ORDINANCE _________________

AN ORDINANCE establishing a Downtown Parking and Business Improvement Area; levying special assessments upon the businesses, multifamily residential or mixed-use projects within the area; providing for the deposit of revenues in a special account and expenditures therefrom; providing for collection of and penalties for delinquencies; providing for the establishment of a Ratepayers Advisory Board, and providing for an implementation agreement with a program manager.

WHEREAS, the businesses, multifamily residential or mixed-use projects located within the area and subject to sixty percent or more of the special assessments levied by this ordinance filed a petition with The City of Seattle to establish a Parking and Business Improvement Area pursuant to RCW 35.87A, which is filed in C.F. 306589; and

WHEREAS, the City adopted Resolution 30669, initiating a Parking and Business Improvement Area via the resolution method instead of the petition method as provided for by RCW 35.87A.030; and

WHEREAS, pursuant to RCW 35.87A.040, the City on April 12, 2004 adopted Resolution 30670 entitled "A RESOLUTION of intention to establish a Downtown Parking and Business Improvement Area, and fixing a date and place for a hearing thereon," and declaring its intent to establish the same; and

WHEREAS, the Downtown Parking and Business Improvement Area (DBIA) established herein is for the purpose of enhancing conditions for the operation of those businesses, multifamily residential or mixed-use projects; and the budget shall be dedicated to activities in addition to basic services provided by The City of Seattle; and

WHEREAS, as provided by Resolution 30670, the City Council, through its Finance and Budget Committee held a public hearing thereon on May 5, 2004, at 9:30 a.m. in the City Council Chambers, City Hall, 600 Fourth Avenue, 2nd Floor, Seattle, Washington; and

WHEREAS, the testimony received at that hearing resulted in the Council determining that establishing a new DBIA is in the best interest of the businesses, multifamily, and mixed-use projects within the DBIA's boundaries; NOW, THEREFORE,

BE IT ORDAINED BY THE CITY OF SEATTLE AS FOLLOWS:

Section 1. Area Established. As authorized by Chapter 35.87A RCW, there is hereby established a Downtown Parking and Business Improvement Area ("Downtown Business Improvement Area" or "DBIA"), to be known as the "Metropolitan Improvement District" or "MID," within the following boundaries as shown on the map attached as Exhibit "A" (when a street or alley is named, the area boundary is the centerline of the right-of-way including vacated portions unless otherwise specified in the description):

From the corner of 4th Avenue and Denny Way, proceed south on 4th Avenue to Cedar Street, east on Cedar Street to the alley between 4th and 5th Avenues, south down the alley to Vine Street, east on Vine Street to 5th Avenue, south on 5th Avenue to Lenora Street, west on Lenora Street to the Alaskan Way Viaduct, north under the Viaduct to Elliott Avenue, north along Elliott Avenue to Bay Street, west along the Bay Street right-of-way to the water, south along the outer harbor line (including from Pier 71 to Pier 47) to South Jackson Street, south along Alaskan Way to King Street, east along King Street to 4th Avenue, north on 4th Avenue to Washington Street, east on Washington Street to 6th Avenue, north along 6th Avenue to Interstate Highway 5, north along Interstate Highway 5 to Denny Way, west along Denny Way to 4th Avenue.

In case of a conflict between the description of the area and the map, the description shall control.

Section 2. Programs. Special Assessment revenues shall be used for the following component programs:

A. Public Areas Maintenance

The maintenance program will provide sidewalk sweeping, removal of litter, graffiti, and drug paraphernalia and maintenance of public planters, street furniture, newspaper boxes and kiosks. The program will additionally provide special services to clean up problem areas.

B. Public Safety

The public safety program will identify, report and act as problem solvers on public safety issues, including those problems specific to high rise properties, in coordination with the Seattle Police Department, mental health and substance abuse programs, and human service agencies.

C. Business Development

The business development program will develop market data resources, market trend information and economic studies to assist in retaining and attracting businesses to the area of the DBIA. The program will also develop and implement programs to improve parking, transit and access in that area.

D. Image Communications and Public Relations

The program will work to increase visitor, tourism, residential and business traffic by promoting the DBIA.

The listing of services is illustrative and not exclusive. All such activities are supplemental to street maintenance and law enforcement provided by the City and are not intended to displace any services regularly provided by municipal government. The estimated cost of these uses and projects over the ten-year period is Thirtyeight Million Six Hundred Ten Thousand Dollars ($38,610,000).

Section 3. Levy of Special Assessments. To finance the programs authorized in Section 2, there is levied upon and shall be collected from the businesses, multifamily residential properties (buildings containing more than four residential units), and mixed-use properties (buildings with both multi-family residential and commercial units) (collectively, "Ratepayers") in the Downtown Business Improvement Area described in Section 1, a ten-year special assessment in the amount of approximately Thirty-eight Million Six Hundred Ten Thousand Dollars ($38,610,000). All businesses and multifamily residential or mixed-use projects within the area established in Section 1 shall be subject to the provisions of this special assessment as authorized by RCW 35.87A.010. The Assessment is measured by the type of use and rate of assessment in the following paragraphs, subject to calculations and limitations in this Section:

Base Year Assessment = (Land Square Footage x $0.31) + (Total 2002 Assessed Value of Site (Property + Improvements)/$1,000 x $0.29). Records for the assessment calculation are based on information provided by the King County Assessor's Office for the year 2002. For properties with an assessed value of $0, including properties deemed historical, the total appraised value of the property will be substituted into the Base Formula in place of the assessed value. Modification or limitations to these assessments are described below.

No Base Year Assessment for any individual parcel shall exceed a total amount equal to ($1.50 x Total Assessed Value/$1,000). This rate is called the "Assessment Ceiling Rate." For the following special classifications of Ratepayers a Special Assessment Ceiling Rate shall be applied as set forth below to adjust the basic Base Year Assessment to determine the actual Base Year Assessment to be applied to that particular class of Ratepayer:

1. Commercial Mixed-Use: $1.50/$1,000 of total assessed value

2. Surface Parking: $0.85/$1,000 of total assessed value

3. Multi-Family Residential Apartments the lesser of: $0.55/$1,000 of total assessed value or $75 per unit.

4. Multi-Family Residential Condominiums: $75 per unit

5. Industrial Warehouse: $0.30/$1,000 of total assessed value

6. Multi-Family Residential Apartments possessing a rent restriction covenant the lesser of: $0.15/$1,000 of total assessed value or $9 per unit

7. Hotel the lesser of: $1.15/$1,000 of total assessed value or $65 per room

8. Non-Residential (Owned by a Non-Profit): $0.30/$1,000 of total assessed value

9. Historical or Assessed Value of $0: $0.07 per building net square foot

10. Floor Area Ratio Greater than 0.5: $0.014 per building net square foot

11. Non-Profit with Assessed Value of $0: $0.01 per building net square foot

When both an Assessment Ceiling Rate and one or more Special Assessment Ceiling Rates apply to a single parcel, the Ratepayer shall pay the lesser of the Assessment Ceiling Rate or the lowest Special Assessment Ceiling Rate. The Assessment Ceiling Rate and the Special Assessment Ceiling Rates apply to all properties of the particular class of Ratepayers and shall remain fixed as set out above throughout the ten year assessment period. Property owned by governmental entities or public utilities, and vacant land shall not be assessed.

Subject to the Assessment Ceiling Rate and the Special Assessment Ceiling Rates, Ratepayers will be assessed by the City for each of the ten years of the assessment as follows:

July 1, 2004-June 30, 2005: Base Year Assessment formula applied to determine collection amount.

A credit for payments received for the time period from the establishment date of the DBIA (estimated to be July 1, 2004) through August 22, 2004, shall be applied to the accounts of ratepayers assessed under the existing Downtown Business Improvement Area, established pursuant to Ordinance 119541.

July 1, 2005 June 30, 2006: Collection amount for each account shall increase three percent.

July 1, 2006 June 30, 2007: Collection amount for each account shall increase three percent.

July 1, 2007 June 30, 2008: Base Year Assessment formula applied integrating the most recent total assessed value for each parcel from the King County Assessor's Office.

July 1, 2008 June 30, 2009: Collection amount for each account shall increase three percent from the prior year.

July 1, 2009 June 30, 2010: Collection amount shall increase three percent from the prior year.

July 1, 2010 June 30, 2011: Base Year Assessment formula applied integrating the most recent total assessed value for each parcel from the King County Assessor's Office.

July 1, 2011 June 30, 2012: Collection amount shall increase three percent from the prior year.

July 1, 2012 June 30, 2013: Collection amount shall increase three percent from the prior year.

"New benefit areas" shall be added to the assessment roll on an annual basis, as follows. A "new benefit area" is created when a parcel's net building square footage increases either as a result of a new building or expansion of an existing building. New benefit areas shall be added to the assessment roll annually in July if its value has been added to the King County Assessor assessment rolls at any point during the preceding year.

During July 1, 2004June 30, 2005, July 1, 2007-June 30, 2008 and July 1, 2010June 30, 2011, new benefit areas shall be assessed according to the appropriate Base Formula factors and Assessment Ceiling rates applicable to use category applicable after new benefit area has occurred. If new benefit areas are added during July 1, 2006 June 30, 2007, July 1, 2005 June 30, 2006, July 1, 2008 June 30, 2009, July 1, 2009 June 30, 2010, July 1, 2011 June 30, 2012, or July 1, 2012 June 30, 2013, this new benefit area shall be assessed for that year's collection amount an annual amount in addition to the previous assessment, until the next year in which the Base Year Assessment formula is applied, using the following formula for specific benefit use category of the new benefit area:

Commercial Condominium

If property is commercial: $ 0.07 per net new building square foot

If property is residential: $75.00 per new unit

Commercial Mixed-Use $ 0.07 per net new building square foot

Hotel $65.00 per new room

Industrial Warehouse $ 0.03 per net new building square foot

Multifamily Residential Apartment $75.00 per new unit

Multifamily Residential Condominium $75.00 per new unit

Multifamily Residential Apartment/Rent Restricted $ 9.00 per new unit

Owned by Nonprofit (Non-residential) $ 0.01 per net new building square foot

For benefit use categories not listed, no additional assessment shall be imposed on those properties whose net building square footage has increased.

Section 4. Rate Changes. Changes in the assessment rate shall only be made by ordinance and as authorized in RCW 35.87A.140.

Section 5. Deposit of Revenues. There is in the City Treasury's Business Improvement Area Fund, a separate subaccount designated the Downtown Business Improvement Area Account (called "the Account"). The following monies shall be deposited in the Account:

(a) All revenues from special assessments levied under this ordinance;

(b) All income to the City from public events financed with special assessments;

(c) Gifts and donations for the Account;

(d) Interest and all other income from the investment of Account deposits;

(e) Restitution moneys for expenditures made from the Account and reimbursements due to the Account.

Section 6. Collection Schedule. Special assessments shall be collected on a semi-annual basis. The Director, Department Executive Administration, or the Director's designee ("Director") may change the billing frequency by directive. A copy of the directive shall be mailed to all Ratepayers not less than 90 days before the new billing cycle is to take effect.

Section 7. Delinquent Payments. If an assessment has not been paid within thirty (30) days after its due date, the Director shall send a reminder notice and add a Five Dollar ($5.00) processing fee. If the assessment is not paid within sixty (60) days after its due date, a delinquency charge shall be added in the amount of ten percent (10%) of the assessment in addition to an additional Five Dollar ($5.00) processing fee. All assessments that are not paid within sixty (60) days of the due date shall also bear interest from the due date at twelve percent (12%) per annum. The Director is authorized to bring an action to collect any unpaid assessments in any court of competent jurisdiction in King County.

Section 8. Notices. Notices of assessment, installment payments, or delinquency, and all other notices contemplated by this ordinance may be sent by ordinary mail or delivered by the City to the address shown on the records of the Director, and, if no address is shown there, to the address shown on the records of the County Assessor. Failure of the Ratepayer to receive any mailed notice shall not release the Ratepayer from the duty to pay the assessment and any interest and delinquency charges on the due date.

Section 9. Disputes. Any Ratepayer aggrieved by the amount of an assessment or delinquency charge may on request obtain a meeting with the Director or the Director's designee. If not satisfied, the Ratepayer may appeal the matter to the City's Hearing Examiner in the manner provided for a contested case under Chapter 3.02 of the Seattle Municipal Code. The Ratepayer has the burden of proof to show that the assessment or delinquency fee is incorrect.

Section 10. Expenditures. Expenditures from the Account shall be made upon vouchers drawn by the Director and shall be used exclusively for the statutory purposes each as more fully defined in Section 2.

Section 11. Ratepayers Advisory Board. The Director shall appoint an interim Ratepayers Advisory Board comprised of Ratepayers from the Area within thirty days of the effective date of this ordinance. The Director shall solicit recommendations from the Ratepayers, and shall appoint the interim board from that list. The interim Ratepayers Advisory Board will recommend a permanent Ratepayers Advisory Board (the "Board") within ninety days of the effective date of this ordinance. The composition of the Board shall be representative of both the entire geographic area of the District and representative of the special classifications in Section 3. The Director may appoint additional members to the Ratepayers Advisory Board to ensure that a broad representation of Ratepayers is provided. The additional members so appointed shall not exceed one-third (1/3) of the entire membership of the Board.

The Ratepayers Advisory Board shall be responsible for adopting bylaws and policy guidelines, providing advice and consultation to the Department initially, and to any individual or agency hired to manage the day-to-day operations of the Business Improvement Area program, on all matters related to the operation of the program.

The Ratepayers Advisory Board shall meet at least once quarterly; recommend an annual work program and budget; address and discuss Ratepayer concerns and questions regarding the DBIA district and program; review all reports submitted to the Department by the program manager; and sponsor an annual Ratepayers' meeting.

At the annual Ratepayers' meeting, the Board shall submit for approval its proposed work plan and budget for the next year, and its recommendation regarding whether to continue with the current program manager. The work plan, budget, and recommendation regarding whether to continue with the current program manager must be approved by a majority vote of the Ratepayers attending the meeting.

Section 12. Administration. The Director shall administer the program for the City with authority to:

(a) Classify Ratepayers within the types of use under Section 3 and resolve ambiguities in the application of rates;

(b) Collect the special assessments; refund special assessments when overpaid or otherwise improperly collected; extend the deadline for payment and waive delinquency charges and interest whenever the delinquency results from extenuating circumstances beyond the Ratepayer's control, such as a casualty loss causing premature closure of the business or bankruptcy or the total payment due to the City (exclusive of penalty and interest) is Ten Dollars ($10.00) or less; and exempt homes for which the King County Assessor has granted an exemption from property taxes under RCW 84.36.381 .389 on account of the low income status of the owner resident.

(c) Calculate and collect the interest for late payments;

(d) After receiving the recommendation of the Ratepayers at their annual meeting, execute an annual program management contract with a Program Manager;

(e) Accept and deposit advance payment of assessments by ratepayers; accept donations from governmental agencies, the public, and owners and operators of businesses on land that is developed or redeveloped during the existence of the DBIA for DBIA programs.

Section 13. Contract for Program Management. The Director is authorized to contract with a Program Manager, after receiving the recommendation of the Ratepayers at the annual meeting, to administer the projects and activities. It is the intent of the City Council that the Director renew the contract with the Downtown Seattle Association (DSA), and its management subsidiary, DBIA Services, to administer the program during the initial year, and for each year thereafter for as long as the Ratepayers concur in its continuation as the Program Manager. The selection of a Program Manager upon the recommendation of the Ratepayers shall obviate compliance with the consultant selection procedures of Seattle Municipal Code Chapter 3.114 and Section 20.46A.170. The Seattle Police Department shall review any proposed contract for private security.

Section 14. Commencement of Assessments. Assessments shall commence as of July 1, 2004.

Section 15. Ratification and Confirmation. The making of contracts and expenditures and the sending of assessment notices pursuant to the authority and prior to the effective date of this ordinance are hereby ratified and confirmed.

Section 16. Winding up of Operations of Existing DBIA. All program operations shall cease immediately on June 30, 2004. Management operations shall continue, but shall be limited to those necessary to close all outstanding accounts of the DBIA. DSA shall direct persons who may have accounts payable to submit final invoices not later than 30 days after the effective date of this ordinance. DSA shall provide the Director with a balance sheet, financial statement, list of payables, list of major vendors and suppliers over the past year, and any other information requested by the Director, not later than 60 days after the effective date of this ordinance.

The Director shall pay all legitimate reimbursable expenses and collect on all outstanding receivables as provided for in Ordinance 119541 for two years after June 30, 2004 in order to pay the legitimate expenses and collect the debts of the DBIA. Delinquent assessments collected before the Account is closed shall be credited to the Account. The Director shall prorate and distribute among the ratepayers the funds remaining in the Account after all expenses are paid.

The Account shall remain open until two years after the effective date of this ordinance. After distribution of all funds, the Director shall close the account. If any delinquent assessments are recovered after the account is closed, the funds shall be credited to the City's General Fund.

Section 17. This ordinance shall take effect and be in force thirty days from and after its passage and approval, if approved by the Mayor, but if not approved and returned by the Mayor within ten (10) days after presentation, it shall take effect as provided by Municipal Code Section 1.04.020.

Passed by the City Council the ____ day of _________, 2004, and signed by me in open session in authentication of its passage this _____ day of __________, 2004.

_________________________________

President __________of the City Council

Approved by me this ____ day of _________, 2004.

_________________________________

Gregory J. Nickels, Mayor

Filed by me this ____ day of _________, 2004.

____________________________________

City Clerk

(Seal)

Exhibit "A" DBIA (Metropolitan Improvement District) Boundary Map Jessica Nadelman:slc DBIA MID Ordinance 4 5/4/04 version # 4

Exhibit "A" DBIA (Metropolitan Improvement District) Boundary Map