HomeMy WebLinkAboutReg 2006-05-01 Item 6B - Discussion - Tukwila Village Mixed Use Retail & Commercial and Townhouse Concept COUNCIL AGENDA SYNOPSIS
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ITEM INFORMATION
CAS NUMBER: 06-051 IORIGLi.a AGENDA DATE: 4/10/06
AGENDA ITEM TITLE Tukwila Village: Discussion of mixed -use retail /commercial and townhouse concept
CATEGORY Durrusion illation Resolution Ordinance Bid Award Public Hearing Other
vrgDar 3Ir6Dare MMBDore %IQQDarz AUgDatr MUSDare Au�D4 10/05
I SPONSOR Council Mayor Adm Svcs DCD Finance Fire Legal P&R Police P1V
SPONSOR'S To discuss whether a mixed -use concept that includes townhouses, a plaza, retail and
SUM? LURY other commercial uses fulfills the City's vision for the Tukwila Village site and if the City
should take steps to implement that concept.
REVIEWED BY COW Mtg CA &P Cmte F&S Cmte Transportation Cmte
Utilities Cmte Arts Comm. Parks Comm. Plot Comm.
DATE:
RECOMMENDATIONS:
SPONSOR/ADMIN. No action requested at this time.
CoMNIITIEE
COST IMPACT FUND SOURCE
EXPENDITURE REQUIRED AMOUNT BUDGET ED APPROPRIATION REQUIRED
so $0 $0
Fund Source:
Comments:
MTG. DATE 1 RECORD OF COUNCIL ACTION
4/10/06 1 Special presentation to Council
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MTG. DATE 1 ATTACHMENTS
5/01/06 Information memo dated 04/26/06
1
INFORt\1A TION MEMO
To: Mayor Mullet
From: Economic Development Administrator
Date: April 26, 2006
Re: Tukwila Village DiscussioIj
ISSUE
Does a mixed-use concept that includes townhouses, a plaza, retail and other commercial uses
fulfill the City's vision for the Tukwila Village site? If so, should the City take steps to
implement that concept?
BACKGROUND
The City annexed the Tukwila International Boulevard (then named Pacific Highway) area in
1989 and 1990. Soon after annexation, the City began steps to revitalize the TIE corridor and
its surrounding neighborhoods. In 1995 Tukwila's Comprehensive Plan included four main
objectives, of which one was "to redevelop and reinvigorate the Pacific Highway corridor"
Also in 1995 the City commissioned a market study that analyzed the potential growth of retail,
office, and other uses for the Pacific Highway Revitalization Plan. The study basically
concluded "the market trends are not strong or obvious at this point" In 1999 the city adopted
a Pacific Highway Revitalization Plan which was amended in 2000 to include an Urban
Renewal Plan. Once the Urban Renewal Plan was adopted, the City was enabled to acquire
land for redevelopment.
As part of the TIE Revitalization, in 2000 the City began acquiring the property now known as
Tukwila Village, which is approximately 5.3 acres located at the intersection of Tukwila
International Boulevard and South 1441h Street. In 2002 the City selected a developer for the
site. Over the ensuing years, a number of options were explored but none met both the
developer's and City's goals.
The City has been approached by Centex Homes to develop a portion of the Tukwila Village
site as a mixed-use development including townhouses, a plaza, retail, and commercial space.
At the Council meeting of April 10, 2006 City staff presented information about the Tukwila
Village site and townhouses. Centex Homes presented a preliminary example of how
townhouses could be integrated with a plaza and retail and commercial space onto the site.
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ANALYSIS
Options:
Since the time the original Request for Proposals (RFP) was issued in 2001, the City has
explored a number of options. In negotiations with the Sabey Corporation (selected as
developer in 2002), the City and developer considered a concept that was primarily office over
retail (the initial RFP proposal), a concept that was residential over retail (the Fuller Sears
design), and a concept that was primarily single story retail with some office. None of these
options met all of the goals of the City and/or developer. The City has also sought suggestions
and market demand perspectives from a variety of developers who focus on senior housing
(subsidized/affordable, assisted livjng, and continuing care) and mixed-use with
condominiums. At this time, there has not been strong interest from established developers.
At this time, the City has three options for the Tukwila Village site:
1. Sell Property "As Is"
. The idea behind this option would be to sell the property fairly quickly to the
highest bidder in its current condition. This option assumes we would not
include a lot of special restrictions on the property, however we could include
some measures such as requiring it to be developed within a certain time period
with a certain number of units of ownership housing. Depending on the specific
situation, some restrictions could decrease the sales price.
. Selling the property "as is" to the highest bidder does not necessarily generate
the highest sales price for the City Some developers may be willing to pay a
higher price if they are partnering with the City because the City may be willing
to amend existing policies or integrate City infrastructure through the
development agreement.
. This would likely be the fastest option to implement.
2. Continue Evaluating Our Options
. We could continue to research and evaluate alternative uses for the site such as
senior housing.
. If it takes longer than a year to evaluate our options, the market demand for
office or condominiums could improve. Conversely, if interest rates rise, the
demand for ownership housing could decrease.
. Because the research and evaluation process involves contacting the
development community, this process also helps market the site to potential
developers.
. There are costs associated with this option, such as interest payments on the
bonds, delay to when the City receives cash from the sale, and delay to when the
property returns to the tax roll.
. We could speed up this process by investing $10,000 to $40,000 for professional
studies that analyze the market demand and financial feasibility of senior
housing, condominiums, retail, etc.
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3. Explore This Mixed-Use, Townhouse Concept
. Centex Homes inquired with City staff about developing the site. Staff
collaborated with Centex on incorporating the City's vision into the Centex
concept. Staff has brought this concept forward to the Council because, although
it still has challenges and risks, it is a concept that appears economically feasible
and may meet a number of the City's goals.
. This option is likely to be faster than option #2.
. This concept could be explored by getting input from other developers or by
getting more detailed analysis with Centex. Before Centex invests more
resources considering this site and before staff explores this concept further, this
is a good opportunity to check with Council on how close this comes to the
City's vision.
Considerations:
The mixed-use concept presented is very preliminary If the City decides to implement a
development along the lines of this concept, many items can change through the development
agreement negotiations and development review processes such as the exact number of units,
site design, etc. Before taking steps to further explore this oplion, we should discuss how well
this concept fulfills the City's vision, especially in terms of the following issues:
. Housing units: ownership, number, scale, elevations, parking
. Retail/commercial space: types, location, amount, parking, who controls
. Plaza: location and size
. Pedestrian friendliness: parking on Tukwila International Blvd
. Library' location and integration
. Developing south parcel separately from north parcel
. Zoning changes: signage, setbacks, etc.
. Design quality
Approval Process:
If the Council determines this mixed-use, townhouse concept is worth pursuing, then the most
likely next steps would be to:
1. Select a developer- Upon selection, we would enter into a period of time in which we
would negotiate exclusively with that developer.
2. Negotiate a development agreement: This would include many items, including the
land sale price, design and construction quality standards, etc. During the negotiations,
the City would perform an analysis of the market value of the property These
negotiations would also include conditions, covenants, and restrictions (CC&R's) on the
property owners. The CC&R's could affect whether the homes are owner occupied,
whether buyers can quickly resell the homes, what types of businesses can occupy the
commercial space, etc.
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3. Approval or rejection of the proposed development agreement: It would be a City
Council decision whether to approve the agreement or not approve the agreement
Note: even though the City and developer would have committed significant time and
resources into the negotiations effort, neither party would be under any obligation to
undertake the development until after a development agreement is approved.
4. Development Review' If a development agreement is approved, the development would
still be required to go through normal development review processes (e.g. Board of
Architecture Review).
Developer Selection:
In selecting a developer, the City has a high amount of flexibility in the process. Some options
are:
1. Evaluate the qualifications of Centex Homes
. Staff could return to Council with information on Centex Homes related to their
development experience and financial capability plus information on Driscoll
Architects' experience and quality of design.
. Council could then decide whether to authorize negotiations with Centex.
. This would be the fastest option for selecting a developer.
2. Request qualifications from other developers (RFQ)
. There is a wide range in how extensive this process can be from simply
contacting a few developers to widely marketing the RFQ and providing
information to generate interest by developers.
. This option would need to include a process to choose from the applicants.
. This method is used more frequently by cities for developer selection than the
RFP method.
3. Request proposals from other developers (RFP)
. This option is similar to the RFQ but is requires significantly more investment
of resources from the developer to create an actual proposal of what they would
do with the site.
. The RFP can require the proposals to include an estimated price the developer
would pay the City for the property Although this is useful information, the
proposals are not actual bids and any price estimates would be non-binding.
. Some developers might see the likelihood of being selected as too low to be
worth their time and would not apply
Communitv Input:
The City has been working on the revitalization of Tukwila International Boulevard for a
number of years and has solicited community input through a variety of methods over those
years such as the Pacific Highway Market Analysis in 1995, the Pacific Highway Revitalization
Plan adopted in 1998, a community meeting at Foster High School in 1998, the Tukwila
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International Boulevard Urban Renewal Plan adopted in 2000, Vision Tubvila meetings in
2003, and presentations by Michael Friedman in 2003/4
Additional community input can be included in a number of ways:
1. Vision for the site: Before the City selects a developer, community members could
provide input on the overall vision for what types of uses should occur on lhe site (e.g.
retail, commercial, government and public facilities, housing, etc.) at Council meetings
or the City could conduct special focus groups or surveys.
2. Design and Site Plan: If the project moves forward and the City has selected a
developer, community men;tbers can provide input through the normal development
review process (e.g. Board of Architecture Review) and development agreement
approval process. In addition to lhe normal review process, the City and/or developer
could hold special focus groups or conduct surveys. For instance, the focus group or
survey could seek citizen input on what amenities in the homes or what types of uses in
the commercial space would make the development more attractive.
RECOlVlMENDA TION
After Council discussion, staff will return at a future meeting with a recommendation.
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