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HomeMy WebLinkAboutCOW 2004-02-23 Item 3F - Contract Amendment - Scope of Work on Tukwila Urban Center / Transit Oriented Development with ECONorthwest for $20,000COUNCIL AGENDA SYNOPSIS Meeting Date 2/10/04 2/23/04 Initials I Prepared by 1 Mayor's review/ Council review 1 SL M" I I SL I I I I I I I I I ITEM INFORMATION I CAS Number: 04-027 I Original Agenda Date 10/27/03 Agenda Item Title: Contract with EcoNW Economic Consultants Original Sponsor: Council Admin. X Timeline: Sponsor's Summary: This contract amendment responds to the evolving TUC Planning process by providing for more detailed work for two tasks from the original scope of work: 1) market analysis absorption population and employment forecasts, and 2) fiscal analysis analyzing and describing potential City financial resources and benefits from recommended expenditures. It will be funded form the TUC grant and is structured as a time and materials contract with a not to exceed amount of $20,000. Recommendations: Sponsor: Committee: Forward to Council Administration: Cost Impact (if known): Not to exceed $20,000 Fund Source (if known): TUC Grant RECORD OF COUNCIL ACTION Meeting Date I Action 2/10/04 I Forward to the Council of the Whole Meeting Date 2/10/04 2/23/04 Staff Memo to CAP CAP Minutes Proposed Contract with EcoNW Staff Memo Proposed Contract with EcoNW CAP Minutes dated 2/10/04 APPENDICES Attachments ITEM No. TO: Mayor Mullet Council of the Whole FROM: Steve Lancaster, DCD Director RE: Proposed Contract with ECO Northwest DATE: February 11, 2004 RE: TUC Eco NW contract amendment Background City of Tukwila Department of Community Development Steve Lancaster, Director As part of our staff/consultant TUC planning team, Terry Moore and Brett Shedder of EcoNW have provided technical assistance with economic and fiscal issues related to the planning of the Tukwila Urban Center (TUC) and the transit- oriented development (TOD). The original contract amount for $59,928.26 was approved in February, 2003. However, the project has continued to evolve and additional Economic analysis is needed. Pronosed Contract Amendment MEMORANDUM Steven M. Mullet, Mayor The enthusiasm of the Public and the Council for the TUC Plan's evolving concepts of: 1) the City's investment in "catalyst" public amenity and associated transportation improvements and 2) focused residential development along the river, is apparent. Like any major investment, detailed economic analysis is warranted to ensure that these specific capital investments and zoning changes "work" in an economic sense. This $20,000 contract amendment will be funded by the existing TUC /TOD grant. It provides additional, more detailed analysis on more general work contained in the original EcoNW contract's Scope of Work. Specifically, this contract amendment provides for more detailed work for two tasks (Task 2, original scope) market analysis absorption population and employment forecasts, and (Task 3, •original scope) fiscal analysis analyzing and describing potential City financial resources and benefits from recommended expenditures. The current status of these analyses and additional work needed are described below: a) Market analysis absorption population and employment forecasts. The work on population and employment forecasts is done. The work on market analysis and G:\PLANNING\LYNNM \TUC \Contracts\Ivtarket analysis \administrative\amendment 1.04 \ECOCO W.DOC Page 1 6300 Southcenter Boulevard, Suite #100 Tukwila, Washington 98188 Phone: 206 431 -3670 Fax: 206 431 -3665 absorption needs to be expanded to respond to the details of the Plan elements worked out in November and approved by City Council Additional new work on "retail entitlements" also remains to be done. b) Fiscal analysis. Eco NW has completed initial general work and submitted it to the City. Further work is needed to build on those points, and incorporate information on development costs into a full fiscal picture of the costs and revenues that the TUC Plan would generate for the City. COMMUNITY AFFAIRS AND PARKS COMMITTEE ACTION Reviewed the draft contract and sent it to the COW for consideration. REOUESTED ACTION Review the draft contract and forward to the full Council for consideration. G:\PLANNING\LYNNM \TUC \Contracts\Market analysis \administrative\amendment 1.04 \ECOCO W. DOC Page 2 fL JL% City of Tukwila Contract for Services Amendment Between the City of Tukwila and ECONorthwest That portion of Contract No. 03 -069 between the City of Tukwila and ECONorthwest (ECO) is amended as follows: New Exhibit: EXHIBIT 13-2 ADDENDUM PROJECT NO. TCSP -TCSP (010) SCOPE OF WORK The two tasks outlined below are extensions and refinements to Tasks 2 and 3 from the original scope of work. Tasks 2 and 3 called for ECO to assist the TUC team in development of a "final scenario for the proposed development of the TUC City Center. As a result of the work of recent months, the team now has in place two final scenarios (or preferred alternatives) for the City Center Development: the Mall-to -Pond and Mall- to- Station alternatives. Both of these will need some additional analysis, and a preferred alternative will need more detailed analysis than specified in Tasks 2 and 3 The following two tasks are designed to help the TUC planning team take the next step and begin to explore potential avenues for implementation of the alternatives. They are expansions of and replacements for Tasks 2 and 3 of the original scope of work. These tasks are: Task 1: Gap analysis Task 2: Fiscal strategies assessment The City and ECO have tentatively agreed that analysis and conclusions of Tasks 1 and 2 will be combined into a single report: this scope of work assumes a single report (draft and final). TASK 1: GAP ANALYSIS In summary, the gap analysis is an estimation of (1) the cost associated with development of the private components of the TUC City Center Development, (2) the market return that the developer could expect to receive from that investment, and (3) the gap between the costs and returns, if any, that would need to be covered by public funds to ensure that the development could go forward. As we see it, such gap analyses would definitely be performed for the Mall-to- Station alternative. They may or may not be needed for the Mall- to-Pond alternative depending on the final definition of that alternative. The reasons: (1) if in the final alternative all the new development is being done by the mall on its property, an evaluation of the performance and absorption of that development may not be necessary; and (2) the project team may judge, based on recent information from meetings with Target and Westfield, that there is not enough current support from these businesses to make the Mall-to -Pond alternative viable The components of the analyses would include: Defmition of the critical components of the City Center Development that would be driven by private sector developers.. ECO would work with FTB to identify, among other things: The parcels that would need to redevelop, at a minimum, to allow the City Center Development to succeed. Reasonable assumptions about the land use categories and configurations that would go on the redeveloping properties. Assumptions about public im ....ents that would be associated with each set of private- sector developments. These improvements are primarily the ones that get the project launched, and have been called by the study team the catalyst improvements. (These assumptions would not play a direct part in the gap analyses, but would be important as a check to ensure that total cost estimates include the full set of private and public sector improvements.) Estimation of development costs, including the costs of land acquisition, construction, and carrying costs. Estimation of the value of the development upon completion of the project in present value terms. Implicit in such an estimation are assumptions about market absorption, and about the costs and value of development in the TUC relative to competing areas (which implies some analysis of comparable sales and interviews). Discussion of retail entitlements (optional). Findings in a technical memorandum (similar in format to others we have produced for this project). A final section would discuss the implications of our analysis. This is the same memorandum that would include the evaluation described in Task 2, following. ECO will be looking at the gap under the assumption that the City has provided all the improvements (as described in the next section). If the analysis of rents and absorption, compared to development cost, results in a less -than market rate of return, there is a gap. The gap would, of course, be even bigger if the assumption were that the developer had to pay some portion of the improvements described in Task 2. TASK 2: FISCAL STRATEGIES ASSESSMENT ECO's role here will be to assemble cost and financial information provided by others in a consistent format. Other team members (the City, Mirai, FTB) will provide ECO with a list of catalyst improvements for the development scenario, a description of what they are and an estimate of their costs, and any additional information they have available that they believe relevant to the level of ECO's analysis (e.g., timing or phasing; known funding sources). Upon receipt of these cost estimates, ECO will include an estimate of the potential gap financing cost estimated in Task 1, thereby generating an estimate of the total public cost of implementation for each preferred alternative. In addition to assessing implementation costs, ECO will also assess potential financing mechanisms and strategies to accomplish the TUC City Center Development. The assessment of potential funding mechanisms would include: Cataloging potential sources of funds, including the City's remaining untapped taxing authority, anticipated new revenue streams, and potential Local Improvement District funding. An assessment of the performance of funding strategies, including an assessment of potential revenues and the incidence of potential new taxes or levies on different categories of payers. The focus of both Task 1 and 2 is on the development of the City Center alternatives over the analysis period, not on the overall development of the TUC. If the City desires a broader description of capital improvements (e.g., for a larger area or over a longer period), it will provide ECO with the necessary information about all improvements, and ECO will incorporate that in formation as a table in its memorandum. COMPENSATION Compensation for the tasks included in the amended Scope of Work (Exhibit B -2) shall not exceed $20,000. Compensation for the entire contract (as amended) shall not exceed $79,928.26. DURATION OF AGREEMENT This agreement shall be extended in full force and effect for a period commencing February _,2004 to December 31, 2004. All other provisions of the contract shall remain in full force and effect. DATED this day of 20 CONTRACTOR CITY OF TUKWILA Steven M. Mullet, Mayor ATTEST /AUTHENTICATED APPROVED AS TO FORM Jane E. Cantu, CMC, City Clerk City Attorney Present: Pam Linder, Chair; Dave Fenton, Joe Duffle e Steve Lancaster, Rebecca Fox, Jack Pace, Lucy Lauterbach V Committee chair approval Community and Parks Committee February 10, 2004 1. Annual Amendment to the Comp Plan Amendments to the Comp Plan are allowed only once a year unless there is an emergency. Staff is preparing changes to the Comp Plan, but because of their workload in other areas, they are doing minimal changes to comply with changed Growth Management Act (GMA) regulations, and three requests that have been submitted by members of the public. Anything beyond these issues will need to be proposed for the 2005 budget, as time does not allow more to be done this year. A proposed public participation schedule was reviewed, and the Committee thought it was very thorough. Expanding on the technical changes that will be proposed by staff, Steve went through the update issues briefly, and Rebecca's memo gave a little more detail. Those issues will be an expanded checklist that relies somewhat on the old comp plan EIS. Steve said some issues could be controversial though they won't be major issues. Our comp plan policies will all be reviewed, and then the GMA regulations will be reviewed to see which of our policies needs to be updated. Dave asked how we could make sure our mailing list reached everyone, and was told the most current list will be used, and anyone who shows an interest in the subject can be contacted. The Hazelnut will also be used to inform citizens about the process. Recommend resolution to COW. 2. Charles River Associates Contract Since fall of 2001 the City has contracted with Charles River in order to use the extensive knowledge and contracts of Dan Brand who works there. Mr. Brand is a pre- eminent expert in the field of parking, and has helped the City do a bit of planning for Sound Transit in this field. Now the work will intensify and his help will be more heavily relied on. Steve pointed out that the contract is not inexpensive, but that it is worth every penny. Sound Transit's original documents referenced Mr. Brand, so they can't say he's not creditable. Recommend contract to COW. ECO Northwest contract Two associates from ECO NW have worked with the City as the plans for the TUC and TOD have begun. They are working with the economic and fiscal issues about the two areas. The next phase will take an in -depth look at markets for housing and development for the TUC/TOD areas. Whether it will pay to build specific housing and retail in certain areas will be looked at from a perspective of whether or not it makes sense. This company's work is paid through a grant. Pam raised the issue of this study having large implications, and said it needed to be compared to the Westfield Mall/Klickitat expansion, Tukwila Village, and the Segale developments. All will be vying for city funds, and priorities will need to be set. Pam said it's hard to compare the costs and benefits of all these projects. Recommend contract to COW.