AN ORDINANCE relating to the possible disposition of Key Tower; authorizing contracts, contract extensions and amendments; and making an appropriation from the City Hall Subfund, all by a three-fourths vote of the City Council.

WHEREAS, Ordinance 117739 authorized the acquisition of Key Tower in 1996, setting the stage for the eventual development of a downtown Municipal Civic Center; and

WHEREAS, Resolution 29731 adopted a City vision and principles for a downtown Municipal Civic Center; and

WHEREAS, Resolution 29789 provided guidance for specific sites within a downtown Municipal Civic Center that included possible City occupancy of Key Tower and the Arctic Building, development of a new Courthouse on the Cordes block and a new City Hall on the east side of the existing Municipal Building site, retention of the Public Safety Building site for future development, and the future disposition of the Dexter Horton and Alaska Buildings; and

WHEREAS, Resolution 29789 also asked the Executive Services Department to market Key Tower in order to ascertain whether the City could realize significant value from the City's investment while still providing high quality work space for employees; and

WHEREAS, Resolution 29795 provided planning guidelines for development of a downtown Municipal Civic Center Site Master Plan; and

WHEREAS, the marketing of Key Tower and planning activities contemplated by Resolutions 29789 and 29795 requires staff time and expert consultant services; Now, Therefore,

BE IT ORDAINED BY THE CITY OF SEATTLE AS FOLLOWS:

Section 1. Real Estate Services: In order to market Key Tower, the Executive Services Department is authorized to solicit proposals and contract for real estate advisory and marketing services. It is expected that the marketing firm, if any, shall also work with the City's contracted real estate advisors, The Seneca Real Estate Group and Craig Kinzer & Company, as the disposition and negotiation team, along with City staff. In addition, The Seneca Real Estate Group and Craig Kinzer & Company shall be responsible for the development of the building sale prospectus, the coordination of any due diligence, and the financial and economic analyses needed by the City. The Executive Services Department is further authorized to amend the existing contract with The Seneca Real Estate Group and Craig Kinzer & Company to include this additional assignment. Compensation for the real estate marketing consultant, if any, and The Seneca Real Estate Group and Craig Kinzer & Company shall be negotiated based on an hourly rate to a fixed maximum fee with incentives to negotiate the highest value for the building. The majority of the compensation for these services shall be paid through the building's sale proceeds. The compensation for marketing the building and bringing proposals to the Mayor and Council shall be on an hourly basis with a maximum monthly rate not to exceed twenty thousand dollars and shall be paid from the City Hall Subfund. Compensation in excess of the retainer shall be contingent upon the sale of Key Tower and shall be paid from the building sale proceeds.

Section 2. Legal Services: The Law Department will be responsible for providing and securing all legal advisory services, and preparing and managing necessary documents. The Executive Services Department is authorized to reimburse the Law Department for such direct services out of the City Hall Subfund.

Section 3. Financial Review: In order for the City Council to review the options for disposition of Key Tower, the City Auditor is authorized to execute one or more agreements with the University of Washington and Property Counselors for an independent review of the Executive Services Department's financial analyses related to the Municipal Civic Plan and the disposition of Key Tower. Costs for these consultants shall be paid out of the City Hall Subfund. The City Auditor shall sign the contract(s) and be re-imbursed for the costs of the contract(s) by the Executive Services Department.

Section 4. Site Master Plan: The Executive Services Department is authorized to solicit proposals and contract for a Site Master Plan for the Municipal Civic Center. The compensation for the services provided under this contract, along with Executive Services Department's staff time, shall be paid out of the City Hall Subfund.

Section 5. Other Costs: The Executive Services Department's incidental costs related to marketing Key Tower, including but not limited to those for staff time for contracting, title insurance and reports, due diligence investigations and reports, and City financial support, shall also be paid out of the City Hall Subfund.

Section 6. The expenditure allowance in the 1998 Budget for the City Hall Subfund is hereby increased in the sum of One Hundred Thousand Dollars ($100,000) for the real estate retainer, legal and financial services and other costs and in the additional sum of One Hundred Thousand Dollars ($100,000) for the Site Master Plan, by the appropriation, hereby made and authorized, of the sum of Two Hundred Thousand Dollars ($200,000), or as much thereof as may be necessary, from unexpended and unencumbered balances in the City Hall Subfund of the General Fund that have been derived from rents and other revenues.

Section 7. The foregoing appropriations are made to meet actual necessary expenditures of the City for which no appropriation has been made due to causes which could not reasonably have been foreseen at the time of the adoption of the 1998 Budget; Now, Therefore, in accordance with RCW 35.32A.060, by reason of the facts above stated this ordinance shall take effect and be in force thirty (30) days from and after its passage and approval, if approved by the Mayor, but if not approved and returned by the Mayor within ten (10) days after presentation, it shall take effect as provided by Municipal Code Section 1.04.020.

PASSED by three-fourths vote of all the members of the City Council the ____ day of ____________, 1998, and signed by me in open session in authentication of its passage this ____ day of _____________, 1998.

___________________ President of the City Council

Approved by me this ____ day of ___, 1998. _____________________________________ Mayor

Filed by me this _____ day of ______, 1998. ______________ City Clerk