As it embarks on a major expansion of its streetcar system, Seattle wants to sell the land below its South Lake Union streetcar-maintenance site to a developer that would construct an office building adjacent to and over the garage.
Early next month the Seattle Department of Transportation will begin a $177 million expansion of its streetcar system downtown and will buy 10 more streetcars to run on the new tracks.
Soon after, the Seattle Department of Transportation (SDOT) wants to sell the land below its streetcar-maintenance facility to a developer that would build a five-story underground parking garage beneath the site and an 11-story office building above it.
Seattle now has two maintenance facilities for its streetcars, because it has two disconnected streetcar lines. Once the new First Avenue streetcar opens in 2020 to connect the First Hill and South Lake Union lines, SDOT will need to expand at least one of the facilities. The agency chose the one in South Lake Union, at the corner of Fairview Avenue and Harrison Street.
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But in July, Skanska, a multinational construction and development firm, which has built office towers at Second and University and in South Lake Union, came to SDOT with an offer. The developer hopes to buy the property next to the maintenance facility and would like to buy the maintenance-facility site, as well.
If the city agrees, and all goes as planned, it should mean the city keeps control of the maintenance facility, but pockets a cool $13 million for selling Skanska the land underneath it and the air above it. But to do it all, the city will have to waive many of its normal requirements for selling public land.
“This is a very intriguing opportunity that was presented to us. It was not one we sought,” Andrew Glass Hastings, SDOT’s director of transit and mobility, told a City Council committee last week. “SDOT certainly has an interest in maximizing the use of this city-owned property.”
Here’s the plan: The streetcar-maintenance facility sits on half of the city-owned lot. Skanska would excavate underneath the other half of the lot to build a five-story underground parking garage.
Then Skanska would lid the new garage and the city would expand the streetcar facility above it. Then Skanska would, on the neighboring property, build the base of a new office building. That building would jut out and hang over the streetcar facility, with 11 stories looming above the maintenance building and rail yard.
Skanska would also demolish a small building at the corner of Fairview and Harrison streets, now used by Seattle City Light.
Legislation authorizing the city to sell the property to Skanska is pending with the City Council, after it passed out of the Transportation and Sustainability Committee this past week.
But the clock is ticking. It’s going to take nearly a year for Skanska to get the necessary permits to do its construction, SDOT officials said. So for the plan to work, the City Council must approve the sale this fall, so there’s enough time to build the parking garage and begin construction of the new maintenance facility by mid-2019, before the streetcar expansion opens in 2020.
“If a developer isn’t able to build below-ground parking, then the SDOT site becomes a much less desirable development site, so it’s unlikely that in the future we’d see an opportunity,” said Sam Spencer a strategic adviser for SDOT.
The condensed timeline means the City Council is being asked to waive many of the normal requirements for selling city property, such as both internal and external review and multiple opportunities for public input.
The speed has caused concern among neighborhood groups.
“Sale of public land is a pretty important deal, and it is for us in South Lake Union particularly, with all the growth we’ve had,” said John Pehrson, a board member of the South Lake Union Community Council who was pushing for the city to look at the site as a possible location for affordable housing.
“It looks like the city is doing this in a hurry and for optimum cost to pay off overruns on capital and operating costs of the streetcar,” Pehrson said.
The city would get $12.9 million for the sale. SDOT proposes using $3.6 million to pay off a loan that was needed to fund operations of the South Lake Union streetcar, $1.4 million for overages on the city’s portion of construction costs on the First Hill streetcar and $4.5 million to increase its order of new streetcars for the coming expansion from 10 vehicles to 11.
The sale is far from a done deal. It still requires City Council approval, and is contingent on Skanska acquiring the neighboring properties, which now house a marketing firm and a jiu jitsu studio, and are appraised at about $6 million.
“This is a unique deal, and I appreciate the kind of, when the opportunity comes along to be able to jump on that,” City Councilmember Mike O’Brien said. “I’m hesitant to commit the city to doing something until we take a little more time.”
Information in this article, originally published Sept. 28, 2017, was corrected Sept. 28, 2017. A previous version of this story incorrectly described the terms of the sale. The city would not lease the land beneath the facility back from the developer. The proposed lease agreement would apply only on an interim basis if all documents are not complete at the time of the proposed sale.