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HomeMy WebLinkAboutTrans 2008-04-15 Item 3A - Discussion - South 142nd Street/54th Avenue South Local Improvement District Formation UpdateTo: Mayor Haggerton From: Public Works Director Date: April 9, 2008 INFORMATION MEMO Subject: Request for the Formation of a Local Improvement District for a New Road and Utilities in the Neighborhood of 54 Avenue South/South 142" Street ISSUE: Request for the formation of a Local Improvement District (LID) for a new road and utilities in the neighborhood of 54 Avenue South/South 142 Street. BACKGROUND: Local Improvement Districts (LID's) are a means of assisting benefiting properties in financing needed capital improvements through the formation of special assessment districts. LID's allow improvements to be fmanced and paid for over a period of time through assessments on the benefiting properties. The governing statute is RCW 35.43. The entire LID process is about financing capital improvements, not constructing them. LID processes lead, ultimately, to the sale of bonds to investors and the retirement of those bonds via annual payments by the property owners within a district. Goals of the LID process are twofold: to present a bond portfolio to investors that will entice them to invest at as low a rate of return as possible; and to assess property owners as fairly as possible in relation to the special benefit received. The statute requires that the assessments per parcel must not exceed the special benefit of the improvement to that parcel, which is defined as the difference between the fair market value of the property before and after the local improvement project. In addition, the assessments must be proportionate to one another. The Transportation Committee met on October 22, 2007 to discuss the possible formation of an LID. The Committee endorsed the Public Works' recommendation to update the proposed project's cost estimate and to have new property appraisals performed. DISCUSSION: The City received in March/April 2006 an informal inquiry from eighteen property owners in the neighborhood of 54 Avenue South/South l42 Street asking about the possibility of forming an LID for the construction of a new roadway, sanitary sewer main, storm drainage, sidewalks, street lighting, and water main. The neighborhood involved is shown on Exhibit A. The City asked KPG to update the preliminary project cost estimate for engineering design, environmental review, construction, and construction management for the proposed roadway and utilities. Exhibit B shows the new cost estimate to be $3,089,350. Public Works selected Allen Brackett Shedd to perform the Special Benefit Study. The attached study, Exhibit C, shows that the Special Benefit is $2,340,000. This amounts to just 76% of the estimated project cost. According to the RCW, the benefiting property owners can only be assessed an amount up to the total of the $2,340,000. This means that if the City wanted to proceed with the formation of the LID, there are several options: 1. Reduce the scope of the project; or 2. The City make up the difference between the project's cost and the value of the special benefit a shortfall of $749,350 plus contingency, inflation, and construction management; or 3. Propose to the LID Petitioners that a Latecomer's Agreement could be established; or 4. Do not form the LID SUMMARY: The LID cannot be formed without significant financial support from the City. Attachments: Exhibit A Proposed LID Map Exhibit B KPG Updated Project Cost Estimate Exhibit C Allen Brackett Shedd Special Benefits Study P:Vim\L.ID Formation Trans Memo3.doc Proposed LID hnpl /naps.digiWna encal.wn/producrior'CityGIS 07_ol_03Gind= xA.htin1 Formation of a Local Improvement District for a New Road and Utilities in the Neighborhood of 54th Avenue South/South 142nd Street Aerial Photo Page 1 of 1 EXHIBIT A 4/92008 CITY OF TUKWILA DEPARTMENT OF PUBLIC WORKS PROPOSED LID 54th Ave S S 142nd St Preliminary Project Cost Estimate Rev 2 Includes Elec Telecom/Illumination; NO Signal Construction Contract General Conditions $200,200 Roadway $395,800 Sidewalk $28,200 Retaining Walls $49,500 Storm Drainage $199,700 Sewer, Gas Water $647,000 Underground Electric Telecommunications $338,300 Traffic Signal $0 Illumination System (by Seattle City Light) $56,400 Roadside Development $86,300 Topo Basemap Survey 50,000 PS E (12% of Construction Contract) SEPA (1% of Construction Contract) LID Administration LID Prelim Cost Estimate- Rev2 11- 07.xls; Project Cost KPG 11/14/2007 Construction Contract Total 2,001,400 241,000 20,100 Construction Mgmt (15% of Construction Contract) 301,000 Publications /Mailings 10,000 Hearings 10,000 Bond Printing /Fees 25,000 Easements 50,000 100,000 Subtotal 2,808,500 Contingency (10 280,850 TOTAL ESTIMATED LID COST 3,089,350 EXHIBIT Allen Brackett Shedd 27221DF.DOC Copyright 0 2008 Preliminary Special Benefits Study for 54th Avenue S. LID Location Between 53rd and 55th Avenue S., north of S. 144th Street Tukwila, Washington Date of Report March 24, 2008 Date of Valuation March 17, 2008 Appraised by Deborah A. Foreman, Senior Associate Heber Kennedy III, Associate EXHIBIT 'a- March 24, 2008 Mr. Bob Giberson, City Engineer Public Works Department City of Tukwila 6300 Southcenter Boulevard Tukwila, Washington 98188 -2544 RE: 54TH AVENUE LID IN TUKWILA, WASHINGTON PRELIMINARY SPECIAL BENEFITS STUDY (Our File #27221) Dear Mr. Giberson: We have completed the Preliminary Special Benefits Study of the proposed Local Improvement District (LID) for the improvement of 54th Avenue S. between 53rd and 55th Avenue S., north of S. 144th Street, in Tukwila, Washington. All portions of the existing right -of -way and tax parcels within the LID boundary are situated within the City of Tukwila. The proposed LID boundary includes those tax parcels located on the 54th Avenue S. right-of-way, as well as three parcels on the unimproved S. 142nd Street right-of-way. The proposed LID project will include construction of a 30- foot -wide asphalt -paved roadway, with curbs, gutters, and sidewalks on one side, culverts on the other, storm water management, and water and utility improvements. The purpose of this analysis was to estimate the amount of special benefits, if any, attaching to the properties within the LID area. The City of Tukwila will utilize this report in preparing the preliminary assessments for the 54th Avenue LID. Our an alysis included a study of historical and current land uses, sales activity, zoning and .sensitive areas, recent long -range planning, and future development trends. Complications in the analysis included a variety of existing development, property sizes, proximity to existing streets, and asymmetrical street development. This is a confidential draft work product for an assignment which is incomplete. It is only intended for the client /client agent, City of Tukwila, as part of the client /consultant review of work in progress. It is not intended for any other use or user and cannot be distributed without written permission by the consultant. This draft work product expires upon additional work/review to be completed by the consultant. The format of this report is a Summary Appraisal Report. It is intended to comply with the reporting requirements set forth under Standards Rule 2 -2(b) of the Uniform Standards of Professional Appraisal Practice (USPAP) for a Summary Appraisal. As such, it presents only summary discussions of the data, reasoning, and analyses that were used in the appraisal process to develop the appraisers' Copyright 2008 opinions of value. Supporting documentation concerning the data, reasoning, and analyses is retained in the appraisers' file. The depth of discussion contained in this report is specific to the needs of the client and for the intended use stated below. The appraisers are not responsible for unauthorized use of this report. Furthermore, in accordance with prior agreement between the client and the appraisers, this report is the result of a limited appraisal process in that certain valuation processes were not fully utilized due to the lack of detailed property information and full inspections. As such, we relied on exterior inspections and King County Assessor's records. The intended user of this report is warned that the reliability of the value conclusions provided may be impacted to the degree of limited availability of detailed property information. We note, however, that these limitations are typical in the analysis of properties for LID proceedings. The preliminary special benefits herein are given subject to the specific assumptions and limiting conditions stated immediately following this transmittal letter, as well as the special assumptions and comments itemized in the Special Benefits Analysis section of this report. Based on our investigation and analysis of all relevant data, it is our opinion the property totals, including estimated special benefits accruing to the subject properties upon completion, as of March 17, 2008, are: "AFTER" VALUE $5,895,000 "BEFORE" VALUE 83.555.000 LID SPECIAL BENEFITS`' $2,340,000 The total cost of the project is about $2,428,000. In the State of Washington, up to 100% of the special benefits may be assessed to property owners, but the assessments cannot be greater; than the special benefits. An LID Property Summary is included in the report detailing the special benefits to each of the property owners as Well as summary information about each of the properties. If you have questions not answered in the accompanying report, please do not hesitate to call. Sincerely, ALLEN BRACKETT SHEDD kr Allen Brackett Shedd 27221DF.DOC Copyright 0 2008 Deborah A. Foreman, Senior Associate Heber Kennedy III, Associate Page 2 LID Property Summary Tukwila 54th Avenue Improvements Allen Brackett Shedd LID Parcel Parcel ID 1 076100 0030 2 076100 0046 3 076100 0047 4 076100 0048 5 076100 0049 6 076100 0050 7 076100 0080 8 076100 0085 9 076100 0090 10 076100 0105 11 076100 0106 12 076100 0107 13 076100 0108 14 076100 0125 15 076100 0130 16 076100 0135 17 076100 0140 18 076100 0145 19 076100 0150 20 167040 0174 21 167040 0176 22 167040 0185 OWNER Pham Ragutero Prasher Hoang Prasher Hoang Lonigro Lonigro Erskine SIDHU HOMES INC SIDHU HOMES INC SIDHU HOMES INC SIDHU HOMES INC Singh Schroeder SIDHU HOMES INC SIDHU HOMES INC SIDHU HOMES INC SIDHU HOMES INC Singh Singh Best Site Address 14234 53rd Avenue S 14202 53rd Avenue S *no Site Address* no Site Address* *no Site Address* 142xx 53rd Avenue S *no Site Address* no Site Address* 5316 S 144th Street *no Site Address* no Site Address* *no Site Address* no Site Address* "no Site Address* no Site Address* *no Site Address* "no Site Address* "no Site Address* *no Site Address* 14128 53rd Avenue S 14118 53rd Avenue S 14115 55th Avenue S TOTALS Lot Home Year Frontage Size (at) Size Built Feet HBU I "Before" 36,812 1580 1918 148,8 4 SFR $440,000 $680,000 9,141 3480 2006 122.775 As Imp. $675,000 $682,000 9,141 197.175 I SFR $50,000 $170,000 9,169 744 l SFR $50,000 $170,000 9,155 74.4 I SFR $50,000 $170,000 9,169 74.4 I SFR $50,000 $170,000 9,224 74.4 1 SFR $50,000 $170,000 8,244 74.4 1 SFR $50,000 $170,000 19,510 1360 1920 148.8 As Imp, /ISFR $370,000 $485,000 9,265 74,4 1 SFR $60,000 $170,000 9,251 74.4 1 SFR $60,000 $170,000 9,237 74.4 1 SFR $60,000 $170,000 9,223 74.4 1 SFR $60,000 $170,000 9,210 74.4 1 SFR $60,000 $170,000 9,196 74.4 1 SFR $50,000 $170,000 9,182 74.4 1 SFR $55,000 $170,000 9,169 74.4 I SFR $55,000 $170,000 9,155 74,4 l SFR $55,000 $170,000 9,141 74,4 I SFR $55,000 $170,000 8,486 2779 2003 115.01 As Imp. $625,000 $631,000 10,496 1380 1950 142,88 As Imp. $280,000 $282,000 19.627 970 1947 74.4 As Lnp. /ISFR $295,000 $415,000 250,203 2065.84 $3,555,000 $5,895,000 Conclusions Fee Simnle "After" Comments Suecial Benefit Amount S/sf Land /ff $/lot 2 roads $240,000,;,,54,55% $6.52 2 roads $7,000 1.04% $0.77 Gains Access $120,000 240.00% $13.13 Gains Access $120,000 `,240.00% $13.09 Gains Access $120,000 240.00% r'. $13.11 Gains Access $120,000 240.00% $13,09 Gains Access $120,000. 240.09% $13.01 Gains Access $120,000 240,00% $14.56 2 roads $115,000 31.08% $5.89 2roads $110,000 183.33% $11.87 Gains Access $110,000 '183.33 %;$11.89 Gains Access $110,000''. '183,33 $11.91 Gains Access $110,000 ,183.33 $11.93 Gains Access $110,000 183,33% $11.94, Gains Access $120,000" 240.00% ,'$13.05 Gains Access $115,000 209.09% $12.52 Gains Access $115,000 209.09% 512.54 Gains Access $115,000 209.09% $12.56 Gains Access $115,000 209.09% $12.58 2 roads $6,000 0.96% $0.71 Can use St or driveway $2,000, 0,71% $0.19 Pending ©$295K $120,000 40,68% $6.11 $2,340,000 $1,613 $120,000 $57 $7,000 $609 $120,000 $1,613 $120,000 $1,613 $120,000 $1,613 ",$120,000, $1,613 .,'$120,000 $1,613 $120,000' $773 $115,000 $1,478 $1,478 $1,478 $1,478 $1,478 $1,613 $1,546 $1,546 $1,546 $1,546 $52 $14 $1,613 $110,000 $110,000 $110,000 $110,000 $110,000 $120,000 $115,000 $115,000 $115,000 $115,000 $6,000 $2,000 $120,000 Copyright E 2008