HomeMy WebLinkAboutMisc communicationDear Mike,
This past week, I did extensive research on the City's Leasehold property to better
understand its market lease rates, given the leasing difficulties this property has faced,
and unfavorable information I have received from Tenants and other sources. My goal
for this property is to create a positive environment for the Tenants and Downtown, and I
am willing to take on the challenges. My partners have taken a hard look at the past
difficulties and challenges on this property and decided not to take ownership in it, but I
am willing to buy them out if this transaction moves forward.
I would like to recap our negotiations with the City to date, briefly go over discrepancies
in the appraisal value, and propose a solution that I feel is fair and workable within the
City guidelines.
When the City first approached us, we did not really want to sell our property, but was
willing to work toward an agreement where we could trade into another suitable property.
The City originally made us an offer as follows: The City's Leasehold property in
addition to $1,757,000 to be paid by the Developer. Unfortunately, the City was unable
to complete the transaction after being made aware of state regulations regarding the
transfer of property. In our negotiations from then on, the City has stated that they would
like to give us the consideration we want for our property, but they must stay within
certain guidelines.
Our current agreement is based on the value of the recent appraisal on the City's
Leasehold property. The cash amount received in addition to the City's property was
reduced from $I;757,000 to $1,000,000. I believe that this would be an equitable trade if
the appraised value of the City's Leasehold property is accurate. This value is best tested
by determining whether the lease rates used in the appraisal are obtainable.
Over the past few months, I have been focusing my efforts on searching for a
replacement property as well doing some research and limited marketing of the City's
property in order to estimate its' lease value. When the appraisal was first received, I had
a chance to glance through it before a meeting at the City, but was not allowed to have a
copy. I did not scrutinize the numbers in the appraisals' analysis until recently.
The appraiser used a 10-year discounted cash flow analysis, which is very difficult for
one to interpret clearly just by observing it. An important factor in the analysis is the
estimated lease rates, and if they are obtainable. The appraiser's estimated lease rates
used in the analysis are $15.00 per square foot currently, and increasing 3% annually to
$20.16 per square foot in the final year. These rates must be achieved in order to arrive at
the appraised value given.
I feel that the appraiser's method of arriving at this rate is inaccurate. The Lease
comparables that were used were completely different property types; newer retail
buildings on Auburn Way and `A' Street with significantly higher traffic counts.
Following, are some facts from my experience and research:
This is a difficult property to lease. There have been only three viable leases in
the Property's history, one of which went out of business. I was the leasing agent
involved in all three, and it was the result of nearly 2 years of marketing of the
property. The current rates are $13.40 and $13.50 per square foot, triple net. The
largest of these, at $2,368 per month, provides 60% of the current income. The
Tenant recently stated that he has been looking into other properties and will
move when his lease is up next year unless some issues are resolved. He stated
that he will want a reduction in his rent because of the high triple net costs and
other issues with the property.
2. After being unable to lease most of the space, over half of the building was leased
at rates of $0.00 and $1.00 per square foot which actually appears to be a net loss
to the Landlord because the Tenant only pays a portion of the triple. I was told by
a few sources that the deals were made because of the difficulties leasing the
space and the desire to get Tenants in the building.
I was recently provided with an estimated market value of the vacant coiner unit
that was done by the current property manager. This space is considered to be the
prime space. She had estimated a market lease rate of $12.00 per square foot,
plus triple nets.
4. 564 sq. ft. located in the back corner of the parking garage was used as a small
radio station. They were allowed to occupy the space for free, and just pay their
share of triple net expenses; In the appraisal analysis, this space was also valued
at $15.00 with 3% increases. In my opinion, due to several undesirable features,
this space would rent for much less than in the appraisal
In order to obtain the value stated in the appraisal, one must take over this
challenging property and quickly lease up the vacant space, or space that becomes
vacant, at rates higher than market for this property. According to the appraiser's
analysis, the Green River space, that was not able to be rented, and offered for
virtually no charge, must be re -leased immediately upon lease expiration at
$20.00 plus triple net.
From my research and experience on this property, I am certain that the assumed income
in the appraisal analysis is optimistically high resulting in an overvalued appraisal.
An approach sometimes used in selling properties for appraised value with vacancies in
question, is for the Seller to guaranty all, or a portion of income on vacant space. I am
proposing that the City guaranty rent on the small space in the back of the garage since it
is greatly overvalued in the analysis. The space will be actively marketed, and if, in fact,
it is able to produce the income, then this issue will not matter. This should fall within
the guidelines that the City must follow, and does not increase the consideration being
offered.
One of my concerns has been ability to maintain a positive cash flow with this property
given the rental history, high expenses, and other issues with the property that were not
addressed in this letter. I am willing to put in the effort and resources necessary to
hopefully make this a successful project and enhance the downtown. I have put in
countless hours on this transaction over the past several months in negotiations and
searching for a replacement property, and would like to move toward closing.
Sincerely,
Harold Gambini
Rob Roscoe
From: Harold Gambini [hgambini@msn.com]
Sent: Wednesday, October 18, 2006 8:41 PM
To: Rob Roscoe
Subject: Terms of Sale for Properly Sale/Exchange
Rob,
Al Following up our conversation, we would be willing to selUexchange our property to the Ciity for
$1,050,000.00 cash, plus Assignment of the Leased Commercial Space under the following terms:
45 parking spaces in garage
Not responsible for cost of security ers F s
City pays excise tax due on sale of our propery D
ll 206-406-3525.
If you have any questions, please came at
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Page 1 of 4
Brenda Heineman
From: Dan Heid
Sent: Wednesday, April 04, 2007 10:23 AM
To: Pete Lewis; Brenda Heineman
Cc: Shelley Coleman
Subject: RE: A better deal?
Mayor: I agree with your comments, I
just met with Brenda and went over the "position" Brenda
and shelley
are working from. That,
together with
your response satisfies me that we are on solid ground. I
do not feel we
need to meet further on
this matter. Thank
you.
From: Pete Lewis
Sent: Wednesday, April 04, 2007 10:19 AM
To: Brenda Heineman; Dan Heid
Cc: Shelley Coleman
Subject: RE: A better deal?
Thank
you for all
of
your comments.
I have considered Councilmember Wagner's
concerns and I think
provided a
proper
response.
If
you do not agree
with any part of that response after reading it
do let me know.
From: Brenda Heineman
Sent: Wednesday, April 04, 2007 10:15 AM
To: Dan Heid
Cc: Pete Lewis; Shelley Coleman
Subject: RE: A better deal?
Rich: I think the Mayor's response is accurate on the valuation. The deal is 1.8 Million as rich suggests. B
From: Dan Heid
Sent: Wednesday, April 04, 2007 10:14 AM
To: Brenda Heineman
Cc: Pete Lewis; Shelley Coleman
Subject: RE: A better deal?
Rich's comments below. We ought to at least have considered them -once we have them.
From: Brenda Heineman
Sent: Wednesday, April 04, 2007 10:13 AM
To: Dan Heid
Cc: Pete Lewis; Shelley Coleman
Subject: RE: A better deal?
Dan: We met on this yesterday. What am I missing. B
From: Dan Heid
Sent: Vednesday, April 04, 2007 50:10 AM
To: Pete Lewis; Brenda Heineman
4/4/2007
Page 2 of 4
Cc: Shelley Coleman
Subject: RE: A better deal?
I do not know the valuation issues, but it is important for us to hammer that out - to make sure that we can justify
it. If the City's appraisal gives us that - together with the factors Brenda has identified, that is good. If they do not
add up, then we need to go back to the drawing board. Should we meet (or at least should Shelley and Brenda
meet)?
From: Pete Lewis
Sent: Wednesday, April 04, 2007 10:03 AM
To: Brenda Heineman; Dan Held
Subject: FW: A better deal?
From: Pete Lewis
Sent: Wednesday, April 04, 2007 10:02 AM
To: 'Rich Wagner (rkwagnerr@comcast.net)'
Subject: RE: A better deal?
I'm going to respond back but could I ask a favor in the future? This is all part of 'once I know, I know". Most of
what you wrote belongs in executive session but has become a part of the written record by the email. Per Brenda
and Dan that now requires me to make a written response. If we could talk some of these things through in the
future it would then require a less formal process. I will send a copy of this email to Sue less this part which
remains between the two, of us.
You noted several problems here; let me go through them perhaps a little out of order.
First, we have been negotiating with Gambini since around July of 2005 on this deal with formal talks beginning in
early'06 to set the time frame. We've been through nearly 30 rounds of talks. We have exhausted all I know how
to do in negotiating. This process gets us to the point of getting out of the retail landlord business that we have no
ability to be in to begin with, out of an overvalued asset we have no expertise at re -valuing while adding to new
development.
Second, the property is not worth what it cost. In an appraisal the Cost Evaluation section is part of the process
but has little meaning or consideration in the final value. Fred used to talk about this quite a bit that we paid too
much for this space. He was absolutely right. He knew it, I knew it. Coming into this as a new elected I knew it but
never thought of it as a bargain but a future inducement for downtown development.
The Tenant Improvements were too much and added little value to the appraisal. TI's are a function of the value
of that tenant and their rental income to determine value. Most of the space is to the college at a low rent. That
was to bring more people to downtown to provide a higher number of people spending money. That is working for
the city but is not a positive asset to a potential buyer. Specifically bringing Green River College in is bringing
more new people downtown which is a good thing for the city. Conversely when trying to sell the property the
majority tenant with a good portion of the building locked in to a low cost lease for possibly eight more years has a
dramatic effect on value of the property now.
Value is set upon market analysis and the more specialized a property then the greater degree of difficulty in
selling the property (smaller market of potential buyers) and therefore a lower value.
Third, the parking space values are very much affected by the fact that parking in the station is free. It does not
matter what was paid, only what value to others would be, dramatically reducing the value. Was it a bad deal to
pay so much for parking spaces? I think it was the best decision on this whole process Council made not from an
income perspective but it was the only way Council got Sound to build more spaces which the entire city knew we
would need.
A property is worth what someone is willing to pay for
4/4/2007
Page 3 of 4
Talking to Brenda I also got this additional information: One of the reasons we came up with the valuation we did
was because Harold would be tied into a lease with Green River community College until 2010 at $610.42 a
month with a right to extend for five years and the rent appears to be locked in. Also this is the largest amount of
space at the Transit Station over 7,000 square feet. The next largest space is 2900 square feet-- the space we
have been unable to rent for over two years now (it is set up for a restaurant but we have never run the gas line --
this should cost between $6 and $10,000). Also the space where the radio station use to be (Su. 100) is very
small (564 sq.ft.) and has limited appeal (maybe a one person insurance agent would be interested). Gambini
knows that it will be some time before a demand for space at the transit center will occur.
So, we are fortunate that we have an opportunity to acquire a building that will be used to further economic
development and the public benefit that would be realized from this real estate transaction would more than justify
the purchase and sale price.
Also, Gambini has been involved with the Transit Station as one of our rental agents its looks like from the file
since 2003 and I believe that informal talks with him have been ongoing since 2005 on the purchase of his
building. AI Hicks say more formal talks took place in the beginning of 2006.
I'm not sure how to negotiate further on this deal with any other party to get us out of this retail space. Please do
come and talk about it.
Pete
From: Rich Wagner (rkwagnerr@comcast.net) [mailto:rkwagnerr@comcast.net]
Sent: Wednesday, April 04, 2007 12:49 AM
To: Pete Lewis
Subject: A better deal?
Pete - I went back through my Sound Transit Garage files tonight and confirmed my suspicions at Mondays
Council Executive Session that Harold Gambini is getting too good of a deal by allowing us only $675,000 value
for the Commercial Space 99 year lease. Following are the value elements as I see them:
(1) $700 000 so-called "purchase price" noted on several spread sheets that Gambini made when he was
convincing us in 2003 that the Commercial Space was a viable business venture (recall Councilmember Poe's
skepticism). This $700,000 would be a portion of the $2,105,696 parking garage total deal that we made with
Sound Transit. I don't have any evidence of how that $700,000 portion was derived except it is suspiciously equal
to $50 per square foot for the 14,000 sf of leasable space which sounds like a property value estimate made by
someone, e.g. Gambini.
(2) The value of the 180 parking spaces that the City paid for in the garage construction: ($2,105,696 -
$700,0000) / 180 spaces = $11,143 per space seems too high. Actually I remember us valuing them at more like
$8,000 per space which puts even more suspicion on the $700,000 "purchase price" number as being too low. In
today's market they would cost $15,000 per space. If we use just $8,000 per space for the 42 spaces that
Gambini wants in order to satisfy his parking requirements for 14,000 sf of retail, etc., that's very conservatively
$336.000 of additional value of parking associated with the commercial space.
(3) Tenant Improvements, project C2036, Council agenda 9/10/03 adds up to $1 029.614 with permits,
contingency, etc. Not all of these TI's are useable by new tenants but the heating, etc. would be, so let's sav that
$400 000 of it is useable.
(4) That adds up to a conservative Total Value of the Commercial Space: $700,000 + $336,000 + $400,000 =
$1 436 000, double the $675,000 that Gambini has offered.
So I think we should be able to negotiate a better deal for the city. At least we should get back up to the $800,000
we thought we were getting in the offer of a couple weeks ago which is still only 56 cents on each dollar of value.
If you generally agree with these numbers, it would be good to share them with Sue. But I think it would
be counter -productive to share them with other Councilmembers
4/4/2007
Page 4 of 4
-- Rich Wagner
4/4/2007
Page 1 of I
Brenda Heineman
To: Shelley Coleman
Subject: Lease Space -Sound Transit Station
Hi Shelley: The following is information concerning the lease space at the Sound Transit Station which is a part of
the property transaction we are in the process of finalizing with Harold Gambini. As you know, we are offering
cash for his building and parking lot, plus a long term sublease for space with 42 parking spaces at the Sound
Transit Station for a total of $1,800,000.00.
We presently have a lease for the largest amount of space available (over 7,000 sp.ft) with Green River
Community College for $610.42 per month until at least 2010 with an option by the college to extend it for another
five years at the same rent.
The next largest space available is 2900 square feet and we have been unable to rent this for over two years. We
never put in the gas line to make this more atractive to restaurant businesses and that will cost between $6,000
and 1$10,000. � — /)
Also, the lease with Primerica n�cily,,,S�pa�c% 105, expires 5114/08 and they have voiced there displeasure at the
amount of parking they are allotted for their customers and employees as well as the amount of money they have
to pay for shared space.
The other space (Space.100)
is 564 sq.
ft. and is
not suited for
many businesses so it is limited in its appeal, i.e.,
a one person insurance
agent
perhaps
would be
interested.
Edward Jones in Space 120 has their lease expiring in April of 09.
In light of the above and the public benefit that will be realized from the property acquired from Gambini, we feel
the valuation is appropriate.
Brenda Heineman
Director of Human Resources
and Risk Management
4l4/2007
Page 1 of 1
Brenda Heineman
From: Brenda Heineman
Sent: Wednesday, April 04, 2007 9:00 AM
To: Pete Lewis
Subject: Sound Lease Space Facts
Hi: One of the reasons we came up with the valuation we did was because Harold would be lied into a lease with
Green River community College until 2010 at $610.42 a month with a right to extend for five years and the rent
appears to be locked in. Also this is the largest amount of space at the Transit Station over 7,000 square feet.
The next largest space is 2900 square feet-- the space we have been unable to rent for over two years now (it is
set up for a restaurant but we have never run the gas line --this should cost between $6 and $10,000). Also the
space where the radio station use to be (Su. 100) is very small (564 sq.ft.) and has limited appeal (maybe a one
person insurance agent would be interested). Gambini knows that it will be some time before a demand for space
at the transit center will occur.
So, we are fortunate that we have an opportunity to acquire a building that will be used to further economic
development and the public benefit that would be realized from this real estate transaction would more than justify
the the purchase and sale price.
Also, Gambini has been involved with the Transit Station as one of our rental agents its looks like from the file
since 2003 and I believe that informal talks with him have been ongoing since 2005 on the purchase of his
building. AI Hicks say more formal talks took place in the beginning of 2006.
If you need any other information, please let me know
B
4/4/2007
Page t of 2
Mark Ellingson
From: David Osaki
Sent: Wednesday, June 28, 2006 9:00 AM
To: AI Hicks; Mark Ellingson; Jim Tinner; Jeff Stottlemyre
Cc: Steven Pitcher; Paul Krauss
Subject: Sound Transit -Tenant Improvement Work at Auburn Station Garage
All,
AI Hicks set up a meeting for tomorrow to discuss a letter Sound Transit sent the City re:
tenant improvements at the transit center (Jeff, Jim, a copy of the letter has been forwarded to
you).
The Mayor has asked that we respond. So when you read the ST letter look at it in context of
developing some type of response. Below is the framework for a possible response, but
certainly it can be changed I don't know'enough about the background behind the permitting
of the work and coordination with Sound Transit to date so I will need some help filling in the
blanks.
(AI, we should still see if we can get someone from Legal to attend tomorrow since some of
this is a contract issue and their claim about increased liability.)
Thanks.
DRAFT
June 30, 2006
Ms. Ellen Gustafson
Deputy Director, Transportation Services
Sound Transit
401 South Jackson Street
Seattle, Washington 98104-282ti
SUBJECT: Tenant Improvement Work at Auburn Station Garage
Dear Ms. Gustafson:
This letter is in response to your June 22, 200ti letter to Paul Krauss regarding tenant
improvement work at the Auburn Station garage. Paul is out of the office at this time but, after
reviewing and discussing your letter with City staff, I find that a timely response is warranted in
advance of his return.
Your letter generally raises two issues -one related to the building fire alarm control system
and a second related to the installation of a wetlab by Green River Community College
(GRCC) and a desire to see related drawings.
6/28/2006
Page 2 of 2
With respect to the fire alarm system, we would note that Green River Community College
hired a contractor (Guardian ??) that was specifically recommended by Sound Transit. This
recommendation was made by _WHOEVER FROM ST RECOMMENDED THEM_. In
hiring this contractor to meet Sound Transit's advice, GRCC paid approximately $5,000 more
than originally intended. (NEED SOMETHING IN HERE ABOUT WHETHER OR NOT THE
FIRE ALARM CONTROL SYSTEM WAS ACCESSED W/O SOUND
TRANSIT AUTHORIZATION...IF IT WAS PART OF THE PERMITS SOUND TRANSIT
DECLINED TO REVIEW -SEE BELOW...etc))
The second issue raised in your letter regarding the wetlab and related tenant improvement
plans is also one we would like to address. We are very surprised that Sound Transit is
requesting a review of the drawings and requesting a meeting to discuss the use of this lab at
this point in time. Last WHATEVER MONTH, City staff contacted Sound Transit and offered
your agency the opportunity to review the GRCC tenant improvement plans for the wetlab.
Sound Transit staff declined our offer to review the plans at that point in time and advised that
we could proceed ahead with WHATEVER WE COULD PROCEED WITH.
CONCLUSION
Needless to say, we feel the City has made a good faith effort to keep Sound Transit apprised
of tenant improvement activity at the Auburn Station.
At this point in time, the status of the GRCC wetlab is WHATEVER THE STATUS IS.
NEED TO DECIDE WHAT WE WANT TO DO FROM HERE: Let them look at the plans?
Meet to discuss their role in reviewing future plans?
Please contact should you have questions.
Sincerely
David Osaki
Community Development Administrator
cc: Mark Ellingson, Facilities Manager, City of Auburn
Paul Krauss, Planning Building and Community Director
Jim Tinner, Building Official, City of Auburn
AI Hicks, Economic Development Planner
6/28/2006
Mark Ellingson
From: Mark Ellingson
Sent: Tuesday, June 27, 20061:00 PM
To: Pete Lewis
Cc: Brenda Heineman
Subject: ST Garage - GRCC WETRC Lab
Mayor,
I had called John Sheldon, Facilities Manager for Sound Transit, prior to attending the first pre -con
meeting for the GRCC WETRC lab on 4/10/06. It was a courtesy call to let him know what was going
on and to give him an opportunity to participate in the project. He told me he didn't need to be
directly involved, but that he would like to see copies of the project drawings and then get as-builts at
the project's completion. In light of the previous problems they had experience with the Auburn
Station my expectation was that John would jump at the chance to be involved, and his casual
response surprised me. During that conversation he also commented on the fact that the contract
between the City and ST didn't give them the "right" to review tenant improvement plans.
John also told me that because of the previous problems with the garage's fire alarm system, and
work ST had done to rebuild it, he wanted GRCC to use Guardian Fire Protection to prevent voiding
ST's warranty with Guardian. I told him I would pass that information on to GRCC at the pre -con,
which I did. Tom Weisweaver, GRCC's Director of Facilities agreed to use Guardian for the fire
protection work on their project and signed contract documents to that effect at a subsequent pre -con
meeting in my presence. My understanding was that that decision added $5,000,00 to the project
cost since Guardian had not been the low bidder.
Per his request, I also sent John Sheldon a copy of the contractor's design submittal package around
the third week of May.
From my perspective, Sound Transit's response to the WETRC project has been quite frustrating.
On the one hand, when given the opportunity to directly participate they declined. But on the other
hand they asked me to provide them with project design info and expected me to watch out for their
best interest where the fire system contractor was concerned, which I did with success. And now
they have concerns about the sewer system.
I gave them the opportunity to come and be involved with the WETRC project from the start and they
declined. Because of that I find it hard to feel much sympathy for their concerns at this point in the
project.
I'll work with Dave and Al to formulate a response to Ellen Gustafson's June 22"d letter
Let me know if you need anything else regarding this issue.
Mark
Vo
SSOUNDTRANSIT P BOARD CHAIR
✓UyJohn W. Ladenburg
p
2 ?0p6 Pierce County Executive
June 22, 2006 NI NG ��,' RIWIVj. BoCo PA n etCE Marshall CHAIRs
Bellevue Councibnember
Mark Olson
Everett Counribmember
BOARD MEMBERS
Paul Krauss
Julie Anderson
Director of Planning and Community Development Tacoma Councilmember
City of Auburn Mary -Alyce Burleigh
25 West Main Street Kirkland Cmmcibnember
Auburn, WA 98001
Fred Butler
Subject: Tenant Improvement Work at Auburn Station Garage Issaquah Deputy Council President
Doty Constantine
Dear Paul:
King Comity Councibnember
Dave Enslow
I am writing to you in hopes that the City of Auburn and Sound Transit can work Stunner Mayor
together to resolve a serious situation at the Auburn garage. Recently some tenant Doug MacDonald
improvement work was done for the City of Auburn's new subtenant, Green River Washington State Department
Community College. As part of this work, the City's contractor accessed the of Transportation Secretary
building fire alarm control system without authorization from Sound Transit. Richard Morin
Edmonds Comrcilrnember
This was the second time this has occurred. On a previous occasion, during system Richard McIver
testing Sound Transit found devices in the City of Auburn's tenant spaces improperly Seattle Cmmcilmember
connected to Sound Transit's fire control system. Other than the safety issues,
having third parties access Sound Transit's fire alarm system can result in the Greg Nickels
Sentde Mayor
following consequences:
• Invalidating warranties Julia Patterson
King County Cmorcilmember
• System failure/shut clown
• Increased costs to both Sound Transit and the City for resulting repairs Larry Phillips
• Capacity issues for future expansion
chair, King County Couimil
• System integrity of programming and device labeling Aaron Reardon
Snolmnrisb County Executive
We understand Green River Community College has or is in the process of installing Ron Sims
a wetlab in the space they are leasing from the City of Auburn. We also understand King County Executive
this wetlab may need to be corrected to our sewer system. Sound Transit has serious Claudia Thomas
concerns with the installation and use of this wetlab and any increased liability this Lakewood Mayor
]ab may pose for us as the property owner. Sound Transit would very much like see
the drawings and discuss the use of this lab with the City of Auburn. Pete von uer
Vice Chair, King Coon County Council
CHIEF EXECUTIVE OFFICER
Joni Farl
Central Puget Sound Regional Transit Authority •Union Station
407 S. Jackson St, Seattle, WA 98104-2826 •Reception: (206) 398-5000 •FAX: (206) 398-5499 • vrvnvsoundtransit.ory
Paul Krauss
June 22, 2006
Page 2 of 2
Although Sound Transit's lease With the City of AuUutn does not give us the ability
to review non-structural tenant improvement plans, we would like to have the
opportunity to review any plans with you in order to address any potential concerns
or impacts to the building and its systems. We believe this would help to prevent any
future problems. John Sheldon, our Facilities Manager is available to meet with you
to discuss this issue and reach an agreement on how we can work together in the
fiuhue. He can be reached at 206-398-5053.
Sincerely,
Ellen Gusta on
Deputy Director, Transportation Services
Cc: Jolm Sheldon
Joan Coumou
Al Hicks
Mike Kamenzind
Page 1 of2
•
i!
To: Municipal Services Committee
From: Paul Krauss
CC:
Date: 6-05-06
Re: Auburn Station Parking Availability
Interoffice Memorandum
The Aubum Station Parking Garage contains 564 parking spaces. Prior to the wnstmction of the
garage, the City of Auburn purchased 180 spaces to meet downtown parking needs not associated
with Metro or Sound Transit riders. Of that number, 83 were paid for by the owner of the New Truitt
building to satisfy the parking requirement associated with the building's construction Of the
remaining amount, 40 were created to satisfy the parking requirement associated with the Auburn
Station Commercial Space. The remaining spaces are potentially available to assist future
development satisfy its parking requirement and currently provide downtown parking for businesses.
Along the way the City decided that it would offer dedicated parking spaces for our tenants and for the
owners of the Truitt Bldg. A formula was established that offered one Permit Parking space for each
1000 sq it of leased space for the private sector tenants of Auburn Station and Truitt (GRCC which
was offered lower rents was not included).
The City has entered into an agreement with the Auburn Downtown Association (ADA) to help
downtown merchants and landlords resolve long term parking concerns through establishing a permit
Program. Administered by the ADA, the permit program provides for spaces in eac unicipal short
term parking lot to be used as "permit spaces". In the Auburn Station Garage, City spaces have y0
been set aside as permit spaces. The City is also contracting with the ADA to se its permit program
to manage the parking spaces assigned to our tenants and to the Truitt Bldg.
Sound Transit is experiencing ridership rates considerably beyond what had been projected. Today,
with less than 50% of the promised service and no reverse commute, Parking at Auburn Station is
essentially 100% full. Currently, the City spaces reserved for Permit Parking are being used by
commuters as long term parking.. At this time the City proposes to begin enforcement of the permit
requirement for the 63 reserved spaces in garage on July 1". This will mean that the City
understands that 117 of our parking spaces can continue to be used by commuters and/or customers
of downtown businesses, at least for the interim. I
04
AUBURN * MORE THAN YOU IMAGINED
Page 2 of 2
The City informed Sound Transit staff of our needs to enforce parking restrictions this week. The
intent was to give our partners in the building ample notice and to encourage them to work to find
alternative parking and/ or means of arrival (such as van pooling) for their commuters. Sound Transit
was also told that the City will need to reclaim more of our parking over time as needs continue to
grow.The City and Sound Transit will provide signs informing commuters that enforcement of the
permit requirement will start July 1.
Enforcement of the permit requirement will result in reduced availability of parking for commuters.
This disruption could be aggravated by potential construction projects that may develop in the near
future. The Mayor and City staff have met with Sound Transit to find solutions to the impacts
associated with the substantial volume of commuter traffic engendered through Sound Transit
operations. At this time immediate solutions are not available. Among the alternatives being explored
are using van pools or commuter buses in those areas where a significant number of commuters
reside. Kent station capacity is not fully utilized and Sound Transit believes some number of riders
could be diverted to that location.
It is apparent that the number of users of Auburn Station has increased dramatically over the last 3
Years and is continuing to increase. Irrespective of the solutions that are implemented, there will be
disruption to established commuter parking patterns. Adversely affected commuters can be expected
to express some resentment and general frustration with parking availability. While providing parking
for users of Sound Transit infrastructure is essentially a Sound Transit responsibility, the situation will
affect Auburn citizens. As a result members of the City Council can anticipate being contacted by
constituents who are dissatisfied by the situation. While Auburn wants to assist with developing
strategies to address the situation, providing parking for Sound Transit and Metro operations is not
within the purview of the City.
AUBURN *MORE THAN YOU IMAGINED
Page I of 1
Mark Ellingson
From: Paul Krauss
Sent: Monday, June 05, 2006 11:32 AM
To: Mark Ellingson; Pete Lewis; Al Hicks
Subject: Letter from Coldwell Banker to all of us on parking from City property manager for Auburn Station
Mark, this issue has been discussed with the mayor and I am taking it before the Muni Services Comm. tonight to
make them aware of it. We are proposing to start by enforcing permit parking for 63 stalls, July 1. The permits
will be through the program operated by the ADA on the City's behalf. The commercial tenants and Truitt Bldg
have permits for 1 stall per 1000 sq ft. GRCC has none given their low rental rate but anybody can buy a permit
slot for $10 per month.
Please coordinate a follow up communication on the matter with Coldwell banker
Paul Krauss AICP
Director, Planning, Building and Community
City of Auburn
6/5/2006
Page 1 of 1
Mark Ellingson
From: Paul Krauss
Sent: Monday, June 05, 2006 4:37 PM
To: Mark Ellingson
Subject: Sounder garage
Looks like Al gave a parking space for each 1000 sq ft and any fraction, So one as 2, the other 1 (Edward Jones I
think) with 3 reserved for the corner
Paul Krauss AICP
Director, Planning, Building and Community
City of Auburn
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PROPERTY MANAGEMENT DIVISION
HAHDA PROPERTY MANAGEMENT LLC
DANFORTH &
ASSOCIATES, INC
May 23, 2006
Peter Lewis
Mark Ellingson
At Hicks
Paul Krause
RE: Tenant Parking Auburn Transit Garage
Dear Sirs:
33313 - IST WAY SOUTH
FEDERAL WAY, WA 98003
BUS. (206) 212-2221
TOLL FREE (800) 260-0522
FAX (253) 838-0760
The issue in difficulty of parking at the Auburn Transit Garage was brought to my attention by
the tenants that occupy the building. It has become increasingly difficult for the tenants to
find a place to park during their business hours, as the commuters are taking up all the spaces.
There are 181 parking spaces allotted to the City of Auburn according to the lease entered into
with Sound Transit. My recommendation is to allot, at this time, 16 (sixteen) spaces (see
yellow highlighted diagram) for the tenant parking. Six spaces, just outside the hallway on
the first floor, ten spaces on the second floor. These spaces would be identified by signs
stating "permit parking only" violators will be towed. Posting of these signs will alert
commenters that the spaces are not available for them to park. I understand that parking
permits were given to PPM Enterprises and Edward R. Jones when the tenants first occupied
the premises. Even though these tenants have permits, without specific designated spots,
these permits have no value.
Security would be able to monitor violators; the tenants are presently paying 10% of the
Security Services charged to the City of Auburn by Sound Transit.
I feel if we don't make some consideration for parking for the tenants at this time, we will to
these tenants at the end of their terms.
Sincerely,
OAVI-01� 4
Linda L. Bryan RMP, MPM
Auburn Transit Garage Property Manager
CITY OF * ** ,
AUBURN
_ Peter B. Lewis, May
WASHINGTON 25 West Main Street * Auburn WA 98001-4998 * www.auburnwo.gov * 253-931-30L
February 15, 2006
r� RECEIVED
Mc Patrick Muldary V �`� /
Regional Vice President , f\ / FEB 1 '7 2006
Primerica Financial Services % CITY OF AUBURN
110 21" Street SW, Suite #105 HUMAN RESOURCES DEPT,
Auburn, WA 98001
Re: Triple Net Charges on Current Lease
Dear Mr. Muldary:
We are in receipt of your letter dated January 31, 2006 regarding the triple net costs
associated with your lease at the transit station. Your concerns focus on the security
charges and the security costs. I would like to address each one.
The security costs are outlined as a valid cost in section 8.1.2 (i)(h). In previous years
these charges had not been applied to your costs. Sound Transit began billing the City
for these services in 2005 and that is why they were not applied in previous years. The
City pays Sound Transit a percentage of the total security costs for the entire station,
as outlined in our contract with them. They began applying this charge in 2005. The
City did not receive the billing from Sound Transit until the second half of the year and
we did not pass this information along to you at that time. We have applied 10% of
those costs to the entire retail space. We believe this is a very conservative ratio.
Since that information was not passed along to you we are willing to forgive the 2005
security costs from the `additional common area charges due from 2005' line on your
2006 projection. We have supplied a revised schedule for 2006 and reduced the cost
from $850.18 to $731,75 as you requested.
The City did hire a property management firm to manage the property. In former
billings for the common areas, we used very conservative estimates of the time spent
on billing, collecting, administering the contracts, and facilities. The City did not use an
overhead inflator either. When we did a study in late 2005 we found that passing along
our costs would be more burdensome to the tenants than the cost of the property
management specialist.
If you have any questions please feel free contact me directly at 253 804 5019,
Sincerely
Shelley Colema
Finance Director
Cc Pete Lewis, Mayor
Linda Bryan, Coldwell Banker
Paul Krauss, Planning Director
Brenda Heineman, Human Resources and Risk Management Director
AUBURN'k MORE THAN YOU IMAGINED