AN ORDINANCE relating to the sale of the surplus property located at 13620 SE Eastgate Way, Bellevue, Washington, in council district six.
By your vote, we have given a do pass recommendation to ordinance 2021 to 32. We will advance into full council and I believe, expedited to next Tuesday's meeting. With that, we will advance to item eight on today's agenda. This item would authorize the executive convey of surplus property owned by the Solid Waste Division and located in Bellevue to three buyers. Through a negotiated direct sale to rose from the council staff would provide the staff report. Morals. The land is yours. Thank you, Mr. Chair. For the record, Terra Rose Council staff. The materials for this item begin on page 36 of your packet. As the chair noted, proposed ordinance 2020 10237 would authorize the executive to convey a 9.81 acre surplus property owned by the Solid Waste Division and located at 13620 Southeast East Gateway in Bellevue to three buyers through direct negotiated sale for nearly $18.89 million. The buyers are proposing to develop the property to contain a men's shelter, as well as workforce housing and affordable housing as described in more depth later in this briefing. But the legislation has some time sensitivity due to a provision requiring council approval within a specific period and executive staff's indication the buyer's desire to close on July 30th. I'm going to start with some background on the property, brief background and the negotiations surrounding the transaction as well as descriptions of the buyers. So I'm not trying to page 37, the Eastgate property is bordered to the north by the factory, a recycling and transfer station with office development along its west and east property boundaries and southeast east gateway to the south. It was purchased in the early 1990s for a potential transfer transfer station location using solid waste funds and accordingly proceeds would accrue to the Southwest Division Operating Fund. The sale has been assumed in the adopted solid base budget for the biennium and in the proposed solid waste ordinance that has been transmitted to the Council. The recitals to the Purchase and Sale Agreement or PSA indicate that in 2019, the County and Congregation for the Homeless entered into an agreement that provided congregations for the homeless the exclusive right to negotiate for the property congregations for the Homeless in King County also previously entered into a purchase and sale agreement as of September 2019. However, executive staff indicate that congregations for the homeless have to secure project partnerships in order for the project to be financially viable. The Transmitted PSA Attachment Age. The proposed ordinance was executed by all parties on or before June 4th, 2021, and would replace and supersede both previously described agreements. Executive staff note that in order to situate a shelter and affordable housing on the site, the proposed buyers completed a binding site plan with the city of Bellevue to authorize the construction and operation of a shelter. And according to the PSA, the binding site plan would also segregate the Eastgate property into three separate properties, each to be acquired by one of the three buyers. I'll now provide some brief background on the proposed buyers. Class at Eastgate is described in the transmitted documents as an affiliate of the Inland Group, a high density residential development and construction company that specializes in income restricted multi-family housing. The Lawrence would acquire the personal identified in the PSA as the workforce housing parcel for the anticipated construction and operation of Affordable Workforce Housing. The Second Buyer Horizon Housing Alliance, or HHC, as described in the transmitted documents as a California nonprofit housing benefit corporation with a mission of producing affordable housing inclusive of support services, HHS would acquire the personnel identified in the PSA as the Affordable Housing. First of all, for the anticipated construction and operation of affordable housing is also anticipated in the PSA that HHS may be replaced by Plymouth Housing Group, a local nonprofit provider of low income housing in King County. Before the sale. Closes congregations for the homeless. The third buyer, or CCH, is described in the transmitted documents as a Washington nonprofit corporation and faith based community organization providing a continuum of services to help men transition out of homelessness. CSA would acquire the parcel identified in the PSA as the shelter personnel for the anticipated construction and operation of an 80 to 100 bed overnight shelter, a drop in center for individuals experiencing homelessness, according to the property summary. The development of this property with a men's shelter would provide the first permanent shelter on the east side of Dane County. Moving ahead to the analysis section of the staff report on page 39, table one on page 39 summarizes the code requirements related to the sale of surplus properties and the status of these requirements for the Eastgate property transaction. I'm not going to go through each one of them and instead and I'm instead going to focus on the appraisal and the use of direct negotiated sale. Negotiated sales will be floating ahead to page 41 for the appraisal. Two approaches were used to determine the value, ultimately culminating in an estimated fair market value of $21.435 million in an appraisal dated October 16th, 2020, which was then validated by a review or. Reasonable, dated March 16th, 2021. The proposed purchase price in the PSA of $18.85 million is equal to the amount of the appraised fair market value less 2.55 million, which the property summary indicates is the estimated cost to remediate the environmental contamination of the property to meet current regulatory criteria, the executive is proposing a negotiated direct sale with the buyer's siting authority and or King County Code that provides that the Council by ordinance may determine that unique circumstances make the sale in the best interests of the public, and also a separate provision in King County code that allows direct sale but is deemed to be in the public interest to restrict the use of a project for the provision of social or health services. The proposed ordinance in front of the committee today would serve as the council's determination, stating that unique circumstances are present because of the community partnerships needed to complete the sale and create a permanent adult shelter to serve the east side of King County. The proposed ordinance would also authorize the executive to convey the property to the buyers consistent with the transmitted PSA. And Table two, beginning on page 42, provides a high level summary of key terms and each section. And again, I'm not going to go through each section of the table, but will instead highlight a few things that are discussed in more detail in the staff report. So now moving on to page 46, you're following along. Article three of the PSA provides terms for and a schedule outlining the percentage of net profits due to the counting should any of the buyers lease or convey their respective parcels within a certain period of time. The percentage of net profits that would be due to the counting decreases over time. As you can see on table three on page 47, with profit sharing for convenience, for sale of a personal going away after the fourth anniversary of the closing date. However, the PSA also provides that the profit sharing would terminate for the two housing entities when they receive their financing and when construction begins on the shelter for FH, executive staff indicate that the financing for the two housing entities has not closed yet. But if everything goes according to their plan, the memo memorializing the profit sharing would only be recorded for CFO H. Moving ahead now to page 47 to describe the use covenants. There are three used covenants that are included in the proposed PSA, one for each of the respective parcels. I'll summarize the key terms of each for the shelter project, CFR each covenants and declares that during the term of the covenant, the use of the person shall be restricted principally to the construction operation and maintenance of a low barrier shelter, but may also be used for the administrative and business operations of CFS and its assigns. The covenant is to be in place until the 20th anniversary of the date the covenant is reported and it automatically terminates upon the expiration of its term for the Workforce Housing Project. The Covenant specifies that each housing unit for the project will be both rent restricted and occupied by individuals whose income at the time of initial occupancy is 60% or less of area, median income or army. Additionally, the Covenant requires Burrus and its successors and assigns to pay residential prevailing wages for the initial construction of the Workforce Housing Project and also shall have an apprentice utilization goal of 15% in importance for King County Code. The covenant shall be binding on all successors and assigns of Florence and is to be in place until the 20th anniversary of the date the Covenant is recorded. The Covenant includes a provision that in the event that Florence successor is in a science, is prevented from building or operating the workforce housing project. During the term of this covenant due to circumstances beyond its control, King County agrees to release and terminate this covenant and in the third use covenant for the Affordable Housing Project. The Covenant specifies that each housing unit for the Affordable Housing Project shall be both rent restricted and occupied by individuals whose income at that time of initial occupancy is 50% or less of am-I. This covenant also has prevailing wage and apprenticeship requirements similar to those I described for the previous covenant. And likewise, this covenant will be binding on all successors and assigns of HHC and is to be in place until the 20th anniversary of the date the Covenant reported. Similarly, this time, it also includes language that King County agrees to release and terminate the covenant in the event that HHC or its successors and assigns is prevented from building or operating the affordable housing project during the term of this covenant due to circumstances beyond its control. And so, in addition to these three covenants included in the PSA that I have just described, attorneys representing the workforce in affordable housing entities have confirmed that the Washington State financing for such housing will require similarly restrictive covenants for a period of, not less, 38 years. Executive staff also have provided draft versions of the anticipated covenants between the Department of Community and Human Services or DHS and each of the proposed buyers as a condition of funding. The Versions Council Staff Review. Currently, state attorneys 50 years and executive staff note that DHS awarded funding through their annual competitive housing capital request for proposals for all three proposed developments on the escape property. Specifically, that includes 3.8 million of these. Each SL and RHD funds were awarded to congregations of the homeless. 8 million of total funds were awarded to Polaris and 5.7 funded by the ISO and 2331 funds. Were awarded. To Horizon. On this, I'll move ahead briefly to discuss the easements and the time sensitivity in addition to conveying the Eastgate property. Article one and exhibits H through M of the PSA would also grant five easements related to the property adjacent to and immediately north of the Eastgate property that is owned by the county and refer to parcel A in the PSA. These easements which comprise of two sewer, one storm drainage, one temporary shoring and a temporary construction easement are summarized on page 49 and then finally moving ahead to the time constraints. As I mentioned earlier, the transmitted PSA includes a provision that the PSA is subject to approval by the council, and this contingency would be. Despite its importance, becomes effective on or before July 15th, 2021, or during a one time extension of 30 days allowed under the PSA executive staff to indicate that the buyers have expressed strong interest in closing on July 30th, noting that if they cannot close by that date, one of the buyers would need a funding extension with the Washington Housing Finance Commission. That would potentially take few weeks. Executive staff have reported that a unilateral extension will be exercised with the hope that the Council will take this proposed ordinance at the July 13th meeting so that the ordinance can be effective in advance of the July 30th closing date. And I would defer to Christopher. Update on whether necessary steps to closing are on track for July 30th. That concludes my remarks. I'm happy to take any questions. And we also have executive staff on the line. You have Tony right, FMD Director. Additionally, Mark Ellenbrook, Director of the Division of Housing Assistance Development of DHS. Jackie Moynihan Assistant Division Director. Is there any questions on DHS funding or their relationship to the project? Thank you, Ms.. Rose. Council members questions on the briefing on the matter before before us. Councilmember Dombroski. Are you seeking to be recognized? Oh, I was just going to inquire about whether an amendment would be in order on this complicated deal. Very impressive work, and I look forward to supporting it. Councilmember Bell. DG Thank you, Mr. Chair. Is a motion in order? It is. I move adoption of our move recommended with the do pass recommendation for ordinance number. And I'm just trying to get myself to. 4137. 2020 10237. Thank you councilmember about the she's moved we give a do pass recommendation to ordinance 2021 to 37. This issue sure can come to number one right there. I would like to second the motion. 1/2 chance in order, but will note your support can further. Do something to me. Member. As the prime council member. Belushi, you want to lead off? Very briefly. I know we're we're sort of out of time here, but the projects that this purchase and sale will support has been in the works for at least seven years. I remember very clearly the meeting of the regional coalition, a regional coalition for housing, our arch, where the mayors of Bellevue, Redmond and Kirkland at the time shook hands and made an agreement that we would develop a full suite of emergency shelter for people in homelessness on East Side. This is the biggest, hardest and last piece of that deal to be to be created. We have supported as a county the women's and family shelter that's opened already in Kirkland. There is a youth and young adult shelter in Redmond, and this would be a men's shelter in Bellevue. But it's turned into so much more than we dreamed of at that time. This proposal, with the services, transitional housing and permanent supportive housing all on the same location, was really going to be a game changer for helping to serve people in the most need in East King County. It's a fantastic project. We're really doing our part. Truthfully, I would have been happy to give the land away. But, you know, we have legal and fiduciary obligations. I think this is a pretty good deal for everybody involved. And I really, really need to thank our POW and facilities management division and and our own central staff, because this is, as has been pointed out, a complicated deal, a lot of moving parts. It took it took the time it took because it was so challenging and technical, but they did a great job. And what's it before us today? I can recommend wholeheartedly and with no reservations, and I hope we will pass it up today. Thank you. Councilmember Lambert. Thank you. Well, I know we don't second, but if you did, I would third. I want to thank three people. And this, as people have said, has been a long time in the making, finding this land, putting together the coalition, getting the demographics together. The list goes on and on. Talking with the communities, just amazing. So I want to thank three people. One is mayor about chief who was part of the championing early on, as was just stated, Kevin Wallace on the council at the time, who has followed through with this and taken a big leadership role. And then somebody that many of you may know, I may not know Steve Roberts. I met Steve many, many years ago, and he came to me and said he wanted to do something really important for the community. And he was one of the early starters of the men's shelter and he has retired in the fairly recent past , but I don't know, a decade, decade and a half. He was such a champion and I watched how he negotiated with these people's lives and put people's lives back together day after day. And so on this big occasion. I would also like to call out Steve Roberts for the work that he did, too, because there was lots of good work behind the scenes from lots of people. But those three I wanted to acknowledge. Thank you, Mr. Chair. Mr. Chair. Thank you, Councilmember. Thank you. First of all, I want to thank the two individuals in particular that Cathy mentioned. One is Mayor Baldacci and two is Kevin Wallace. They proved that to people who were coming from different parts of the room to come together to create a house. And they worked together on that council and they had different views on the world, but they had a centralized view of how they work together, and both of them deserved the credit from the East Side and of the East Side. I just want to recognize that in federal way, the Horizon Housing Alliance has had a very successful senior housing built here. And this organization, which has roots in Eastern Washington, is their executive director. Someone I've got to know and I will tell you flat out, it takes a partnership. And we made the great and the best partnership with this organization. They are committed to providing quality housing in a good environment, and I think the East Side will be beneficial with that relationship and that partnership. And again, I want to thank both Mayor Narducci and then Deputy Mayor Wallace. Thank you. Further discussion. See none. Council member Belushi to close. I urge everyone support and I really did only do the internal things. And so I'm not going to belabor the external things, but let's just say it takes a village and there are many partners externally to make this happen as well. And starting with the city of Bellevue, who came today and the partners that we're working on this purchase and sale agreement with, I do urge everyone support. Thank you, madam. Quickly to please Cotterell. Thank you, Mr. Chair. Councilmember and party to Councilmember Dombrowski. I come from member done. By. Councilmember Colwell Councilmember Lumber High. Councilmember Oscar I. Councilmember one right there, I. Council members I. Hi. Mr. Chair. Hi. Mr. Chair. The vote is nine zero now. Thank you. By your vote, we have given a do pass recommendation to ordinance 2021 to 37. We will expedite that to full council this coming Tuesday. It is now 1206, unless there is objection. The chair would intend to adjourn the meeting and take up the remaining ordinance, either the next not having consulted the timelines carefully, either the next town meeting, or would be very supportive of taking this to full council. Is there interest in. Some discussion this hour. To the next full council would be great with me. Mr. Chair, if that's permissible. But it. As chair of the committee, I'll have I'll be supportive of relieving the committee of it, bringing it to a full council. Thank you. All right, then with that, I want to thank everybody for their time and attention today. And the committee of the whole is adjourned.