Composed partly of land left over from the city’s reconfiguration of Mercer Street, the site spans 2.86 acres, is located steps from Amazon’s headquarters and can accommodate more than 1,300 apartments or 1 million square feet of commercial space.

Share story

Seattle officials are narrowing in on an offer for city-owned properties known as the “Mercer Mega Block” and hope to open negotiations soon with the team behind the proposal.

They’re not yet ruling out some other offers and are keeping the leading plan under wraps for the moment, saying confidential talks will yield the best deal for the valuable South Lake Union site.

Meanwhile, an activist alliance is urging transparency and pushing for as much of the land as possible to become affordable housing, rather than offices and pricey homes.

Mayor Jenny Durkan’s administration intends to disclose details about the proposals before sending an agreement to the City Council for review and approval. The council passed a resolution last year laying out its priorities for the site, including affordable housing.

“There will be further public process but we think there’s an advantage in not sharing all the information right now,” budget-office director Ben Noble said.

Composed partly of land left over from the city’s reconfiguration of Mercer Street, the Mega Block spans 2.86 acres, is located steps from Amazon’s headquarters and can accommodate more than 1,300 apartments or 1 million square feet of commercial space.

The Durkan administration issued a request for proposals in July, seeking a purchase or long-term ground lease for the massive site.

The administration received seven proposals and sent six to an evaluation committee with eight city-department representatives and one noncity representative, said Steven Shain, a budget-office project manager. The noncity representative is Kate Joncas, a former deputy mayor who now is an independent consultant.

The committee decided to allow all six teams to subsequently make “best and final offers,” Shain told the council this past week. Once those were submitted this month, the evaluation committee identified a No. 1 offer among a top three, he said.

Both the administration and the team behind the leading offer need to carry out due-diligence work before talks can begin, Shain said. But assuming that work goes well, negotiations could start early next year and rough terms could be agreed upon in spring 2019, he said.

In the meantime, officials want to continue conversations with the other top teams, said Shain, who shared additional details with the council in a closed-door executive session.

The Durkan administration’s request for proposals said the city would prioritize plans with affordable-housing components, such as offers with at least 175 units of on-site affordable housing.

That number should have been larger and should have been a requirement rather than a recommendation, according to the Mercer Mega Block Community Alliance, which in October called on the administration to cancel the request for proposals and start over.

The Alliance’s members, including the Sierra Club’s Seattle chapter, Real Change, the Transit Riders Union and 350 Seattle, say the Mega Block is uniquely suited for affordable-housing development due to its location near amenities, jobs, transit and services.

Many South Lake Union apartment buildings are too expensive for the janitors, security officers and waiters who work in the neighborhood. The city could transfer the site to a nonprofit at a steep discount.

“We believe this public land should be used to further the city’s environmental-justice mission,” said Leah Missik, a Sierra Club board member. “More affordable housing is what we need to make sure people don’t have to drive long distances to get to work.”

The Durkan administration has pressed ahead, so now some Alliance members are asking for more transparency and counting on the council to ensure enough affordable housing is created, Missik said.

“We would like the process to be more open,” she said, making the case that public pressure could help the city drive a hard bargain.

But Noble said the Durkan administration’s goal has been to seek the best balance between cash that could be used for affordable housing elsewhere and affordable-housing on site.

Developing most of the Mega Block as affordable housing would be very expensive because the site is so large and is zoned for high-rise construction, he said.

In past years, Seattle borrowed more than $30 million against the land to help pay for the Mercer Street project and to address homelessness, and that money must be repaid, Noble noted. Part of the property was purchased with gas-tax revenue, complicating development by the city, and the site must undergo environmental remediation, he added.

Making the proposals public now would weaken Seattle’s position because the teams would learn about each other’s offers, he said.