While a proposed park, promenade and walkway would boost property values, some residents call a local improvement district unfair.
The Seattle City Council passed a resolution Monday declaring the city’s intent to create a local improvement district (LID) that would raise $200 million from nearby property owners to help build a new park promenade along the downtown waterfront.
The resolution also states the city’s intent to order construction of the waterfront improvements, which are expected to cost about $700 million in total.
Finally, the resolution directs the city clerk to notify each property owner in the proposed LID about what they would pay and about public hearings scheduled for July.
The vote was 8-0. Councilmember Sally Bagshaw was disqualified from voting because she owns a condominium unit inside the proposed LID.
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Before the vote, many downtown dwellers testified against the LID, arguing they shouldn’t have to contribute more to the new waterfront than other people in the area.
“The city has just decided to take the money from us,” John Bates said.
The council members acknowledged concerns about the ability of certain people to pay but described the LID generally as a fair way to raise cash for an important project.
“This is the beginning of a process,” Council President Bruce Harrell said.
Separately, the council approved an ordinance Monday that will, in the future, allow Bagshaw to weigh in on the proposed waterfront LID.
Authorized by state law, LIDs allow cities to raise money for infrastructure projects by charging nearby property owners who stand to benefit through property-value increases. The owners pay the LID a percentage of their anticipated “special benefits.”
The proposed LID would stretch from Safeco Field to Wall Street and Denny Way, and from Elliott Bay to Fourth Avenue and Interstate 5, taking in about 6,130 parcels.
A special-benefits study published this month reports those parcels would see their values increase a combined $415 million because of the new waterfront.
To raise $200 million, according to the city’s preliminary plan for the LID, the property owners would pay about 48 percent of each parcel’s special benefit.
Under that plan, commercial properties — including office, hotel, retail and rental-apartment buildings — would pay about $175 million. Condo properties would pay about $25 million.
The median payment for a commercial property in the LID would be $7,370, and the median payment for a condo unit would be $2,379, according to the city’s Office of the Waterfront, which is overseeing the project.
Property owners would be able to choose between making their payments at once or over 20 years, with interest.
Properties very close to the waterfront would pay more and properties farther away would pay less.
For example, the owner of an 865-square-foot condo unit on Alaskan Way — based on a projected property-value increase from $519,000 to $534,000 — would pay $7,515.
The owner of an 853-square-foot condo unit on Third Avenue — based on a projected increase from $533,125 to $535,791 — would pay $1,287.
The Office of the Waterfront has an online tool that enables property owners to determine how much they might pay.
The city’s plans for the new downtown waterfront have called for an LID since 2012, and the council initially intended to act in 2014. The project was delayed for years when the machine boring a tunnel to replace the Alaskan Way Viaduct broke down. Now that the tunnel has been dug, the viaduct is scheduled to be demolished soon.
The project is slated to include a promenade, a renovated Waterfront Park, a walkway to Pike Place Market and improved street connections.
Seattle’s plans for the project say the LID would contribute $200 million, the state $193 million, the city at least $195 million and philanthropists about $100 million.
Submitted to Mayor Jenny Durkan and sponsored by Councilmember Debora Juarez, the resolution is just one step in the journey Seattle must travel before it can create the LID and start collecting money.
The city must now notify all the LID property owners and members of the public about the public hearings, which will be held on July 13, 17, 18 and 28.
Rather than have the council host the hearings, Juarez’s resolution calls for the Seattle hearing examiner to conduct the hearings and report back by Sept. 4.
“I wanted someone with a sharper eye to hear public comments,” Juarez said at a Monday briefing.
After the hearings, the council is expected to consider an ordinance that would create the LID. Only then would opponents have the opportunity to vote it down.
Within 30 days, they would need property owners representing at least $120 million of the proposed payments (60 percent of the $200 million) to protest the LID’s creation.
Absent a successful protest, the council would next year pass legislation setting exact payment amounts for each parcel, preceded by a period for individual appeals.
Dozens of residents spoke out against the proposed LID at meetings of Juarez’s civic-development committee earlier this month. On Monday, some argued the LID and other rising costs in Seattle would combine to drive less-affluent people out of downtown.
Property-value increases driven by the waterfront project would immediately benefit only those condo-unit owners who would be willing to sell, Oonagh O’Connor said.
Juarez said LID-payment deferrals would be available for qualifying seniors, low-income homeowners and people with disabilities. Nonprofit-housing providers would not need to pay, and Seattle could offer deferrals for social-service organizations.
The concerns of working- and middle-class people downtown should be taken seriously, Councilmember Kshama Sawant said. But most downtown properties are owned by well-off people and businesses, she said.
The separate ordinance passed by the council Monday will, under certain circumstances, exempt council members from a provision of Seattle’s ethics code.
The code generally bars city officials from matters in which they have a financial interest. That provision stopped Bagshaw from voting Monday and has left her unable to meet with people in the council’s District 7 about the project.
Once Monday’s ordinance takes effect, council members will be allowed to participate in matters that set assessments, taxes, rates and fees and which apply those costs equally or proportionally to other people — as long as they disclose their own interest.