Form revised: December 14, 2010

FISCAL NOTE FOR NON-CAPITAL PROJECTS

Department:	Contact Person/Phone:	CBO Analyst/Phone:
Seattle City Light	Dave Barber 684-0400	Calvin Chow 684-4652

Legislation Title:

AN ORDINANCE relating to the City Light Department; declaring the former Sunnydale Substation (PMA 609) located at 15002 8^th Avenue South in Burien, Washington, to be surplus to The City of Seattle’s needs; authorizing its sale to the Port of Seattle; authorizing the Superintendent of the City Light Department to execute a Purchase and Sale Agreement and other documents in connection therewith; and ratifying and confirming certain prior acts.

Summary of the Legislation:

This legislation would authorize Seattle City Light (SCL) to sell the former Sunnydale Substation property to the Port of Seattle for true and full market value and to deposit the sale proceeds into the City Light Fund.

Background:

The Sunnydale Substation is a former 4 kV substation located in Burien, Washington.  This property lies east of 8^th Avenue South, about 300 feet south of SR 518.  A map is provided in Attachment A.  This property became excess to SCL’s needs when the utility converted its electrical distribution system from 4 kV to 12 kV.  The 12 kV system increased capacity and provided a more efficient delivery of power to its customers, reducing the need for a significant number of 4kV substations in and around the City.

Once declared excess by SCL, the Fleets and Facilities Department (FFD), now known as the Department of Finance and Administrative Services, circulated this property among other City departments and other public jurisdictions.  It was determined that this property was not needed for any City use.  The Port of Seattle offered to purchase the property to extend the Sea-Tac Airport Buffer Zone.  The Port now owns all of the property surrounding the former Sunnydale Substation site.

As directed by Resolution 30862, FFD evaluated this property in accordance with the Procedures for the Evaluation of Reuse and Disposal of the City’s Real Property, soliciting comments from nearby property owners and tenants and local community groups.  The property was posted to advise of the proposed sale and to solicit comments.  There were two comments from members of the public who expressed interest in buying this property should it be offered for sale; no other comments were received.  The City’s real estate disposition procedures provide a preference for sales to other public jurisdictions, and the City’s Real Estate Oversight Committee recommended that this property be sold to the Port of Seattle by negotiated sale.

The property has been appraised twice.  The sale price of $178,212 was based on a Port of Seattle appraisal dated April 19, 2010, reviewed and approved by SCL, with a small negotiated environmental offset.

_X__   This legislation has financial implications.

Anticipated Revenue/Reimbursement: Resulting from this Legislation:

Fund Name and Number	Department	Revenue Source	2011 Revenue	2012 Revenue
City Light Fund	Seattle City Light	Sale of Excess Property	$178,212
TOTAL			$178,212

What is the financial cost of not implementing the legislation?

The financial cost of not implementing the legislation is the loss of revenue generated by the sale.  The other financial cost is the ongoing expense to the City for periodic trash removal and vegetation management of the property.

Does this legislation affect any departments besides the originating department?

No.

What are the possible alternatives to the legislation that could achieve the same or similar objectives?

None.

Is the legislation subject to public hearing requirements?

The sale of utility property does require a public hearing.  The public hearing would be held at    a meeting of the City Council’s Energy, Technology & Civil Rights Committee prior to the Committee’s vote on the legislation.

Other Issues:

None.

List attachments to the fiscal note below:

Attachment A:  Report on Evaluation of Reuse and Disposal Options for PMA #609, including aerial view and vicinity map of Sunnydale Substation. The map is for informational purposes only and is not intended to modify or supplement the legal description in the Ordinance.

REPORT ON EVALUATION OF REUSE AND DISPOSAL OPTIONS FOR

PMA No. _609, Former Sunnydale Substation

Resolution 29799 directs that the Executive is to make its recommendations on the reuse or disposal of excess property on a case by case basis, using the Procedures for Evaluation of the Reuse and Disposal of the City’s Real Property adopted by that resolution.  Additionally, the Resolution identifies guidelines which are to be considered in making a recommendation.  This report addresses each of the guidelines outlined in Resolution 29799, and also the provisions of Resolution 30862, adopted May 1, 2006, which amended the earlier Resolution.

Property Management Area:               PMA No. 609 – Former Sunnydale Substation

15002 8^th Ave. S. Burien, Washington

BACKGROUND INFORMATION

Legal Description:

The east 70.00 feet of the north 110.00 feet of the west half of the southwest quarter of the southwest quarter of the northeast quarter of Section 20, Township 23 North, Range 4 East, W.M. in King County, Washington, and the north 20 feet of that portion of the west half of the southwest quarter of the southwest quarter of the northeast quarter of said Section, lying west of the west line of the east 70.00 feet of said subdivision;  EXCEPT the west 30.00 feet thereof deeded to King County, Washington for road.

Physical Description and Related Factors:

PMA No. 609 – Former Sunnydale Substation - is a panhandle shaped lot, comprising approximately 12,197 sq ft.  It is located 700 ft west of Lora Lake with a street address of 15002 8^th Ave. S., in Burien. The parcel is identified by the King County Assessor as Property Identification No. 202304-9013.  The northern boundary of PMA No. 609 measures 294 feet.  The panhandle portion of the property functions as a 20-foot wide access road that runs east from 8^th Ave. S. for 224 feet until it meets the “pan,” that comprises the actual substation area. This access panhandle is unimproved. If a road once existed there, it has now been overgrown with grasses over which tire lanes are faintly visible. An easement allowing ingress and egress to the adjoining parcel to the south cuts across the 20 feet of this access road from 8^th Ave. S. The rectangular substation working area measures 70 feet along its southern boundary and 90 feet on its east and west sides.  It is surrounded by a low 4” chain link fence with a swinging gate along the northern line. A row of 30-40’ cedars crate a green screen immediately outside the east and north boundary fences.  Unlike other surplus substations, its concrete pad has been removed although there are random chunks of concrete aggregate scattered around the site.  There are several places where several underground electrical conduit feeds have been severed about one foot above the floor.  A mix of vegetation, including Scotch Broom, moss, grasses, and ten 2-4-foot tall madrona trees, is scattered throughout the area.  An abandoned and non-functional electric power box is attached to the inside fence in the northwest corner of the substation working area.  The station itself is elevated and relatively flat, situated 10 feet above the grade of the paved areas to the west and south

The neighboring parcels adjoining the north and east boundaries contain Lora Lake apartment complex. This apartment complex is currently unoccupied and completely surrounded by security fencing.  Immediately south of PMA No. 609 is a large level asphalt parking lot that is owned by the Port of Seattle. No structures are situated on the Port property, although it once was the site of the Olympic Bowling Alley.  The land is zoned Airport Industrial according to the Zoning Map adopted 12/6/2010 and is designated Airport Industrial with Automall / Commercial Retail according to the Comprehensive Plan adopted 12/14/2009 by the, City of Burien.

GUIDELINE A:  CONSISTENCY

The analysis should consider the purpose for which the property was originally acquired, funding sources used to acquire the property, terms and conditions of original acquisition, the title or deed conveying the property, or any other contract or instrument by which the City is bound or to which the property is subject, and City, state or federal ordinances, statues and regulations.

Acquisition History

PMA No. 609 was originally acquired under the authority of Ordinance 109984 as requested by the Superintendent of City Light Department, for the purpose of electrical transmission.  On November 28^th, 1958 Percy Blaker, Rosaland Walker, Norma F. Owen, Ruth McIntosh and Clyde Matteson, all of whom constitute the entire Board of the Tenth Church of Christ Scientist, conveyed the subject property to the City of Seattle Department of Lighting by Statutory Warranty Deed, for the sum of $4,305.00.  The Tenth Church of Christ Scientist also granted an easement for ingress and egress over said north 20.00 feet of the property for the benefit of the property immediately adjoining the strip on the south.

Sale or disposition of this property originally acquired for public utility purposes is subject to the provisions of RCW 35.94.040 which requires a statement of fair market value or consideration to be paid and such other terms and conditions for such disposition as the legislative authority deems to be in the best public interest.

GUIDELINE B:  COMPATIBILITY AND SUITABILITY

The recommendation should reflect an assessment of the potential for use of the property in support of adopted Neighborhood Plans; as or in support of low-income housing and/or affordable housing;,  in support of economic development;, for park or open space; in support of Sound Transit Link Light Rail station area development; as or in support of child care facilities, and in support of other priorities reflected in adopted City policies.

Context.

This property is located within the City of Burien.  Development is regulated by Burien Municipal Code Title 19, Section 19.15.070, Airport Industrial Zone.  The Airport Industrial (AI) zone implements the Airport Industrial Comprehensive Plan designation within the Northeast Redevelopment Area.  The purpose and intent of this designation is to facilitate economic development and provide flexibility for airport-compatible uses in a campus-like setting with internal circulation to minimize the number of access points to Des Moines Memorial Drive.”  The property is located south of and adjacent to the former Lora Lake Apartments, and north of a vacant, undeveloped parcel, all of which are owned by the Port of Seattle.  The subject property is surrounded by property owned by the Port and is very near the third runway at SeaTac International Airport.

There is one other City of Seattle-owned property in the general area.

Property	Size	Description	Location relative to PMA 609
Burien Pump Station	9400 sq ft	Pump Station	.25 mile north of subject property

Range of Options.

The usual range of options for disposition of excess utility property includes sale by public bid, negotiated sale, or transfer of jurisdiction to another City department for a non-utility public purpose.  This property was subject of a five-party Memorandum of Understanding concerning the preservation of affordable housing at the Lora Lake Apartments.  Under that agreement’s terms, PMA No. 609 was to be sold by Seattle City Light to King County for fair market value provided that the Seattle City Council authorized such a transaction.  Circulation of the property among city departments and other public entities in July 2004 generated no interest from any department in acquiring PMA No. 609 for a present or future governmental purpose.  That five party agreement dissolved when environmental testing of the Lora Lake site pointed to a $10 million dollar cleanup cost.  At that point King County was not interested in any trade that might involve ownership of such a contaminated property.  The Port of Seattle has now expressed an interest in purchasing the subject property as it owns the large parcels immediately south and north of the subject property.

GUIDELINE C:  OTHER FACTORS

The recommendation should consider the highest and best use of the property, compatibility of the proposed use with the physical characteristics of the property and with surrounding uses, timing and term of the proposed use, appropriateness of the consideration to be received, unique attributes that make the property hard to replace, potential for consolidation with adjacent public property to accomplish future goals and objectives, conditions in the real estate market, and known environmental factors that make affect the value of the property.

Highest and Best Use:

The property lies within the Airport Industrial (A1) zone that encourages airport compatible design.  The best and highest use of this property would be compatible with airport activities located in the vicinity.  Burien Municipal Code Section 19.15.070 details allowed uses in the zone.

Compatibility with the physical characteristics:

The lot is fairly level, with a 10ft contour on 60% of the main body.  The panhandle access road is also relatively level as it runs eastward from 8^th Avenue South to the substation equipment site.  While the configuration is not the best for commercial use on a stand-alone basis, consolidation with the Port of Seattle property to the north and south facilitates a wider range of airport industrial uses.

Compatibility with surrounding uses:

The parcel is located in the Airport Industrial Zone and is within close proximity of SeaTac airport.  Any future use of the land will comply with the AI Zone as determined by the City of Burien.

Timing and Term of Proposed Use

The property will be sold to the Port of Seattle based on an appraisal dated 4/19/2010.  Use of the property will be up to the Purchaser and the timing of the sale is not a factor in this disposition.

Appropriateness of the consideration:

Sale or disposition of this property originally acquired for public utility purposes is subject to the provisions of RCW 35.94.040 which requires a statement of fair market value or consideration to be paid and such other terms and conditions for such disposition as the legislative authority deems to be in the best public interest.

Unique Attributes:

The property is within easy access to SR No. 518, 8^th Ave. S. and Des Moines Memorial Drive.  It is close to the international airport, and Airport light rail station and is approximately 900 ft from the flight path of the third runway for SeaTac Airport.

Potential for Consolidation with adjacent public property:

The neighboring parcel to the north is the former Lora Lake Apartments, which is currently owned by the Port of Seattle.   The apartments were formermly under negotiation for purchase by the King County Housing Authority in accordance with the now-defunct MOU agreement that called for PMA 609 to be purchased by King County for development of light commercial business.  There used to be a 162 unit apartment complex on the property which was intended to remain affordable housing.

Conditions in the real estate market:

Employment tends to drive the real estate market, particularly for industrial/commercial properties.  Although unemployment in the Seattle Metro region as of December of 2010 was 8.2%, well below the Washington State average of 9.2%, unemployment isn’t expected to decline to below 8% until sometime in mid-2012.  Growth in employment is expected to be 1.8% in 2011 and 2.6% in 2012.  The primary problems in the real estate market today are oversupply, price depression caused by foreclosures and defaults, and difficulty in obtaining credit.  Until the employment situation stabilizes and improves, it is unlikely that oversupply will be absorbed, housing prices and rental rates will rise, and credit will flow to owners and developers seeking new opportunities.  Areas like Burien are currently in transition given the shortage of available building lots in Puget Sound.  Some inherent advantages to Burien are its proximity to the City of Seattle, with its jobs and workers, and its proximity to Sea-Tac International Airport, as well as to the new light rail line connecting them. The City of Burien has undertaken a drive to revitalize the area through zoning and economic development strategies with mixed results.

Known environmental factors:

The property sits near the third runway of SeaTac Airport, with the associated noise from air traffic, and may require a noise buffer, depending on the type of land usage.  An Environmental Site Assessment Report was completed January. 2001 by Herrera Environmental Consultants and found that transformer oil within an area that “covers approximately 40 square feet; depth is unknown, but is greater than 2 feet.  It is probable that 5 to 10 cubic yards of soil is contaminated above cleanup levels.”  Results also found that there is no asbestos, PCB’s are not above “practical quantitation limits or screening levels in any of the soil and concrete samples submitted for analysis.”  DDT was detected, “at an estimate concentration of 14 mg/kg, which is below the practical quantitation limit for this analyte.”

GUIDELINE D: SALE

The recommendation should evaluate the potential for selling the property to non-City public entities and to members of the general public.

PUBLIC INVOLVEMENT

Excess Property Response Forms were circulated to public agencies and other City departments to ascertain interest in the subject property.  None of the potential buyers expressed an interest.  A notice was mailed to 422 neighbors drawn from a list of residents and taxpayers that live within 1000 feet of PMA 609 on November 29^th and 30^th, 2007.  A total of two comments had been received as of the January 4, 2008 deadline.  Both of these comments were from private parties expressing an interest in purchasing the property should it become available for sale.

RECOMMENDATION

FAS recommends that PMA No. 609 be sold to the Port of Seattle for an agreed upon price.

THRESHOLD DETERMINATION

The Disposition Procedures provide that FAS assesses the complexity of the issues on each excess property following the initial round of public involvement.  The purpose of this analysis is to structure the extent of additional public input that should be obtained prior to forwarding a recommendation to the City Council.  The Property Threshold Determination Form prepared for Sunnydale Substation is attached at the end of this report. The transaction is rated as being “Simple” based upon the factors considered and the score calculated for disposition of PMA No. 609.

NEXT STEPS

On February 11, 2008 FAS provided a summary version of this preliminary report to the Real Estate Oversight Committee.  Since that time the Preliminary Report has been revised and the recommendation has evolved.  The REOC approved sale of the subject property to King County under the terms of the MOU.  The reality is that King County is no longer interested but the Port of Seattle is.  Given that sale to an entity outside the City was approved by the REOC, FAS believes it is not necessary to return to the REOC for approval of a revised recommendation.  At this time, a summary of the Preliminary Report needs to be given to all City departments and Public Agencies that expressed an interest in the Excess Property, and to members of the public who responded to the Initial Public Notice.  This notice will advise how to obtain a full copy of the report, and advise that FAS will consider comments on the Preliminary Report for 30 days after mailing and direct where and to whom any comments should be addressed.  FAS will also post one sign visible to the public at each street frontage abutting the Excess Property which provides the same information.

After comments are received after the posting of the Preliminary Report, FAS then revises its recommendation as appropriate, and prepares a Final Report including a report on public involvement, community comments, and feedback.  The Recommendation is then forwarded to the City Council with any legislation necessary to implement the recommendation for the excess property.  All comment-makers and other interested parties are provided with at least two-weeks notice of the transmission of the legislative package concerning the property to the Council.

PROPERTY REVIEW PROCESS DETERMINATION FORM
Property Name:	Sunnydale Substation
Address:	15002 8^th Avenue S.,  Burien, WA.   98148
PMA ID:	609	Subject Parcel #	2023049013
Dept./Dept ID:	Seattle City Light	Current Use:	Public Utility
Area (Sq. Ft.):	12,197	Zoning:	A1
Est. Value:	$185,000.00	Assessed Value:	$97,500.00
PROPOSED USES AND RECOMMENDED USE
Department/Governmental Agencies: Port of Seattle		Proposed Use:  Combine with Adjoining Fee for Future Use
Other Parties wishing to acquire: None		Proposed Use: N/A
RES’S RECOMMENDED USE: Sell to Port of Seattle for Fair Market Value.
PROPERTY REVIEW PROCESS DETERMINATION (circle appropriate response)
1.)  Is more than one City dept/Public Agency wishing to acquire?			No / Yes	15
2.) Are there any pending community proposals for Reuse/ Disposal?			No / Yes	15
3.) Have citizens, community groups and/or other interested parties contacted the City regarding any of the proposed options?			No / Yes	15
4.) Will consideration be other than cash?			No / Yes	10
5.) Is Sale or Trade to a private party being recommended?			No / Yes	25
6.) Will the proposed use require changes in zoning/other regulations?			No /Yes	20
7.) Is the estimated Fair Market Value between $250,000-$1,000,000?			No / Yes	10
8.) Is the estimated Fair Market Value over $1,000,000?			No/ Yes	45
Total Number of Points Awarded for "Yes" Responses:				15
Property Classification for purposes of Disposal review:     Simple   /   Complex (circle one)  (a score of 45+ points result   results in a “Complex” classification) Signature:  Louis Webster, AICP                                        Department: FAS              Date: March 22, 2011

Note:  All of the buildings shown on this map east of 8^th Avenue South in the complex formerly known as the Lora Lake Apartments have been demolished and removed from the site.