Form revised April 22, 2003

FISCAL NOTE FOR NON-CAPITAL PROJECTS

Department:	Contact Person/Phone:	DOF Analyst/Phone:
Seattle Center	Ned Dunn, 684-7212 Robert Nellams 684-7334 Angela Tinker, Law, 684-8239	Helen Welborn, 233-7884

Legislation Title:

AN ORDINANCE relating to the Seattle Center Department; authorizing execution of a lease agreement with Pottery Northwest, Inc., for use of space on the Seattle Center campus.

· Summary of the Legislation:

This legislation authorizes a lease agreement with Pottery Northwest, a Washington nonprofit corporation, for use of space on the Seattle Center campus. The term of the lease is four and one-half years, from July 1, 2003 to December 31, 2007, with the option for three additional two-year terms. Under the terms of the lease, Pottery Northwest shall use the leased space (1) to provide pottery classes open to the general public; (2) to provide workspace for potters; and (3) to provide a gallery for the display and sale of pottery objects. Base rent increases from the current annual amount of $14,400 to $28,800 ($14,400 for the initial half-year). Beginning in 2005, base rent is increased by a CPI adjustment. In addition to annual CPI adjustments, base rent increases by $2,500 for each two-year option period. These increases would take effect in 2008, 2010, and 2012. Pottery Northwest has the opportunity to offset up to 25% of its annual rent with services that benefit the City, with the Seattle Center Director making the final determination as to the value of such services and whether to accept such services as an offset to rent.

· Background: (Include brief description of the purpose and context of legislation and include record of previous legislation and funding history, if applicable):

Pottery Northwest has leased space from Seattle Center since January 1983. The original lease agreement was authorized by Ordinance 110817 and extended through December 1990. Subsequently, Ordinance 117044 authorized a lease period from January 1991 through December 1995. Since January 1996, Pottery Northwest has leased space on a month-to-month basis under the “holding over” provisions in the 1991 lease. The Pottery Northwest space is located on the west edge of the campus along First Avenue North, south of KeyArena and adjacent to the First Avenue North Parking Garage. For the last twenty years Pottery Northwest has added to the cultural and artistic activities at Seattle Center.

· Please check one of the following:

____ This legislation does not have any financial implications. (Stop here and delete the remainder of this document prior to saving and printing.)

__X__ This legislation has financial implications. (Please complete all relevant sections that follow.)

Appropriations (in $1,000s): (Please only reflect the dollar amount actually appropriated by this legislation.)

Fund Name and Number	Department	Budget Control Level*	2003 Appropriation	2004 Anticipated Appropriation
			None	None
TOTAL

* This is line of business for operating budgets, and program or project for capital improvements

Notes:

Anticipated Revenue/Reimbursement (in $1,000s) Resulting From This Legislation:

Fund Name and Number	Department	Revenue Source	2003 Revenue	2004 Revenue
Seattle Center Operating Fund (11410)	Seattle Center	Rent payments from Pottery Northwest	$14,400	$28,800
TOTAL			$14,400	$28,800

Notes: Under the lease, Pottery Northwest will pay $14,400 in rent for the second half of 2003. In the first half of 2003, Pottery Northwest will pay rent of $7,116 under the terms of the previous agreement. As noted above, under the new agreement, Pottery Northwest has the opportunity to offset up to 25% of its annual rent with services that benefit the City. This provision is in keeping with the Seattle Center Director’s authority under SMC 17.16.030 to accept in-kind contributions of services for the City’s benefit to offset office space rental payments due from non-profit organizations. Under the Pottery Northwest Lease Agreement, the Seattle Center Director will make the final determination as to the value of such services and whether to accept such services as an offset to rent. Seattle Center’s 2003 Adopted-2004 Endorsed budget assumes the previous lease rates. The new rates provide revenue increases of approximately $7,000 in 2003 and $14,000 in 2004. Additional expenditure authority for this additional revenue is not needed, however.

Total Regular Positions Created Or Abrogated Through This Legislation, Including FTE Impact:

Position Title*	Part-Time/ Full Time	2003 Positions	2003 FTE	2004 Positions**	2004 FTE**
None
None
TOTAL

· Fund Name and Number: _________________________________________

· Department: ___________________________________________________

* List each position separately

** 2004 positions and FTE are total 2004 position changes resulting from this legislation, not incremental changes from 2003.

· Do positions sunset in the future? (If yes, identify sunset date):

Spending/Cash Flow (in $1,000s): (Please complete this section only in those cases where part or all of the funds will be spent in a different year than when they were appropriated (e.g., as in the case of certain grants and capital projects.)

Fund Name and Number	Department	Budget Control Level*	2003 Expenditures	2004 Anticipated Expenditures
TOTAL

* This is line of business for operating budgets, and program or project for capital improvements

Notes:

· What is the financial cost of not implementing the legislation? (Estimate the costs to the City of not implementing the legislation, including estimated costs to maintain or expand an existing facility or the cost avoidance due to replacement of an existing facility, potential conflicts with regulatory requirements, or other potential costs if the legislation is not implemented.)

Without legislation authorizing the lease, rent payment continue at the current, lower rate (a difference of $14,400 on an annual basis).

· What are the possible alternatives to the legislation that could achieve the same or similar objectives? (Include any potential alternatives to the proposed legislation, such as reducing fee-supported activities, identifying outside funding sources for fee-supported activities, etc.)

In theory, Seattle Center could find another tenant for the Pottery Northwest space. However there would be significant capital costs to transform the space from a pottery space to another use.

· Is the legislation subject to public hearing requirements: (If yes, what public hearings have been held to date, and/or what plans are in place to hold a public hearing(s) in the future.)

No.

· Other Issues (including long-term implications of the legislation):

Pottery Northwest has been a Seattle Center resident organization for twenty years. Both parties would like to see Pottery Northwest remain at Seattle Center.