AN ORDINANCE authorizing the execution of the First Amendment to 1998 Agreement Between The City of Seattle and the University of Washington to revise land acquisition and leasing provisions of that Agreement.

WHEREAS, the University of Washington is Seattle's largest employer with 24,000 employees at the central campus; and

WHEREAS, the University of Washington confers more than 10,000 degrees a year, including almost one third of all bachelor's degrees and master's degrees, two thirds of all Ph.D.'s and half of all professional degrees awarded in the state; and

WHEREAS, a well-educated work force boosts Seattle's economic productivity, generates innovation, and acts as a magnet for leadingedge, high-paying businesses; and

WHEREAS, since 1974, the University of Washington has been the number one public university in the United States in receiving federal support for research and training, and in fiscal year 2002 received more than $800 million in public and private grant and contract support; and

WHEREAS, the University of Washington researchers who attract public and private grant and contract support need additional office and research space for the duration of their grants; and

WHEREAS, the University of Washington has nearly reached its limit of 550,000 square feet of leased space in the primary and secondary impact zones, currently barring researchers from leasing additional space in those areas; and

WHEREAS, a lease lid was imposed upon the University of Washington in the 1970s, and other major institutions in the 1980s in order to prevent the conversion of housing to institutional uses in surrounding neighborhoods; and

WHEREAS, lease lids on major institutions, except for the University of Washington, were lifted in 1996 by Ordinance118362, and were replaced by policies encouraging development inside of Major Institution Overlay District boundaries and requiring major institutions to report activity occurring within 2500 feet outside their boundaries; and

WHEREAS, Council Resolution 29488 directed the City's Department of Design, Construction and Land Use to establish an annual reporting program to monitor development and leasing trends subsequent to the December 1996 baseline report, and no significant negative effects have been observed; and

WHEREAS, the Vision Statement for the University Community Urban Center Plan states "The University Community will seek an active partnership with the University of Washington as a catalyst for positive change involved in both residential and business concerns"; and

WHEREAS, the University of Washington is subject to current land use regulations in the University District, which include Commercial zones, Neighborhood Commercial zones, and pedestrian-designated streets where certain street-level uses are required to preserve the streetfront's commercial or pedestrian-oriented character; and

WHEREAS, University of Washington employees and researchers located in the primary and secondary impact zones are subject to the University of Washington Transportation Management Plan, which includes programs to reduce commuting by single-occupant vehicles, and will enable students and faculty employed by the University's research activities to be located within walking distance of classrooms, libraries, and offices on campus; and

WHEREAS, allowing University of Washington researchers and other University activities to lease more space in the University District will likely reduce vacancy rates and stimulate economic activity;

WHEREAS, residents of communities surrounding the University are plagued by the negative effects of overoccupied rental dwellings that house students off-campus in single-family homes that have been converted to multi-unit tenancies, and

WHEREAS, the University has agreed to use its authority to stabilize adjacent residential neighborhoods and mitigate pressures for multiunit conversions of single-family homes as the University extends its leasing of commercial properties in the University District; NOW THEREFORE,

BE IT ORDAINED BY THE CITY OF SEATTLE AS FOLLOWS:

Section 1. The Mayor is hereby authorized to execute, on behalf of the City, the First Amendment to the 1998 Agreement between The City of Seattle and The University of Washington, substantially in the form of Exhibit 1.

Section 2. This ordinance shall take effect and be in force thirty (30) days from and after its approval 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 the City Council the _____ day of ____________, 2003, and signed by me in open session in authentication of its passage this _____ day of _________________, 2003. _____________________________________ President _______ of the City Council

Approved by me this _____ day of _________________, 2003. ___________________________________________ Mayor

Filed by me this _____ day of ____________________, 2003. ___________________________________________ City Clerk

Exhibit 1: First Amendment to the 1998 Agreement Between the City Of Seattle and the University Of Washington 2/14/03 (Ver. 2) ta Exhibit 1

FIRST AMENDMENT to the 1998 AGREEMENT

between

THE CITY OF SEATTLE

and

THE UNIVERSITY OF WASHINGTON

This First Amendment dated _____________, 2003 is by and between the City of Seattle, a municipal corporation of the State of Washington, and the University of Washington, an institution of higher education and agency of the State of Washington, and amends that certain agreement of 1998 between the parties referred to as the 1998 City-University Agreement.

WHEREAS, the parties intend to amend the 1998 City University Agreement to reflect changes made in the University of Washington Master Plan Seattle Campus of January 2003 (CMP) regarding leasing and acquisition policies only and intend with future amendments to correct other inconsistencies between the City University Agreement and the CMP and to alter the process for future master plans;

WHEREAS, the University can contribute to the revitalization of the greater University District Northwest Urban Center Village (UDNUCV) area through the creation of jobs which creates increased demand for local businesses; and

WHEREAS, The University can play a role in encouraging the development of market rate rental and for-sale housing in the UDNUCV, thus providing long-term stable residents to bolster the economic vitality of the local business area;

NOW THEREFORE, the parties agree as follows:

I. Amendment of Section II.D.1. The parties intend that the information required in the annual report in section II. D.1. of the City-University Agreement should be changed to reflect the University of Washington's use of leased and acquired property consistent with the Seattle Land Use Code and changed to a semiannual basis. The parties agree that Section II.D.1. is amended to read as follows

D. Reports

1. The University will prepare and submit reports to DCLU, the City Council and CUCAC which will provide the following information on a semiannual basis up to 2008 and thereafter on an annual basis:

a. A status report on all ongoing development projects at the University:

b. Proposed project development changes, and major and minor amendments;

c. Any identified changes in direct, indirect, and cumulative adverse environmental impacts to the surrounding community and the City as a result of changes to the proposed development schedule set forth in the Master Plan;

d. The results of the annual campus traffic counts and survey results for the campus and biennial University District area estimates;

e. Progress made in achieving the goals and objectives contained in the transportation management program towards reduction of singleoccupant vehicle use by institution employees, staff and/or students; and the progress made in meeting conditions of master plan approval;

f. The number of jobs added through UW leasing in the UDNUCV;

g. A description of UW leases in buildings that contain housing and efforts that the UW has made to facilitate, influence, promote and encourage the creation of housing including efforts to assist its faculty and staff with housing options;

h. The City will a report on commercial real estate conditions, including lease rates and vacancy rates in the UDNUCV compared to other areas and send that information to the University for inclusion in the report;

i. The City will report on the progress of housing development in the UDNUCV, including the number and type of units built, the jobs/housing ratio in the area, progress in meeting City housing and jobs targets in the UDNUCV and send that information to the University for inclusion in the report;

j. A description of how UW off-campus leasing activity and development are consistent with applicable neighborhood plans.

II. Replacement of Section II.D.2. The parties intend that the information required in the annual report regarding leasing and acquisitions in section II. D.2. of the City-University Agreement should be changed to reflect the University of Washington's use of leased and acquired property consistent with the Seattle Land Use Code and changed to a semiannual basis. The parties agree that Section D.2. is replaced in its entirety, with the following:

2. In addition to the information required by II.D.1, the semiannual report will include the following information:

a. Any purchases completed and proposed uses of such property located within the Primary & Secondary Impact Zones;

b. Any gifts of real property and proposed use of such property located within the Primary and Secondary Impact Zones;

c. Current summary of all leases within the City of Seattle, both outside and within the Primary and Secondary Impact Zones including the location, amount of space, use, term, underlying zone designation, identification of which leases and associated uses are for street-level spaces, and which leases are within the UDNUCV. This summary will also include any known plans for additional leases within the next year within the UDNUCV; and

d. The amount of residential space, if any, located in buildings within which the University also leases space for any use.

3. The City's Department of Design Construction and Land use shall lead an interdepartmental team, including the Department of Parks and Recreation, Office of Economic Development, Office of Housing, the Seattle Human Services Department and the Seattle Department of Transportation to prepare a 5-year summary report in 2008 on the impacts of UW property leasing and acquisition upon the UDNUCV. DCLU will combine the information provided under Sections II.D.1. and 2. for the preceding five years, and will provide an analysis of University leasing and acquisition within the UDNUCV. DCLU will provide this analysis to the University and CUCAC for their review and comment prior to submission to the City Council.

III. Replacement of Section II.E. The parties intend that the limitations on leasing and acquisitions in section II. E. of the City-University Agreement be changed to allow the University of Washington to use leased and acquired property consistent with the Seattle Land Use Code, subject to certain limitations. The parties hereby agree that the City-University Agreement be amended by replacing Section II.E., Land Acquisition and Leasing, in its entirety, with a new Section II.E. as set forth below:

E. Property Acquisition and Leasing

1. Policy.

a. Acquisition Policy. The Acquisition Policy is as follows: The University may purchase property within the City of Seattle. University use and development of acquired property in the City of Seattle must conform to the City of Seattle's use and development regulations.

b. Leasing Policy. The Leasing Policy is as follows:

(1) Permitted Leasing: Notwithstanding any provision of the University of Washington Master Plan, Seattle Campus, and conditions of its approval, the University of Washington may lease any property within the City of Seattle, subject to all of the following:

a) Permitted Leasing Focus: While the University may lease any property within the City of Seattle, within the Primary and Secondary Impact Zones it will work toward directing 75% of its leasing in the Impact Zones to the University District Northwest Urban Center Village (UDNUCV) as defined by the City's Comprehensive Plan and shown on the attached map. (Attachment 1);

b) In 2008, five years after adoption of this first amendment to the City-University Agreement, the City and the University shall conduct a review of UW off-campus leasing;

c) Using the University District Market Analysis (Gardner/Johnson May 2, 2003) as a baseline, the City and the University shall consider the condition of the University market area by analyzing the following factors: the number of housing units created as compared to the City's Comprehensive Plan Housing Goals for the UDNUCV, the number of University created jobs in the UDNUCV as compared to the City's Comprehensive Plan Jobs goal, the amount of UW lease payments to landlords within the UDNUCV, the economic contribution to businesses within the UDNUCV by UW employees, the contribution of UW academic capital to residents and businesses within the UDNUCV, whether or not there have been impacts upon the commercial and residential real estate markets or the on character of commercial areas, and whether or not there has been active encouragement by the University to influence the production of market-rate housing in the UDNUCV, the extent to which the permitted leasing focus has been achieved, and the extent to which the University has meaningfully participated in the development and implementation of the revitalization plan for the University District called for by City of Seattle Resolution 30605;

d) Based on the analysis conducted pursuant to "b)" and "c)"above, the City and the University will determine whether or not UW leasing, and/or the permitted leasing focus, of off-campus leasing within the UDUNCV shall be continued or modified after 2010;

e) UW off-campus leases shall continue to be permitted without limit, unless limits are established through amendment to this CityUniversity Agreement;

f) No leasing shall be allowed at the street level in a commercial zone, except for uses similar to retail sales and services, customer service offices, entertainment use, child care centers, medical clinics, extension service offices or other uses permitted under the Master Plan or in a Council-approved neighborhood plan, and only to the extent such uses are also permitted by the underlying City development regulations;

g) Except as permitted in an adopted master plan, within the University District Northwest Urban Center Village (UDNUCV), the use of leased space by the University shall neither result in the demolition of a structure(s) that contains a residential use nor change a residential use to a nonresidential use, unless such use is replaced with comparable use within the UDNUCV. Comparable use shall be defined to be the number of units and comparable price to those demolished; and

h) The University will develop a housing quality complaint program for students using UW services to find off-campus, private housing, within University District residential areas, including University Park, beginning with information to students about DCLU code compliance, tenants' rights, landlord/tenant issues and mediation services among others. This program will be implemented in the 200405 academic year. The University will also complete the "Guide to Student Community Relations Neighbor to Neighbor Expectations" as outlined in the Regents' response to the City Council's preliminary Campus Master Plan decision. This guide will be complete by the fall of 2003 and mailed to students living in off-campus, private housing, within University District residential areas, including University Park.

(2) The University will limit its real property leasing to University programs that cannot reasonably be accommodated within existing University facilities. Prior to considering leasing or rental agreements, the University will make reasonable attempts to locate academic and research activities within available and suitable University facilities. When existing facilities are not available or suitable, the University will make reasonable attempts to lease in areas where the University-related activity is a use compatible with the existing uses in the area.

(3) Use and development of leased space will comply with City of Seattle land use regulations.

2. Master Plan Amendments. Amendments to the University's Master Plan will not be required for land acquisition and leasing.

IV. Creation of a New Section II.H. The parties intend that the following section be added to the agreement to reflect the joint commitment by the City and the University to promote and encourage new housing development within the UDNUCV as set forth below:

H. Housing Goals

1. The City and the University have a shared interest in, and are committed to using their unique positions to stimulate, the creation of additional market-rate housing in the UDNUCV, consistent with the Comprehensive Plan and the goals and objectives outlined in the University Community Urban Center Plan. The University is committed to work with private developers to encourage the creation of mixeduse projects that include market-rate rental, and for-sale, housing and to stimulate additional housing opportunities for UW faculty and staff. The City is committed to reviewing its zoning regulations and examining strategies for providing incentives for housing production.

2. The City and the University recognize that the primary housing goals of the University Community Urban Center Plan are to: (1) provide housing for a mix of demographic and income groups; (2) encourage a stable residential population; and (3) enhance neighborhood design quality and compatibility by using a variety of strategies including development partnerships, zoning modifications, financing subsidies and cost-reduction measures. Both parties agree that providing additional urban housing and increasing long-term residential stakeholders will promote neighborhood stability and investment and establish additional market opportunities for retail and service businesses.

3. The University has multiple interests in having housing options available for faculty and staff in close proximity to the University. Such housing would serve to minimize transportation impacts and assist in the recruitment and retention of key personnel. The University's presence and influence in the economy of the UDNUCV affords it a unique ability to encourage the development of housing to serve UW faculty and staff and other potential long-term residential stakeholders. The University will continue its efforts, to the extent allowed by law, to provide housing financing opportunities for its faculty and staff including but not limited to, programs such as the Hometown Homeloan Program. The University will report to the City on its efforts to stimulate new housing production and development of housing options for faculty and staff as outlined in Section II.D.2. of this Agreement.

4. As the City reviews zoning regulations within the UDNUCV, it will work to eliminate barriers to housing development and may provide incentives for the creation of additional housing units.

UNIVERSITY OF WASHINGTON CITY OF SEATTLE ____________________________ _______________________

President, date Mayor, date

June 10, 2003 Version 9 ta

Attachment 1 University District Northwest Urban Center Village and Environs ta