Template revised September 22, 2016.
COMMISSION
AGENDA MEMORANDUM
Item No.
7a
BRIEFING ITEM
Date of Meeting
March 27, 2018
DATE: March 8, 2017
TO: Steve Metruck, Executive Director
FROM: Geraldine Poor, Regional Transportation Manager
Lindsay Wolpa, Regional Government Affairs Manager
Jeffrey Utterback, Director, Real Estate and Economic Development
SUBJECT: City of Seattle Waterfront Seattle Local Improvement District (LID) Proposal
EXECUTIVE SUMMARY
Seattle’s city center waterfront is transforming to a new place to live, work and play. We are
living through the redevelopment of the downtown waterfront, to create a new regional asset.
Waterfront Seattle is a program of improvements led by the city of Seattle that capitalizes on
the opportunity created by Washington State’s removal of the Alaskan Way Viaduct and the
City’s rebuilt Elliott Bay Seawall. The Port of Seattle has been a significant financial partner in
the overall Alaskan Way Viaduct Replacement Program.
In 2012, the City released the Waterfront Seattle funding plan, for which a key component is a
Local Improvement District (LID), a funding tool allowed under State law, by which property
owners help fund public improvements in proportion to the amount of direct benefit their
property will accrue. City staff will present an overview of the Waterfront Seattle Program and
its funding plan, the LID formation process, and the LID special benefit study currently
underway. The City Council will have two key decision points in the coming year –
consideration of a resolution of the intent to form the LID during the second quarter of 2018
and consideration of an ordinance to actually form the LID during the fourth quarter of 2018.
BACKGROUND
Years of design work and community involvement have formed the waterfront design.
Foundational design plans were released in 2012, and work has continued since then to bring
these ideas to life. The Waterfront Seattle program will provide about 20 acres of improved
parks and public spaces connecting Seattle’s urban core to Elliott Bay. There are multiple
projects included in the program, a subset of which has been identified for partial funding from
the LID. These specific projects include:
a new promenade park from Pioneer Square to the Seattle Aquarium,
a new elevated pathway connecting the waterfront to the Pike Place Market,
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Template revised September 22, 2016.
improved sidewalks and public space along Pike and Pine streets from First Avenue to
Capitol Hill, and
improvements to east-west streets in Pioneer Square and Pike/Pine.
The City will also invest $3.5 million new funding annually from the Seattle Parks District to help
ensure a high-quality park experience, with $1-2 million of additional annual funding and
management support from non-profit community partners, the Friends of the Waterfront.
LID, Special Benefit, and Process
Through a LID, property owners pay to help fund public improvements that directly benefit
their property, based on an amount of increase in their property value directly attributed to the
improvements. For the proposed Waterfront LID, special benefit to each property would be the
difference between the fair market value of each property before and after the City’s
Waterfront Seattle Program builds the park and streetscape improvements. The “special
benefit” does not include general appreciation in value or the increased value from other
projects that are also improving the areas (such as the removal of the Viaduct or replacement
of the seawall). State law governing Local Improvement Districts allow minimal exemptions for
housing authorities and federally owned properties. While they are not assessed for general
taxes, it is expected that other government jurisdictions’ properties are included for special
benefit assessment, which includes State, County, and the Port owned land.
An independent real estate appraiser provided the City his “Summary Memorandum of the
Waterfront Seattle Project Special Benefit Feasibility Study” in August 2017. The City has
maintained a “Waterfront Seattle LID” website, which has included detailed information and
updates related to the effort. The appraiser is currently finishing a study of the special benefit
that each property in the LID study are will receive. This information at a parcel level is
expected in April 2018. Sometime during Q3 of this year, the Seattle City Council will consider a
resolution regarding the intent to form this LID and subsequently during Q4, they will consider
an ordinance to actually form the LID. Following each step with the City Council, there will be
specific protest periods. The complete timeline is available in the accompanying presentation
materials.
At a broad level, there are two phases during the LID legislative process:
• the creation of the LID itself and
• the finalization of the assessment amounts.
The formation of the LID is planned to take place in 2018. As discussed above, the creation
process will include two Council votes, public hearings, and the opportunity for property
owners to protest the formation itself and file legal appeals. If the City Council votes to form
the LID, Council would then consider the finalization of assessment amounts in 2019, which will
include another two votes, public hearings in which property owners may contest their actual
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Template revised September 22, 2016.
assessment amounts, and another legal appeal period. Collections are anticipated to begin in
the fourth quarter of 2019.
At this time, the Waterfront Seattle Program proposed funding sources are:
Waterfront Seattle total cost
$688M
Public Funding
$388M
State
$193M
City
$195M
Local Improvement District (LID)
$200M
Private Philanthropy
$100M
The impact to property owners within the boundaries of the LID is assumed at this time to be
$200 million.
Port of Seattle properties
The Port of Seattle owns multiple properties along the central waterfront: Terminal 46, Pier 66,
Pier 69, and buildings and land holdings in the World Trade Center complex. Initially, it was
assumed all of these Port properties would be included within the assessed area. The final LID
Analysis Area considered in the Waterfront Seattle Project LID Feasibility Study, completed in
August 2017, determined a smaller boundary for the special benefit study (Fall 2017-April
2018). Regarding Terminal 46, the Preliminary Feasibility Study Summary (August 2017)
comments that “the Industrial-zoned Port of Seattle waterfront property does not benefit from
this project due to the lack in change of use and minimal impact of this type of new amenities
on the existing use.” Pier 69 is also excluded from the special benefit study area boundary.
Further parcel level information with respect to special benefit and preliminary assessment
amounts is expected in the Special Benefit Study in early April of this year. The final LID
boundary and amount of assessment will be proposed after the Special Benefit Study is
complete, and is subject to the decision of the city council. City staff presentations suggest that
assessments are often 50-70 percent of the special benefit amount.
At this time, the City has not informed the Port the amount we would be assessed. It should
also be noted that we have not budgeted for it.
Terminology
• Special benefit: Estimated increase in a property’s fair market value as a result of public
improvements.
Special benefit study: Conducted by an independent appraisal firm to determine the LID
boundary and the difference between the fair market value of each property before and
immediately after the improvement.
• Assessment: Portion of the special benefit each property owner will pay. Cannot exceed
the amount of the special benefit.
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Template revised September 22, 2016.
• Assessment ratio: Portion of the special benefit each property will pay. Same ratio will
apply to all assessed properties. (Determined by City Council)
Legal Protections and Guidelines
• Total assessments not more than special benefits
• Total assessments not more than total cost
• Assessments are roughly proportionate to each other
ATTACHMENTS
Presentation
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS
September 29, 2016 –The Commission was briefed on the “Waterfront Panorama: Public
Investment Shaping the City Center Waterfront.” The State, City of Seattle and the
Friends of the Waterfront, described the current work to revitalize the Seattle
waterfront in concert with removal of the Alaskan Way Viaduct, and review the funding
partnership, including private investment.
In August 2013, the Port Commission moved to support Port participation in the Alaskan
Way Viaduct Replacement Program with a port contribution of $281 million so that the
replacement of the viaduct achieves the best balance among retaining and creating
jobs, sustaining regional economic vitality, and benefiting the environment.
Over the last several years, there has been many commission briefings by the city, state and
transit agencies on various aspects of this work.
