On Monday the City Council will vote on legislation to enter into an agreement between the City of Seattle and Sound Transit. This agreement will formalize City-Sound Transit cooperation to implement the West Seattle and Ballard light rail projects, approved by voters in the November, 2015 ST3 ballot measure.
The agreement notes that the scope for ST3 is equal to the first two Sound Transit ballot measures (1996 and 2008) combined. To meet this challenge, the agreement notes Sound Transit is embracing new ways of working internally, and with project partners like the City of Seattle.
The goal of the agreement is for the City and Sound Transit to work together seamlessly, with clarity to budget and schedule, and with specific points for City concurrence. A number of provisions are designed to help move the timeline forward as much as possible.
The agreement calls for the development of a preferred alternative for a light rail alignment, with city concurrence, during the 1st or 2nd quarter of 2019. It is important to note that this involves setting a preferred alternative earlier in the process than during ST2. Construction is set to begin in 2025, with service to West Seattle beginning in 2030.
The starting point for consideration is the representative alignment included in the ST3 plan approved by voters. Here’s the link for West Seattle to Downtown Light Rail. It lists stations at Delridge, Avalon, and Alaska Junction, and notes, “this representative light rail project would connect West Seattle to downtown Seattle via Alaska Street, Fauntleroy Way, Genesee Street, Delridge Avenue, Spokane Street, and the SODO Busway.”
As a Sound Transit project, the Sound Transit Board approves the alignment for light rail. The agreement includes an “Elected Leadership Group” to make recommendations regarding the alignment and other issues to the Sound Transit Board. The Elected Leadership Group will consist of Sound Transit Board members and other local elected officials in the corridor. As District 1 representative for West Seattle, I’ll be serving on this board.
Regarding potential alternatives, the “Parties acknowledge that suggestions to study additional alternatives are likely to emerge during the alternatives development process. The Parties will collaborate on the evaluation of reasonable alternatives that could meet project objectives and fulfill the purpose and intent of the voter-approved ST3 Plan. The target is to identify options to be investigated as soon as possible during alternatives development to support the goal of early and durable consensus on a preferred alternative.”
The agreement also sets a goal of seeking ways to streamline permitting. These could involve code changes, or discretionary department decisions. (for more, see Exhibit G, a letter from Sound Transit from April 25, 2016). Exhibit D notes the goal for a preliminary permitting plan is the 1st quarter of 2018.
The agreement further notes the City and Sound Transit will seek to resolve any potential conflicts between City, such as the Fauntleroy Way Project, and Sound Transit planned projects: “The Parties will share information on existing conditions and planned projects within the Project area with the intent to identify opportunities for coordination and resolve conflicts as early as possible during Project development, and to reduce risks to Project development and delivery.”
The legislation was approved in the Sustainability and Transportation Committee earlier this week; here’s a link to the presentation.
HOW DID WE GET HERE?
Back in October 2012 the City called for a study of the KeyArena, this was contained in the ordinance that authorized then-Mayor Mike McGinn to enter into a MOU with King County and ArenaCo. (Chris Hansen). In part that MOU stated:
“During the 12 months following approval of the MOU, the City will lead a planning process to evaluate options for the future of Key Arena or the Key Arena site… The goal of this process will be to identify an option(s) that is financially sustainable and that significantly contributes to the vitality of Seattle Center. As part of this process, the City will consider the interests of Key Arena’s current tenants and their role in ensuring the future success of Key Arena and the Key Arena site and the new Arena…”
In September 2014, the Council added two additional requirements for issues to study in the report authorized by the MOU. The report needed to include study of a possible scenario in which the SODO arena was not built. Under a scenario where the SODO arena was not built, the report needed to include costs and benefits first of maintaining KeyArena as it currently is; and second, cost and benefits of redeveloping KeyArena so that it could host an NHL or NBA team. This work product became known as the AECOM report.
On June 19, 2015, the AECOM report was issued. It concluded that the KeyArena could attract and host a sports franchise, but it would need to be modernized in order to do so. This report was never heard by the Council in committee and very few people new about its existence. In 2016 several parties approached the City and indicated an interest in redeveloping KeyArena. But remember, between 2012-2016, the City was focused on a potential SODO arena.
In 2016, the Council took up the Occidental Avenue street vacation. On May 4, I wrote about it on my blog. All street vacations require a public benefit commensurate to the value of the street vacated and to mitigate impacts resulting from the use of a vacated street. I believed that the public benefit that the street vacation required needed to include an NBA team because of potential impacts from the project on the good industrial and maritime jobs, the traffic, and economic impacts of the SODO arena project made possible by vacationing Occidental Avenue. As I said then: “The hope of a team is not a public benefit. In short, I think it was only possible to meet the necessary public benefit threshold if we’d considered the legislation after attaining an NBA team.” The MOU with ArenaCo. ended on December 3, 2017, with no potential NBA team in sight.
HOW DID WE END UP WITH THE OAK VIEW GROUP AS A PARTNER?
In early January 2017, the Executive released a Request for Proposal (RFP) for “redeveloping and operating KeyArena at Seattle Center as a world-class civic arena presenting music, entertainment, and sports events, including the potential for NBA and NHL events.”
The result was two separate applications. However, ArenaCo. (Chris Hansen) was not one of the responders. In early September ArenaCo. released a proposal to redevelop the KeyArena; however, that proposal was not submitted within the City’s RFP process. Had it been, and if it met the requirements of the RFP, it might have been considered.
The Executive selected the Oak View Group (OVG) as the successful bidder to the RFP.
WHAT IS IN THE KeyArena MOU?
The Council worked in collaboration with the Executive and OVG to negotiate the MOU. At the start of the negotiations, in June of 2017, the Council sent a letter that outlined its priorities for an MOU. Because of my committee obligations, I also sent my own letter focusing on labor and arts issues. The subtext of these letters was, paraphrasing: “Mayor & OVG: The Council has to vote on the MOU and we expect a final MOU to address these issues.”
IS THE CITY PAYING ANYTHING TO REBUILD THE KeyArena?
No, the total cost of the redevelopment will be borne by OVG. There is no public money in the redevelopment, nor is there public debt financing. The price tag of $600 million will be funded by a combination of debt OVG will assume ($187 million), private equity ($353 million), and historic tax credits ($60 million). If they are unable to secure the historical tax credit, OVG is obligated to absorb the additional $60 million as additional debt. Our independent financial consultant has confirmed that OVG has the ability to do so, should this condition arise.
OVG will also pay the City $3.5 million in order to reimburse the City for the costs to negotiate the MOU.
WHAT WILL THE CITY GET IN REVENUE IF OVG NOW GETS TO OPERATE THE KeyArena?
The City will always get more than we are making now from revenue generated from KeyArena. Specifically, the City will always receive at least a guaranteed baseline rent from OVG equal to the City’s recent historical revenues from operations at KeyArena plus and will be maintained at $304 million over the terms of the lease. This includes incremental tax revenue share *above what we currently receive* on Sales Tax, City B&O Tax, Leasehold Excise Tax, City Parking Tax, Parking Revenues, and Campus Sponsorships. The portion of increment above what we get today that the city will receive is 25% of the additional increment for the first 10 years, and 50% of the additional increment for the 29 years following the first 10 years.
The lease is 41 years, two years of construction and a 39-years of operation. Below you can see a chart that shows the different revenue possibilities based on tenants after the arena reopens: no tenant, NHL only, and NHL and NBA. With the City making a base rent of $304 million as well as incremental revenue mentioned above. This chart best illustrates the incentive that OVG has to bring back not only the NHL, but the NBA. It also demonstrates how we will get no less revenue than we do today from the operation of the facility even if neither an NHL or NBA team is secured.
OVG will have a 39-year lease with two possible extensions of eight years each. Before OVG is eligible to receive the extensions, OVG will need to invest in the facility. To receive the first eight year extension, OVG will have to invest at least $50 million on renovations between years 21 and 30 of the lease. To receive a 2nd eight year lease extension, OVG must invest another $50 million on renovations between years 31 and 47 of the lease. OVG will have the option of investing $250 million or more beginning in year 21 to trigger both eight year extensions.
WHAT ARE OTHER OVG FINANCIAL OBLIGATIONS?
For the facility?
- OVG must spend $1 million or more per year in the first ten years on capital expenditures.
- OVG must spend at least $2 million a year from years 11-39 on capital expenditures.
- OVG must incur the costs to preserve the historic roofline.
- OVG must incur the costs to meet LEED Gold rating or equivalent standards in construction.
For Transportation Needs?
- OVG will provide $40 million in transportation funding to the City.
- OVG will pay up to $250,000 for a mobility and transportation study.
For other Citywide Needs?
- OVG will provide $20 million in charitable contributions (a mix of cash and in-kind donations), $10 million of which will be dedicated to YouthCare.
- OVG and the city commit to develop a Community Benefits Agreement to foster equity and social justice and provide supporting programs and services for youth, arts, sports, music, and culture.
- OVG will provide 14 rent-free days at the arena reserved for community events.
- OVG has committed funding for art commensurate to the obligations for city funded projects under our “1% for the Arts” program. For a $600 million project, that’s $6 million for art.
- OVG will make a Mandatory Housing Affordability (MHA) payment for the increase in arena square footage to the KeyArena.
What about the current tenants at Seattle Center?
- OVG will provide $1.5 million to relocate the Seattle Center Skate Park.
- OVG will pay for temporary relocation costs of Pottery Northwest during construction.
- OVG will also provide $500,000 for all other displaced tenants.
How will OVG support our work force?
- OVG has agreed to include a Community Workforce Agreement which includes priority hire terms with all contractors and subcontractors. This means that they will be required to have a percentage of project hours performed by workers living in economically distressed areas; as well as have apprentice utilization requirements and women and people of color aspirational goals.
- OVG has committed to a Labor Harmony Agreement which ensures they will bargain in good faith with their workforce.
- OVG has committed to create an inclusion plan using the City’s Women and Minority Owned Businesses (WMBEs) for construction projects.
- OVG will offer employment to current KeyArena workers with commensurate salary and benefits to what they make working for the City.
While I am mostly satisfied with the framework that the MOU creates, we have yet to complete the full transaction. The Council will continue to meet on this issue in 2018 and consider more detailed transaction documents. I will continue to be vigilant in protecting the City, its assets, and residents. Examples like this stadium in Georgia that was touted as being privately funded encourage what I feel is a healthy skepticism of arenas. I will continue to insist that Seattle does not shoulder the cost of private enterprise or, as it’s said in the article: “socialize the costs [of building a stadium], [and] privatize the profits.”
King County Metro is planning to convert bus route 120 into a Rapid Ride H Line in 2020. A new Rapid Ride H Line will continue the current service from Downtown Seattle through Delridge, White Center, and Burien. The goals of Rapid Ride are:
- Greater frequency and reliability for each commutes downtown and cross-town as well as travel within the neighborhood,
- Additional service on nights and weekends
- Improvements for sidewalks, street crossings, and paths for getting to stops for pedestrians and bikes, and for those with limited mobility.
As part of their outreach process, they are conducting a public survey to allow you to identify and prioritize transportation needs and opportunities around Route 120 and the future H Line. You can take the survey here.
SDOT is collaborating on capital improvements, and will bring an update to City Council once they complete 10% project design.
Metro KC will be scheduling outreach meetings in early 2019; I’ll let you know when dates are available. I’m working with the Delridge Neighborhood District Council, Metro KC, and Seattle Department of Transportation (SDOT) on a community-led meeting for Metro-KC and SDOT to hear community suggestions and concerns about the proposed changes.
More information is available at Metro’s H Ride webpage.
The City’s Duwamish Valley Action Team will hold a multilingual open house on Saturday, December 9 at Concord Elementary School, at 723 South Concord Street, from 10 a.m. to 1 p.m.:
WHAT: Multilingual Open House & Holiday Celebration; lunch, childcare, and simultaneous interpretation in Spanish, Vietnamese, and Somali will be provided
WHEN: Saturday, December 9th, 2017.
WHERE: Concord International Elementary School, 10 a.m. (open house from 10 a.m. – 12 p.m.; lunch from 12 – 1 p.m.
The City’s Duwamish Valley Action Team (DAT) was created to advance the City’s environmental justice and equitable development goals in the Duwamish Valley, with an emphasis in the South Park and Georgetown neighborhoods.
The DAT has been reviewing and acting upon input received from more than 390 Duwamish Valley residents and small business owners earlier this year.
City staff from multiple departments will share details on how they plan to address many community-identified priorities, in seven topic areas: 1) Public safety; 2) Healthy environment; 3) Parks and open spaces; 4) Community capacity; 5) Mobility and transportation; 6) Economic opportunity and jobs; and 7) Affordable housing. City staff will rotate by language group (English, Spanish, Vietnamese, and Somali) until they cover each topic.
Here is some background on the effort from the project website:
For years, the communities in the Duwamish Valley have experienced documented inequities. To start addressing these inequities, Seattle City Council passed Resolution 31567, directing the creation of a City Interdepartmental Team to align and coordinate City programs and capital investments to address these issues. In April 2016, the City released the Equity & Environment Agenda and announced the creation of the Duwamish Valley Program as an immediate action to advance the environmental justice goals of the agenda. Since June 2016, OSE and OPCD have worked with sixteen other City departments (Duwamish Valley Action Team or DAT) to better align and coordinate efforts to advance environmental justice, address racial and neighborhood-level disparities, reduce health inequities, build community capacity, create stronger economic pathways and opportunity, and build trust in government.
For more information contact: Alberto Rodriguez email@example.com (206) 615-1739 or
David Goldberg firstname.lastname@example.org (206) 615-1447
On Friday, December 15, I will be at the South Park Community Center (8319 8th Ave S) from 2:00p.m. – 7:00p.m. Please be sure to arrive no later than 6:30 pm, as the final meeting of the day will begin at 6:30 p.m.
These hours are walk-in friendly, but if you would like to let me know you’re coming in advance you can email my scheduler Alex Clardy (email@example.com).