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HomeMy WebLinkAbout10-02-2000OCTOBER 2000 I. CALL TO ORDER: Chair Sue Singer called the meeting to order at 6:00 pm. Members present: Chaff Sue Singer, Vice Chair Rich Wagner, Councilmember Pete Lewis. Others present included: Mayor Chuck BOOth, Chief Russ Vandver, Chief Jim Kelly, Plan. Dir. Paul Krauss, Finance Dir. Diane Supler, PW Dff, Christine Engler, Proj. Eng. Scott Nutter, and Secretary Jeanne Herold. Visitors present: Doug Christensen, Rasmus Nielsen, Robert Jones, Jack Locke, Harold Gambini, Bruce Alverson II. CONSENT: ISiiiliIaLP..r.o.p_~: Russ Vandver explained that the majority of the items being surplused are non-serviceable and are items that would be picked up by M & O for auction. Periodically an auction is held and the surplused items are added to the auction. Chief Vandver explained that the space heater and ambulance no longer meet code. Diane Supler suggested that those items be destroyed since they no longer meet code. Vice Chair Wagner made a motion to recommend approval of surplus equipment no longer serviceable. Chair Singer concurred. [.ease Agreements for Construction of Private ][l'nngars at Auburn Municipal Airport: Diane Supler presented information regarding the lease agreements prior to Mr. Krauss' presentation, Diane explained that there was a lot of discussion with Councilmember Poe on rate increases and on some of the language. All of Councilmember Poe's recommendations from the last meeting were incorporated. Item 06 was probably the item with the largest change. Basically, what is going to be done is use the change in the Seattle-Bremerton CPIU and apply that rate. There were some discussions on the MIA appraisal and making some changes there. Ms. Supler is still lOOking into the fact that the potential tenants have indicated they have some concerns about the insurance liability. Councilmemhar Wagner asked about the second paragraph under Item #7 which begins "In the event the Lessee disagrees with the City's appraisal, etc." with the key words being on the next page - "but in no even shall the lease rate be lower than the one in effect at the time of arbitration". "The decision of the arbitrator shall be final." There was some discussion regarding checking with the City Attorney. Ms. Supler stated that perhaps Mr. Krauss had discussed this particular item with the City Attorney and that she would follow up on it. Diane Supler stated that late Friday afternoon she and Mr. Krauss made some changes to Item #6 and #7, making them clearer. Councilmember Wager asked about the late charge (Item /19- LATE CHARGES) going up from 5% to 12%. Ms. Supler explained that everything else that is done in the City is at 12% and there would be an inequity to just charge 5% with this particular group. Chair Singer asked the Committee if they were ready to vote on this and Councilmember Wagner stated that he was if they could ignore the letter dated October 2, 2000 received from the potential Lessees. Diane Supler stated that from Financc's perspective there wasn't any urgency Municipal Services Committee Meeting 1 October 2, 2000 to adopt the lease agreement at this meeting. Councilmember Wagner made a motion to table this item until everyone has had the opportunity to digest the recent letter of October 2~. Chair Singer concurred, however asked if any of the potential Lessees wished to speak. Robert Jones spoke and stated that he felt before signing the lease he had his attorney look it over so he sent him the September Th lease which was the current one at the time. Most of the items addressed are of an administnttive nature, but some are more complex and important to him. Item's addressed were: 1) PROPERTY SUBJECT TO THIS LEASE AGREEMENT: Basically an administrative issue. 2) TERM: After the 3 years, Lessee's would like an additional three, 5-year options to renew the lease. 3)PURPOSE: Basically an administrative wording changes. 4) RENT: In as much as it was appraised as a fair market value at $0.33 per square foot, they would like to go with the fair market value. The Council recommended $0.40 per square foot. That's roughly a 21% premium over fair market value. They would like to go with the fair market value of $0.33. 5)Item 13-1NSURANCE COVERAGE: Insurance coverage was discussed recently. 6) Item 14-INDEMNIFICATION/HOLD HARMLESS: Basically an administrative legal coverage. Also, the Lessee's wanted added, the sentence o.~ to indemni__fv under the terms qf this para_tn'a_nh shall commence only after Lemsor provides ten (lOI days prior written notice qf the matters ~ving rise to indemnification." This was something that was suggested by their attorney. 7) Item 18-ENVIRONMENTAL PROVISIONS: That is wording suggested be added by their attorney. Councilmember Wagner stated that to his knowledge there was something in the lease covering that issue. Paul Krauss stated that the language in the lease was what the City Attorney was comfortable with. 8) Item 27-RETENTION OF AIRSPACE RIGHT BY LESSOR: This item is basically and administrative issue regarding wording. 9)The Lessee's wished to have the remainder of page 3 of the Oct. 2~ letter added. 10) The Lessee's would like to ask that when the lease is revised, that it be reflected that it is a ~ 11) Lastly, on page 4. In the September 7~ lease document, the Lessee's are allowed to remove the hanger, building at the end of 30 years. However, in the September 27~ document, that right was removed and they would like to see that put back in again. Mr. Krauss stated that he and Diane Supler met with Councilmember Poe last week to get his input on the final changes. He was very comfortable that the lease reflects the basic fundamentals that he was told to include in terms under the section for TERM and RATE. There are some changes regarding simplifying the 5-year renewal, and how to evaluate the property and that includes an Appeals Provision and some other mechanisms that were requested at the last meeting. Mr. Krauss feels Council needs to make a decision on what changes are valid or whether to go with it as is. Councilmember Wagner asked Mr. Krauss if he had spoken to Mike Reynolds regarding Item #7 and the decision of the arbitrator being final. Mr. Krauss stated he would clarify that. Councilmember Wagner stated that he was in favor of going with the lease per the latest revision and not accommodate the requests in the October 2nd letter. Municipal Services Committee Meeting 2 October 2, 2000 Question was raised about the extension of the lease. Mr. Krauss stated that the Council was quite clear. It was a 30-year term and Councilmember Poe was very adamant that at the end of the lease the building should revert to the City and he believes that's normally the way it's done. Chair Singer asked Mr. Kran~s to have the City Attorney review the October 2~ letter. Councilmember Wagner stated that he would like to see the issue of the lease concluded and he proposed that it be allowed to be moved to the next meeting. Resolution No. 3266: Russ Vandver asked for approval of Resolution No. 3266. A Resolution of the City Council of the City of Auburn, Washington, authorizing the creation of an Intergovernmental Agreement between the City of Auburn and Lewis County Fire District No. 13 for the purpose of sale by the City of Auburn of one (1) fire apparatus to Lewis County Fire District No. 13 for fire protection purposes. Chief Vandver explained that this is a 1971 Mack Fire Engine, which was surplused last year when the Fire Department purchased and placed in service a 1998 Pierce Quantum replacement fire engine. The top bid was $1751.00. Couneilmember Wagner made a motion to approve Resolution No. 3266 to accept the bid. Chair Singer concurred. III. INFORMATION/DISCUSSION Status Report and Financing Options on the Sound Transit Garage: Paul Krauss stated that he was coming to this Committee to get the dialogue going on the parking garage and to do it quickly in order to get a contract. Sound Transit had the garage out in a design build bid and they have come back very strong. While they're still in negotiations and can't be too specific about who they're negotiating with until they finish, it's fair to say that it looks as though there is going to be somewhere upwards of 160 to 180 parking stalls potentially. Surplus to Sound Transit's needs which then could be made available to the City. The probable price on this though, again is subject to negotiation but is potentially extremely good. About a third of what it would cost to actually build a new structure and probably half of what it would cost to just build a surface parking lot. The City has already gotten an offer from David Allen who wants to build a 5 story building on the Past Time block to purchase or lease 117 parking spaces. Of the 180, 24 would be needed to support the retail. Other property owners, Bruce Alverson being one have indicated that they would desire to be in a position to be able to acquire some oftha parking spaces as well. Mr. Krauss further stated that the City needs to explore options for how those spaces are acquired. The letter received fi~om David Allen spoke about an LID. Diane Supler has been doing some investigation and LID's may not be appropriate to be used in this instance. Mr. Krauss and Ms. Supler are meeting with Hugh Spitzer to get suggestions on different ways of financing. Discussion ensued. Mr. Gambini from Northwest Corporate Real Estate spoke to the Committee and stated that he has been researching the value of the retail space basing it on the market demand for the space rather than cost approach. The cost is substantially less then it would be to go out and develop the space. Any investment project would he based on the rent that Municipal Services Committee Meeting 3 October 2, 2000 would be the net income over a period of years. Mr. Gambini did a financial analysis based on that concept and was very conservative on the rates, the lease up time and the costs associated and it justifies a very good return. He stated that he has worked in this area downtown for about 11 years in commercial real estate and has done a lot of office leasing. The retail space at $12.00 per foot as a rate is very low for office space compared to other cities. It would be very conservative and lease out very quickly. Mr. Gambini has contacted a variety of tenants that have been targeted such as Cleaners, Flower Shops, some Coffee Houses, some Sandwich Shops, Take Outs, Mail Boxes, etc. The owner of the Purple Rose Flower Shop is interested, Brace Alverson, owner of the Sun Break Caf~ is very interested, Owners of the Bag Man Deli and Caf~ were very interested. The Auburn Auto Dealers are very interested. Possibly a Notions Store and a Video Store. Mr. Gambini and Mr. Locke presented a diagram and pictures of the potential building. Paul Krauss stated that he was going to have Mr. Gambini continue to pursue this and work this issue over the coming two to four weeks quite intensively to negotiate the final view with Sound Transit. Approximate .figures for the parking and the retail, is around 1.6 to 1.9 price range. Right now there is about $750,000 left from the Down Town Development Fund. The project is actually something that will produces an income and Mr. Krauss feels that parking is something that can be marketed right away. Discussion ensued. Mr. Kranss stated he was not asking for any decision at this meeting, just brought this to Committee as information. Goedecke North Wetland Mitigation-King County_ Easement Purchase: Scott Nutter passed out maps of the Wetland delineation to all of the committee members. Mr. Nutter explained that the City of Auburn recently started on the 277th project designing the whole corridor from Auburn Way North to West Valley Highway. The environmental docnmenta have been started which has brought up an issue that Phase H was given to King County partially through the environmental documentation. King County has come to the City requesting to use the same mitigation location as the 277* project. The reason for this is, it was documented and designed and part of the biological assessment for both phases so King County is trying to conform biological assessments through mitigation of Mill Creek and the Goedecke site. To minimize design changes and some overall complications the city is trying to make changes to their environmental documents since the environmental process has been started jointly. Councilmember Wagner asked Scott Nutter to explain again what the County's first position was. Mr. Nutter explained that the County has asked, if. they mitigate adjacent to the site proposed for the 277t~ project, the Goedecke North, it would fall under the same type wetland restoration enhancement that Mr. Nutter is proposing. It keeps them in conformance with biological assessment, which was jointly done for both phases. Discussion ensued. No action was required on this item as it was presented as information only at this time. Mr. Nutter will bring this item back as an action item at a later date. Municipal Services cormmttee Meeting 4 October 2, 2000 Airport Security: Paul Krauss explained that there has been a series of break-ins at the Airport. Someone is breaking into aireraR. The Police Department is not in a position to patrol it very often. Mr. Krauss is proposing to contract with a security company to do 3 to 4 visits every night on a rotating basis and then put a surcharge onto the tenant's bill. Another problem at the Airport is with geese. The problem is that the ponds that were put in last year had to be hydro-seeded and the geese like the seed. They're also eating the grass. They're living offthe end of the nmway. Everything possible has been tried to get rid of the birds. Mr. Krauss has met with the FAA and the State DNR and what has been concluded is the only thing that works with some effect is to have somebody shoot some of the geese periodically. The birds quickly learn that this is not a hospitable place and leave for long periods of time. The DNR has state employees that would actually come out and do it. They're looking for us to sign a contract for them to do it. Mr. Krauss has no problem si~tming the contract because this is a safety problem. The cost is about $3,000. Mr. Wagner suggested doing it. IV. ADJOURNMENT: There being no further business, the meeting was adjourned at 7:25 pm. Submitted by: Jeanne Ho'old, Secretary Municipal Services Coranut~ee Meeting 5 October 2, 2000