Form revised April 13, 2004

FISCAL NOTE FOR CAPITAL PROJECTS ONLY

Department:	Contact Person/Phone:	DOF Analyst/Phone:
Seattle Public Utilities	Ray Hoffman, 4-5852	Cameron Keyes 684-8048

Legislation Title: AN ORDINANCE relating to the purchase of approximately 2.7 acres of property in the vicinity of the Northgate Mall; authorizing execution of a Purchase and Sale Agreement and acceptance of a Limited Warranty Deed for such property; placing such property under the jurisdiction of Seattle Public Utilities; adding a project for the development of a Thornton Creek Water Quality Channel Project to the Capital Improvement Program (CIP) for the Drainage and Wastewater Fund; and increasing the appropriation to Seattle Public Utilities with respect to the property purchase.

Summary and background of the Legislation:

In December 2003, the City Council approved the Northgate Mall Development Agreement that provides the City a 12-month option to purchase 2.7 acres of the Northgate South lot. City Council Resolution 30642 requested that Seattle Public Utilities (SPU) evaluate and recommend one of three specified options for natural drainage and open space for the Northgate South Lot. The three options include: 1) daylighting storm flows in the conveyance pipe under the Northgate South Lot, 2) constructing a series of natural system swales to treat drainage from the adjacent neighborhood, and 3) constructing a hybrid (Hybrid), which involves diverting dry weather flows and flows from frequent storm events from the conveyance pipe at NE 100th Street and 3rd Avenue NE to a surface channel for water quality treatment. SPU presented analyses of these three options to the Northgate Stakeholders Group for their review. On June 3, 2004, the Northgate Stakeholders Group unanimously recommended the Hybrid option.

In addition, Resolution 30642 requested that SPU coordinate site planning with Lorig Associates (Lorig) who has an option to purchase the adjacent 5.9 acres to build a mixed-use development. SPU and Lorig have coordinated site planning and have come to agreement on a proposed reconfiguration of the two parcels that would provide mutual benefits for drainage, open space and mixed-use development.

Three related ordinances are proposed to implement this proposal. This fiscal note pertains to the first which is an ordinance to exercise the City’s option to purchase the 2.7 acres of land, pursuant to the Northgate Mall Development Agreement and establish the Thornton Creek Water Quality Channel Project. The second companion ordinance is to request funding for this project.The third ordinance authorizes a memorandum of understanding between Lorig and the City regarding agreements to reconfigure their respective parcels and jointly plan and execute their respective projects.

On December 8, 2003, Lorig sent a letter to City Council stating that their ability to proceed with development of the mixed use project and to fulfill the requirements of the Northgate Mall Development Agreement is dependent on the City’s timely decisions to purchase this land and implement the stormwater project. Adoption of these three companion ordinances is necessary for the Thornton Creek Water Quality Channel and Lorig mixed use projects to proceed and to be coordinated on a timely schedule.

Project Name:	Project I.D.	Project Location:	Start Date:	End Date
Thornton Creek Water Quality Channel	C343306	Thornton Creek Watershed between NE 100^th and NE 103; at 5^th Avenue NE	3^rd Quarter 04	3^rd Quarter 04

· Please check any of the following that apply:

__√__ This legislation creates, funds, or anticipates a new CIP Project. The current CIP is being amended through this ordinance.

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

__√___ This legislation has financial implications. (Please complete all relevant sections that follow.)

Appropriations: This table should reflect appropriations that are a direct result of this legislation.In the event that the projects associated with this ordinance have appropriations that were, or will be, received because of previous or future legislation or budget actions, please provide details in the Notes section below. Finally, if this legislation does not directly change an appropriation, but results in budget authority being moved within a Budget Control Level, or to a Budget Control Level (up to 10%), please explain in the Notes section below.

Fund Name and Number	Department	Budget Control Level*	2004 Appropriation	2005 Anticipated Appropriation
Drainage and Wastewater (44010)	Seattle Public Utilities	Protection of Beneficial Uses (C333)	$400,000	None
TOTAL			$400,000	None

*See budget book to obtain the appropriate Budget Control Level for your department.

Notes:

Spending Plan and Future Appropriations for Capital Projects: Please list the timing of anticipated appropriation authority requests and expected spending plan. In addition, please identify your cost estimate methodology including inflation assumptions, the projected costs of meeting applicable LEED standards, and the percent for art and design as appropriate.

Spending Plan and Budget	2004	2005	2006	2007	2008	2009	Total
Spending Plan	$400,000	0	0	0	0	0	$400,000
Current Year Appropriation	$400,000
Future Appropriations		0	0	0	0	0	0

Notes:

Funding source: Identify funding sources including revenue generated from the project and the expected level of funding from each source.

Funding Source (Fund Name and Number, if applicable)	2004	2005	2006	2007	2008	2009	Total
Drainage and Wastewater (44010)	$400,000	0	0	0	0	0	$400,000
TOTAL	$400,000	0	0	0	0	0	$400,000

Notes:

Bond Financing Required: If the project or program requires financing, please list type of financing, amount, interest rate, term and annual debt service or payment amount. Please include issuance costs of 3% in listed amount.

Type	Amount	Assumed Interest Rate	Term	Timing	Expected Annual Debt Service/Payment
TOTAL

Notes: The Project will be funded through a combination of DWF operating revenues and bond proceeds generated through regular revenue bond issues used to finance the Drainage and Wastewater Fund CIP. A separate revenue bond issue to fund this project is not required.

Uses and Sources for Operation and Maintenance Costs for the Project: Estimate cost of one-time startup, operating and maintaining the project over a six-year period and identify each fund source available. Estimate the annual savings of implementing the LEED Silver standard. Identify key assumptions such as staffing required, assumed utility usage and rates and other potential drivers of the facility’s cost.

O&M	2004	2005	2006	2007	2008	2009	Total
Uses
Start Up
On-going
Sources (itemize)

Notes: This fiscal note pertains only to the purchase of the land for the Thornton Creek Water Quality Channel. Long-term operations and maintenance for the project is detailed in the fiscal note for the companion CIP legislation. The property is an undeveloped asphalt lot and operations and maintenance costs will be minimal during the interim between purchasing the land and constructing the project.

Periodic Major Maintenance costs for the project: Estimate capital cost of performing periodic maintenance over life of facility. Please identify major work items, frequency.

Major Maintenance Item	Frequency	Cost	Likely Funding Source
TOTAL

Funding sources for replacement of project: Identify possible and/or recommended method of financing the project replacement costs.

Total Regular Positions Created Or Abrogated Through This Legislation, Including FTE Impact: This table should only reflect the actual number of positions created by this legislation In the event that positions have been, or will be, created as a result of previous or future legislation or budget actions, please provide details in the Notes section below the table.

Position Title and Department*		Fund Name	Fund Number	Part-Time/ Full Time	2004 Positions	2004 FTE	2005 Positions**	2005 FTE**
	TOTAL

* List each position separately

** 2005 positions and FTE are total 2005 position changes resulting from this legislation, not incremental changes. Therefore, under 2005, please be sure to include any continuing positions from 2004.

Notes: None.

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

· 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):

If the City does not construct the project, the City would likely incur additional costs stemming from continued controversy regarding the best use of the site to improve Thornton Creek and meet the goals of the Northgate Comprehensive Plan. In addition, per the terms of the Northgate Mall Development Agreement, the City must forfeit the land acquisition cost of $375,000 and convey the land back to the former property owner, Simon, if no stormwater or open space improvements have occurred by December 31, 2008.

This project is expected to provide water quality benefits that could count toward the Department of Ecology non-point pollution clean up plan for Thornton Creek targeted to begin in 2005. If this project is not implemented, the City will likely have to invest planning resources to identify other capital improvement projects to improve water quality in Thornton Creek.

The City would also lose tax revenue that would be gained by implementing this project. The value of the property in its undeveloped state and tax revenues to the City are far below their future potential once the property is developed. If the south lot (Parcels A and B) were to remain undeveloped for another twenty years, the City would receive $508,000 total revenue in today’s dollars. If the legislation is adopted and Lorig develops 450 housing units, 65,000 s.f. retail, and 54,000 s.f. office space as proposed, the City will receive $7.7 million over twenty years (today’s dollars). The Lorig development will also generate $610,000 in one-time revenue from construction.

New development will create jobs and stimulate new economic investment in Northgate. Joint planning between the Lorig, King County and the City will achieve progress toward King County’s transit-oriented development future

· What are the possible alternatives to the legislation that could achieve the same or similar objectives (Include any potential alternatives to the proposed legislation, including using an existing facility to fulfill the uses envisioned by the proposed project, adding components to or subtracting components from the total proposed project, contracting with an outside organization to provide the services the proposed project would fill, or other alternatives):

If the City does not proceed with acquisition of this land before December 2004, the City will forfeit its option to acquire the 2.7 acres at $375,000, well below fair market value. If the City were to purchase this land at a fair market value, the cost is estimated to be well in excess of $4 million.

· 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, however, the Northgate Stakeholders Group has reviewed and unanimously recommended the Thornton Creek Water Quality Channel project after discussions at five meetings, several field trips and informal sessions, and receiving public input at the May 13, 2004 Northgate Community Forum.

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

Please list attachments to the fiscal note below: