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Home My WebLink AboutCAP 2015-11-09 Item 2D - Discussion - Traveler's Choice Motel - 4Culture LeaseCity of Tukwila Jim Haggerton, Mayor INFORMATIONAL MEMORANDUM TO: Mayor Haggerton Community Affairs and Parks Committee FROM: Derek Speck, Economic Development Administrator Joyce Trantina, Project Development Manager DATE: November 4, 2015 SUBJECT: Traveler's Choice Motel: 4Culture Lease ISSUE Should the City demolish the Traveler's Choice Motel or temporarily lease it to 4Culture to be used for art such as artist studios, galleries, work space, practice space, or performances? BACKGROUND On September 28, 2015 staff reported to the Community Affairs and Parks Committee (CAP) on an opportunity to lease the Traveler's Choice motel to 4Culture for temporary arts related uses such as artist studios, galleries, work space, practice space and performances. Possibly the building could be even become an art object or experience. If the Council were not interested in leasing the site to 4Culture, then staff would recommend the building be demolished as part of the same demolition contract with the other three motels and Smoke Shop. At the CAP meeting, the committee expressed support for bringing more art into the community but would like the City to be more specific about the types of activities allowed. They also urged the involvement of the Arts Commission during the process. The Committee requested staff to work with 4Culture on a specific proposal and draft lease and return to the Committee. Staff opened bids for the demolition of the motels on October 22, 2015. We are scheduled to present those results to Council at the Community of the Whole meeting on November 9, 2015 and will ask Council to forward the bid award to a Regular meeting for Council decision. Staff would have presented the bid results to the Finance and Safety Committee on November 3rd however, that meeting was cancelled. When the Council makes the decision to award the bid, we will need to know whether to include the Traveler's Choice as part of the demolition contract. Because the Arts Commission did not meet in October or November, staff has not met with the Commission as a whole. However, staff has provided the CAP memos and minutes to the Arts Commission, offered to answer questions, and invited them to the CAP and Council meetings on November 9, 2015. City and 4Culture staff continued working on the project. We do not have a draft lease at this time however we have a list of the basic deal terms. They are: 29 INFORMATIONAL MEMO Page 2 (1) City leases the property to 4Culture for $1 per year. (2) 4Culture must provide public access to the property to view or participate in art. (3) City has no responsibility for making any improvements to the property. (4) 4Culture pays for improvements, ongoing maintenance, taxes and fees. (5) Property may only be used for arts related activities such as work space, practice space, performance space, galleries, sales of art, and public events. (6) Property may not be used for any type of living space (motel or apartments) except for a manager's unit. (7) 4Culture would screen the artists before approving rental agreements. (8) 4Culture would include limitations on hours of operation, allowed activities, and allowed art materials in the rental agreements. (9) All use must comply with City zoning, building, fire and other codes. (10) City could access the property to perform testing or investigation related to the sale or redevelopment of the site. (11) The term of the lease would be up to five years. (12) If crime occurs on the property, 4Culture and /or the City could terminate the lease. (13) The City could terminate the lease after three years (with one year notice) if the City decided to use the property for City facilities. The 4Culture Board of Directors met on October 28, 2015 and discussed the potential of leasing the Travelers Choice motel site from the City of Tukwila for art - related uses. Board members were very enthusiastic and excited about this project, and asked their staff to develop a more detailed outline and cost analysis. Their staff believes the Board will be prepared to make a decision on the project at their December 2 meeting. DISCUSSION City staff knows that demolishing the motels and smoke shop are a high priority for the City and that the Council may not want the possible lease to 4Culture to delay the demolition. Therefore, the Council discussion of the demolition contract is scheduled for November 9, 2015. The Council could decide to award the demolition contract at their November 16, 2015 meeting. In that case, it is very likely the onsite demolition work will start in mid - December. In order to decide after the 4Culture board of director's meeting on December 2, 2015 the Council would need to decide to award the demolition contract at their December 7, 2015 meeting. In that case, it is very likely the onsite demolition work would start in early January. Thus, waiting for the 4Culture board decision would likely push the start of demolition out about three or four weeks. Staff believes the 4Culture lease is a good opportunity and recommends the Council wait until December 7th to approve the demolition contract. If the City Council decides to not demolish the Traveler's Choice, staff will return to CAP in early 2016 with a proposed lease with 4Culture. City staff understands that there may be public concern that allowing the site to be leased by another organization for arts - related uses could attract crime. Staff believes these issues can be avoided and the lease would be a benefit to the community. First, 4Culture is a well - managed and well- funded public development authority that has significant experience in screening artists and a reputation to maintain. Second, the City can include provisions in the lease that will ensure 4Culture manages the property well and lets the City terminate the lease if there are crime problems. 30 INFORMATIONAL MEMO Page 3 FINANCIAL IMPACT Based on the bid from the lowest, qualified bidder for the demolition contract, the cost to demolish the Traveler's Choice is approximately $133,000 plus a 15% contingency for a total of $153,000. Leasing the property to 4Culture would delay when the City would incur that cost. The main financial risk would be if the City and 4Culture are not able to execute a lease and then the City would need to solicit a separate demolition contract for the Traveler's Choice. It would require additional staff time and it's possible that contract would be more expensive than the current bid due to the economies of scale. RECOMMENDATION For information only. Staff wanted to brief the CAP because the demolition contract will be discussed at the City Council meeting on November 9. ATTACHMENTS 4Culture staff report dated October 19, 2015 4Culture staff presentation to their board of directors 31 STAFF REPORT DATE October 19, 2015 TO 4Culture Board of Directors PREPARED BY Heather Dwyer RE Traveler's Choice Motel, Tukwila I� CULTURE TEL 206 296.7580 V /TTY 206 296.8574 FAX 206 296.8629 101 PREFONTAINE PL S SEATTLE WA 98104 WWW.4CULTURE.0RG BACKGROUND In order to reduce crime in the Tukwila International Boulevard neighborhood the City of Tukwila purchased four motels (Great Bear, Boulevard, Spruce, Traveler's Choice) and the Sam Smoke Shop. All structures other than the Traveler's Choice are dilapidated structures that are adjacent to each other and offer the City a good opportunity for redevelopment. Since it is likely to be a few years until any developer is ready to start construction, staff plans to demolish these structures in order to reduce blight in the neighborhood. The Traveler's Choice Motel is separate from the other motels and is adjacent to a residential neighborhood. When the Federal Government seized the motel in 2013 it was not one that the City had planned to purchase. It had high crime levels similar to the other motels but since it was outside the City's community renewal area, the City did not have condemnation authority and so did not think the property owner would want to sell. Once the Federal Government seized the motel, the U.S. Attorney's Office was able to coordinate a settlement agreement with the owner and lender and the City purchased the property in 2014. The City has completed the specifications for demolition of all of these structures and is now issuing a call for bids. The demolition of the Traveler's Choice is included as an additive alternate. BASIC SITE INFORMATION The Traveler's Choice Motel, located at S. 146th Street, near Tukwila International Boulevard, and was built in 1992 on a .61 acre site. It is .7 miles, an approximately a 12 minute walk from the Tukwila Light Rail Station. From 4Culture, it is 10 8 miles, which is approximately 20 minutes by car. The Traveler's Choice is a two floor, sprinklered, wood frame structure with thirty-four motel rooms and one manager's unit. The rooms are generally small (twenty -eight of the rooms are approximately 150 square feet) and do not have kitchen facilities or closets. It is considered to be in average condition and has a remaining economic life of 3o years. The property is located within the Neighborhood Commercial Center zone, which does not allow construction of multi - family residential units (e.g. apartments) unless they are above office or retail uses. 4CULTURE PAGE 1 33 Although the structure appears to be in reasonably good shape, it was built to code for a motel (Group R Division i) and converting it to alternative, would require extensive renovation to meet the State building codes. One manager unit is not complete, but available. A lobby, small office is accessible. A storage /laundry area is wired for a commercial dryer and offers 24o voltage. PROCESS AND CONSIDERATIONS In late September, City of Tukwila staff presented two thoughtful options to their Community Affairs and Parks Committee for the Traveler's Choice property. Those options included: ■ Sell the property, for building re -use or for land value, which is estimated at $400,000; or ■ Hold the property, for use by the City as they further develop their Comprehensive Plan, which may revise zoning. City staffs memorandum to the Committee indicated they had identified two options if they elected to hold the property. • Demolish the structure and maintain the lot, making immediate demolition an efficient choice. • Lease the property. The memorandum also identified leasing options if the City elected to hold the property. • Retail, Office, Commercial — City staff has been contacted by organizations and staff is not recommending these uses due to: limited management experience; maintenance costs; and possible long -term disposition impacts. ■ Use as Motel — The City's zoning code no longer allows motels in this location. • Housing for Homeless — As noted above, converting the motel would require extensive, expensive renovation to meet the State building codes for housing. • Arts Use — Use the site to support arts use and programming, administered by 4Culture. SELECTION OF 4CULTURE City staff believes that converting a motel to a use that brings more art into the community can provide many public benefits including valuable service to Tukwila residents and public image. This may also save the City money by delaying, and possibly avoiding, the cost of demolition. A temporary lease would still protect the City's option to use the property for city facilities at a future time. Staff selected 4Culture, as the best leasing entity because we are: • Dedicated to advancing community through culture in King County. • Financially stable and have the means to secure, maintain and program the site. • Have expertise in working with cultural facilities, cultural organizations and individual artists. Tukwila City staff recommends leasing the property to 4Culture as an alternative temporary uses for the Traveler's Choice Motel. 34 4CULTURE PAGE 2 On September 23, the Tukwila City Council's Community Affairs and Parks Committee recommended staff move forward on pursuing a temporarily lease of the Traveler's Choice Motel to 4Culture — to be used for art use and programming. SITE POTENTIAL 4Culture has staff has identified numerous uses for the Traveler's Choice Motel and grounds including, but not limited to: • Artist making space — studio space for writers to write, musicians to practice etc. The 240 voltage in the laundry area could support a small kiln or other equipment. • Artist presenting space — mini galleries, film screenings, readings and performances seen, heard and experienced in the rooms. • Artist retail space — contemporary to traditional, artist makers offer goods for sale. • Building as art — visual artists paint, sculpt and reimagine the building itself as a public artwork. • Performance and installation grounds — the parking lot can become a festival and sculptural installation site. Videos projected, dance, music and built creations. • Engagement — Tukwila artists and residents could have the opportunity to engage with other regional creatives through these activities. SITE CONSIDERATIONS 4Culture staff has identified several site considerations that may limit some uses of the Traveler's Choice Motel and grounds including, but not limited to: • Residential area — artists work hours would need to respect the noise and traffic requirements of the neighborhood, especially the residential trailer park adjacent to the site. • ADA accessibility — no elevator or ADA access exists on the second level. Public functions and possible artists with disabilities working on site would have to take place on the ground floor. • Safety — all uses must meet current code. Most met in 1992, but review would be needed. • Employees — if an artist has employees, they must be located on the ground floor (ADA). • Development Impact Fees — Fire and Parks is ok, but we need to review traffic impact. • Business licenses — All artists operating a business must have a Tukwila Business License. • On site manager — Resident manager may be desirable for general security and oversite. FINANCIAL CONSIDERATIONS By not including the Traveler's Choice demolition the estimated savings to the City of Tukwila will be approximately $23o,000, however, that expense may escalate in the 3 -5 year time of the proposed lease period. 4Culture staff has identified the following financial considerations for the temporary lease of the Traveler's Choice Motel and grounds including, but not limited to: One -Time Expenses: 4CULTURE PAGE 3 35 ■ Furniture and carpet disposal — rooms have items such as beds, dressers, bedside tables etc. ■ Manager unit —for on -site manager, remodeling would be necessary (kitchenette install). Annual Expenses: • Lease payments — $i.00 annually • Liability Insurance — estimate pending • Property Taxes — pending further research GENERAL, SHORT -TERM TIMELINE Nov. 3ND — Demo. To be reviewed by Finance & Safety Committee Nov. 3ND — Tukwila Arts Commission Meeting (date may be changed due to election) Nov. 4TH — Draft Lease Terms to be submitted to City of Tukwila Staff Nov. 9TH — Staff Report (with Lease Terms) to be discussed with Tukwila City Council Nov. 9 TH - Council will review /discuss recommended vendor for demolition Nov. 16 TH - Tukwila City Council Meeting: authorize Mayor to execute contract demo. Nov. 17 TH - Notice to successful bidder Dec. 1 -4 TH - Contract executed to successful demolition bidder Dec. 7 TH - Notice to Proceed to successful demolition bidder PROPOSED LEASE TERMS Tukwila staff has asked their Council to authorize the Mayor to enter into a lease agreement with 4Culture so that if and when 4Culture is ready, they can execute the lease more quickly. If 4Culture and the City are not able to agree to terms, then the City would proceed with the demolition on December 7th. 4Culture staff and Tukwila City staff recommend the following terms: (1) City leases the property to 4Culture for $i per year. (2) 4Culture must provide public access to the property to view or participate in art. (3) City has no responsibility for making any improvements to the property. (4) 4Culture pays for improvements, ongoing maintenance, taxes and fees. (5) Property may only be used for arts related activities such as work space, practice space, performance space, galleries, sales of art, and public events. (6) Property may not be used for any type of living space (motel or apartments) except for one unit. (7) All use must comply with City zoning and building codes. (8) City could access the property to perform testing or investigation related to the sale or redevelopment of the site. (9) The term of the lease would be up to five years. (1o) After three years, the City could terminate the lease with one year notice if the City decided to use the property for City facilities. RECOMMENDATION In the interest of delaying or preventing demolition of the Traveler's Choice Motel in Tukwila, the Board expresses interest and recommends that staff conduct due diligence on the Motel including, but not limited to structural and health safety; financial impacts; liabilities; on -site and program management; and community interest. 36 4CULTURE PAGE 4 L RECOMMENDATION C 0 _c ai _c u co o lA • — C la) - — C 0 „ , 0 s" -0 c u u r° cu ro D D a) -o °r -a 4-) .— ol 1-u c (fl (r) c a) 0 0 c (1) .4.7) _C l..) -1--1 0 92 4-1 Li— -o a) -•`- cu .4. cl) cu; .6U .4—I lft E = ___ -I—I >, CL (0 .= .= _u -' Cri 5, 71) a ja c D t _ ro 0 CU 74-, CL U -0 E E -0 LI- (1) 0 " - • - C 0 U u 73 — (0 D ra a) _c s_ L.) •— ro a) E a.) c -s- 4--, +, cz a) .- - a) Ln 0 . - cy) 4, ro , (1) aJ ‘4_ ro 4-- c IL- c_c ro E s_ 4 loanS w9tri, S LPVE ialoitv airogo sialeActu ;,. iHLLJILLLrL _ ,. • 173°441MasM_K--"g7" , 0 , 0 :.i . s • ■ f..v ..r."e .,.. 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