiring an operational work plan for the authority to be put together this fall.

And that's something that's ongoing that we're working on with Council Central staff and with King County Regional Homeless Authority staff.

And I think it's going well.

So I just wanted to maybe put an update on the record.

That comment for me is probably sufficient.

I'm happy to highlight that we anticipate that at the October meeting of the Governing Committee, it will be presented to all the Governing Committee members.

It was previously presented.

There have been some revisions to it.

Mostly, the broad substance remains the same.

I can't obviously speak to its prospects with the Governing Committee, but RHA, as I mentioned before, broadly sees what it encompasses as things that it's appropriate to ask us to provide regular updates on and present as our steps that we're going to be doing in the next 24 months.

Excellent.

Thank you so much.

And I look forward to that work and everything else that we discussed in today's update.

So thank you so much for coming by.

Um, thank you for the, um, slide deck and we look forward to following up on areas of interest.

So thank you so much.

Thank you.

And thank you all for your support for many of the issues that we've already raised today.

Great.

Okay.

Uh, next agenda item.

Will the clerk please read item two into the record?

Agenda Item 2, Resolution 32100, a resolution supporting the development of LIDs across Interstate 5.

Thank you so much, Mr. Clerk.

During the last committee meeting, we heard from the Office of Planning and Community Development as well as council central staff.

And we have Lish Whitson from our central staff here to answer additional questions.

But first, we heard from stakeholders regarding some requested amendments to the resolution.

One of those requests has been for a technical revision to increase the study area by two blocks.

That is agreed to by the Office of Planning and Community Development to make the city more competitive for the grants that we are seeking as part of this litting process.

For that reason, I am bringing forward a technical amendment.

So why don't we start by describing that amendment, and then let's have a broader discussion of the underlying bill.

So, Lish, could you describe the amendment?

Sure, you've basically described it.

Uh, the amendment would extend the northern boundary of the downtown section.

Um, of the study area, um.

From Denny way to Thomas street, which would impart, um.

voice support for LIDS next to a large Seattle Housing Authority affordable housing project that sits at Denny and I-5.

Thank you very much.

Are there any questions on this amendment before I formally move the amendment?

Well, actually, I think technically speaking, I have to move the resolution first.

So why don't I just backtrack a little bit?

I move resolution 32100, a resolution supporting the development of LIDS across Interstate 5. Is there a second?

Second.

Moved and seconded.

The resolution is in front of the committee.

I move the committee adopt amendment one to resolution 32100. Is there a second for the amendment?

The amendment has been seconded.

Will the clerk please call the roll on the adoption of amendment one?

Council Member Herbold?

Yes.

Council Member Morales?

Yes.

Council Member Mosqueda?

Aye.

Chair Lewis?

Yes.

Chair, there are four in favor, none opposed.

Thank you, Mr. Clerk.

The amendment hangs.

We now have the resolution as amended in front of the committee.

So I'm going to make just a couple of remarks on the resolution as amended.

Really appreciate the discussion that we had a couple of weeks ago in the committee.

During the interim period of time between that meeting and this meeting, we met with representatives from WSDOT, which was a very productive meeting, to talk about the scope and scale of plans that WSDOT has for the I-5 corridor, including the portion that falls in Seattle and would potentially be in the LIDZ zone, talking about future infrastructure upgrades and improvements.

talking about future capacity upgrades, changes, studies, different projects that WSDOT will be pursuing, and this resolution is timely to integrate our planning work with that work that WSDOT is doing, so any changes, improvements, modifications to I-5 are done with the idea that ultimately there will be lids in these fillable zones in the I-5 corridor.

Really excited to be moving this resolution forward to have of the city for the first time in our history put this Lit I-5 movement, which has been a very strong organizing effort that has produced impact studies, development, design charrettes, that has really moved this forward in a very profound way to make this a reality.

This is our opportunity as a city to take that next step.

for the first time formally adopt as policy our desire to pursue living projects in these zones, to have that incorporated into our long-term planning.

to have that incorporated into our intergovernmental strategy to seek funding, grants, and support from the federal, state, and other local governments to support these efforts to reunite neighborhoods and to bring back vibrancy to places where it's long been limited and lost from the division of these communities that this freeway has brought.

So with that, I'm really looking forward to this and happy to hand this over to other council members to make remarks on the resolution before we vote.

Are there council members wishing to be recognized to speak?

Seeing none, let us call the question on this resolution.

Will the clerk please call the roll on recommending the passage of Resolution 32100. Oh, sorry, Council Member Mosqueda, I was wondering why your hand wasn't up, Council Member Mosqueda.

This is like something you're really into.

Go ahead, please.

Yeah, thank you so much, Mr. Chair.

I'm sorry, I didn't realize we were on final, final passage.

Yes, happy to support this today.

And I just wanted to say thank you for all of the work that's been done by this committee, by the department, and also highlight the fact that we have a federal administration that continues to talk about how infrastructure, especially infrastructure around highways, has been historically used as a way to divide communities of color, as a way to push not only freeways and highways between communities that also used placement of things like dumps and recycling centers as another way to divide communities and that they have put forward funding in the Bipartisan Infrastructure Act to try to right some of those historic wrongs.

I am hopeful that we can continue not only to advance this concept here, but also to capitalize on the federal interest in reuniting communities.

So very thankful that this is moving forward and really excited about putting some more action onto this resolution as we move forward.

Thank you, Mr. Chair.

Thank you, Council Member Muscata.

Are there other council members looking to be recognized?

Seeing none, will the clerk please call the roll on the passage of resolution 32100 as amended?

Council Member Herbold.

Yes.

Council Member Morales.

Yes.

Council Member Mosqueda.

Aye.

Chair Lewis.

Yes.

Chair, there are four in favor and none opposed.

Thank you.

The resolution will be referred to the next full council.

Item three.

Will the clerk please read item three into the record?

agenda item three, council bill 120643, an ordinance relating to commercial tenancies, establishing limits on the maximum personal guarantee that may be included in or as a condition of commercial leases and establishing limits on the value of a commercial leases required security deposit and or letters of credit and adding a new chapter to the Seattle Municipal Code.

Thank you, Mr. Chair.

We are joined by Anne Gorman from Council Central staff.

Do we have other presenters on this measure for today?

Not today.

Okay.

I do know that we have representatives from Washington Hospitality in the gallery.

I want to thank them for their work at the front for helping get us to this place.

I think it was alluded in public comment that this is um, the result of nine months of very intensive stakeholdering, um, and, uh, staff analysis and work.

Uh, so, I want to start by just acknowledging at the front, um, my personal, uh, gratitude, uh, to Ann Gorman for her work in shepherding this through, um, uh, amid, uh, uh, lots of, um, uh, potential issues that we had to workshop that have been manifested into this policy to make it as strong as possible and really appreciate Anne's work through what has been one of the more complicated but very rewarding policy projects that I've taken on as a council member.

With that, I want to actually turn it over to Anne to have the central staff presentation.

We are not voting on this policy in today's meeting.

This policy, as was alluded to in public comment, is a very important but also complicated policy that I want to make sure we spend time with as a committee in really scrutinizing, looking at, and getting additional feedback from community members who are impacted.

And we did hear from several of them in public comment.

So, this first session is really about an introduction to this policy, some overview of where we've been on a COVID-era emergency piece of legislation that I sponsored that provided temporary relief.

for this issue around personal guarantees, and a way to make this protection more lasting to give the security that is necessary for the insecurities that we heard today in our public comment that a lot of people in our community are still facing as we come out of the uncertainty of COVID.

So, I'll turn it over to Ann, and, I do want to just make sure that I state before the presentation that this presentation was not listed on the committee agenda, but a physical copy of the presentation has been made available in council chambers, and the presentation was distributed by e-mail to committee members this morning.

The electronic copy of this presentation is going to be posted to the committee records after this meeting for members of the public who maybe have not seen it in advance.

It will be posted with the records after this meeting.

And for committee members, it was distributed via email earlier today.

So with that, I will pass it over to Ann to go through the presentation.

Thank you very much, Chair Lewis and committee members.

Anne Gorman of your Council Central staff.

I'm here to provide an overview of Council Bill 120643. Could I have the first slide, please?

This bill, I should mention, is sponsored by Chair Lewis.

And Chair, I'd like to thank you for acknowledging that this bill is complex.

I may beg the patience of committee members this afternoon going into some detail, but the details are important here.

This bill would impose requirements on new commercial leases.

So let me first walk through what the bill means by commercial leases.

Like all leases, they are legally binding contracts between a lessor and a tenant for the rental of property.

Leases allow a tenant to occupy and use the property in exchange for rent.

And the bill specifically defines this rental of property as for the purpose of conducting business.

It's in the tenant's interest to have a fiscal place from which to conduct that business, and it is a lessor's interest to be able to generate profit from the property.

The central staff memo provides some information about the various ways and different time frames in which that profit might be realized.

Commercial lease terms vary in length, as some of the public commenters mentioned.

They can last up to 20 years and include options to renew.

This bill would apply to new leases only and not to lease renewals.

Most commercial leases require a personal guarantee, and many also require a security deposit and or letters of credit.

These commitments can be described either in the lease itself or in legal documents that are executed separately in tandem with the lease.

And I will next describe each of these commitments.

Next slide.

Personal guarantee.

What is a personal guarantee?

This could be considered the main subject of this bill, and it's a term that might not be familiar to those of us whose only experience is with residential leases.

So I will spend some time here.

A personal guarantee is a commitment that certain expenses will be paid over a certain duration or durations of time.

As an example, if I open up a coffee shop, the lessor may require me to commit to five years of rent payments and the cost of upgrading the plumbing so I can run the espresso machines as a personal guarantee.

And this is a legally binding commitment that makes me personally liable to pay five years of rent and those plumbing costs.

In theory, someone else could take on this liability.

For instance, a relative or friend who really believes in my coffee.

But most of the time, it's the business owner who assumes the liability.

So what happens if my coffee is actually not that great?

and my shop goes out of business after two years.

I am still personally liable to pay the lessor an additional three years of rent payments, plus the plumbing costs.

And I'm not earning anything from the business anymore, so I have to pay these costs from my personal assets.

So the lease itself is a contract that allows the tenant to occupy and use the property in exchange for rent.

And the personal guarantee is an additional commitment that the tenant has to make on top of signing the lease.

Next slide.

The next item that might be included in or as a condition of commercial lease is a security deposit.

And most of us do have some familiarity with security deposits.

This is a payment made to the lessor prior to the tenant's use and occupation of the property.

So it is not a rent payment.

This payment can be made either by a business owner or an individual.

Cash just has to make its way to the lessor somehow.

A security deposit ensures that the lessor has this cash on hand if a tenant does not meet certain financial obligations associated with the lease.

Typically, those obligations include rent, sometimes utility payments, but a lessor could choose to make the security deposit applicable to other potential nonpayments on the tenant's part.

And what a security deposit does is it mitigates the financial risk that a lessor takes on in leasing the property.

There's always the possibility that the tenant will turn out to be detrimental to the lessor's interest in earning a profit.

And when the lessor has a security deposit, that detriment is just less keenly felt.

From a tenant's perspective, a security deposit is a commitment of capital.

Money spent to make a security deposit is money that is not available for other costs associated with starting a business or continuing to operate that business.

And the staff memo describes some of these costs, for example, supplies or employee uniforms or a vehicle.

Next slide.

The next item that might be included in or as a condition of a commercial lease are letters of credit.

And letters of credit are like a security deposit in that they mitigate the risk that a lesser takes on, but they are different from a security deposit in that they don't involve cash payment to the lessor.

And there are two types of letters of credit that tend to be included in commercial leases.

They both involve a bank or a financial institution in a transactional way, so they're going to involve some additional fees, fees that will be paid either by an individual who is obtaining the letters of credit, who's usually the business owner, or by the business itself.

The first type is a line of credit which the bank issues to a person or business for the purpose of availability to the lessor.

The other is access to funds or securities that the bank is holding on behalf of a person or a business.

And both of these scenarios are for the purpose of making cash available to the lessor.

if the tenant does not meet certain financial obligations associated with the lease.

So the same purpose as a security deposit, but via different mechanisms.

And like a security deposit from a tenant's perspective, letters of credit mean a commitment of either credit or capital, which could otherwise be used to support business needs.

Next slide.

So, what would Council Bill 120643 do related to these three things?

First of all, it would limit the personal guarantee liability that can be included in a commercial lease to the first two years of rent payments, plus the total cost of any tenant improvements provided by the lessor.

No such limit currently pertains in Seattle.

It would also limit the value of the security deposit and letters of credit in the aggregate to two months of rent payments.

And again, no such limit currently exists.

Administratively, it would oppose some requirements on lessors after the passage of the legislation.

They would have to provide notice of the new limits to all current tenants, even though the only benefit to those tenants would be in the future.

after their current leases have expired and they're in the market for new ones.

And in the future, lessors would have to provide the same information to all new and prospective tenants.

As a note, Chapter 7 of the Seattle Municipal Code addresses this type of mandatory disclosure related to residential leases.

So this aspect of the bill is not an entirely new area of regulation.

And the bill also creates a structure for the issuance of citations, including monetary penalties in hearings by the city hearing examiner.

Next slide.

The central staff memo provides some additional contextual information about the bill, and I will briefly touch on those factors.

One of the public commenters today, Steve Hooper, made reference to this being first in the nation legislation, and it is important to state up front that That's true, and this legislation would be innovative.

We often look to other jurisdictions, other cities, other states with similar regulations when we're thinking about implementing new legislation.

And we're just not able to do that in this case and predict what impacts would be here in Seattle because there is no similar regulation elsewhere in the country.

Also, in analyzing a bill, we often look to available data to understand quantitatively the case for that bill.

And here we've run into a common pitfall of being innovative, which is that we weren't able to find data sets suggesting that regulation is needed regarding personal guarantees, security deposits.

and or letters of credit or specifically what those regulations should be.

We weren't able to find much research on these topics even nationally.

Research is focused more on how increased access to capital and credit helps new businesses survive.

And to the extent that this bill would lead to some foregone expenditures by business owners, it would provide that increased access.

But this is a case where absence of evidence is not evidence of absence.

This is just one of the costs of leading the field and producing innovative legislation.

Committee members should also be aware that the bill was drafted based on a great deal of stakeholder input from commercial tenants, but without similarly broad engagement of lessors.

So in the sense that the bill seeks to balance the financial interests of these parties, it's not clear that it's done that.

The memo also discusses the fact that not all commercial lessors are created equal.

There are huge national conglomerates, and there are owners of a single commercial property who may not even be earning monthly profit from lease payments.

And given this difference, even creating a hypothetical lessor stakeholder group such that it spoke with one voice might not be realistic.

Finally, there could be costs to the Department of Finance and Administrative Services to implement the legislation.

The bill does not include any outreach or enforcement structure, so there are no staff ads.

but it does create some incremental work for FAS staff that may not be able to be absorbed.

And as we learn more, we will keep committee members updated about those potential costs.

Next slide.

Now is the time when I will answer questions as best I can.

Thank you so much.

And Council Member Herbold.

Thank you.

A couple questions.

So, folks may recall that during COVID, I sponsored legislation that this council passed that only was in place during the state of emergency.

It was Ordinance 12-6066.

It prohibited all rent increases to small businesses and also required that lessors negotiate payment plans for rent that small businesses had fallen behind on.

We defined businesses in that legislation as inclusive of non-profits.

So I'm wondering whether or not this legislation is inclusive as non-profits as a type of business.

That's my first question.

Oh, I will answer.

I'm not sure the extent to which stakeholder engagement included nonprofit businesses.

And I received a call from a stakeholder earlier this week asking about just that point.

And assuming that this is consistent with the sponsor's interest, I think that it's worth engaging with law and seeing whether we should broaden the definition of commercial property to make clear that although it is commercial property, non-profit business might be conducted from it.

Also, you had mentioned that there was not a lot of data to evaluate the potential impacts of a bill like this.

No other bills in other jurisdictions.

Do we have at least anecdotal information that we've collected about the bill that was similar that was in place during the state of emergency that might be illustrative to our deliberations here?

I am not aware of any data that that was collected regarding that bill.

I suspect that stakeholders might themselves have some information and I can work with them to gather what information they have and to make sure that it is publicly presented at the next meeting of this committee.

I think that would be really helpful.

Yeah, and to jump in on that, Council Member Herbold, we do have pretty extensive anecdotal experiences that we've collected and can bring an endless parade of small business owners who will share their stories about this.

And we heard a couple of those in public comment today.

Per the information you just sort of raised, which was anecdotal information, specific information from people who are impacted and affected that has made this rise to this level.

I would also just add that we probably, there might also be some national sources of information we could look at pertaining to similar emergency measures.

We were not the only city to propose emergency measures around personal guarantees during COVID at New York, New York City for one, I believe had such a proposal.

So there are other places we can look to for the COVID era policies where a similar record was built.

But yes, working with Washington Hospitality and Seattle Restaurant Alliance, we can work on a way to more formally aggregate that anecdotal information into a package to answer that question.

Great.

And then my last question relates to how the issue of tenant improvements fits into the maximum personal guarantee that is permitted by the legislation.

And I understand this to say that there's a limit on rent that will go towards the maximum personal guarantee permitted, but there is no total limit on the tenant improvements that could be required, just that the total of those tenant improvements count towards the maximum personal guarantee.

In a situation that I ran into I don't know, recently, maybe a year ago, a local business in my district recently closed, and they had a situation where there was significant tenant improvements required by the landlord.

And after she made those very costly tenant improvements, she stayed to the end of her term, and then the landlord chose not to re-up her lease.

So I'm just wondering how, without capping the tenant improvements or without having a requirement that if you sink a lot of your own money into physical improvements, there should be an expectation that the lease lives on for a certain amount of time or something like that.

I don't understand the function of including the total cost of tenant improvements in this maximum guarantee if that could be an unlimited number of dollars and there's no sort of protection associated with that investment.

We could certainly explore what a reasonable cap on the tenant improvements might be.

It's my understanding that sometimes these costs can be pretty significant, as with the commercial kitchen example that you cited.

And I would imagine that at some point, if there is a cap, lessors will be just less willing to make improvements and to extend these leases to new tenants.

So this is a bit of a balancing act.

But in the example you cite, it does seem that the landlord should not have the unilateral ability to say, you're going to pay for all these things.

And by the way, I'm not going to renew your lease.

So, um, that, that could be potentially another area of, of commercial lease regulation for, for council to explore in the future.

Thank you for, um, stating back my inarticulate explanation of the, um, of the situation.

Cause it shows to me that you understood the point I was getting across.

I really appreciate that and would like to look into that further with you.

Thank you, Councilmember Herbold.

Councilmember Morales.

Thank you.

I don't have questions, but I do want to thank you, Mr. Chair, for raising this issue.

And, you know, we know that it's not just residential tenants in the city who are dealing with a real need for tenant protections.

Our small businesses are also getting pushed out of the city by the increasing cost of doing business here.

So it sounds like this is a really good first step for us to start to understand what the options are for making sure that we're providing some tenant protection to our small businesses.

I have hundreds of small businesses in my district as well.

And, and, you know, many of them are business owners who don't speak English as a first language, for example.

And so there is an additional layer of barrier to them understanding you know, what kind of leases they're getting themselves into, how they might get out of such a lease, what the requirements are for ensuring that they have access to stability for their businesses.

So I think this is, this is, you know, I have a feeling once we kind of stick our nose under this tent, we're going to realize that there are a lot of issues that we need to be working on as a city to make sure that our small business community has greater protections in the city.

And I really am looking forward to having those conversations and just want to thank you for raising this issue and look forward to working on it with you.

Thank you so much, Council Member Morales.

Just to digress for a moment, I do think that lots of things were really put into focus for us as community members during COVID, things that we really took for granted and things that when faced with extreme pressures caused a lot of anxiety and hurt in the community.

And one of those things was looking at the massive amount of insecurity a lot of small businesses that aren't, you know, they're not strictly speaking, you know, a government service.

They're not strictly speaking, you know, like an art and cultural institution in and of themselves.

but they are foundational institutions and gathering places in our neighborhoods that are important and essential to us.

And as you state, are facing increasing pressures to exist, to thrive, and to remain here, and a little part of all of us goes away when we lose these businesses.

And this is one of the things that really came from community.

Look, I took property law in law school, But I wasn't sitting around thinking, you know, what arcane property law thing can I do to help restaurants?

I did it because a lot of people in my community came to me and said, we need this or we will not be here when COVID is over.

And to build on and work on that is absolutely essential for us as a council and city leaders, because we don't want to lose these really critical and important places in our community.

sense of community that they build.

Councilmember Herbold.

Thanks.

Just to follow up on both of your comments and something I sort of alluded to in mine, I just want to remind council members and the viewing public, one of the things that we found out during COVID, or for some of us, I think maybe not found out, but we're reminded of, is that we were able to put a freeze to ban rent increases for commercial leases because there is not a state preemption for commercial leases.

And so I did do, after that law went out, lapsed with the state of emergency.

I did do some light stakeholdering to see whether or not there was any interest in replacing the ban with some sort of a rent regulation.

I think there was interest, just not the bandwidth to engage in I think what would be a big policy bite to take on.

And so I just flagged that for future work in this area.

As Council Member Morales said, there's a lot to be done, and I think we're just beginning to peel the onion.

And thank you, Chair Lewis, for helping us do so.

Thank you.

Are there any other questions or comments from council colleagues?

This is our first hearing on this topic.

I wanted to get it in before the council recess.

I wanted to give people time to familiarize themselves with the policy.

As Anne indicated, there's going to be additional stakeholdering that our office is going to want to do with impacted parties.

but wanted to make sure that we got this initial hearing out there, make sure offices can prepare, start thinking about this policy, and, uh, hopefully be in a position to take action on this policy before the budget this fall.

Uh, are there any, um, uh, closing comments?

Not seeing any.

Uh, let's close out Item 3. Thank you.

Um, again, just, Anne, thank you so much.

Uh, this has been a very big and, and, um, time-consuming policy project to Shepard, and really appreciate your diligence, professionalism, and ability in working with stakeholders, working with the law department, working with my office to bring this forward.

I want to thank Malik Paktamanamang on my staff, as well as Jacob Thorpe, my chief of staff, for their work on this policy.

And, of course, Seattle Restaurant Alliance and Washington Hospitality.

Austin Miller, who's in the gallery, has been extremely helpful on getting us what we need and getting this policy in front of us.

So thank you very much and looking forward to continuing this discussion in the coming weeks.

With that, council colleagues, that's our last agenda item.

Is there anything for the good of the order?

Seeing nothing for the good of the order, it is 3.50 p.m.

and this committee meeting is adjourned.

Recording stopped.