FISCAL NOTE FOR CAPITAL PROJECTS ONLY
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Department: |
Contact Person/Phone: |
DOF Analyst/Phone: |
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Fleets and Facilities |
Mary Pearson 4-0407 |
Dwight Dively 4-0503 |
Summary and background of the Legislation:
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Summary of Legislation:
This legislation authorizes the Fleets and Facilities Department (FFD) Director to sell to Triad Civic Center LLC (“Triad”) the Public Safety Building Site for consideration valued at $25,000,000. Under the terms of the agreement, Triad will develop the Site and finance all aspects of the development. As part of the development of the Site, Triad agrees to construct the Civic Square on the south portion of the Site. The Square will include a public plaza and associated retail space to help activate the Civic Square.
After completion of the Civic Square, Triad will convey the Civic Square back to the City as part of the consideration for the Site. The difference between the cost to construct the Civic Square and $25,000,000 will be paid to the City in cash. If Triad is successful in obtaining New Market Tax Credits related to the project, the City would receive additional consideration, up to an additional $1,270,000.
The proceeds from this transaction shall first be used to reimburse costs incurred and paid by FFD in conjunction with the sale of the Site. The remaining proceeds shall be deposited in the Unrestricted Subaccount of the Cumulative Reserve Subfund (00164) in accordance with SMC 5.80.030.
The legislation includes the following authorizations:
· Authorizes the FFD Director or his or her designee to execute the Purchase and Sale Agreement for the Site.
· Authorizes the FFD director or his or her designee to execute the Seattle Civic Square Project Agreement and other related documents. These documents may include a parking agreement and a master lease agreement.
· Authorizes the FFD director, in consultation with City Council or its designee(s), to amend the Purchase and Sale Agreement and to make decisions and give approvals during the design and construction of the redevelopment project. Decisions that are related to the City’s financial rights or obligations, but that do not affect the City’s overall remuneration, are further subject to the approval of the Director of Finance. Decisions or amendments affecting the City’s overall consideration for the Site shall be subject to approval by separate ordinance.
Background:
The redevelopment of the former Public Safety Building block is the final project in the implementation of the Civic Center Master Plan. Previous projects included the development of a new Justice Center and a new City Hall, demolition of the former Public Safety Building, acquisition of the Seattle Municipal Tower, and sale of the Dexter Horton, Arctic and Alaska Buildings.
In May 2005, the City determined to proceed with redevelopment of the Site, consistent with the Civic Center Master Plan vision for civic public open space, private development, underground parking and pedestrian access to the Metro/Sound Transit bus tunnel, and directed FFD to proceed with a public solicitation for development proposals. A Request for Concepts for redevelopment of the Site was published and distributed in April 2006. Three of the development teams responding to the Request for Concepts were invited to respond to a Request for Proposals issued in September 2006.
In 2007, Triad was selected as the preferred developer for redevelopment of the Site. They proposed to develop a signature project for this block that will be consistent with the Civic Center Master Plan, enhance the vibrancy of the area and contribute to its economic vitality.
This transaction will require Triad to finance and develop the Site into a mixed-use project, including a retail/commercial/residential tower and underground parking that Triad would own and manage. Triad would also finance and develop an adjacent and integrated public plaza with adjacent retail that the City would own.
The City and Triad signed a Letter of Intent in February 2007, demonstrating the City’s intent to proceed with the sale of the Site to Triad and Triad’s commitment to develop a portion of the Site as the Civic Square. In August 2007, Resolution 31007 requested that FFD’s Director or designee negotiate a Purchase and Sale Agreement with Triad for the Site. In addition to the base remuneration of $25 million, the Purchase and Sale Agreement provides the City with up to an additional $1.27 million in consideration if Triad is successful in securing Free Market Tax Credits for the project.
The following is the approximate Project Schedule: MUP Application: Early 2008 Building Permit Early 2009 Start of Construction 2009 Completion 2011
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Project Name: |
Project I.D. |
Project Location: |
Start Date: |
End Date |
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Civic Square Development |
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600 Third Avenue, City of Seattle |
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· Please check any of the following that apply:
____ This legislation creates, funds, or anticipates a new CIP Project. (Please note whether the current CIP is being amended through this ordinance, or provide the Ordinance or Council Bill number of the separate legislation that has amended/is amending the CIP.)
____ 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.)
This legislation authorizes the sale of City-owned real property and defines the consideration for the sale of that property. However, the financing and development will be undertaken by the developer, Triad, and there are no appropriations associated with the transaction and project.
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.
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Fund Name and Number |
Department |
Budget Control Level* |
2007 Appropriation |
2008 Anticipated Appropriation |
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TOTAL |
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*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.
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Spending Plan and Budget |
2007 |
2008 |
2009 |
2010 |
2011 |
2012 |
Total |
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Spending Plan |
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Current Year Appropriation |
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Future Appropriations |
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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) |
2007 |
2008 |
2009 |
2010 |
2011 |
2012 |
Total |
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TOTAL |
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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 |
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TOTAL |
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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 |
2007 |
2008 |
2009 |
2010 |
2011 |
2012 |
Total |
Uses |
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Start Up |
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On-going |
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Sources (itemize) |
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Notes:
At completion of the project in 2011, the Civic Square will be reconveyed to the City. The Project Agreement includes an outline of the operation, maintenance and programming plan for the Civic Square, and that plan will be further detailed as design development proceeds. The Civic Square will be managed by the City or, at the City’s discretion, a public development authority, with active participation by interested stakeholders and the adjacent tower owner(s).
Civic Square operations, maintenance and programming are intended to be financially self-sustaining. Funding sources will include revenues from the Civic Square retail, events programming and a revenue stream from the tower, as provided in the agreements. A detailed pro forma will be developed for future budget consideration; the developer’s preliminary estimate for operation of the Civic Square, submitted with the developer’s proposal, is approximately $1 million per year in 2006 dollars.
Periodic Major Maintenance costs for the project: Estimate capital cost of performing periodic maintenance over life of facility. Please identify major work items, frequency.
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Major Maintenance Item |
Frequency |
Cost |
Likely Funding Source |
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TOTAL |
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Funding sources for replacement of project: Identify possible and/or recommended method of financing the project replacement costs. |
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Total Regular Positions Created, Modified, 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.
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Position Title and Department* |
Position Number for Existing Positions |
Fund Name and Number |
Part-Time/ Full Time |
2007 Positions |
2007 FTE |
2008 Positions** |
2008 FTE** |
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TOTAL |
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* List each position separately
** 2008 positions and FTE are total 2008 position changes resulting from this legislation, not incremental changes. Therefore, under 2008, please be sure to include any continuing positions from 2007.
Notes:
N/A
· Do positions sunset in the future?
N/A
· What is the financial cost of not implementing the legislation:
Completion of the Civic Center Master Plan would be jeopardized, and the City would forgo the opportunity to obtain $25,000,000 in redevelopment value and cash. The City would also lose the incremental revenue expected from the project, including sales tax from construction and operations (retail and parking) and real estate transfer taxes. In addition, the City would not recover its sunk costs for real estate and legal expenses associated with soliciting proposals and negotiating the proposed transaction.
· What are the possible alternatives to the legislation that could achieve the same or similar objectives
There are no alternatives to the legislation that could achieve the same or similar objectives.
· Is the legislation subject to public hearing requirements:
Yes, a “CLEAN” hearing is required and will be completed prior to consideration of this legislation.
· Other Issues
Future legislation is required to accept reconveyance of the Civic Square and to implement an operations, maintenance and programming approach, such as creation of a public development authority or some other option.
Please list attachments to the fiscal note below:
N/A