Form revised: December 6, 2011

FISCAL NOTE FOR CAPITAL PROJECTS ONLY

Department:	Contact Person/Phone:	CBO Analyst/Phone:
Department of Transportation	Larry Huggins/684-5001	Stephen Barham/733-9084

Legislation Title:

AN ORDINANCE relating to the Mercer Corridor Project West Phase; authorizing the Director of Transportation to acquire, accept, and record, on behalf of the City of Seattle, an easement for a portion of Block 73, D.T. Denny’s Home Addition to the City of Seattle, from IRIS Holdings, LLC, a Washington limited liability company, to widen and extend 6^th Avenue North; authorizing the Director of Transportation to acquire, accept, and record, on behalf of the City of Seattle, a bargain and sale deed for a portion of Block 63, Block 64, and Block 73, D.T. Denny’s Home Addition to the City of Seattle, together with the vacated streets and vacated alleys, from IRIS Holdings, LLC, a Washington limited liability company, to widen Mercer Street; authorizing the transfer of jurisdiction of portions of Block 54, D.T. Denny’s Home Addition to the City of Seattle from the Seattle Center Department to the Seattle Department of Transportation and designating it for street purposes to widen Mercer Street and 5^th Avenue North; authorizing the Director of Transportation to acquire all of the property rights necessary for converting Mercer Street and Roy Street into two-way streets between 9^th Avenue North and 5^th Avenue West, as well as constructing bicycle, pedestrian, and transportation improvements, and constructing the street grid across Broad Street; authorizing acquisition of real property rights within the area bounded on the north by Roy Street, on the south by John Street, on the east by 9^th Avenue North, and on the west by 5^th Avenue West, and on Elliott Avenue West near the intersection of Elliott Avenue West and West Mercer Place, through negotiation and use of eminent domain (condemnation); authorizing payment of all other costs associated with the acquisitions; and ratifying and confirming certain prior acts.

Summary and background of the Legislation:

This legislation authorizes the Director of the Seattle Department of Transportation (SDOT) to:  

(1) Accept and record a bargain and sale deed and an easement for property in the vicinity of Mercer Street and Aurora Avenue North.  Accepting the bargain and sale deed, for property known as Tract A is consistent with the Purchase Agreement that was entered into between the City and IRIS Holdings, LLC, (IRIS), a subsidiary of the Bill & Melinda Gates Foundation in 2006.  The Purchase Agreement was authorized by Ordinance 121742.  Acquiring an easement over property known as Tract B is consistent with the Sixth Avenue Extension Agreement.  The Sixth Avenue Extension Agreement was authorized by Ordinance 123418. 

(2) Acquire any other property necessary for converting Mercer Street and Roy Street into two-way streets between 9^th Avenue North and 5th Avenue West; constructing bicycle, pedestrian, and transportation improvements; and constructing the street grid across Broad Street, within the area bounded on the north by Roy Street, on the south by John Street, on the east by 9^th Avenue North, and on the west by 5^th Avenue West, and on Elliott Avenue West near the intersection of Elliott Avenue West and West Mercer Place, through negotiation and use of eminent domain.  SDOT will only acquire property necessary for the Mercer Corridor Project West Phase (the Project) and that is funded within the CIP.  The estimated acquisition costs are included in the Project budget. 

The legislation also transfers jurisdiction of portions of property located in the vicinity of Mercer Street and 5th Avenue North from the Seattle Center Department to SDOT.  There are no financial implications with transferring property from Seattle Center to SDOT.

Project Name:	Project I.D.:	Project Location:	Start Date:	End Date:
Mercer Corridor Project West Phase	TC367110	Mercer St/5^th Ave W/Dexter Ave N	Q1/2010	Q4/2015

Please check any of the following that apply:

____    This legislation creates, funds, or anticipates a new CIP Project.

____ This legislation does not have any financial implications.

__X_  This legislation has financial implications.

Appropriations:

Fund Name and Number	Department	Budget Control Level*	Existing 2012 Appropriation	New 2012 Appropriation (if any)	2013 Anticipated Appropriation
TOTAL

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

Appropriations Notes:  Appropriations to support this legislation were made in the 2012 Adopted Budget. 

Spending Plan and Future Appropriations for Capital Projects:

Spending Plan and Budget	2012	2013	2014	2015	2016	2017	Total
Spending Plan
Current Year Appropriation
Future Appropriations

Spending Plan and Budget Notes:  This legislation does not make any changes to the spending plan or anticipated appropriations for this Project included in the 2012-2017 Adopted Capital Improvement Program. 

Funding Source:

Funding Source (Fund Name and Number, if applicable)	2012	2013	2014	2015	2016	2017	Total
TOTAL

Funding Source Notes:  This legislation does not make any changes to the funding sources for this Project included in the 2012-2017 Adopted Capital Improvement Program. 

Bond Financing Required:

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

Bond Notes: Bond financing sources to support this legislation were accomplished as part of the 2012 Adopted Budget. 

Uses and Sources for Operation and Maintenance Costs for the Project:

O&M	2012	2013	2014	2015	2016	2017	Total
Uses
Start Up
On-going
Sources (itemize)

Operation and Maintenance Notes: 

Periodic Major Maintenance Costs for the Project: 

Major Maintenance Item	Frequency	Cost	Likely Funding Source
TOTAL

Funding sources for replacement of project: 

Total Regular Positions Created, Modified, or Abrogated through this Legislation, Including FTE Impact: 

Position Title and Department*	Position # for Existing Positions	Fund Name & #	PT/FT	2012 Positions	2012 FTE	2013 Positions**	2013 FTE **
N/A
TOTAL

*   List each position separately

** 2013 positions and FTE are total 2013 position changes resulting from this legislation, not incremental changes.  Therefore, under 2013, please be sure to include any continuing positions from 2012.

Position Notes:

Do positions sunset in the future?  N/A

(If yes, identify sunset date.)

Other Implications:

a) Does the legislation have indirect financial implications, or long-term implications?

Indirect implications: Under the Purchase Agreement, the property that was sold by the City to IRIS (Lot 2) included a 50-foot area for potential future right-of-way along the south side of Mercer Street (Tract A) from 5^th Avenue North to Aurora Avenue North.  The $1.6 million purchase price for Tract A is included in the total $50,443,030 Lot 2 purchase price. 

The City reserved the right to reacquire title to Tract A so long as constructing a widened Mercer Street is initiated by 2015.  Under the terms of the Purchase Agreement, $100,000 of the $1.6 million purchase price is paid to the City at closing, along with $1,500,000 plus interest, deferred and contingent on whether the City exercises its right to assume title to Tract A.  The $1,500,000 deferred amount was shown as an adjustment to the purchase price.  If the City does not exercise its option to reacquire Tract A, then the $1,500,000, plus interest, comes to the City in 2015 and becomes part of the net sale proceeds dedicated to the Seattle Center.  If the City exercises its reacquisition rights, the deferred amount is returned to IRIS.  The terms regarding the Mercer right-of-way portion of the property are included in the Mercer Right of Way Assumption Agreement (Assumption Agreement), which is an exhibit to the Purchase Agreement.

      Long-term implications: the acquired property will be added to the inventory of streets     and sidewalks SDOT maintains. 

b) What is the financial cost of not implementing the legislation?

If the legislation is not implemented, significant modifications to the Project would be required that would increase the scope, schedule, and budget beyond current levels of funding or the design changes would result in an inadequate connection across Aurora Avenue North for pedestrians and bicyclists, as well as cars and trucks from Interstate 5 and State Route 99.  

Delay in the ability to acquire right-of-way may ultimately increase costs due to inflation and an increasingly competitive bidding climate driven, in part, by a large volume of regional construction work anticipated in the next few years.  The City must exercise its reacquisition right by September 30, 2013 and proceed with construction by September 30, 2015 as provided in the Assumption Agreement. 

Property acquisition is critical to timely completion of the Project.  The current schedule and cost estimates are based upon completing the design and right-of-way acquisition work by the end of July, 2012 in order to begin construction during the 4^th quarter of 2012.

Additionally, as noted above, if the legislation is not implemented, the City would receive $1.5 million plus interest from IRIS in 2015.  The Project could not, however, proceed as planned.

c) Does this legislation affect any departments besides the originating department? 

Yes.  The Project affects the following departments: 

Seattle Center:  Transfer of landscaped property surrounding the KCTS building to transportation use (sidewalk, bicycle path, and/or traffic lane); no operational or fiscal impact.  Staff: Robert Nellams, Jill Crary and Layne Cubell.

Seattle City Light:  Existing overhead electrical power transmission and overhead electrical power distribution utilities currently located on the IRIS Campus within the former 6th Ave right-of-way are being relocated and converted to an underground configuration primarily in the area to be acquired for 6th Avenue North with the understanding that it is being acquired for City right-of-way with the Project improvements.  However, even with the relocation to the new 6th Ave North right-of-way Seattle City Light (SCL) will require easements through a portion of the Broad Street right-of-way being transferred to the IRIS Campus. This is necessary to maintain the circuit routing as agreed-upon by IRIS and SCL from the SCL-Broad Street Substation to the new 6th Ave North right-of-way.  It is imperative to understand that if SDOT does not acquire the 6th Avenue North right-of-way, SCL will have to secure more extensive easements across the IRIS Campus to maintain the circuit routes for the existing  electrical power transmission and electrical power distribution utilities.  Staff:  Michael Clark and Greg Stamatiou.

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

None. 

e) Is a public hearing required for this legislation? 

A CLEAN Hearing was held on October 6, 2009.  Public comments can be given at the public comment section of the Transportation Committee meeting scheduled to vote on this Council Bill. 

f) Is publication of notice with The Daily Journal of Commerce and/or The Seattle Times required for this legislation?

Yes.  Under RCW 8.25.290, the City is required to publish notice of this action in both the Daily Journal of Commerce and the Seattle Times newspapers. 

g) Does this legislation affect a piece of property?

            Yes.  This legislation: transfers property rights from portions of one Tract in the vicinity of Mercer Street and Aurora Avenue North, transfers jurisdiction of portions of another Tract in the vicinity of Mercer Street and 5^th Avenue North from the Seattle Center to SDOT, and authorizes the Director to acquire any other property necessary for the Project within the Project area, with condemnation authority.   

h) Other Issues:

List attachments to the fiscal note below: