City Council

City Hall City of Olympia 601 4th Avenue E Olympia, WA 98501 Information: 360.753.8447 Meeting Minutes City Council Thursday, June 26, 2014 5:30 PM Room 207 Special Council Meeting to Conduct Business as Community Economic and Revitalization Committee (CERC)/Citizens Advisory Committee (CAC) 1. ROLL CALL Committee Members Present: · Mayor Stephen Buxbaum · Mayor Pro Tem Nathaniel Jones · Councilmember Julie Hankins Other Councilmembers Present: · Jeannine Roe · Cheryl Selby Citizens Advisory Committee (CAC) Members Present: · Jerry Parker · Jerry Reilly · Theresa Madden · Mike Reid · Renee Sunde · Carol Richmond · Allen Miller · Rachel Newmann Staff and Consultants Present: · Paul Simmons, Director, Parks Arts and Recreation Department · Keith Stahley, Director, Community Planning and Development · Lorelei Juntunen, ECONorthwest via teleconference · Erik Rundell, ECONorthwest via teleconference CALL TO ORDER Mayor Buxbaum called the meeting to order at 5:30 p.m. 2. MEETING BUSINESS 2.A 14-0625 Review of Development and Financial Assumptions Behind the Consultant Team’s Feasibility Analysis City of Olympia Page 1 City Council Meeting Minutes June 26, 2014 Mayor Buxbaum welcomed Councilmembers, CERC and CAC members in attendance. He provided an overview of the meeting objectives and outlined the process that would be used for the discussion. He noted it was critical for participants to understand facts and data before moving discussion to the broader community. He clarified the role of the three scenarios that have been developed to date, and said the CAC is needed to help design an effective public participation process at subsequent meetings. Ms. Juntunen and Mr. Rundell walked the attendees through a PowerPoint Presentation. Ms. Juntunen said she hoped attendees could all get on the same page about the assumptions and offer feedback about the general concepts. She noted this meeting was not about selecting a preferred scenario. There was discussion about information on the slides, particularly regarding the feasibility gap associated with the three scenarios, the effect of amenities on the feasibility gap and potential revenues (rents) the project could charge. Ms. Juntunen noted site amenities would benefit more than just the project site and would likely benefit the broader community. Mr. Rundell reviewed slides related to the pro forma cost and revenue projections. He responded to questions about whether the cost of the land included the buildings, what the value of the land is, whether financing costs were included in the pro forma, and what the definition of effective income and triple net rent was. Mr. Rundell displayed a series of spreadsheets related to each scenario and individual parcels that comprise each scenario. There were questions about the loan to value ratio (LTV) used in the pro forma. Mr. Rundell explained he used 65%, which may be high. A question was raised about the 5% contingency that was used. The CAC asked for clarification of what the cash on cash return was. Mr. Rundell was able to input different numbers for LTV to demonstrate the impact on the bottom line of the project. There was discussion about how the pro forma analysis was helpful in considering options for closing the feasibility gap. There were questions and discussion about what the right level of public investment would be in the project and that ultimately that would be a fairly subjective judgment that City Council would need to make. It was noted that both the revenues by way of additional tax dollars, as well as other less tangible benefits, would need to be considered. The group considered whether the three scenarios presented were sufficient to describe all of the possible options. They discussed that the scenarios currently under consideration are derivatives of a public private partnership approach and that an all-public approach and an all-private approach need to be considered as well. Ms. Juntunen added that the objective of this process is to identify what the maximum value is and what will make this project financially feasible from both a public and a City of Olympia Page 2 City Council Meeting Minutes June 26, 2014 private perspective. There were further questions related to whether there is market demand for the retail space and the apartments proposed, and if not now, then how long before there is market demand. Ms. Juntunen responded that Olympia is setting the stage for this sort of development to occur, and she used a map of new multiple family developments in Portland to illustrate her point. Ms. Juntunen closed her presentation by reminding the CERC and CAC members that we would be meeting again in August to continue the discussion. At that time she would have more information about the revenue impacts of the various scenarios and she would be ready to continue the conversation about how to involve the broader public in this process. Mayor Buxbaum thanked the CAC members and the public for attending. The discussion was completed. 3. ADJOURNMENT Mayor Buxbaum adjourned the meeting at 7:20 p.m. City of Olympia Page 3