HomeMy WebLinkAboutCAP 2013-01-28 Item 2C - Development Agreement - 223 Andover Park East with South Center WA LLCTO:
City of Tukwila
Jim Haggerton, Mayor
INFORMATIONAL MEMORANDUM
Mayor Haggerton
Community Affairs and Parks Committee
FROM: Derek Speck, Economic Development Administrator
DATE: January 23, 2013
SUBJECT: 223 Andover Park East Proposed Development Agreement
ISSUE
The owner of 223 Andover Park East (the former Circuit City site) has asked the City for
permission to construct a building that would exceed some current zoning limits at that site.
BACKGROUND
In 2010, Omar and Christine Lee, as the managing members of South Center WA LLC,
purchased the property at 223 Andover Park East, which was the former Circuit City site. Since
that time the owners have conducted preliminary feasibility analysis to redevelop the site. Their
current concept is to construct a pair of attached, seventeen story buildings that would be
almost 180 feet tall and would comprise approximately 170 hotel guest rooms and 280
residential units.
Current zoning at this location does not allow residential units and has a height limit of 115 feet.
The owners would now like to perform additional analysis to determine if this project is
financially feasible. Before they invest the additional funds necessary for the more in -depth
analysis, however, they would like approval of the residential use and additional height. They
are not requesting any other approvals at this time. The project would still go through the City's
regular design review and building permitting processes.
DISCUSSION
The key question for the City is whether we want to encourage this type of development in this
location. This development would be a significant change for the area.
The site is located in the core of the Tukwila Urban Center (TUC), which is between Westfield
Southcenter and the Sounder commuter rail station. The TUC is also known to some people as
Tukwila's Southcenter District. Bringing this many residents into the Southcenter District will be
a significant step toward the area feeling more like a downtown for Tukwila and would have the
effect of adding a new neighborhood and constituency. These would also be the tallest buildings
in Tukwila.
Staff believes this is an excellent project that will serve as a positive catalyst for the City's vision
for future growth in the Southcenter District for the following reasons:
1. Fosters a Neighborhood: This project will be a catalyst to create a pedestrian friendly,
walkable neighborhood in the core of Tukwila's Southcenter District. The people who
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INFORMATIONAL MEMO
Page 2
would choose to stay or live in this development would do so for the convenient access
to the freeways but also for the convenience of walking to restaurants, entertainment,
shopping, buses, and the commuter rail station.
2. Supports Existing Business: This project's guests and residents will support existing
businesses.
3. Improves City Image: The project will be high quality and will improve the image of
Tukwila's Southcenter District and identity for the entire City.
4. Encourages Residential Development: The project will stimulate additional development
in the Southcenter District's core by serving as an example of the financial feasibility of
residential development.
5. Encourages Apartments in Other Neighborhoods to Improve: The residential units will
encourage the private sector to redevelop or renovate existing apartments in Tukwila by
showing demand for higher quality units and rents that justify new construction.
6. Supports Comprehensive Plan: This site lies within the core of Tukwila's Urban Center
(TUC). The City's Comprehensive Plan has a vision for the TUC to be a "great place for
working, shopping, doing business, living, or playing." One of the noted future features is
"a core area of high quality, walkable retail, entertainment, housing, public spaces, and
employment..." Since this site is located in the TUC core and would add housing that is
walkable to transit, retail, and entertainment, it supports the Comprehensive Plan.
7. Supports Housing Targets: The residential units will help the City meet its housing
targets as required by the State Growth Management Act and as determined through
King County's Countywide Planning Policies.
8. Supports Urban Center Designation: The TUC was designated as one of the region's
urban centers, which are described in the Countywide Planning Policies as areas of
concentrated employment and housing with direct service by high capacity transit. As
such, the TUC earns preferential treatment for transit service and facility improvements.
The housing and employment with this project supports the TUC's urban center
designation.
Southcenter Plan
The City of Tukwila is preparing a plan for the Southcenter District. The Plan will present the
community's vision for the evolution and continued growth of the area for the next 20 years and
will include related changes to zoning and development standards and requirements. Although
the Plan is still in development, it appears that the owners' development proposal is very likely
to fit within the vision of the Plan.
The Tukwila Planning Commission has completed their review of the most recent draft
Southcenter Plan documents and approved the draft documents as presented at their October
25, 2012 meeting. Those documents support residential uses at this site but would set a height
limit of 70 feet. However, it should be noted that the owners secured a major investor just prior
to the Planning Commission's approval and so the height issues inherent in this project were not
fully considered. At the Planning Commission's October 25, 2012 meeting, this project was
W: \Derek \Omar Lee \Council Memo V2.doc
34
INFORMATIONAL MEMO
Page 3
briefly discussed and the Commission indicated strong support. If the Council approves a
development agreement allowing this height at this site, the draft Southcenter Plan documents
can be revised to take this policy into account.
Development Agreement
In order to build to this height and allow residential uses at this site, the City would need to
either change the zoning for the neighborhood or execute a development agreement for that
specific property. Since the City is currently working on the Southcenter Plan it is more
appropriate at this time to execute a development agreement for this site. A development
agreement would require the Council to hold a public hearing and approve the agreement by
ordinance.
Staff recommends the basic terms of the agreement to be as follows:
1. The City would grant the current owners the right to construct buildings on the Circuit
City parcel up to 180 feet for up to 50% of the lot area. The remainder of the lot would
have height limits as determined by the zoning in effect at the time that a complete
design review application is submitted.
2. The City would grant the owners the right to include up to 300 residential housing units.
3. The owners must submit a complete building permit application to the City before the
end of 2015. Otherwise, these rights expire. Once a complete building permit
application is accepted by the City, the vesting rights apply as under State law.
4. The residential housing units must be platted as condos and the water intrusion system
must meet the state's laws as required for condos.
This agreement would provide the owners almost three years to complete the financial
feasibility, complete environmental analysis, secure hotel agreements, arrange financing,
complete design review, and create construction documents for building permit submittal.
This agreement would not change any other governing regulations. The rest of the zoning
codes, building codes, and other development standards would be applied as for any other
project. This agreement would not change any fees related to the project. In the future the
owners may request the City waive, amend, or defer fees but that would be a future decision for
the City Council.
Staff is seeking feedback from the Committee on proposed terms. If the Committee is
interested in this proposal, then staff will prepare a draft development agreement and ordinance
for Council approval. Staff would like the Council to hold a public hearing at the Committee of
the Whole meeting on March 11 and schedule a vote for the Regular meeting on March 18.
Official notice for the public hearing would be published on February 25.
The Committee could reconsider this item with the draft agreement and ordinance at its meeting
on February 25 and then decide whether to forward the item to the full Council. However, staff
recommends the Committee forward this item to the full Council's Committee of the Whole
meeting on February 25. That would enable the full council to have extra time to review and
discuss the draft agreement and ordinance.
W: \Derek \Omar Lee \Council Memo V2.doc
35
INFORMATIONAL MEMO
Page 4
FINANCIAL IMPACT
There is no additional budget requested for this item. If this project gets developed as
proposed, it would generate additional sales and property taxes and fees and additional
requests for public service.
RECOMMENDATION
The Council is being asked to consider this item at the February 25, 2013 Committee of the
Whole meeting, hold a public hearing at the March 11, 2013 Committee of the Whole meeting,
and take action at the March 18, 2013 Regular Meeting.
ATTACHMENTS
Letter from Omar Lee dated January 17, 2013
Conceptual sketches from Mulvanny G2 dated January 23, 2013
Mass and scale sketches dated December 2012
W: \Derek \Omar Lee \Council Memo V2.doc
36
South Center WA, LLC
18230 East Valley Highway Suite 195 Washington 98032
Telephone (425) 251 -1600 Facsimile (425) 251 -1900
January 17, 2013
Mayor Haggerton,
We have enjoyed working with you and your staff on the future development of our
property located at 223 Andover Park East, which was formerly a Circuit City store. We
purchased this property in October of 2010, because we like the location and believe in the future
of Tukwila's Central Business District (CBD).
At our first meeting in late 2010, you and your staff shared your vision for Tukwila's
CBD. This meeting inspired us to seriously consider building a pair of seventeen -story towers
consisting of apartments and a luxury hotel. To date, we have made a significant investment into
evaluating the financial feasibility of this project. However, before taking the next step with the
development, we must have certainty regarding the allowable building height. The current
zoning height limit is 115 feet. This development project requires up to 180 feet excluding
mechanical appendages. We respectfully submit that requesting the City grant us a variance in
the form of a development agreement.
Although the project will change as our plans develop due to lender /investor
requirements and market demand, our current concept is to include 171 hotel rooms and 282
residential units. We will also include some retail and restaurant space on the ground floor.
We believe this project is a great opportunity for the City of Tukwila, as it will set the
stage for additional developments in the CBD. This project will create many jobs and attract
more customers to local businesses. Furthermore, it will improve Tukwila's image by
demonstrating its status as a desirable location for large development projects and pro - growth
attitude.
Our investors and we have a strong track record for developing quality projects (please
see a copy of my resume attached hereto). We have developed many retail and commercial
properties, office buildings, apartment complexes and shopping malls. Our nearest project is only
a few miles away at the Great Wall Shopping Mall in Kent. We transformed what used to be an
abandoned hardware store into a thriving Asian shopping mall that provides hundreds of jobs and
37
is now used as a central location for food, entertainment and shopping. We look forward to
performing a similar transformation with this currently abandoned Circuit City building.
We are very excited to get this project underway and are looking forward to working with
you and your staff. Thank you for your support, time and consideration.
Very Truly Yours,
38
mar . Lee
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Mass and Scale Sketches
December 2012
View from Conference Room 2 in the 6300 Building (existing Circuit City location is circled in photo)
55
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View from the Tukwila Hill Reservoir (existing Circuit City location is circled)
View looking south along Andover Park E
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Looking west over West Valley Highway and Green River towards the Mall
Images provided by the Department of Community Development. All images are approximate.