The day had finally arrived. The day we voted. It went so smoothly and was actually so easy that I almost forgot why I had had a pit in my stomach for the last several months. But then I remembered the history, the issue, the concerns – the desired outcome and all of the work that we, and I do mean the collective we, put into this issue as we tried our best to improve something we inherited.
I’m talking about the proposed Lease Amendment to Building 11 at Magnuson Park, formally known as Council Bill 117196. The legislation was transmitted to Council from the Mayor’s Office in June. This was an amendment to an existing lease signed in 2008. On paper, it was relatively simple, as the description read:
Authorizing the Superintendent of Parks and Recreation to execute an Amended and Restated Lease between the City of Seattle and Building 11 Investors LLC for the renovation and use of Building 11 at Warren G. Magnuson Park.
This lease amendment turned out to be anything but simple.
The original lease agreement between the City of Seattle and Building 11 LLC was passed by Full Council on September 29th, 2008, and is currently in effect. This was well before my time on Council. I was not at the table for negotiations in the years leading up the original agreement. My responsibility was limited to working with the lease amendment. Kindly referred to by wonks as “Version 4,” the legislation was introduced to my Parks and Seattle Center Committee on June 6th.
Building 11 LLC, the development company that holds the 2008 lease, requested an amendment to their original lease for a variety of reasons. They needed 11,000 square feet of additional park land for a play area for a potential daycare tenant. The LLC also saw an opportunity to take full advantage of the historic tax credit program, administered by the National Park Service and to do so they wanted to extend their lease term from 30 years to 40 years. The amended lease also provided lender language and included a non-disturbance clause, also desired by the LLC to accommodate potential tenants.
The LLC asked for amendments, but these requests were neither small nor minor. An additional ten years to the initial term and the addition of over 11,000 square feet of outdoor play space without an increase in rent are significant changes. But most importantly, the LLC’s expectation to offset thousands of dollars annually for public benefits already offered by Sail Sand Point as part of their mission statement did not make sense.
Since I would be ushering the amendment through Council, I read the original lease from 2008 and its crucial attachments. The more I read, the more questions I had.
How were our public benefits defined? How would we determine our offsets? How did the classifications of “primary Parks use” and “other Parks use” come about? Was this a fair deal for Seattle taxpayers?
While I respect the work that took place years ago, I also knew this was our opportunity to make some clarifications and improve some of the terms from the original 2008 lease.
I entered into negotiations with the best intentions. I understood that the LLC needed to see an attractive return on their investment, but I also knew that the City and those who are friends of our parks needed to benefit, too. That’s the hallmark of a truly successful partnership.
I listened intently and I learned what each side wanted and I felt we could reach an agreement. I remained optimistic through many months of discussions and evaluations. Unfortunately, after countless meetings, we reached an impasse. Our good faith efforts were captured in a number of iterations of the lease, specifically Version A and Version C. Copies of both can be found on my website.
After being informed that the LLC would not agree to either version of the amended lease, I made the decision to end negotiations. I made sure that the amended lease included the items that the LLC needed — the lender language, non-disturbance clause, and the square footage for a play area — in hopes that the LLC would see the value and sign the agreement. We put forth terms that were fair for the City of Seattle, the LLC, and for the citizens of this city.
Version A, with an amended Exhibit G regarding public benefit offsets, was presented at the Parks and Seattle Center Committee on August 4th. A motion was made and seconded, and a vote was taken. Version A passed out of Committee with a vote of 3-0, with Councilmembers Rasmussen and Licata joining me with a vote in favor.
That same version went before Full Council on August 8, 2011. After many thoughtful comments were made by my Council colleagues, Council Bill 117196 passed 8-1, with the lone vote in opposition cast by Councilmember Burgess.
Months of negotiations have come to a close. Hundreds of hours have been spent on this issue. Thousands of emails have been sent by supporters of Magnuson Park, the artists, Sail Sand Point, and the LLC. It is now out of our hands and the ball is in the LLC’s court. I continue to believe the amended lease as proposed is better for all parties. Nonetheless, we have learned a great deal in this process and Building 11 will be improved. We will now move on to work with Parks, the Magnuson Park Advisory Council, and the greater community, and we will focus on the vision of Magnuson Park we all know and want it to be. That is, after all, why we all worked so hard.