City Council

City Hall City of Olympia 601 4th Avenue E Olympia, WA 98501 Information: 360.753.8447 Meeting Minutes City Council Thursday, August 7, 2014 6:30 PM Council Chambers Special Meeting of the City Council to Conduct Business of the Community & Economic Revitalization Committee (CERC) - Joint Meeting with CAC 1. ROLL CALL Present: 3 - Mayor Stephen H. Buxbaum, Mayor Pro Tem Nathaniel Jones and Councilmember Julie Hankins OTHERS PRESENT Staff Keith Stahley Consultants Lorelei Juntunen, ECONorthwest Eric Rundell, ECONorthwest CAC Members Jerry Reilly Allen Miller Thera Black Connie Phegley Rachel Newmann Theresa Madden Donna Feddern Ray LaForge Erica Cooper George Sharp Kari Qvigstad Kris Goddard 2. CALL TO ORDER Mayor Buxbaum called the meeting to order at 6:40 p.m. 3. APPROVAL OF MINUTES - None 4. BUSINESS OF THE EVENING City of Olympia Page 1 City Council Meeting Minutes August 7, 2014 4.A 14-0767 Consideration of Updated Design Scenarios and Feasibility Work for the Isthmus Urban Design Process Mayor Buxbaum welcomed everyone and thanked them for participating in this learning process of a Community Renewal Area. He then introduced Loralei Juntunen from ECONorthwest to start the presentation. Ms. Juntunen gave a brief introduction to the presentation. During the evening we will: 1. Review progress to date 2. Summarize return on investment (ROI) 3. Discuss lessons learned 4. Next steps recommendations from CAC and CERC to City Council Progress to date: The CAC began by developing Guiding principles with the top two being: 1. Create a vibrant mixed use area 2. Create an extraordinary pedestrian environment Design Concepts were then discussed at two scenario development workshops and the consultants used the scenarios to quantify costs and benefits. Ms. Juntunen then introduced Eric Rundell from ECONorthwest to discuss the calculations for ROI. Mr. Rundell stated the revenue assumptions that are made in the following scenarios are taxes such as property, sales, B & O, Utility and Hotel. They also assume phasing of the development. Scenario 1 depicts future costs of the parcel the City purchased last year. Some demolition is required but no funds for site preparation and park development has been identified. The City costs are approximately $6 million and limited ROI. The Revenues : Costs is 1:29. For every $29.00 spent, $1.00 in revenue is gained. The Mayor emphasized that Scenario 1 is the existing condition now. The money has to completely come from the City. We are able to tear one building down but we will have to put a fence around the remaining rubble because we do not have funding to do anything with the rubble or contamined ground. Discussion followed regarding Washington regulations around property value and taxes, and bonding costs, which are not included in the scenarios. Scenario 2 includes the park and adds a hotel at Capital Center. Permits have been issued for the structure. We are assuming the current investment is underwater with limited options other than pursuing a hotel. Although feasibility is not certain, the ROI is better based on hotel taxes. The Revenue : Costs for this scenario is 1:3. Scenario 3 adds a park at Capital Center. This would cost an additional $12 million with no additional revenue. The ROI is 1:88. The full burden for the costs would be City of Olympia Page 2 City Council Meeting Minutes August 7, 2014 on the public. There are also operation and maintenance costs. There are also other factors to consider such as where would the money come from, what about ongoing maintenance, and there is work needed on Percival landing. Mayor Buxbaum added there are different opinions about where the money would come from and is why we need to involve the public for the discussion. This scenario is $18 million with no funding and there are other projects to consider such as Percival Landing, soccer fields, etc. Mayor Pro Tem Jones added that even though the ROI is a negative number in all scenarios, it doesn't mean it is a bad thing. There are other reasons to do it. The public must discuss whether it is worth it. Scenario 4 includes private sector partnerships. The ROI is 1:2 and well as other non-fiscal benefits like economic development, place making, quality of life, and community pride. Because a lot more development would be involved in this scenario, there will be additional revenue from taxes, parking, etc. We are projecting just the City's tax and not the whole tax. In Scenario 4 the City costs include parks on City-owned land, streetscape improvement, and demolition and brownfield cleanup on City-owned property. The costs shared with a partner may include purchase & site preparation on acquired parcels, shared parking structure, parks on acquired land, and feasibility gap. The developer costs are land, demolition, construction, parking, and remediation. Mayor Buxbaum reminded the CAC the reason they are having this conversation is the CRA tool. The City does not need a CRA for developing a park. We do need a CRA for an alternate approach that includes private sector. The 4th scenario assumed the CRA with partnerships, which make the public costs less. Mayor Buxbaum was asked to explain the use of condemnation under a CRA. He stated in terms of condemnation, the City currently has the power for public safety. Under the CRA, there are additional powers for economic development purposes or removing blight. The property must then be put to a public use or a viable economic use and the owner is paid a fair market value. The CERC has discussed very stringent authority if it was used. For instance, we have discussed property that is vacant, blighted and has had no economic benefit for five years. The discussion was completed. 4.B 14-0769 Consider Next Steps in the Isthmus Urban Design Process and Community Renewal Area Public Participation Process In considering next steps in the Isthmus Urban Design Process, the CERC brainstormed answer to these questions. 1. What are the costs of not intervening? 2. Are there specific action steps that can be taken / should be recommended to Council? City of Olympia Page 3 City Council Meeting Minutes August 7, 2014 3. How do we include the broader public in this discussion? He explained the CERC members want to share with the CAC the answers they came up with and get feedback and ideas from the CAC about this work. 1. What are the costs of not intervening? - Community stays "stuck" and needs are not met - Status quo is not cost beneficial, slow growth, detrimental to community - Missed opportunity for: creativity and partnership on Capitol Center Tower; Community-led development; and Change our way of doing business 2. Expand scope beyond Isthmus: move to CRA conversation - Identify and prioritize sites of interest in the Downtown that need intervention (Griswolds, Vine Street Building, Reliable Steel, etc.) - Complete the work on the Isthmus, including rebranding - Identify and clarify needed tools - Initiate public conversation about priorities for revitalizing the Isthmus and Downtown - Invite property owners and developers to be creative and bring forward development projects (and private capital) - Provide structure and funding for due diligence on projects. Tests: feasibility, public support, etc - Result: ideas that can be tested in a public forum The CAC discussed having more conversations with developers and providing them feasibility and certainty in development, and presenting the status quo and the challenges of moving forward to the public. 3. How to include the public? - Public education Explain the need for CRA (feasibility gap, public - private partnerships) Identify sites based on criteria Visualizations of development: provide a full range of choices including cost estimate The CAC and CERC members broke up into three teams and discussed the same questions. They regrouped at 8:45 pm and shared the results of the discussions. Table 1: They agreed they liked the CRA tool and want to move forward but the community has a long way to go before doing anything. We have a lot of community education to complete. The isthmus does need help but we need to decide if that is the right place to start. There needs to be a deliberate thought, alignment, and agreement as how the CRA City of Olympia Page 4 City Council Meeting Minutes August 7, 2014 aligns with the Downtown Master Plan. Starting with the Isthmus is very complicated with citizens that want to undermine the project but it would also garner public attention and engagement. Table 2: We believe in the process of CRA but we were split on whether the downtown or the isthmus is the place to start. The political realities of working on this may be very difficult. We also talked about the inter play between the downtown master plan and CRA. It may be premature to do a public open house because we have not addressed all the challenges yet. The Open House should be interactive, starting with the Isthmus. The public process does need to happen with a lot more information for them. We do not want to call it an intervention but maybe “transition”. We believe design is more important that height. Table 3: Be thoughtful about how you frame your questions and be positive. It is easier to come up with helpful responses if you think of the benefits of private / public partnerships. The team has a great deal of interest in presenting a choice to the public. There is interest in using the downtown plan as some means of informing the CRA. If we can’t get a decision on the CRA and the action plan before the downtown planning process we shouldn’t move forward with it. We are not ready to do it now. There was agreement to rebrand the "Isthmus". They also discussed “it doesn’t hurt to ask the private property owners what their vision is like”. Ms. Juntunen summarized the CAC recommendations but stating she did not hear any opposition to a Community Renewal Area and the CAC agreed. Mayor Buxbaum closed the meeting stating the committee is convinced there is benefits of a CRA as a tool. The CERC will meet again to have a full discussion to compare notes and learn from what has transpired tonight. There are tangible actions the CERC can take forward to the City Council. The discussion was completed. 5. ADJOURNMENT The meeting adjourned at 9:13 p.m. City of Olympia Page 5