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04/16/2002 City CouncilEDMONDS CITY COUNCIL APPROVED MINUTES April 16, 2002 The Edmonds City Council meeting was called to order at 7:00 p.m. by Mayor Gary Haaken'son in the Council Chambers, 250 5d' Avenue North, Edmonds, followed by the flag salute. ELECTED OFFICIALS PRESENT STAFF PRESENT Gary Haakenson, Mayor David Stern, Chief of Police Dave Earling, Council President Stephen Clifton, Community Services Director Jeff Wilson, Councilmember Peggy Hetzler, Administrative Services Director Michael Plunkett, Councilmember Brent Hunter, Human Resources Director Lora Petso, Councilmember Arvilla Ohlde, Parks and Recreation Director Dave Orvis, Councilmember Jim Larson, Assistant Admin. Serv. Director Deanna Dawson, Councilmember Rob Chave, Planning Manager Dave Gebert, City Engineer ELECTED OFFICIAL ABSENT Scott Snyder, City Attorney Richard Marin, Councilmember Sandy Chase, City Clerk Jana Spellman, Senior Executive Council Asst. Jeannie Dines, Recorder 1. APPROVAL OF AGENDA COUNCILMEMBER ORVIS MOVED, SECONDED BY COUNCILMEMBER WILSON, FOR APPROVAL OF THE AGENDA AS PRESENTED. MOTION CARRIED UNANIMOUSLY. 2. CONSENT AGENDA ITEMS Councilmember Petso requested Item E be removed from the Consent Agenda and Councilmember Wilson requested Item B be removed. COUNCILMEMBER PLUNKETT MOVED, SECONDED BY COUNCIL PRESIDENT EARLING, FOR APPROVAL OF THE BALANCE OF THE CONSENT AGENDA. MOTION CARRIED UNANIMOUSLY. The agenda items approved are as follows: (A) ROLL CALL ppm (C) APPROVAL OF CLAIM CHECKS #54811 THROUGH #54932 FOR THE WEEK OF hecks APRIL 8, 2002, IN THE AMOUNT OF $168,772.38 1 Rescue Boat (D) AUTHORIZATION FOR MAYOR TO SIGN ADDENDUM TO INTERLOCAL AGREEMENT WITH THE PORT OF EDMONDS FOR USE OF A RESCUE BOAT Res# 1022 Adult Enter- (F) RESOLUTION NO. 1022 ESTABLISHING LICENSE AND PROCESSING FEES FOR ainment ADULT ENTERTAINMENT FACILITIES, MANAGERS AND ENTERTAINERS. Licensing Fees (G) ORDINANCE NO. 3395 AMENDING SECTION 5.28.010 OF THE EDMONDS CITY rd# 3395 CODE; ADOPTING BY REFERENCE RCW 9A.56.096 REGARDING THE THEFT OF 'rheft of RENTAL, LEASED OR LEASE -PURCHASED PROPERTY; AND DELETING A Rental, REFERENCE IN SECTION 5.28.010 TO RCW 9.45.062, WHICH HAS BEEN Leased or Lease - LEGISLATIVELY REPEALED Purchased Property Edmonds City Council Approved Minutes April 16, 2002 Page 1 Item B: Approval of City Council Meeting Minutes of April 9, 2002 Councilmember Wilson requested the following corrections to the minutes: Page 11, second paragraph: "Councilmember Wilson recalled that Mr. Bullock stated in his presentation prove /9/02 that additional parking would be provided and...„ Minutes Page 12, fifth paragraph: "Councilmember Wilson asked whether the usable open space was intended for with orreetions general public use or the use restricted to residents in the PRD.” Page 25, last paragraph: "However, he supported incorporation e*he conditions that set the style and materials..." COUNCILMEMBER WILSON MOVED, SECONDED BY COUNCILMEMBER DAWSON, FOR APPROVAL OF ITEM B AS AMENDED. MOTION CARRIED UNANIMOUSLY. The item approved is as follows: (B) APPROVAL OF CITY COUNCIL MEETING MINUTES OF APRIL 9, 2002 Item E: Approval of 2002 Funding Request for the Edmonds Historical Museum Councilmember Petso stated that although she loved the museum and the work they did, the Council packet did not contain sufficient information such as the museum budget and there was no discussion of whether the City had space that could be donated to the museum for storage. She hoped when a larger Approve request for the Historical Museum was considered during the budget that other options would be Museum considered. Funding Request COUNCIL PRESIDENT EARLING MOVED, SECONDED BY COUNCILMEMBER ORVIS, FOR APPROVAL OF ITEM E. MOTION CARRIED (5-1), COUNCILMEMBER PETSO OPPOSED. (E) APPROVAL OF 2002 FUNDING REQUEST FOR THE EDMONDS HISTORICAL MUSEUM Scandinavian estival Day 3. PROCLAMATION IN HONOR OF SCANDINAVIAN FESTIVAL DAY IN EDMONDS, MAY 4- 2002 Mayor Haakenson explained the seventh annual Scandinavian Festival Day was May 4 and many activities were scheduled throughout the day including arts, crafts, workshops, a Norwegian pancake breakfast and a Troll Stroll. Mayor Haakenson presented a Proclamation in honor of Scandinavian Festival Day in Edmonds on May 4 to Bob and Erlene Stevenson and thanked them for all they do. Bob Stevenson, Chairman of the Festival, advised events include the pancake breakfast beginning at 7:00 a.m. as well as several chorus groups. He advised a schedule would be posted at the Masonic Center the day of the event. Erlene Stevenson advised the hours for the breakfast were 7:00 - 1:00, music and dance performances were from 9:00 - 3:00, and workshops from 10:00 - 2:00. Glen Werner, dressed as a troll, encouraged the public to attend the Scandinavian Festival. ohn Quast, 4. INTRODUCTION OF MAYOR'S APPOINTMENT TO THE CITIZENS COMMISSION ON Vitizens nmission SALARIES OF ELECTED OFFICIALS omi ialaries ,le°ted Human Resources Director Brent Hunter introduced John Quast, the newest member of the Citizens cials Commission on Salaries of Elected Officials, the Mayor's appointment who replaces Don Bakken who Edmonds City Council Approved Minutes April 16, 2002 Page 2 li resigned recently. Mr. Hunter described Mr. Quast's background and explained the Citizens Ci mmission on Salaries of Elected Officials was established in 1999 by ordinance to review the salaries' of elected officials every two years and prepare a recommendation for Council consideration. The Commission will hold two public hearings to gather input on April 22 and May 20, in the City Hall Third Floor Conference Room at 7:00 p.m. The Commission's recommendation would be presented to the Council on June 4. He advised further information was available at City Hall. Mayor Haakenson thanked Mr. Quast for serving on the Commission and expressed his appreciation to Don Bakken for his participation on the Commission since 1999. Continuance 5. or Closed Record Meeting — Robert Hale File R-2001- 180 FOLLOWING CLOSED RECORD HEARING: FROM SINGLE FAMILY RESIDENTIAL TO MULTIPLE FAMILY RESIDENTIAL. (Applicant: Robert Hale / File No. R-2001-180). The Council will set the date for a new closed record hearing. Council President Earling explained the City received a request from John Bissell & Associates to continue this hearing indefinitely. The recommendation of the City Attorney was to continue e hearing for three months and then possibly continue it again. COUNCIL PRESIDENT EARLING MOVED, SECONDED BY COUNCILMEMBER ORVIS, TO CONTINUE THE HEARING TO JULY 16, 2002. MOTION CARRIED UNANIMOUSLY. Closed 6. PUBLIC HEARING ON THE PLANNING BOARD RECOMMENDATION TO APPROVE AN Record AMENDMENT TO AN APPROVED CONTRACT REZONE (R-97-28) REMOVING THE Meeting - Contract CONTRACT RESTRICTION ON NET BUILDABLE AREA. THE SITE IS LOCATEVAT 18400 Rezone OLYMPIC VIEW DRIVE. (Applicant: Han Park / File No. R-02-5). 18400 Olympic Mayor Haakenson indicated the parties of record were Steve Cobb, Wally Danielson, Roger; Hertrich, View Drive (Han Park/ David Johnson, Rob Michel, and Mr. and Mrs. Park. File R-02-5) Councilmember Wilson disclosed that at the time the rezone application was originally reviewed by the City, he was a staff member and worked directly on this application, preparing and presenting the staff report to the Council. He said it had been a number of years since he had reviewed the file and he was confident he could make an unbiased decision on the matter. City Attorney Scott Snyder advised contract rezones were a mixed quasi-judicial and legislative) action Councilmember Petso disclosed she received a telephone message from Roger Hertrich inquiring about which PRD ordinance would apply. She returned the call to Mr. Hertrich, advising she could not discuss the matter with him. i Mayor Haakenson asked whether any audience member objected to any Councilmembers' participation. Hearing no objections, Mayor Haakenson stated all Councilmembers would participate. Planning Manager Rob Chave explained this application was an amendment to a contract rezone originally approved by the Council in 1998. At that time, a number of conditions were included in the contract including, "Building pads shall occupy a maximum of 21% of the net buildable area. The net Edmonds City Council Approved Minutes April 16, 2002 Page 3 buildable area means the total area of property minus the right-of-way area in accordance with Edmonds City Development Code." The applicant was now requesting this condition be eliminated from the contract. Mr. Chave clarified if this amendment was approved, the only change would be to remove this condition and the other conditions would remain in effect. Mr. Chave explained the property was located on the west side of Olympic View Drive at approximately 184th Street SW and included a substantial amount of property. Also included in the property and under contract was a City -owned parcel. The contract stipulates that at the time the property undergoes development, the title would transfer to the applicant. This has not occurred at this time; development has not taken place and no application for a PRD has been received. Mr. Chave explained that any new PRD application would be reviewed under the new PRD regulations. The Planning Board recommended approval based on 1) the applicant submitted information during the hearing that the net developable area that would be guided by the 21 % maximum would not be sufficient to allow them to develop reasonably sized homes on the property, and 2) under the new PRD regulations there would be more control and conditions imposed to ensure compatibility with the neighborhood. Staff also supported the application. Councilmember Petso asked whether the Council had any conflict due to the City's ownership interest in the property and the possible benefit to the City and citizens from a decision that would allow more homes to be constructed on the property. Mr. Snyder answered the amount the City received did not increase or decrease based on the number of units that were developed. One of the provisions in the purchase and sale agreement was that the Council reserves all the Council's legislative discretion; the Council was under no obligation to act for or against any proposal. Mr. Chave pointed out neither the Planning Board or planning staff who were involved in reviewing the application were involved in the negotiations for the property sale. Councilmember Petso asked whether under the new PRD ordinance, more homes would be allowed because the applicant did not need to net out the right-of-way. Mr. Chave answered affirmatively. Councilmember Petso asked how many homes could be constructed. Mr. Chave answered approximately 32-33. Councilmember Petso observed that since only 43,000 square feet was available for home footprints, the houses could not be constructed large enough thus the request to eliminate the 21% requirement. Councilmember Petso inquired whether large enough houses could be constructed if fewer homes were constructed. Mr. Chave agreed there was the potential for larger but fewer homes if the applicant developed fewer lots than allowed. Mr. Snyder explained that in order to approve a rezone, the Council must find that the criteria in the ordinance have been met. The City cannot force provisions of a contract rezone on any party; the contract must be voluntarily offered by the developer, typically as an inducement to the City to approve the rezone. The Council looks to the contract to determine whether as conditioned or limited by the contract, the rezone criteria were met. He clarified the Council did not have the ability to negotiate terms, they were freely offered by the applicant as an inducement to find that the criteria have been met. Mr. Chave indicated the records shows the 21% maximum lot coverage was offered by the applicant. Referring to the map on page 17, Mr. Chave identified the lot the City owns, lot 12, at the northwest corner. Councilmember Dawson asked whether at the time the applicant proposed the 21% maximum lot coverage, the applicant had indicated homes of 2600 — 2800 square feet could be constructed. Mr. Chave Edmonds City Council Approved Minutes April 16, 2002 Page 4 agreed. Councilmember Dawson asked what had changed. Mr. Chave answered the PRD ordinance had changed and the prospective developer had changed. Mr. Snyder pointed out the record reflected the inability to market the property which indicated that condition was onerous. Mr. Chave explained the applicant was referring to the ground floor footprint of the homes, not the total square footage. Councilmember Dawson inquired whether the ground floor footprint was smaller only because they were proposing 33 homes rather than 26. Mr. Chave said it was possible a different configuration of homes may be required now than was required in 1998 or the ground floor footprint was more important for marketing at this time. Councilmember Dawson argued this had to be about building more houses because presumably for a 2800 square foot house, the ground floor footprint would be more than 1000 square feet. Mr. Chave referred to the 1998 record and a discussion regarding square footage, recalling a ground floor footprint of 1300-1400 had been discussed which would result in 2600-2800 total square footage. He concluded something had changed that lead the applicant to believe with the configuration of lots, the PRD, etc., they would be left with only 1000 square foot footprints rather than 1400 square foot footprints. Councilmember Dawson asked whether anything else had changed, whether there were any requirements in the new PRD ordinance that would make it more onerous to comply with. Mr. Chave answered no, the new PRD regulations were more flexible. Councilmember Dawson pointed out when the contract rezone was previously reviewed by the Council, it was approved with a 3-2 vote with the inclusion of the 21% maximum lot coverage provision. Mr. Chave agreed. As this was an amendment to the contract rezone, Councilmember Wilson observed the Council's only action was to accept or reject the proposed amendment and if rejected, the condition would cl ntinue to be part of the contract rezone. Mr. Snyder agreed. Councilmember Wilson asked whether there was a sunset date on the original contract rezone. Mr. Chave explained there was no sunset date but the contract rezone could not be amended for two years following the approval date. Councilmember Wilson asked whether there was a date specified for submitting the PRD. Mr. Chave answered there was no date specified for applying for the PRD 1* For Councilmember Orvis, Mr. Chave explained the contract rezone changed the zoning from RS -12 to RS -8 with the addition of the conditions outlined in the Council packet. Councilmember Orvis inquired about the rezone criteria on page 40. Mr. Chave advised this was the rezone criteria in effect in 1997/1998 and were still applicable. For Councilmember Wilson, Mr. Chave identified the RS -8 zoned property to the south, RS�12 zoned property to the north, noting this property was on the boundary between those zones. Councilmember Dawson referred to page 6, where Mr. Bullock indicates staff did not find the slope a hardship that would prevent the applicant from meeting Condition 1.2 and that staff did not feel the applicant presented a strong argument why the contract rezone condition should be eliminated. Mr. Chave acknowledged that was staff's position at the start of the hearing and staff felt it was up to the applicant to show reasons why the condition should be eliminated. The applicant presented evidence at the hearing that indicated the 1000 square foot footprint was not sufficient. He clarified the slopes were the reason for the PRD and why a PRD was appropriate for the property. Edmonds City Council Approved Minutes April 16, 2002 Page 5 Councilmember Dawson clarified the only reason a house with more than a 1000 square feet footprint could not be constructed was the number of houses, 33 rather than 26. She observed this was the only change since 1998. Mr. Chave acknowledged this could be the case, noting the slopes were the same, requiring the houses be clustered. Mayor Haakenson advised the applicant would be allowed 20 minutes for their presentation and should reserve time for rebuttal. Following the applicant's presentation, public comment from the parties of record would be accepted, followed by the applicant's rebuttal and remand to the Council for action. Applicant Steve Cobb disclosed at the time the contract rezone was done, he was on the Planning Board and had a lot to do with the 21% condition. He was also on the Planning Board when many of the public hearings and discussions took place regarding the new PRD ordinance. Mayor Haakenson asked whether there were any objections to his participation. There were no objections voiced. Mr. Cobb explained the reason they were requesting the 21% maximum lot coverage condition be deleted was the new PRD ordinance and the restrictions for critical areas and the amount of open space, made it very burdensome to abide by the 21 % maximum lot coverage. He noted developers have indicated it was not economical to develop the property with the 21% maximum lot coverage. He explained it was not their intent to develop 33 lots; it was their intent to do a nice PRD that would allow the neighbors to have input. He pointed out the new PRD ordinance placed further restrictions on development such as the placement of garages such as encouraging garages to be no more than '/2 the width of the front of the house or be placed behind the house. He noted this would limit the footprint particularly with a 21% maximum lot coverage restriction. The new PRD ordinance also requests front sidewalks rather than using the driveway to access the house which requires more impervious surface. He noted the PRD also requests front porches be emphasized. He summarized these were the reasons the usable footprint had been reduced from 1300 square feet to 1000 square feet. Mr. Cobb acknowledged the number of lots allowed by the square footage would be 32-33 but smaller houses would be required to adhere to the 21% maximum lot coverage. He commented they would not object to 26 lots but the 21% maximum lot coverage was not feasible. (Mr. Cobb retained 5 minutes for rebuttal) Councilmember Petso asked how Mr. Cobb calculated the 1300 figure because her calculations using the net buildable area divided by 26 lots results in approximately 1700 square feet. Mr. Cobb answered 1300 was determined using the amount dedicated to the road from Olympic View Drive, the critical areas, the same setback requirements. Councilmember Petso noted the record indicated the net area without right- of-way of 24,019 square feet and 21% was approximately 43,000 square feet. Mr. Cobb disagreed, pointing out that at the time of the rezone, half of 18305 was included in the square footage projections and that lot was no longer included, resulting in less square footage. Councilmember Plunkett asked Mr. Cobb to address how the project would continue to meet the contract rezone criteria. Mr. Cobb referred to page 40 and reviewed how they met each of the criteria. He explained the project was still consistent with the Comprehensive Plan and consistent with the zoning code due to the surrounding RS -12 and RS -8 zoning, and was compatible with the existing land uses. Regarding sufficient change in the character of the immediate area or surrounding area or in City policy, he pointed out there had been change in the City's policy via adoption of the new PRD ordinance. COUNCIL PRESIDENT EARLING MOVED, SECONDED BY COUNCILMEMBER PLUNKETT, TO EXTEND THIS ITEM FOR 20 MINUTES. MOTION CARRIED UNANIMOUSLY. Edmonds City Council Approved Minutes April 16, 2002 Page 6 Mr. Cobb indicated the proposal was economically and physically suitable when developed as a PRD, and the elimination of the 21% maximum lot coverage condition did not change the relative gain to the public health, safety and welfare as determined in 1998 when the original contract rezone was approved as the City received a public street and the neighborhood received houses comparable to the area. Councilmember Plunkett concluded it was Mr. Cobb's assertion that the amendment complied with the standards for a contract rezone. Mr. Cobb agreed. Councilmember Wilson referred to Condition 1. 1.2 regarding the 21% building pad, noting this condition did not imply that the driveway or other hard surfaces would be calculated in the 21%. He noted Mr. Cobb's comment regarding the requirement to provide separate sidewalks did not appear to be applicable. Mr. Cobb indicated he may have been incorrect regarding including the sidewalk surface. He pointed out the other requirements of the PRD regarding front porches and garages placed further restrictions on the footprint. Councilmember Wilson asked whether the PRD required front porches or only that they be emphasized. Mr. Cobb read from the design guidelines, "Therefore houses should have porches consistent with the style and scale of the house and the neighborhood. Main entries should be prominent and oriented to the street." Councilmember Wilson asked whether it would be possible to emphasize the front porch and main entrance via materials and textures rather than the size. Mr. Cobb referred to the graphics in the guidelines that illustrate the front porch taking up a good portion of the front of the house. Councilmember Wilson inquired whether a percentage was stipulated. Mr. Cobb answered no. Councilmember Wilson pointed out it was then open to interpretation. Mr. Cobb agreed. Councilmember Wilson referred to the rezone criteria regarding suitability, specifically whether the property was economically and physically suitable for the uses of the zoning, pointing out the amendment did not change the zoning or whether the property could be used as it was presently zoned. Mr. Cobb answered it could be used but likely would not be used because they had been unable to find a developer willing to develop it. Councilmember Wilson asked whether the remainder of that criteria, the length of time the property remained undeveloped, was being applied. Mr. Cobb answered yes, the property would have been developed following the initial contract rezone if a developer found it economically feasible. He noted this was one of the largest parcels in Edmonds but was still undeveloped. They were told the 21% maximum lot coverage was the primary reason it was not being developed, particularly under the new PRD ordinance. Mr. Snyder requested Mr. Cobb cite the information in the record that he referred to regarding development and that this was the largest parcel. Mr. Cobb said he has mentioned this previously in his presentation but it may not be reflected in the minutes. Mr. Snyder suggested Councilmembers refer to the records when posing questions. Councilmember Wilson referred to the original contract rezone application, recalling the Parks! were not the sole applicant but had a developer working with them who submitted the application and indicated it was feasible to develop under those standards. Mr. Cobb explained the Parks were represented by Charles Maki who was not a developer but a consultant acting on the Parks' behalf. Councilmember Wilson asked whether the 21% maximum lot coverage was proposed by the applicant. Mr. Cobb answered it was. Councilmember Dawson asked how the placement of the garage impacted the footprint, recalling the new PRD encouraged a smaller, less noticeable garage. Mr. Cobb answered the location of the garage impacted the footprint. Councilmember Dawson noted the garage requirements under the new PRD did Edmonds City Council Approved Minutes April 16, 2002 Page 7 not limit the net buildable area. Mr. Cobb answered the design was the limiting factor. Councilmember Dawson pointed out it appeared the new PRD ordinance encouraged a smaller garage that would take up less building pad. Mr. Cobb disagreed, explaining the PRD regulated where the garage was placed which required the house to be built around the garage placement. He clarified the PRD did not stipulate the size of the garage only that it not be a prominent feature. Councilmember Dawson recalled only 26 lots could be constructed under the old PRD regulations. Mr. Cobb answered they could not do any more lots under the new PRD than they could under the old PRD regulations because the basis was that the number of lots was the same as the number of lots allowed in the zone for that property. Councilmember Dawson concluded there was no difference in the net buildable area now as compared to 1998. Mr. Cobb agreed there was no change in the net buildable area but the areas that were usable differed under the new PRD due to critical areas and the 10% required open space. Councilmember Dawson clarified the only amendment being sought was to eliminate the 21% maximum lot coverage requirement. Public Comment from Parties of Record Roger Hertrich, 1020 Puget Drive, Edmonds, advised he did not live in this area but was concerned about development via a PRD, particularly the new PRD regulations which he alleged were much more liberal. He pointed out the purpose of a contract rezone was to allow the City to keep a handle on an area being developed with higher density. He referred to the applicant's indication that the proposal was consistent with the neighborhood and questioned how 33 lots would be consistent with the area. He referred to the Council's review of another PRD last week. (Mr. Snyder cautioned Mr. Hertrich to restrict his comments to information in the record.) Mr. Hertrich questioned what zoning 33 lots on this parcel would equate to. He suggested the applicant revert to the original zoning and apply for a PRD based on RS -12 zoning which would be more appropriate for this area. Rob Michel, 7902 212th Street SW, Edmonds, asked Mr. Chave to clarify the difference between the net buildable area under the new and old PRD regulations. Mr. Michel explained if the Council did not concur with the Planning Board recommendation, the contract rezone would remain in place and the property developed under the new PRD regulations. He explained that in order to build enough houses to make this a profitable development, the number of lots would have to be increased to the maximum amount because a project was not feasible with 26 lots. Mayor Haakenson closed the public comment portion of this item. Two audience members, Sally Barringer and James Thompson, indicated they were also parties of records and requested an opportunity to speak. COUNCILMEMBER ORVIS MOVED, SECONDED BY COUNCILMEMBER PLUNKETT, MOVED TO EXTEND THIS ITEM FOR 20 MINUTES. MOTION CARRIED UNANIMOUSLY. Mayor Haakenson declared a brief recess to allow Mr. Snyder to research the parties of record. Mr. Snyder explained as part of Regulatory Reform, the legislature enacted legislation that limits the number of open record hearings. In this instance, the open record hearing was held by the Planning Board on February 27, 2002. Mr. Snyder explained that although Mr. Thompson indicated he was at every other hearing, he did not appear or present testimony on February 27 and therefore was not a party of record. Ms. Barringer referred to a letter she submitted that was included in the Planning Board file but was not included in tonight's packet. Mr. Chave clarified the hearing Ms. Barringer referred to in her Edmonds City Council Approved Minutes April 16, 2002 Page 8 letter was a city -initiated rezone where the City sought to rezone this property from RS -8 back to RS -12. Mr. Snyder concluded neither Ms. Barringer nor Mr. Thompson appeared or presented evidence on February 27 and were not parties of record to this action. Ms. Barringer's letter was not distributed to the Council or the applicant as she was not a party of record. Mr. Cobb advised the applicant was willing to waive the rule and allow these two individuals an opportunity to speak. Mr. Snyder advised this was acceptable. He recommended Ms. Barringer's letter not be distributed as it was submitted in regard to a different matter. Mayor Haakenson reopened the public comment portion of this item. James Thompson, 18305 80th Avenue W, Edmonds, pointed out a PRD was required to: coordinate development with the character and integrity of the surrounding area which have been or were being developed under conditional regulations; provide for integration of new development into the existing community while protecting and preserving the value of the surrounding neighborhood; provide opportunity for affordable housing to meet the needs of a wide range of income and age groups; be compatible with surrounding properties; and develop 10% of the gross lot area as usable open space in PRDs with five or more lots. He questioned how the garage would interfere with the pad of a house. He noted the land area less the road and divided by the 8,000 zoning resulted in a certain number of houses but questioned how this would result in 33 houses. He urged the Council to deny the proposed amendment. Mr. Snyder reminded speakers their comments must address information in the record; they could argue information in the record but could not provide new information. Sally Barringer, 18405 791h Place W, Edmonds, said her primary concern in her letter to the Planning Board was the proposed road on 184th where there was a large, steep bank (270 feet), 190 feet of which was on her property. She noted the applicant cut into the toe of this slope and damaged the roots of her trees. She recommended this area be rocked. She noted it was difficult to get information, as she did not receive notice of the last meeting. She described zoning surrounding the property, and indicated the cul- de-sac was zoned RS -12 although her lot was 13,000 square feet. She asked whether the neighborhood would be able to provide input when the applicant applied for a PRD. Mayor Haakenson closed the public participation portion of this item. He requested Mr. Chave describe the process for approving a PRD. Mr. Chave explained this project would be subject to review and approval of a PRD, which requires review by the Architectural Design Board (ADB), and an open record public hearing before the Hearing Examiner. Property owners within 300 feet would be provided notice of the public hearing and new testimony would be accepted. The subject of the ADB review and Hearing Examiner review would be design specific and address issues such as slopes, design of the road, lot layout, building design, etc. He explained the review tonight was overall zoning, overall density and specifically the condition of 21% maximum lot coverage. Mr. Chave recalled there was discussion in the record in 1998 regarding net density. He referred to pages 54 and 55, where net density was originally discussed and how it was to be interpreted. When staff prepared the report on the current action, staff reviewed the minutes to determine what 21% meant. The discussion in the 1998 minutes reflects 21% was with regard to structures such as garages, houses, and associated appurtenances and did not refer to driveways, sidewalks and other impervious surfaces. Edmonds City Council Approved Minutes April 16, 2002 Page 9 Mr. Snyder indicated Ms. Barringer's remarks regarding the toe of the slope were not in the record. With regard to her comment regarding the road, this was reflected on pages 72 and 17 of the record. The City has conditionally vacated the right-of-way shown on the map on page 17 as not open. Mr. Chave identified the conditionally vacated right-of-way to the north of the cul-de-sac. He noted this was identified as not open due to the steep topography, which would prevent construction of a roadway in that area. Mr. Snyder pointed out in Conditions 1.4 and 1.5 on page 22 of the record, the applicant obligated themselves to replace the right-of-way with a cul-de-sac and connection to 184'. He clarified the road right-of-way was to be vacated upon development of the property; if the property was not developed, it won't be vacated. Councilmember Wilson clarified that although Ms. Barringer's lot was approximately 13,000 square feet, it was zoned RS -8. Mr. Chave agreed. Councilmember Wilson expressed concern that although the staff report was included in the record, the appendices that showed the context in which this project was reviewed were not included. Mr. Snyder clarified that unless they were submitted as part of the staff report at the Planning Board hearing, it was not part of the record. Councilmember Wilson asked if that information was provided to the Planning Board. Mr. Chave answered no, the information provided to the Council was the same as was provided to the Planning Board. He explained a barebones application was submitted, asking for the text amendment. Staff furnished what they deemed to be pertinent information from the original rezone to the Planning Board for review but did not include all information from the original rezone because it was a huge packet. Councilmember Petso recalled a citizen suggested the property revert back to RS -12 zoning and asked whether there was a mechanism for reverting the zoning to RS -12 without the conditions of the rezone. Mr. Chave answered a new rezone application would have to be filed. Councilmember Wilson read from Item C of the Findings of Fact, (page 4 of the record), "Evidence was presented during the public hearing stating that Condition 1.2, which limited building pads to a maximum of 21% of the net buildable area, has been keeping the property from being developed. It was specifically pointed out that the 21% limitation would cause only about 1,000 square feet of ground floor living area to be available per lot." The Finding also indicated that 35% was the normal allowable lot coverage for RS -8 zoned property. Councilmember Wilson asked how the 1,000 square feet of ground floor living area was determined as he was unable to find any evidence in the record. Mr. Chave stated it was testimony provided to the Planning Board during the hearing; there was no plan submitted. COUNCILMEMBER ORVIS MOVED, SECONDED BY COUNCILMEMBER WILSON, TO EXTEND THIS ITEM FOR TEN MINUTES. MOTION CARRIED UNANIMOUSLY. Rebuttal Mr. Cobb alleged the Council was losing sight of what they were here to decide — whether to strike the paragraph regarding 21% maximum lot coverage from the contract rezone. He emphasized striking that one paragraph did not change the number of lots that could be created using a PRD and the RS -8 zone. He explained there were no schematics or plot plans submitted because none were presented to the Planning Board. He noted it was too early in the process to develop an accurate design, which would be done via the PRD process. He noted the way the PRD was established all interested parties would have ample opportunity to express their concerns. Mr. Cobb summarized the new PRD regulations and new restrictions made development more difficult. Without the 21% lot coverage restriction, they could create a better project for the neighborhood. He noted they have established a timetable for development with the approval of the proposed amendment. Mayor Haakenson remanded the matter to Council for action. Edmonds City Council Approved Minutes April 16, 2002 Page 10 Councilmember Petso expressed her appreciation for the candor of Mr. Michel's testimony that indicated they were in fact considering more lots and the differences in how the new PRD regulations � calculated the number of lots. She noted when the contract rezone was approved, both the Planning Board and the Council's decisions were split and there was evidence in the record that the conditions imposed by the contract were relevant. She noted Mr. Cobb (as a Planning Board member) was very interested in the condition that the Council was now being asked to repeal. She referred to his comment on page 49, that indicated he would like the PRD process to make the 21% even lower, on page 50 — Mr. Cobb's comment regarding taking advantage of the 21% the applicant offered, and another comment regarding making 21% the maximum. Councilmember Petso noted the intent was to protect the neighborhood and make the development more compatible. Councilmember Petso questioned whether the contract rezone would have been approved without the 21% lot coverage condition. She acknowledged the PRD regulations were different; however,'the record reflected comments indicating attached units were not allowed but they were under the new PRD regulations. She summarized the conditions under which the contract rezone was approved have changed. She referred to a comment by a Planning Board member that agreeing to the contract rezone was an important factor to the decision and that the applicant (page 52) stated the contract, was very specific and all codes and rules necessary to protect the people around the property were in place. She said if the condition were eliminated, it may result in a situation that differed from the original approval, creating the possibility the development would no longer be consistent with the requirements of the zoning code. Councilmember Petso referred to pages 17 and 64 of the record where Mr. Johnson testified �t was not consistent with the zoning goal of protecting his privacy, that most surrounding properties were RS -12, and property that was not zoned RS -12 was developed at RS -12. She noted zoning the property RS -8 was inconsistent with the neighborhood and if the condition regarding lot coverage was eliminated, it would definitely be inconsistent with the neighborhood. She noted if the developers wanted a larger ground floor, they could build fewer houses. Councilmember Petso referred to page 75 of the record where then -staff member Mr. Wilson indicates there could be no greater number of units than 26; however, tonight it appears there could be more units. She was inclined to think it was an illegal spot zone in the first place and no longer met the criteria on page 40 if this condition were removed. Specifically it no longer met the purpose of the zoning ordinance to protect the neighbors and it was no longer consistent with the surrounding area because the majority of the surrounding area was either zoned RS -12 or developed at RS -12. Councilmember Orvis indicated he would not support the Planning Board's recommendation. He referred to the evaluation criteria in 20.40.010 (page 40) commenting he questioned how the criteria related to the change from RS -12 to RS -8 as well as how the criteria could be used to change the buildable area on the lot. He was particularly concerned with criteria C — F that addressed suitability. He found RS -8 was not suitable for the topography of the property and was not compatible with the surrounding RS -12 zoning. COUNCILMEMBER DAWSON MOVED, SECONDED BY COUNCILMEMBER PETSO, TO DENY THE PROPOSED AMENDMENT TO THE CONTRACT REZONE AND LEAVE THE CONTRACT REZONE AS IT STANDS TODAY. Council President Earling indicated he would support the motion, primarily because of the 1000 square feet testimony. He acknowledged this property was very challenging to develop. He supported the Edmonds City Council Approved Minutes April 16, 2002 Page 11 Parks' property rights and was hopeful a recommendation would be presented in the future that did not have a fatal flaw. Councilmember Wilson indicated he would also support the motion and concurred with Council President Earling's statement. He noted in the original application, there was a conceptual plat layout that allowed those reviewing it to visualize the layout on the property. He said without similar analysis of the proposed amendment, the assertion that development was not feasible unless that condition was removed could not be deemed a factual statement. Councilmember Dawson echoed Council President Earling and Councilmember Wilson's comments, particularly the hope that this property would be developed in a manner that was consistent with the neighborhood. She agreed no information had been presented that indicated whether the 21% maximum lot coverage was appropriate. She noted the Council previously approved the contract rezone with a 21% maximum lot coverage and she was not comfortable changing that decision without a great deal more information. Council President Earling clarified this property was suitable for and should be developed as a PRD. He pointed out developing the property with 12,000 square foot lots would require homes that were a dramatic contrast to the neighborhood. MOTION CARRIED (5-1), COUNCILMEMBER PLUNKETT OPPOSED. 7. AUDIENCE COMMENTS Mayor Haakenson advised public comment would be accepted during Agenda Item 8 concerning the Public Facilities District. Councilmember Dawson expressed concern this had not been announced as a public hearing and many people, including the neighbors, were not aware that public comment would be accepted. Although she agreed it was important to allow public comment, she emphasized this was not a public hearing. Roger Hertrich, 1020 Puget Drive, Edmonds, referenced the City's contract with the Edmonds Alliance for Alliance for Economic Development, and expressed concern with the role the Alliance has played with Economic Develop- regard to lobbying efforts at the City level to double density downtown, increase building heights in the ent bowl area by one floor, and reduce parking requirements. He commented it was now obvious that he was right; the tourism and marketing contract were not in compliance. He suggested the City, 1) request an audit of all moneys granted to the Alliance each year, approximately $30,000 since 1996, to determine how it was spent and whether the expenditures complied with the contract, and 2) require the Alliance return any moneys that were illegally spent. He urged the Council to take action. Public g, REQUEST FOR MATCHING FUNDS TO HELP THE EDMONDS PUBLIC FACILITIES Facilities DISTRICT PURCHASE AND RENOVATE PORTIONS OF THE PUGET SOUND CHRISTIAN District Request for COLLEGE Matching Funds Mayor Haakenson explained the Puget Sound Christian College (PSCC) was put up for sale some time ago and the City had the Right of First Refusal. He asked the City Attorney whether the information covered by the Right of First Refusal including the offer presented to the college was public or privileged information. City Attorney Scott Snyder answered the Right of First Refusal was a City contractual right and was recorded in the City Clerk's Office. The Right of First Refusal was a required legal step in exercising the rights under that document. Both the Right of First Refusal and the notice to the City to exercise its Right of First Refusal as well as the attachments to the letter were public documents and subject to disclosure under the Public Disclosure Act. Edmonds City Council Approved Minutes April 16, 2002 Page 12 Mayor Haakenson explained while bids were being accepted by the PSCC, he met with three potential purchasers who inquired about the City's interest. All three were told of the City's desire to keep the auditorium and gymnasium, all three agreed that was something they would like to do, and all three were directed to the Public Facilities District (PFD) as the appropriate body to partner with. Mayor Haakenson noted all three were interested in concessions from the City including relaxing height restrictions and density restrictions in order to build on their portion of the site. He noted that once a partner was identified the purchaser would still need to return to the Council to request any relaxation in height and density regulations. Because there had been a great deal of discussion in the public regarding who the purchaser was and what the price was, and because Mr. Snyder indicated it was public information, Mayor Haakenson advised he received a letter on March 4 from the Anderson Hunter law firm stating that the PSCC had received an offer to purchase the property for $6.5 million. The offer was acceptable to the PSCC and subject to the City's Right of First Refusal. Attached to the letter was an offer made by Peer Frame, Covenant Construction Management Inc. Mayor Haakenson explained he presented that offer to the Council in Executive Session and the Council declined to exercise the City's Right of First Refusal at that price and suggested the potential buyer meet with the PFD Board. Community Services Director Stephen Clifton explained the Council formed the PFD Board in April 2001 and charged them with exploring and determining the market demand for and feasibility of developing a regional center. Since their formation, the PFD Board has been conducting due diligence activities which included hiring Property Counselors to prepare a Market Demand and Feasibility Study which was completed in November 2001 as well as a Business Plan which was completed in January 2002. He recalled the Edmonds PFD and Property Counselors presented information about the Market Demand and Feasibility Study to the Council on November 20, 2001, and presented information regarding next steps on January 15, 2002. Mr. Clifton explained as a result of preparing the Study and Plan and conducting numerous PFD Board meetings, the Board chose to work toward creating a regional center utilizing the old PSCC site. The Edmonds PFD Board was here tonight to request matching funds in the amount of $2 million to help the Edmonds PFD purchase and renovate the auditorium and gymnasium at PSCC. Edmonds PFD Board Member Jan Conner explained the Market Demand and Feasibility Study concluded that an Edmonds Event Center was feasible but not without significant challenges, primarily financial. In January 2002, the PFD published a Business Plan that envisioned the Event Center located on property currently owned by PSCC. She explained the PSCC housed the Edmonds High School for several decades, featured distinctive art deco architecture, and contained the only large auditorium in South Snohomish County. Since the publication of the Business Plan, the Board has attmpted to address concerns expressed by citizens regarding the impact, traffic flow, and parking issues. Ms. Conner explained another issue that arose from the Business Plan was operating performance. Prior to the PFD Board's meeting with the Council Finance Committee on April 9, the Board requested Greg Easton, Property Counselors Principal, review and revise the Edmonds Event Center Business PI an based on new information and operational scenarios. Ms. Conner explained that when the Edmonds PFD was formed, it became eligible for a rebate of state sales and use tax which has a projected present value of approximately $3 million. The Edmonds PFD also applied to the Snohomish County PFD for an allocation with a present value of $2.7 million. She noted the Snohomish County PFD has already made significant commitments to Lynnwood and Everett for their projects. Edmonds City Council Approved Minutes April 16, 2002 Page 13 To ensure community involvement, Ms. Conner explained State law required a 1/3 match of the sales and use tax rebates. Adding a sense of urgency was the fact that Snohomish County PFD has indicated an allocation to the Edmonds PFD would depend on submission of a match guarantee by April 19. She noted this date was related to deadlines imposed on the Snohomish County PFD by the Snohomish County Council. At this time, the only source of matching funds is the City of Edmonds. Therefore, the Edmonds PFD requests the Edmonds City Council make a $2 million match guarantee against the use tax rebate. She emphasized this was the best and perhaps only opportunity the Edmonds project would have to get funds from Snohomish County PFD. This match would enable the Event Center project to proceed as well as give substance to the passage of a recent amendment to the Comprehensive Plan that addresses the importance of developing the PSCC site. Ms. Conner explained this was a great investment opportunity for Edmonds due to the ability for the City to invest $1 and receive $3 already collected state tax dollars in return. She explained Edmonds, the community, and the region needed the Event Center. Never again would the City have the opportunity to preserve a historic site, restore a valuable performing arts venue and create a conference capability with so much outside assistance. If the City chose not to provide the requested match, $5.7+ million would be lost to other entities that recognized the value and would reap the benefit. In addition to the $2 million match, the Edmonds PFD Board requested the City guarantee the payment of bond debt service and any operating deficit. She explained the rebate of sales and use tax generated in Edmonds and Snohomish County should adequately cover the bond debt service. Under the use scenario presented to the Council, the financial picture for operating expenditures was much improved. The Edmonds PFD Board planned to solicit contributions, grants, and gifts in the form of a capital campaign to cover any operating deficit. She emphasized the PFD Board planned only to seek operating funds from the City Council as a last resort. Ms. Conner explained the Board was currently negotiating with the prospective purchaser of the PSCC a package that includes partial ownership of the property, improved parking, and some renovation. She noted the Board was not at liberty to discuss the specifics until the negotiations were concluded. Ms. Conner summarized this was a work in progress and she acknowledged there were challenges ahead. However, the Board was convinced that a team effort on behalf of the community would prevail. She concluded it would be a shame if Edmonds watched while neighboring cities such as Lynnwood and Everett took advantage of what was left on the table by Edmonds. Greg Easton, Property Counselors, explained the PFD Board requested he revise operating projections consistent with the evolving concept for the facility and that would concentrate investment on renovation of the auditorium, provide structured parking within the first phase of the project, and retain the existing classrooms and gymnasium as they are. He reviewed three operating scenarios and the financial picture associated with each. The first operating scenario would accommodate auditorium events only. Under this scenario, several adjustments were made to the operating projections, 1) eliminate all projected uses other than performing arts events, auditorium uses and special community events (specifically excluding conventions, conventions with exhibits, banquets and receptions), 2) reduced the staffing requirements due to less need for event staff, 3) adjust the food and beverage projections to reflect a commission paid by outside caterers, and 4) add parking fee revenue due to the development of parking in the first phase. He noted previous projections did not include any revenue from parking fees. He explained the revised operating projections now included sources of unearned revenue to fund the operating deficit including an Edmonds City Council Approved Minutes April 16, 2002 Page 14 admission tax, and in-kind contributions. He summarized in the auditorium only scenario, an operating deficit of $56,000 per year was anticipated which was less than projected in the January Business Plan. The second scenario was use of the auditorium as well as other areas in the facility at a level less than previously projected but consistent with the usability of the gymnasium and upstairs classrooms in their current form. In addition to the auditorium use, this scenario would accommodate small meetings and conferences as well as banquets and receptions. With the additional rental revenues, parking revenues, additional food/beverage commissions, and contributed income (admissions tax and in-kind contributions) the projected operating deficit was projected to be zero. The third scenario included auditorium events, use of the gymnasium and classrooms as well as use of the gymnasium on Monday — Thursday for athletic uses. He pointed out it was important to supplement funds available for facilities such as this with grants and contributions from the community. He noted this would be an important element of this project. Recognizing that the Council and community were relying on the information Mr. Easton' provided, Councilmember Plunkett requested he describe his experience. Mr. Easton described his involvement in developing the original studies for the Maydenbauer Center, which has extensive convention facilities as well as a performing arts facility. He explained his continued involvement in the Maydenbauer Center including reviewing the financial performance of the facility, updating the financial status of the project, and working with the Financial Oversight Committee. He summarized this provided the opportunity to review his projections and relate them to the actual experience of the facility. Councilmember Plunkett inquired whether the projections were conservative. Mr. Easton answered they were not conservative, but were attainable. Councilmember Dawson expressed concern with the slim packet of information provided to the Council that differs so radically from the January Business Plan. She inquired whether a revised Business Plan had been developed. Mr. Easton answered the PFD Board was in the process of revising the Business Plan and anticipated it would be complete by the end of the week for the presentation to Snohomish County PFD on Friday, April 19. Councilmember Dawson expressed concern that the PFD Board was requesting a guarantee from the City without presenting a revised Business Plan to support the operating projections. She asked if the proposal was to purchase and renovate only the auditorium and gymnasium. Mr. Easton answered the current proposal was to purchase the auditorium and gymnasium, renovate only the auditorium, and construct onsite parking. There are also funds projected to be spent on structural improvements of the facility but not on upgrading the interior finishes of the gymnasium or classrooms. Councilmember Dawson asked the projected cost of purchasing the facility. Mr. Easton answered that was currently under negotiation. Ms. Conner noted the PFD Board's request for funding and guarantee could include contingencies. She explained a purchase price had not finalized. The PFD Board had $7.5 million to spend on acquisition, upgrade to the building, parking and any improvements to the auditorium and gymnasium would require capital fund raising, gifts, contributions, grants, etc. Councilmember Dawson asked who the potential developer was. Ms. Conner noted Mayor Haakenson referred to Covenant Construction Management but she was unable to quote a purchase price until the negotiations were finalized. Councilmember Dawson inquired about what else would be developed on the site. Ms. Conner referred to Mayor Haakenson's comments regarding parties' interest in increased height and density. She noted it would be development that would be compatible and not be a greater impact to the immediate area. Edmonds City Council Approved Minutes April 16, 2002 Page 15 Councilmember Dawson asked if the PFD Board's negotiations have included discussion about the Board lobbying the Council to increase heights or density restrictions. Ms. Conner answered they had not. Councilmember Dawson asked which of the three scenarios the PFD wanted the Council to support. Ms. Conner answered the best use of the facility was using the auditorium and using the gymnasium for events and athletics. Councilmember Dawson asked whether any feasibility study had been done regarding the athletic component. Mr. Easton answered the net revenues from athletics were projected at $17,000 based on information provided by the City's Parks and Recreation Department. This was also consistent with revenues collected by PSCC currently for the use of the north gymnasium. Councilmember Dawson asked whether the projection for 316 events per year was realistic. Mr. Easton answered this was not an unreasonable estimate and it was consistent with the level of utilization for similar facilities. He noted on some days there would be more than one event. Councilmember Dawson asked whether it was consistent with the current level of utilization. Mr. Easton acknowledged it was more performing arts events and athletic use. Councilmember Dawson referred to the projection for 105 performing arts events per year and asked how many performing arts events were held currently. Mr. Easton answered approximately 25 per year. Councilmember Dawson asked if there was a demand for 105 performing arts events per year. Mr. Easton answered the Market Demand and Feasibility Study addressed potential use by local groups (those currently using the facility), regional groups (Pacific Northwest Ballet, Seattle Opera, etc.), and touring groups. He summarized the usage was based on detailed discussions with those user groups. Councilmember Dawson inquired about the projected rental fee for the facility. Mr. Easton stated it was anticipated to be $750 per performing arts event, which was slightly above the current fee. The PFD Board was sensitive to the need to provide a facility to performing arts groups at a fee they could afford. Councilmember Dawson observed the projections include a number of small meetings, receptions and banquets, noting these uses were not in previous proposals. Mr. Easton answered those uses had always been anticipated to be included; the type of events that were no longer included were conventions and conventions with exhibits. COUNCILMEMBER PLUNKETT MOVED, SECONDED BY COUNCILMEMBER ORVIS, TO EXTEND THIS ITEM FOR ONE HOUR. MOTION CARRIED UNANIMOUSLY. Councilmember Dawson recalled the previous plan was a more state-of-the-art convention center and meeting facility. She asked whether any feasibility study had been conducted on the demand for the "upstairs old classroom and gymnasium" versus the high profile convention center. Mr. Easton answered the type of events that would occur in those classrooms were small local events and meetings. He noted only conventions and conventions with exhibits required specialized space and, under the current proposal, that type of space would not be provided. Councilmember Dawson inquired about the demand for small meeting spaces for 25-30 people in the area or from outside the area. Mr. Easton answered they did not envision much demand from outside the community but within the community there was always a demand for small rooms at an affordable price. He noted as the price increased, the demand also dropped. The rental rates for those rooms would be consistent with other small meeting rooms within the community and it was his understanding such meeting rooms were scarce. Councilmember Dawson asked whether there was a difference in the capital cost for the auditorium only scenario and the auditorium/event/athletics scenario. Mr. Easton explained auditorium/event/athletics scenario merely added more events to the same facility. Ms. Conner noted the greater utilization under Edmonds City Council Approved Minutes April 16, 2002 Page 16 the auditorium/event/athletics scenario was the gymnasium. She pointed out there was no other facility in the area that could accommodate a sit-down banquet for 400 people. She commented the intent was not to be in direct competition with the Floral Arts Center or other facilities in the City but to provide a venue for entities that currently must hold events outside the community. Councilmember Dawson observed there was no difference in the number of staff for the three', scenarios although each reflected a different number of events. Mr. Easton explained the proposal was a rental facility so the responsibilities of staff would be to book the building and collect rents. He acknowledged this would be a lean staff that would be worked hard. Councilmember Dawson asked whether the feasibility study regarding use of the auditorium reflected limited staff and that users would provide their own crews. Mr. Easton explained in most instances, a facility was made available for rent, which included certain basic features but extra setup, microphones, etc. was provided at an additional charge. Councilmember Dawson recalled the previous projections reflected far greater staff costs. Mr. Easton answered much of the staff costs were related to conventions and exhibits and the higher level of service associated with that type of event. Councilmember Dawson noted the proposal was to have 4x the number of events that were currently held in the auditorium. She asked if the groups he anticipated using the facility were interested in a barebones type operation. Mr. Easton noted in many instances, the users provide their own ticket takers, technical staff, etc.— that was standard in the business. Councilmember Dawson asked if the personnel costs included City staff time. Mr. Easton answered they did not, but other general administrative charges included insurance and professional services such as legal services, accounting, etc. that would be purchased from the City or other outside vendor. Councilmember Dawson noted the projected staff cost was $48,000; however, the PFD has already spent over $120,000 in City staff time this year. Mr. Clifton clarified, explaining the figure provided to the Council last week was total expenditures related to PFD activities, not what it cost the City. He recalled the City allocated $34,000 in 2001 to the PFD and the PFD was obligated to pay back 2/3 (or $21,000) of the amount collected in sales and use tax. Therefore the total was $53,000 — $16,000 in staff time (including benefits), $24,000 in legal fees, and the $13,000 from the original $34,000 allocation. Ms. Conner added the original $34,000 allocation was from hotel/motel tax funds, not the General Fund. Councilmember Dawson pointed out utility costs were projected to be the same for all scenarios. She questioned how this would be possible when the auditorium only projected 196 events and the auditorium/events and auditorium/events/athletics projected 316 events. Mr. Easton advised the figure shown for utilities under the auditorium/events/athletic scenario would be adequate to support that activity and could be reduced for the auditorium only and auditorium/event scenario. Councilmember Dawson commented the Business Plan had not previously included parking and there was no information provided regarding the parking structure today. Ms. Conner explained the intent was to have 160 stalls underground and 60 stalls above ground, all contained on site. Councilmember Dawson asked about the cost to construct a parking structure. Ms. Conner said it had been estimated to be $2.7 million. Councilmember Dawson observed that spending $2.7 million for the parking structure and $3.8 million for acquisition left only $1 million for renovation. Ms. Conner anticipated the $7.5 million would cover acquisition, a parking structure, and structural improvements such as ADA, seismic and asbestos removal Edmonds City Council Approved Minutes April 16, 2002 Page 17 and very little renovation. She reiterated a capital campaign would be conducted and grants were being applied for to fund upgrades of the facility. Councilmember Dawson referred to projected revenues of $150,000 from parking and asked the cost of parking. Mr. Easton explained the cost in today's dollars was estimated to be $4 per vehicle assuming three attendees per vehicle for ticketed events, banquets and receptions. Councilmember Dawson asked whether any other facility in the area charged for parking. Mr. Easton answered he was not aware of any other. Councilmember Dawson asked whether charging for parking would impact the demand for the facility. Mr. Easton explained the bulk of the parking revenue was from ticketed events in the auditorium. He noted users were accustomed to paying for parking at events and did not feel $4 was an aggressive figure. Councilmember Dawson asked the percentage of the admission tax. Mr. Easton answered it was a 5% tax on the gross value of the ticket, the rate authorized by the PFD legislation. Councilmember Dawson asked if that amount was included in previous projections. Mr. Easton advised it was. Councilmember Plunkett asked whether any changes in the projection would be necessary as a result of Councilmember Dawson's questions. Ms. Conner answered no. Councilmember Plunkett asked whether most of Councilmember Dawson's questions had been addressed in the projections. Ms. Conner answered yes. She explained the PFD began with a grandiose plan, scaled it back once, and now have scaled it down to reality given the amount of available funds. She reiterated Mr. Easton's indication that these numbers were attainable. Councilmember Wilson asked how long the City would be responsible for guaranteeing the bond debt service. Ms. Conner answered 25 years. Councilmember Wilson asked how long the City would be obligated to provide any operating deficit. Ms. Conner explained the intent was to come to the City for funds for the operating deficit only as a last resort. She noted Kirkland raised $600,000 per year to offset their M&O deficit. She emphasized funds could be raised in the community to offset the operating deficit. Councilmember Wilson asked if any projections had been done to determine how long it would be until fund raising was in place to address any operating deficit. Ms. Conner explained the figures provided projected stabilization in 2006. She noted the project would be phased depending on the funds that could be raised. She anticipated the building would be operational in 2004. Councilmember Wilson asked whether the PFD would still have needed funds from the City if the PFD had sought a public vote to increase the sales tax. Ms. Conner explained that with the constraints imposed by the Snohomish County PFD, there was no other option than to come to the City. She explained the construction deadline was moved from January 1, 2003 to January 1, 2004; however, the Snohomish County PFD imposed a viability deadline of April 30, 2002. She noted the Edmonds PFD did not want to extend the viability deadline as it would open the door to another entity forming a PFD and possibly seeking the Snohomish County PFD allocation for the Museum of Flight. Councilmember Wilson asked whether the projected revenues assumed a minimal amount of renovation. Ms. Conner stated the projected revenues were based on minimal renovations and as capital was raised for further renovations, the rental rates would be increased to reflect the improved facility. Councilmember Wilson asked if the number of events currently held at the PSCC was limited by accessibility to the auditorium due to existing agreements the PSCC has with other users. Mr. Easton answered 20 events per year reflected the performing arts use. There were also two church services held on the site every Sunday. Edmonds City Council Approved Minutes April 16, 2002 Page 18 Councilmember Petso referred to Mayor Haakenson's remark regarding height and density concessions and asked whether she should be inclined not to proceed with the project if she was unwilling to consider height and density concessions. Mayor Haakenson explained each of the potential bidders that he met with, who were interested in partnering on a joint project, were willing to work with a partner to create a performing arts/convention center but were also interested in increased height and density in order to develop their project on the property. He noted this would come to the Council regardless of whether there was a performing arts center on the property. Ms. Conner answered that fact should not kill this proj ect. Councilmember Petso asked how the City would keep the PFD or renters of the project under control after pledging the funds. For example if a renter caused a great deal of neighborhood disruption, what recourse would citizens have to control the use? Mr. Clifton explained under PFD legislation, the PFD had the ability to own, operate, maintain, etc. a regional center and was an antonymous body. Thus the City Council would have no control over the type of events that took place in the facility. It would be the PFD Board that authorized the uses that could occur in the facility. Mr. Snyder assumed if the Council chose to provide funds, the City could, via an interlocal agreement between agencies, impose conditions on the use of the funds. Councilmember Petso asked whether those conditions would need to be established tonight. Mr. Snyder pointed out this would require the creation of a fairly complex interlocal agreement. The Council could give staff direction regarding the type of conditions but the agreement would need to be drafted for review by the Council and PFD Board at a later date. In response to a question raised by Councilmember Petso regarding the request for the City to guarantee payment of bonds, Administrative Services Director Peggy Hetzler explained the $7.5 million was the maximum amount the PFD could issue bonds for based on three dedicated revenue streams: 1) Edmonds sales and use tax rebate, 2) the Snohomish County PFD funding, and 3) the City's match. Over a 25 -year period, those revenue streams would generate $15 million. However, all that the PFD could access would be $7.5 million. The proposal was to issue $7.5 million in debt that would be repaid over a 25 - year period. She explained Snohomish County volunteered to issue bonds on behalf of the PFD but requires the City guarantee debt service in the event one of the years in the 25 -year revenue stream did not generate sufficient revenue to pay that year's debt service. Ms. Hetzler explained the PFD asked that she identify possible funding sources the City could devote to accomplish this 1/3 match. She identified the first '/4 Real Estate Excise Tax (BEET) as the most appropriate funding source for the 1/3 match. She explained this revenue source was restricted by State law to capital projects identified in the City's Comprehensive Plan and the revenues were currently dedicated by the Council to park purchases. She noted the PSCC was included in the City's Comprehensive Plan. She referred to a 5 -year forecast of REET funds, explaining that assuming a conservative 1% annual revenue growth factor, incorporating all capital projects currently identified in the Parks Capital Plan, and assuming certain grant proceeds would be associated with some projects due to the Parks Department's past success in obtaining IAC grants, this fund would have the capacity to absorb the $2 million match the PFD requested. Council President Earling asked Ms. Hetzler to describe the typical annual growth factor in the REET revenues. Ms. Hetzler explained her research of the past six years indicated total revenues have increased by over 95% and each year there were increases of 15%-18% consistently until 2000 when revenues declined by 15% that year. However, in 2001, revenues increased by 18%. Year-to-date collections are on track with the amounts collected in 2001 and 1999. She noted it was difficult to Edmonds City Council Approved Minutes April 16, 2002 Page 19 project revenues in this fund because it was economically sensitive and particularly sensitive to interest rate fluctuations. Council President Earling noted the forecast indicated some benefit from providing $1 million in cash and $1 million in bonds. He asked Ms. Hetzler to describe the benefits of this scenario. Ms. Hetzler explained she also considered providing $2 million in cash or financing the full $2 million to identify a match each year between the incoming BEET revenues and outgoing debt service payments. What appeared to provide the best match was a $1 million cash contribution and financing the remaining $1 million contribution over 25 years. She noted this would allow the fund to maintain a fairly significant cash balance at all times. Councilmember Dawson asked if Fund 126 could only be used for park purchases, how could it be used when the City would not be purchasing anything. Mr. Snyder explained that would be one of the purposes of the interlocal agreement, to provide an audit trail showing consideration that would meet the statutory requirements. He noted the City would end up with some property interest to support the use of the park funds. Councilmember Dawson commented the City could not provide the $2 million from Fund 126 absent some type of agreement or interest in the property. Mr. Snyder explained via an interlocal agreement the City could cooperate and give property to another district provided the use of the funds in the hands of the other public entity complied with the statute. He concluded the Council could provide a statement of intent tonight that would be subject to approval of an agreement at a later date Councilmember Dawson asked who would pay the $7.5 million in bonds. Ms. Hetzler answered it would be paid from the PFD's revenue streams. Ms. Hetzler explained the sales tax revenue streams were more than sufficient to pay the annual debt service. Councilmember Dawson asked why a guarantee was necessary. Ms. Hetzler explained sales tax revenue was also economically sensitive and over a 25 -year period, the revenue streams were estimated to escalate by 3% per year although historically sales tax revenue has grown at a higher rate. However, due to recessions and other events, there may be a year when the revenue stream was not sufficient to cover the debt service. Councilmember Dawson asked the amount of the annual debt service on the bond. Ms. Hetzler explained it would be a structured debt service that required payment of interest only in the early years due to growth in the revenue stream over time. The debt service would initially be approximately $440,000 per year and increase to over $800,000 per year toward the end of the bond issue. Councilmember Petso asked why the Marina Beach debt service was still in the REET account, recalling there had been grants obtained to refund the bond. Ms. Hetzler advised the City did receive grant proceedings of $2,031,000; she discussed with Mayor Haakenson when the grant proceeds were received whether the bonds should be called or the cash left in the REET fund until other issues were explored such as the PFD'S request. She explained that having the extra cash on hand made this work for the PFD. The City could choose to refund the $2 million in bonds but the fund would need to provide debt for the $2 million contribution to the PFD. Since the Marina Beach bonds were already issued and the debt issuance cost already paid, it would seem more economical to leave the grant proceeds in place rather than issuing more debt for $2 million and refunding $2 million in debt. Councilmember Petso asked whether the intent was to pay debt service on Marina Beach and borrow an additional $1 million. Ms. Hetzler agreed that was the plan. Councilmember Plunkett asked whether the REET funds could be used without impacting other projects including an opportunity that might arise such as creating parkland from the old Woodway Elementary Edmonds City Council Approved Minutes April 16, 2002 Page 20 i School. Parks and Recreation Director Arvilla Ohlde explained in the scenario outlined where Fund 126 pays the debt on City Hall and the option of the debt service for Marina Beach, the fund could still support all the capital fund acquisitions identified in the Comprehensive Plan and did not jeopardize any of the planned expenditures. Public Comments Mayor Haakenson asked the audience members in support of the request to stand; a majority of the audience stood. He then asked audience members who were opposed to the request to stand; several audience members stood. Bill Trenkamp, 424 Daley Street, Edmonds, indicated he was opposed to the PFD request for $2 million for a number of reasons including: the State budget was $1.6 billion short; Snohomish County sales tax revenues have been declining; the City has sought ways to cut services due to declining funds; and the Pacific NW was leading the nation in unemployment and lagging in recovery. If $2 million was available, it should be used for existing City needs and not a project that would indebt the public for another 25 years. He pointed out a study conducted in 1997 commissioned by a performing arts group determined that the auditorium even after renovation would be a poor facility for performing arts. He alleged the projected development costs were not based on complete information. The project was not financially feasible because there were no current seismic studies, no current traffic impact studies, no EIS, no architectural and design study, revenues were unstable and must come from gifts and grants, the projected costs were based on inflated dollars in 1988 and 1996 studies rather than current costs, codes have changed over the years and the current codes could not be met by 1988 and 1996 studies, and no property cost had been determined. There also had not been any study of the negative impact on the people living in the residential neighborhood surrounding the site. He described the significant impact of the 20+ performing arts events and Sunday church services had on the neighborhood. i Gail Sarvis, 1101 12th Avenue N, Edmonds, encouraged the Council to vote yes on the PFD'S request to purchase and renovate the PSCC. She recalled comments from the community about the loss of historical places, noting this was an opportunity to preserve some of Edmonds history. She described the use of the PSCC auditorium by students in the Jazz Connection (established by the Edmonds Daybreaker Rotary) for their performances. If the auditorium was not available for their performances, she explained this endeavor may not be possible. Jack Loos, 729 Main Street, Edmonds, remarked the Council was in a unique position as it had demonstrated an interest in this type of project by looking at community arts as a whole as well as including it in the Comprehensive Plan. The Council now had a proposal to make this a reality. He urged the Council to follow through with the concepts developed in the past. Darlene McLellan, 22615 92nd Avenue W, Edmonds, indicated her strong belief in partnerships and stated this was the opportunity for the City to do a partnership. She noted the volunteer PFD Board had matured rapidly, identified available resources and developed a realistic option. Now was the time for the City to provide the necessary and available support to make the project happen. She pointed out Snohomish County had no obligation to support the project if the local community did not. She urged the Council to proceed with the conviction that this was a worthwhile effort that preserved a fine building for the future and allowing the arts community to remain intact and flourish. Council President Earling asked Ms. McLellan if she felt there was enough support in the community to raise $20,000 - $50,000 per year to cover the operating deficit if necessary. Ms. McLellan said there was interest from the Edmonds Arts Festival Foundation in seeing this type of thing happen. The Foundation Edmonds City Council Approved Minutes April 16, 2002 Page 21 chose not to maintain a building because museums without other draws categorically die in the debt of maintaining a building. Further, the community was interested in saving something from the past. She summarized yes, there was enough support in the community to raise funds to cover the operating deficit. Cami Smith, 9228 183rd Place SW, Edmonds, described her involvement in the arts including currently serving on the Washington State Arts Commission. When traveling throughout the state she was continually in awe of the support that even small towns provide for their cultural centers. She commented her 13 -year old, when told the auditorium may be lost, said "that would be really dumb, then what would we do?" Michael Smith, 9228 183rd Place SW, Edmonds, speaking as a citizen art advocate and President of the Fine Arts Center of Edmonds (FACE), on behalf of the FACE Board of Directors, urged the Council to stand up for the arts in the community and vote in favor of the PFD funding for performing arts. He asked what it would say about the community that prided itself as an arts community, if the auditorium were lost due to a lack of political support. He urged the Council not to use fiduciary responsibility as an excuse not to make the financial commitment that this community treasure deserved. The Council could address any fiduciary concerns by imposing appropriate conditions and oversight to ensure a viable management plan was developed. He urged the Council to demonstrate their commitment to the arts by supporting the PFD'S request. He acknowledged four FACE board members in the audience. Edwina Baxter. .2212498 Ih Avenue W, Edmonds, pointed out the citizens clearly supported this project but had not been given the chance at philanthropy given the events surrounding the ultimate fate of the PSCC. She noted the historic museum united civic leaders and activists who rarely agreed. She explained this was an opportunity to save something unique as there was no other venue of this size in the area. She summarized there were many community and art organizations hoping the efforts to save the auditorium succeeded. Council President Earling asked Ms. Baxter whether there was sufficient support in the community to provide funds for the operating deficit if necessary. Ms. Baxter answered yes, and offered to assist with that effort. Roberta McBride, 8523 215th Street SW, Edmonds, recalled last year the Council created the PFD to explore the possibility of creating a regional center in Edmonds. Over the past several months, she attended most of their board meetings and watched as they worked to meet impossible deadlines. The Board has worked to satisfy state, county and city requirements and have modified their original plans considerably in an attempt to make the project more economically feasible. The PFD listened to neighborhood opponents and made every effort to accommodate their concerns. The PSCC was desperately needed by the community, and once renovated would be an enticing venue for other arts organizations to bring cultural enhancement to the City. Without the auditorium, performing arts organizations would be forced to find other communities in which to perform and Edmonds would lose much of what made it a desirable community. In response to the comment that even if renovated this would be a poor performing arts facility, she pointed out this was the only performing arts facility in South Snohomish County. The PFD deserved the support of the Council that created it and the community deserved this facility. She urged the Council to support the PFD'S efforts. Norma Dermand, 16214 Meadow Road, Lynnwood, noted Edmonds has always stood out as the arts center of the area and arts have been an integral part of the character of Edmonds. She noted it would be unthinkable for the area not to have a performing arts venue and it would much more expensive to build a new facility rather than save the existing facility. Although some neighbors oppose the facility, many Edmonds City Council Approved Minutes April 16, 2002 Page 22 i i were thrilled to have it in their neighborhood and found it to be very convenient. The arts groups were beneficial to the city because they attracted people from outside the area to attend performances. With the loss of the auditorium, the symphony, if it survived, would be forced to leave Edmonds. She concluded the City had much to gain by saving the auditorium and much to lose by letting it go. She urged the Council to find a way to save the auditorium. Jeri Hamilton, 808 Driftwood Lane, Edmonds, urged the Council to seize this opportunity i Ito support the request for matching funds to obtain the historic PSCC for the arts and the community. Mayor Haakenson congratulated Ms. Hamilton on being named "Citizen of the Year." Natalie Shippen, 1022 Euclid, Edmonds, pointed out the Council was being asked to provide $2 million, to guarantee payment of bonds and to fund any operating deficits that may occur. She questioned whether the Council had sufficient information to make such an open-ended financial commitment. She noted an arts district worked with the Edmonds Community College several years ago to build a new facility but encountered the same problems the PFD has encountered. Prior,to seeking public finds, that arts district developed an operating agreement to clarify the responsibilities of the owner and operator, prepared documentation identifying personnel expenses, fee assumptions and budget, and itemized the performances that would use the auditorium each month. Although she supported acquiring the auditorium, she disagreed with the process that has been followed. She commented it had been shown the PFD was an awkward vehicle to accomplish that and preferred the Council purchase only the auditorium and gymnasium. Roger Hertrich, 1020 Puget Drive, Edmonds, explained his concerns with the impact of parking on the neighborhood had been addressed via the inclusion of parking in the original proposal. He agreed the PFD Board had done a remarkable job. He supported preserving the PSCC and urged the Council to consider the importance of the timing of this request. He pointed out if the $2 million was not invested, the City would lose $2.7 million. He commented the questions posed by Councilmember Dawson were good and her intent was to protect citizens but timing was of the essence; if the Council did not act now, the opportunity to preserve the PSCC would be lost. He urged the Council to envision thei economic stimulus the facility could provide to the City. Rich Demeroutis, 921 Pine Street, Edmonds, expressed concern about the projected use of the gymnasium for receptions and meetings and questioned whether people would want to hold a meeting or reception in a gymnasium. He expressed concern that not enough research had been done on the structural integrity of the gymnasium and auditorium. He recalled when underground paiking was considered on the Public Safety campus, the water table was too high, a possibility that may exist at the PSCC. These unknown issues would increase the cost of renovation and construction of the parking facility. He was concerned with the City providing $2 million and being accountable for future; costs. He noted the community was not known for large companies that donate to the arts such as may; donate to the Kirkland Performing Arts Center. He suggested the PFD request more time from the Snohomish County PFD, particularly since the construction deadline has been moved to 2004. Peter Frame, Covenant Construction Management, Inc. advised they were the purchaser of, the PSCC and the entity working with the PFD and a proponent who planned to construct senior housing on the north half of the site. He agreed the PSCC was a one -of -a -kind structure and the City should find a way to preserve it. He explained the south half of the building was structurally sound and could be 'renovated. The north portion of the PSCC was not structurally sound and should be demolished which they are proposing to do. The proposal was to build 100% affordable senior housing on the north portion of the Edmonds City Council Approved Minutes April 16, 2002 Page 23 site along with a parking structure under the north portion which would allow the event center to operate without impacting the neighborhood. Their experience with senior housing indicates there would be little need for cars and that the development would have a low parking requirement and demand. He commented independent senior apartments had a low impact on city services and the tenants gave more to the community than they required in services such as volunteering at the event center. He pointed out the huge demand for this type of housing and was hopeful they could enter into an agreement with the PFD to complete the project. He agreed time was of the essence. Carol Nordling, 1020 Alder, Edmonds, was frustrated the project was taking on a regional aspect. Although people often refer to Edmonds as a quaint town, this was incompatible with a regional center due to the accompanying noise and traffic. Her primary concern was the regional aspect of a convention center in a residential neighborhood. She was disappointed the arts community had been notified of tonight's meeting but the neighbors had not. Hearing no further comment, Mayor Haakenson closed the public comment portion of this item. Councilmember Dawson clarified the parking would be provided under the senior housing portion and the PFD would pay for the parking structure. Mr. Frame explained they would provide the land and the PFD would pay $2.7 million for 160 underground spaces plus 60 above ground spaces for a total of 220 spaces. He explained their use would also have 80 underground spaces in the garage. Councilmember Dawson asked what studies had been done to determine whether underground parking was feasible. Mr. Frame acknowledged no studies had been done yet. Councilmember Dawson clarified Mr. Frame was in negotiations with PSCC to purchase the property for $6.5 million and they would sell the auditorium and gymnasium to the PFD for $3.8 million. Mr. Frame agreed. Councilmember Dawson asked if the intent was to demolish the buildings if the PFD and/or the City did not purchase them. Mr. Frame answered no, they did not propose to tear the entire structure down. Their intent has been to work with the City on a public/private partnership and satisfy the needs of the arts groups in the community and sub -region. He pointed out this was a unique opportunity to provide senior affordable housing which was nearly impossible to provide in Edmonds. Councilmember Dawson observed the property was zoned "Public" and Council approval would be required to change the zoning of at least a portion of the property. Mr. Frame answered other options are being discussed and they did not have a specific plan that required a rezone although that was a possibility. Councilmember Dawson inquired what plans they had that would not require a rezone. Mr. Frame answered he was unable to accurately explain what had recently been discussed with City staff and would prefer not to speculate further without giving the Community Development Director and City Attorney an opportunity to consider a proposal that has surfaced during the past few days. Councilmember Dawson asked if partnering with the PFD made it easier to do the project without seeking a rezone. Mr. Frame answered the intent initially was to seek a rezone and there was a proposal submitted by PSCC to amend the Comprehensive Plan and seek a rezone to R-1.5 zoning. Councilmember Dawson inquired whether the alternate proposal was contingent upon their partnering with the PFD Board. Mr. Frame agreed, noting their preference was that the two projects occur together. Councilmember Dawson pointed out there was a provision in the PFD legislation that states if the PFD partnered with certain groups, they could "slide things into existing zoning" without a rezone. Mr. Edmonds City Council Approved Minutes April 16, 2002 Page 24 Snyder said he was aware of the provision but did not know the details. Councilmember Dawson pointed out that may eliminate the Council's ability to vote on a rezone of the property. Mr. Snyder pointed out the Council could impose conditions on their participation in the project including ceding back to the Council the authority that this provision took away. Council President Earling noted a purchase price had been tentatively agreed on with the PSCC and an offer made to the PFD of $3.8 million but an agreement had not been reached on the $3.8 million. Mr. Frame agreed. Councilmember Wilson inquired about the due diligence time frame for the property. Mr. Frame explained they have conducted investigation but not extensive soils tests. He noted they have some experience with building subterranean garages in Edmonds and have successfully built a subterranean garage at 4r'' and Walnut and did not encounter any unusual problems. Councilmember Wilson asked when their due diligence would be complete. Mr. Frame answered as soon as possible and a time line had been established in the contract that they were required to meet. He would like to have due diligence completed by mid-May. Councilmember Wilson asked whether go/no go points had been identified in the due diligence and asked Mr. Frame to describe those points. Mr. Frame commented most of that would be political. Based on their inspection, they did not anticipate any subterranean problems but a quick soils test would confirm that. Councilmember Wilson recalled the PFD planned to begin operation in 2004 and questioned how Mr. Frame envisioned the process proceeding so that the senior housing was operational at the same time. Mr. Frame said if the PFD plans to be open in 2004, they would plan to be open at the same time. He asked that the community and Council work actively in support of this or inform them that they were not supportive. In response to Councilmember Dawson's inquires regarding land use decisions, Mr. Clifton emphasized there had been no negotiations between the PFD Board and Covenant Construction with regard to any land use decisions. Land use decisions sought by Covenant Construction would be the sole responsibility of Covenant Construction and not the PFD Board. Councilmember Wilson questioned if the PSCC was identified as a historic structure, was there an ability to waive some requirements. Mr. Snyder answered historic preservation was aimed at tax breaks rather than waiver of building code requirements, particularly places of public assembly. Mr. Snyder explained there may be opportunities to maintain the fagade via a waiver of the number of windows and openings and exterior surfaces required under the Energy Code. He commented the intent was to maintain the look and feel of a historic building but not impact the safety or structural integrity. Councilmember Wilson pointed out the action the Council was being asked to take was only';providing funds to allow the PFD to proceed and did not absolve the developer from proceeding with the required review and analysis. Further, the Council providing funding did not obligate the Council to approve any variances, modifications, etc. or ignore findings such as the impacts were so significant they could not be mitigated. Mr. Snyder agreed. He explained he saw this proposal for the first time today and was uncertain what level of commitment the Council was being asked to provide. He pointed out the best the Council could do tonight would be to state an intention to go forward perhaps in a three step process: 1) a general commitment that would meet the Snohomish County PFD requirement; 2) an agreement to agree Edmonds City Council Approved Minutes April 16, 2002 Page 25 that would identify deal points between the City and PFD; and 3) develop a more extensive interlocal agreement and possibly a three party agreement. He summarized a very complex transaction would be required to satisfy the audit trail and satisfy legal and bonding requirements. He asked staff what was the minimum necessary to go forward, noting the Council could not make a $2 million appropriation tonight as public notification was required to amend the budget. Mr. Clifton answered a number of questions were posed to Snohomish County staff regarding what guarantees they want the PFD or the City to provide, but Snohomish County did not provide answers regarding what specific guarantees they are seeking other than they want to see a viable project and that the City supported the project. COUNCIL PRESIDENT EARLING MOVED, SECONDED BY COUNCILMEMBER PLUNKETT, THAT THE COUNCIL AUTHORIZE THE MAYOR AND COUNCIL PRESIDENT TO SIGN A LETTER OF INTENT FOR $2 MILLION CONDITIONED ON: 1) SNOHOMISH COUNTY PFD COMMITTING SALES AND USE TAX TO THE PROJECT. 2) A SUCCESSFUL NEGOTIATED AGREEMENT WITH COVENANT CONSTRUCTION MANAGEMENT, INC. 3) A SATISFACTORY INTERLOCAL AGREEMENT WITH THE EDMONDS PFD. 4) COMPLETION OF A VIABLE BUSINESS PLAN FROM THE PFD. Council President Earling commented the Council most often considered infrastructure and public safety issues which were the guts of the community but to him, the arts community was the soul of the community. Due to his background with the arts, finding a way to sustain and enrich the arts as well as the historical value of the building became very important to him. He recalled in 1984 the City applied for the Main Street Project and was not selected, in part because the city did not have many buildings of a historic nature. He pointed out this was an opportunity for the Council to move forward but with a number of conditions. He recalled there was an implication made by a member of the public that the $2 million would come from the General Fund; he clarified the funds would come from Fund 126 and possibly from bonding. Councilmember Plunkett thanked the PFD board members and art organizations for bringing the project to this point. He recalled ten years ago, this was a dream, a dream that was incorporated into the Comprehensive Plan. He referred to the suggestion that the $2 million should be spent on existing City needs, pointing out this was an existing city need that was identified in the Comprehensive Plan. Although he did not want to discount the hard numbers, he pointed out a lot of building and worthwhile projects were built on faith and hope and that was how the Edmonds Event Center would be built because the community believed in it. For that reason, he would support the proposed motion. Councilmember Petso said although she did not originally support forming the PFD because the project at that time appeared to be "completely and utterly hopeless," she was impressed with how the PFD changed the project based on new opportunities that arose and have presented a proposal she was somewhat interested in. She agreed with the speaker who criticized the Council's procedures for not advertising this as an item on which public comment would be accepted. She urged the Council to stop doing that, particularly when it was apparent some knew the Council would accept public comment but others may not have known. Councilmember Petso did not favor the Council proceeding with any further action tonight other than what Snohomish County Council required. Her impression was that Snohomish County wanted to know where the 1/3 would come from and she was willing to commit to an intent to provide those funds but Edmonds City Council Approved Minutes April 16, 2002 Page 26 questioned whether that was sufficient for Snohomish County. Regarding the City guaranteeing the bonds, she was willing to commit to that with the assumption that the City could limit its total's financial exposure. She was agreeable if the risk under the proposed motion was $2 million; however if the risk were $2 million plus the $7.5 million, she would require more details. She questioned whether Mr. Snyder could draft a letter of intent that provided an out for the Council. Mr. Snyder asked Council President Earling for clarification regarding his motion, whether the reference of Covenant Construction would also include another viable private partners. Council President Earling agreed that was his intent. Mr. Snyder asked whether the intent of the motion was that any further approvals would be contingent on necessary opinions of bond counsel and other approvals that may be necessary. Council President Earling and Councilmember Plunkett accepted this as a� friendly amendment to the motion. Mr. Snyder pointed out that although the Council had stated its intent, it reserved absolute legislative discretion regarding the approval of each of the four phases in open session following a public hearing. Council President Earling agreed that was his intent. Councilmember Orvis indicated he would vote in favor of the motion. He recalled when he interviewed the PFD Board candidates, he asked about community support for the project. He pointed out the PFD selected a site that did not block views, chose to preserve a historic building rather than build a new building, did not ask for a sales tax increase that would have raised the sales tax to the highest in the state and instead pursued an alternate route that did not require any increased taxes. He thanked the PFD Board, the Council, and members of the community for their efforts. Councilmember Dawson commented there was a great deal of support for preserving the PSCC. Her initial inclination tonight was that it was not fair to make a decision of this magnitude without the input of the community, without a public hearing. Given Mr. Snyder's explanation of what the Council was actually voting on, the Council was only agreeing to talk further. She stressed the need for a public hearing on this issue to gather more information from the community. She indicated she would support the proposed motion to keep the process moving forward. She commended the PFD Board for everything they had been able to accomplish in a short timeframe. Councilmember Wilson indicated he would support the motion as crafted and as clarified by Mr. Snyder because it provided go and no-go points when the Council could make a decision whether to proceed or withdraw and it provided a great opportunity for the community to get involved. He commented that not pursing the opportunity to save the PSCC would be a disservice to the community in view of the outpouring of support for preserving it. Council President Earling stated that although he included four conditions in the motion, it was the intent of the Council to move forward and this should be clearly conveyed to the Snohomish County PFD. He clarified the action being taken tonight would direct the Mayor, staff and him to craft a letter outlining the intent to move forward and the conditions. With regard to his questions to Ms. McLellan, and Ms. Baxter regarding support in the community, he explained if there was a need to raise funds to cover the operating deficit, the arts community should be interested enough to solve that problem should it arise. MOTION CARRIED UNANIMOUSLY. 9. REPORT ON CITY COUNCIL COMMITTEE MEETINGS OF APRIL 9.2002 Due to the late hour, this item was postponed. Edmonds City Council Approved Minutes April 16, 2002 Page 27 10. MAYOR'S COMMENTS Due to the late hour, this item was postponed. 11. COUNCIL COMMENTS Due to the late hour, this item was postponed. With no further business, the Council meeting was adjourned at 11:50 p.m. /;'J� Y rkTNSON, MAYOR ""t/ L�6'- SANDRA S. CHASE, CITY CLERK Edmonds City Council Approved Minutes April 16, 2002 Page 28 AGENDA EDMONDS CITY COUNCIL Council Chambers, Public Safety Complex 250 5t" Avenue North 7:00 - 10:00 p.m. APRIL 16, 2002 7:00 p.m. - Call to Order Flag Salute Approval of Agenda Consent Agenda Items Roll Call Approval of City Council Meeting Minutes of April 9, 2002 Approval of Claim Checks #54811 Through #54932 for the Week of April 8, 2002, in the Amount of $168,772.38 (D) Authorization for Mayor to Sign Addendum to Interlocal Agreement with the Port of Edmonds for Use of a Rescue Boat (E) Approval of 2002 Funding Request for the Edmonds Historical Museum (F) Proposed Resolution Establishing License and Processing Fees, for Adult Entertainment Facilities, Managers and Entertainers (G) Proposed Ordinance amending Section 5.28.010 of the Edmonds City Code; adopting by reference RCW 9A.56.096 regarding the theft of rental, leased or lease -purchased property; and deleting a reference in Section 5.28.010 to RCW 9.45.062, which has been legislatively repealed. 3. ( 5 Min.) Proclamation in Honor of Scandinavian Festival Day in Edmonds, May 4, 2002 4. ( 5 Min.) Introduction of Mayor's Appointment to the Citizens Commission on iSalaries of Elected Officials Page 1 of 2 CITY COUNCIL MEETING AGENDA APRIL 16, 2002 'Page 2 of 2 ' .. 5. (10 Min.) Report on continuance granted by the Council President for the following closed record hearing: Public Hearing on a Contract Rezone request for Somerset Court, a proposed 80 -unit assisted living facility, to be located at 8204, 8210, and 8220 - 234" Street SW. The applicant is requesting to rezone the property from Single Family Residential to Multiple Family Residential. (Applicant: Robert Hale / File No. R-2001-180). This hearing is a closed record review of the Planning Board recommendation. Only parties of record may speak on this matter. The Council will set the date for a new closed record hearing. 6. (30 Min.) Public Hearing on the Planning Board recommendation to approve an amendment to an approved contract rezone (R-97-28) removing the contract restriction on net buildable area. The site is located at 18400 Olympic View Drive. (Applicant: Han Park / File No. R-02-5). This hearing is a closed record review of the Planning Board recommendation. Only parties of record may speak on this matter. 7. Audience Comments (3 Minute Limit Per Person) 8. (30 Min.) Request for Matching Funds to Help the Edmonds Public Facilities District Purchase and Renovate Portions of the Puget Sound Christian College 9. (15 Min.) Report on City Council Committee Meetings of April 9, 2002 10. ( 5 Min.) Mayor's Comments 11. (15 Min.) Council Comments ADJOURN Parking and meeting rooms are accessible for persons with disabilities. Contact the City Clerk at (425) 771-0245 with 24 hours advance notice for special accommodations. The Council Agenda as well as a delayed telecast of the meeting appears on AT&T Cable, Channel 21.